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GST: CBIC extends due date for filing FORM GST CMP-08

GST: CBIC extends due date for filing FORM GST CMP-08

The Central Board of Indirect Taxes and Customs ( CBIC ) has notified the extension for filing returns by the composition dealers in Form CMP-08.

According to the Notification, “Provided that the due date for furnishing the statement containing the details of payment of self-assessed tax in said FORM GST CMP-08, for the quarter April, 2019 to June, 2019, or part thereof, shall be the 31st day of July, 2019.”

The composition taxpayers shall furnish a statement, every quarter or, as the case may be, part thereof containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017, till the 18th day of the month succeeding such quarter.

“The said persons shall furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4 of the Central Goods and Services Tax Rules, 2017, on or before the 30th day of April following the end of such financial year,”.

Under the GST regime rolled out from 1st July 2017, the composition scheme is an alternative method of tax levy under GST designed to simplify compliance and reduce compliance costs for small taxpayers. The main feature of this scheme is that the business or person who has opted to pay tax under this scheme can pay tax at a flat percentage of turnover every quarter, instead of paying tax at a normal rate every month.

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Source: Taxscan.
GST Cell, ni-MSME to conduct 3-day training program on GST

GST Cell, ni-MSME to conduct 3-day training program on GST

To impart the knowledge about Goods and Service Tax (GST) and procedures for implementation, GST cell in association with ni-msme has proposed to conduct training program on GST to have a better understanding about the new tax regime.

The three days certification program will start from July 29 here, and will end on July 31, 2019.

The objective of the program is to impart the knowledge about Model GST law and to provide valuable insights on impact of GST on Industry/Trade/ Services.

In addition, it will give practical knowledge of the different procedures required under GST Act and Rules such as Registration, tax invoices, Filing of Returns, availing Input Tax Credit, compliance, Refunds and other documentation requirements.

The target participants for the program are Entrepreneurs of Industry and trade, Key managerial personnel, Professionals, Tax consultants, Academicians and students.

On the successful completion of program, the participant will be able to understand the transitional issues relating to migration from Current indirect tax structure to GST regime.

GST is a game changing reform for the Indian economy by creating a common Indian market and reducing the cascading effect of tax on the cost of goods and services. GST has a large ramification on business processes and there is a grave necessity for the industry members, entrepreneurs of Industry/Trade, Managerial personnel, Finance managers and professionals to ensure compliance with the Act, and for benefitting from the seamless pass through of Tax to the final consumer.

Source: Knn-india.

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Importers do not need state-wise registration under GST regime

Importers do not need state-wise registration under GST regime

Importers with godowns or those which store goods at customs warehouses in different states got relief from the advance authority of ruling (AAR) under the goods and services tax (GST) regime.

The AAR, Maharashtra, in two recent rulings, said that these companies do not need a separate registration in each state and that a registration where their headquarters are located would be enough. These firms can sell products in different states and raise invoices against their head offices, it ruled.

Harpreet Singh, a partner at KPMG, said in one of the cases, the petitioner — Aarel Import Export —noted it has a head office in Mumbai and is exporter and importer of products such as black matpe, toor whole, pet coke, and agarbatti.

The applicant wished to import coke from Indonesia at Paradip port in Odisha. The item would be stored at Customs warehouse at the port. It wished to sell coke to customers in Odisha from the said warehouse but wanted to clear the bill against Mumbai office by paying customs duty, if any, and IGST.

The AAR held that no separate registration is required in Odisha. It also held that the place from where the applicant makes a taxable supply of goods shall be his location — Mumbai office in this case. Since the applicant does not have any godown or place of business in Odisha, it can clear goods on the basis of an invoice issued by the Mumbai headquarters. It also stated that the applicant can mention the GSTIN of Mumbai office in the e-way bill and dispatch place as Paradip Port.

In the other case, petitioner Gandhar Oil Refinery (India) Ltd said it carries out manufacturing activity from its plants located at Silvassa and Taloja in Maharashtra. The company is engaged in the trading activity of non-coking coal and carrying out businesses from many states. Here also, the AAR held that the applicant need not take separate registration in each state where the goods are imported and stored in godowns.


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Source: Business-Standard.
Government rules out bringing oil products under GST for now

Government rules out bringing oil products under GST for now

The Centre has virtually ruled out including petroleum products within the ambit of GST immediately, turning down repeated demands from the aviation sector and oil companies.

Even the petroleum ministry had taken up cudgels for the sector that has been arguing that the benefit of GST is not accruing to them as companies cannot claim an input tax credit. The credit can only be claimed if the entire chain from inputs to the final product pays GST.

The Centre is, however, of the view that the change in the regime may not pass muster with the states, which want to retain flexibility in taxing a few items that they have control over. Stamp duty on real estate, excise on alcohol and petroleum products are among the handful of items on which states still have control after the introduction of GST.

