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Coronavirus lockdown: GST collections may see a sharp drop in March and April

Coronavirus lockdown: GST collections may see a sharp drop in March and April

Virtual lockdown and closure of offices across states will have impact on GST collections in March and April even as taxpayers demand extension of date of filing of returns from March 20 to some other date.

Businesses across the board would operate at minimal level. Primarily, sectors such as travel, hotel and food will see a sharp fall in the business.

According to an SBI research report, the inoperability analysis for three sectors namely Transport, Tourism and Hotels shows significant impact on demand and hence output. “On an aggregate basis, we estimate that the impact of a 5 per cent inoperability shock could be 90 basis point on GDP from Trade, Hotel and Transport to Storage and Communication segment. It could be spread over 2019-20 and 2020-21, with a larger impact in the latter year.”

The report further says on an average 25 million and 300 million people use airplanes and trains, respectively each month. “A 10 per cent reduction will lead to loss of revenue of Rs 3,500 crore on a monthly basis.”

Trade, hotels, transport, communication and broadcasting were likely to generate Rs 33 lakh crore worth of value of services in the current financial year. This number might be revised downward, impacting GST collections from this segment.

GST is charged at 5 per cent on economy class airfare and 12 per cent on business class airfare, while GST on train fare is 5 per cent. The GST on hotel rooms with tariffs of up to Rs 7,500 per night is 12 per cent and the tax on room tariff of above Rs 7,500 is 18 per cent. Impact on transport, tourism and hotels would further impact sectors such as fuel minerals, electricity and water and rubber, plastic, coke and petroleum products.

All these would impact the GST collections immediately further squeezing the government’s fiscal situation in the current financial year though finance ministry officials expects the impact of corona virus to be visible only in the next financial year. The government had a GST collection target of Rs 1.25 lakh crore in March. That looks unlikely now. In February, the monthly GST collection was Rs 1.06 lakh crore against the revenue department’s target of Rs 1.10 lakh crore.

As per the central government’s revised budget estimate, revenue from GST in the current financial year is likely to be Rs 6.12 lakh crore. Till January, the collection was around Rs 5 lakh crore.

Meanwhile, with most offices have been forced to work on minimal staff and many have asked their employees to work from home, many businesses would find it difficult to file returns on the due date – 20th March. There is now demand from some quarters that GST filing dates should be deferred.

“As the taxpayers short of staff as most of them are unable to report to offices, an extension of due date of payment of GST and filing of return is eagerly being awaited,” says Pritam Mahure, a Pune-based chartered accountant.

Rajat Mohan, partner, says though they are not facing any problem technologically, flow of data is a big issue. “There are no discussions around issues with the data that we have of our clients as they are shutting down offices. We are just pushing across the same to the servers and getting it filed,” he says.

Source: Business-Today

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Govt blocks GST e-way bill generation; move may impact 300,000 firms

Govt blocks GST e-way bill generation; move may impact 300,000 firms

Businesses of roughly 300,000 firms paying goods and services tax (GST) were likely impacted on Monday, as the government had blocked e-way bill generation for non-compliant assessees.

These businesses had not filed their monthly GST Return (GSTR)-3B for two consecutive months. The government had notified the rule last month as an enforcement measure amid subdued revenue collection.

The GST system has been grappling with low levels of compliance. Only 65-68 per cent of eligible GST filers file the GSTR-3B within the due date, the GST Network (GSTN) data shows.

“This month, the taxpayer will be alerted with a cautionary message while generating e-way bills, in case GSTR-3B for the past two successive months of the consignor/consignee GST identification number (GSTIN) has not been filed. From next month onwards, such GSTINs will be blocked,” the note had said.

The same has become operational from December 3.

According to the data by the GSTN, the information technology backbone of the two-year-old indirect tax regime, there are 2 million GSTINs that have not filed GSTR-3B for September and October. Of these 2 million GSTINs, 347,000 GSTINs (or 16.7 per cent) had transactions in the e-way bill system for September and October, which are learnt to have been impacted immediately.