At the time of the introduction of GST two years ago, the states and the Centre had decided to pool their powers, which now vests with the GST Council. The panel headed by the Union finance minister now decides the rates and the indirect tax regime, leaving only a few items with the state FM.

In any case, the overall levy is not going to reduce significantly as the government will impose cess above the 28% rate on petrol and diesel to ensure that there is no loss to the exchequer.

Besides, sources told TOI, politically too the Centre is not keen on moving to GST for products such as aviation turbine fuel (ATF) or jet fuel, despite the high-decibel lobbying unleashed by airlines.

The government believes that the taxes on ATF, which airlines say is among the highest in the world, is passed on to consumers. To ensure that the transition to GST is tax-neutral, the Centre and the states will have no option but to raise the levy on air tickets. “There will be no change for the flyers,” said a source.

Over the past two years, the government has discussed the possibility of shifting to a GST regime for sectors such as real estate, where under-construction units face the levy but on receipt of the completion certificate, stamp duty is levied. But the Centre and the states have refrained from expanding the ambit, opting for the new tax mechanism to settle down.


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Source: Times-of-India
No GST at duty-free shops: HC

No GST at duty-free shops: HC

Multiple court rulings on payment of goods and services tax (GST) at duty-free shops are making life confusing for those buying perfumes and chocolates from these stores.

A recent Allahabad high court judgment may, however, provide some relief with the court ruling that there shall be no tax levied in case of purchases made at duty free stores at the arrival or departure terminals. The court held that tax will not be levied as the goods never cross customs border and passengers carry the items as their personal belonging.

The ruling is similar to the one by Karnataka high court where in case of Flemingo Duty Free Shop, it was held that sale or purchase by such stores would be a transaction in the course of export or import.

But what complicates matters is a ruling by the MP high court in the case of Vasu Clothing, where it held that the transactions were liable to GST as supply to a duty-free shop by an Indian supplier is not to “a place outside India” and therefore such supplies do not qualify as exports under GST.

Moreover, the Authority for Advance Ruling (AAR) had held that supply of goods to passengers going abroad from duty-free shops at Delhi International Airport is liable to GST. Alcohol, which is the most popular item at duty-free shops, is outside the ambit of GST.

“Applicability of GST on duty-free shops has been a perennial issue under the erstwhile VAT regime with multiple diverse rulings. The situation has not improved even under GST on account of diverse rulings by MP and Karnataka high courts. The new ruling seems to have rightly interpreted the provisions under the GST law as well as baggage rules to arrive at the conclusion which appears to be rational and in line with the legislative intent,” said Harpreet Singh, partner at consulting firm KPMG.

The Allahabad HC order came in response to a PIL filed by Atin Krishna on the grounds that the exchequer is losing revenue. The petitioner has argued that the respondent is liable to pay Central and state GST on the goods sold to international passengers at its departure terminal and is ineligible to get refunds of the accumulated input tax credit.

The respondents countered it saying that the supply of goods till they cross customs border should be considered as an inter-state supply under the integrated GST.

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Source: Times of India.
GST standard rates may not be merged any time soon

GST standard rates may not be merged any time soon

The Revenue Department does not think it would be appropriate even in the near future to merge the two standard rates of Goods & Services Tax (GST) into one rate.

The existing GST regime has multiple rates: 0, 0.25, 1, 3, 5, 12, 18 and 28 per cent. The 12 per cent and 18 per cent rates are known as ‘Standard Rates.’

There has been talk of merging the two rates and having one standard rate of 15 per cent to simplify the GST structure.

Also, it will help blunt the criticism of there being too many rates. (0.25, 1 and 3 are special rates. The 0.25 per cent rate is for uncut diamonds; 1 per cent is for affordable housing and 3 per cent for gold and silver.)

“At this juncture clubbing of the two rates into one rate of 15 per cent might cause a revenue loss of approximately ₹1 lakh crore annually,” a senior Revenue Department official told BusinessLine. He further added that such a revenue loss is unwarranted at this moment as it would also affect the overall fiscal deficit. The government aims to restrict the deficit to 3.4 per cent of GDP in the current fiscal year.

Lopsided impact

As of now, out of 1,200 plus goods, nearly 42 per cent attract GST at the rate of 18 per cent, while nearly 15 per cent fall within the 12 per cent bracket. This means the proposed rate change will lead to a higher rate on fewer goods and a lower rate on more goods, leading to a revenue loss.

“This exercise can take place once revenue collection stabilises and average monthly collection is more than ₹1 lakh crore,” the official said.

Since implementation of GST from July 1, 2017, there have been just four instances when the monthly collection crossed ₹1 lakh crore. For 2018-19, the government aims to get ₹13.38 lakh crore (CGST+SGST+IGST+Compensation loss) but revised this later to ₹11.48 lakh crore. Now, for the current fiscal year (2019-20), the aim is ₹13.71 lakh crore. This means the monthly average collection should be ₹1.14 lakh crore. The collection in April stood at ₹1.13 lakh crore.

What the experts think

MS Mani, Partner at Deloitte India, said that with GST collections showing signs of stabilising in recent months, it may be better to for wait for some time before rationalising rates further.

“The initial focus could be on further simplification of procedures on returns, audits and input tax credits,” he said.

Rajat Mohan, Partner, AMRG & Associates, felt that consolidating the twin slabs of 18 per cent and 12 per cent to tax services under a single slab of 15 per cent, as suggested by former Chief Economic Advisor Arvind Subramanian, would lead to an immediate downward spiral in tax collections. “The high volume of transactions in the B2C service segment, such as life insurance, health insurance, construction of commercial shops and offices, accommodation services, food and beverages, social care services etc would pull effective tax contributions down by 3 per cent of the erstwhile contribution, which is expected to be colossal in absolute terms,” said Mohan.


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Source: Hindu-business-Line
GST Council to implement changes in phased manner

GST Council to implement changes in phased manner

Big businesses will have to start filing goods and services tax (GST) returns in the new form before others, with the authorities planning a gradual approach for all future changes to the indirect tax system to avoid disruption when economic growth has slowed down.

The authorities were expected to adopt tough enforcement measures to shore up revenue receipts, especially with the two-year transition period for GST ending in June. However, the GST Council has decided that changes in the tax system and steps to enforce compliance have to be gradual to avoid a backlash. The priority for the Bharatiya Janata Party, which has been returned to power at the centre, is to stimulate the economy and avoid turbulence on account of taxation. The Union and state governments share voting rights in the council and cannot get decisions approved without each other’s support.

The council had in December recommended that the new returns should be adopted on a pilot basis from April and compulsorily by 1 July. It will soon finalize the details of the roll out of the new returns.

“A gradual and nuanced approach will be taken as far as changes to GST is concerned. The priority before the council is to roll out the new tax returns. The approach to improving compliance will be to utilize data to identify individuals and businesses with risk of revenue leakage in a non-intrusive manner,” a person familiar with the discussions in the council said on condition of anonymity.

The move is being made against the backdrop of the problems that businesses had faced initially in the GST regime that forced authorities to suspend or modify some of the self-policing features of GST and defer return filing deadlines several times. The focus on hand-holding businesses rather than enforcement in the transition phase, combined with tax rate cuts, led to the Union and state governments collecting ₹22,000 crore less than the targeted ₹12 trillion for FY19.

The authorities do not believe the answer to the shortfall is an aggressive enforcement. Stimulating economic growth, which has decelerated from 8.3% in the last quarter of FY18 to 6.6% in the third quarter of FY19 is a priority for the National Democratic Alliance government. “Some tightening of tax administration is already taking place in a non-disruptive way,” said the person cited above.

The centre recently authorized the income tax department to share details, including sales and profits, that businesses reported in income tax returns with GSTN, the company that processes GST returns, to scale up scrutiny, Mint had reported on 1 May.

The gradual approach also implies that future structural changes to GST, such as inclusion of jet fuel, petrol and diesel in GST, as well as convergence of the two standard rates of 12% and 18%, will be a slow process keeping in mind economic realities. There is unlikely to be any major GST rate reduction soon, considering the centre’s revenue requirements for welfare schemes at a time it has had to deviate from its fiscal consolidation road map.

Source: Live-Mint.

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New GST regime may hurt builders, says expert

New GST regime may hurt builders, says expert

Real estate developers have to pay more taxes under Goods and Services Tax (GST) for residential projects, if they source a bulk of their inputs (like cement and capital goods) from unregistered dealers.

For residential projects started after April 1, 2019, the builder has to mandatorily charge customers a concessional rate of 5% or 1% (affordable residential apartments), as per the decision of the GST Council.

For ongoing projects, they were given an option to choose between the old rate of 12% or 8% for affordable housing and the new rates by May 20.

Under the old rate, builders were allowed to claim credit on input costs incurred on steel, cement and sand for under-construction buildings to offset their GST liabilities. The new rate comes without the input tax benefit.

According to advocate G. Natarajan, senior partner, Swamy Associates, there are more pain points for builders under the new concessional GST rates announced for the real estate sector.

Cost to go up

Though it was believed that the reduction in GST rates would reduce the price of apartments, it is not so, as the costs for the builder would go up due to denial of input tax credit, he added.

“Whatever the GST liability is, it has to be paid only in cash and you are not eligible to take input tax credit,” Mr. Natarajan said, addressing developers at a session on GST for the construction industry.

The event was organised by CREDAI Chennai in association with The Domotics.

Under the new tax rates, Mr. Natarajan pointed out that if a developer procures cement from an unregistered dealer, he will have to pay GST on cement at the rate of 28% under the reverse charge mechanism and no input tax credit will be available.

Generally, a supplier of goods or services pays the tax on supply. But in case of reverse charge, the receiver is liable to pay the tax. Similarly, he said that if the developer procured capital goods from an unregistered dealer, he would have to pay the tax at whatever rate was applicable for that category of capital goods.

Registered dealers

Mr. Natarajan also said the developer had to make sure that 80% of all inputs and services were purchased from registered dealers. If not, the developer would have to pay tax on the shortfall value at the rate of 18%.

For example, if the value of input is ₹10 crore, the builder has to purchase ₹8 crore from registered users. If he purchases only ₹6 crore from registered users, for the remaining value of ₹2 crore, he has to pay GST of 18%.

At the event, J.M. Kennedy, Commissioner of GST, Trichy, released the book on demystifying GST for construction industry authored by Natarajan.

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Source: The-Hindu
High Court issues notice to Centre and Delhi govt on ‘blocked credits’ under GST

High Court issues notice to Centre and Delhi govt on ‘blocked credits’ under GST

The Delhi High Court on Monday issued a notice to the Centre and the Delhi government on the issue of ‘blocked credits’ under the Goods & Services Tax (GST) regime. Such a mechanism is affecting hotels and malls.

The GST Act has a provision, under Section 16, for input tax credit (ITC), which helps businesses deduct the tax paid on inputs at the time of paying tax on output, thus lowering the tax paid in cash. However, this Section is subject to certain restrictions as laid down under Section 17 of the Act. These restrictions are also referred to as ‘blocked credits’.

The related Section says: “Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business.”

The petition was moved by a firm building a five-star hotel in the Capital. It has been procuring multiple goods and services, including works contract services, for use in the construction of the property.

Denial of credit

The petition mentioned that by virtue of provisions under the Act, the input tax credit available on the procurement of goods and services or both, including works contract services used for the construction of the immovable property, is denied to the petitioner.

The denial of credit disregards that the property so constructed by the petitioner would be used by it for furtherance of business, it said.

The petition specifically talks about two provisions related with ‘blocked credits’. Section 17(5)(c) ITC shall not be available in respect of the “works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service”.

Similarly, Section 17(5)(d) says ITC will not be available for “…goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account, including when such goods or services or both are used in the course or furtherance of business.”

It was prayed before the court to quash and declare both the provisions as violating the fundamental right of the petitioner and, therefore, violation of Article 14 of the Constitution (equality before law).

According to Abhishek A Rastogi, partner at Khaitan & Co, who is arguing the matter in the Delhi High Court, the arbitrariness with respect to Section 17(5) of the CGST Act and the respective State Acts arises as these provisions intend to deny credit for construction projects while the objectives of the GST are completely different and provide for credits to the receiver when the output is in the course or furtherance of business. The impugned provisions have been challenged on the grounds of arbitrariness and vagueness of the phrase ‘on his own account’.

“The distinction between B2B (business to business) and B2C (business to consumer) transactions, especially for cases when the output activity is charged to GST, needs to be looked into to avoid tax cascading effect,” he said.

Source: The-Hindu-Business-Line.

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GST will not reduce deficits of Indian state governments significantly: Report

GST will not reduce deficits of Indian state governments significantly: Report

Goods and Services Tax (GST) regime in India is not likely to reduce the deficits of state governments significantly, amid large and growing expenditure mandates for the social sector as well as capital spending, says a report.

According to S&P Global Ratings the institutional framework for Indian states is evolving, but there is structural deficits due to persistent revenue expenditure mismatch.

S&P Global Ratings credit analyst YeeFarn Phua in the report titled “Public Finance System Overview: Indian States” noted that the passage of the GST bill in 2017 is a major overhaul of tax structure and will help to widen the tax base and improve revenues of state governments.

“However, states will continue to run large deficits because a significant part of this imbalance is from the expenditure side. States are unable to cut expenditures because of large and growing expenditure mandates for the social sector as well as capital spending. Therefore, the revenue-expenditure gap will remain large,” said Phua.

Further, policy implementation remains sub-par in India, the report noted.

Another significant development in recent years has been the adoption of an amended Fiscal Responsibility Management (FRBM) Act, which forms the fiscal framework, in March 2018, the report noted.

Under the amended FRBM Act, the government will target a debt-to-GDP ratio of 60 per cent with the split being 40:20 for central government and states.

Further, the government will use fiscal deficit as the key operational target, the report said but added that the FRBM committee lacks the authority to mandate its core recommendations.

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Source: Business-Today