“These firms were given enough warning last month that their e-way bill system would be blocked over non-compliance. Businesses not filing returns should not be allowed to move goods,” said a government official.

Firms in Odisha and West Bengal are learnt to have been severely affected with this move. Experts said this has put these businesses in peril.

“Due to slowdown and cash crunch, taxpayers are already struggling to survive. This measure will effectively mean halting business and will have negative consequences for taxpayers and the economy,” said Pritam Mahure, leader at Pune-based accountancy firm Pritam Mahure and Associates.

“Suppose, the supplier of goods has filed GST returns in time, but the person to whom he is selling goods i.e., purchaser of goods has failed to file GST returns, in that case, the supplier who is compliant will not be able to generate e-way bill as his recipient is non-compliant,” said Vishal Raheja, deputy general manager, Taxmann.

The e-way bill facility will get unblocked within three hours of payment of dues and filing returns.

Nirmala Sitharaman holds meeting on GST simplification

Nirmala Sitharaman holds meeting on GST simplification

Finance Minister Nirmala Sitharaman on Saturday held meeting with chartered accountants, traders and other stakeholders as part of efforts to further simplify Goods and Services Tax (GST) forms and make the filling process more user-friendly.

To highlight the problems faced by GST filers, the stakeholders attempted to file specific returns on a real-time basis in the meeting and tried to show where they are facing difficulties.

The finance minister assured the stakeholders that their suggestions on simplification of GST filing will be implemented soon, Revenue Secretary Ajay Bhushan Pandey said after the meeting here.

The minister also suggested to hold similar exercises in the entire country next month to understand the issues and concerns of GST filers, the secretary further said.

“Commissioner of a circle will call in some of assesses who will file in return and give suggestions. It was also decided that the GSTN and CBIC will interact regularly after December 7 as this is an evolving system and this kind of interaction are required for further improvement of the system,” he said.

New GST return is available on the portal for trial and consultations will be held all across the country on December 7 to get feedback on the new system, he said, adding about 85,000 returns on a voluntary basis have been filed so far although the new form becomes mandatory from April 1, 2020.

As a part of the ongoing efforts to address a concern raised on the process of filling GST forms, the finance minister invited Rajasthan Tax Consultants’ Association, ICAI, CAIT and Laghu Udyog Bharti and they attempted to file specific returns on a realtime basis and tried to present where they are having difficulties.

Some of the suggestions were with regard to change or amendment to entries in the filing, credit and debit note, he said.

“This meeting was fruitful. In some cases they were not aware of the existing instructions, in some cases they pointed out to confusion and some suggestion with regard to further easing were made,” he said, adding that some clarificatory circular would be issued wherever required and other suggestions would be implemented.

No major issues were found in the basic filing of return, he said.

CBIC Chairman, GSTN CEO, Member (Tax Policy), CBIC, AS (Revenue), Joint Secretary (Revenue), JS (TRU-1) and EVP- GSTN were also present in the meeting.

Source: India-Today

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GST Network to release new version of return filing interface on 22 October

GST Network to release new version of return filing interface on 22 October

GST Network (GSTN) will release improved version of GST return filing interface on 22 October with an aim to further simplify the process.

“Many of the suggestions were incorporated in version 2 which is in place right now. Version 3 is going to come on October 22 of this month,” GST Network CEO Prakash Kumar said at a seminar organised by IIT Delhi Alumni Association here.

GST Network provides IT infrastructure and services to central and state governments, taxpayers and other stakeholders for implementation of the GST.

Goods and Services Tax (GST) has reduced complexity in indirect taxation as its implementation has lowered the number of forms to be filed by businesses to just 12, from 495 under as many as 17 central and state laws in the pre-GST era, Kumar said. The indirect tax administration now shares data with the income tax department, a move that has helped in unearthing instances of tax evasion, he added.

Kumar said that income tax department confirms the range of turnover, not the exact data of tax payer, which has helped in detecting mismatches. At present, there are 12.3 million registered GST tax payers.

Speaking at the occasion, GST Council Special Secretary Rajeev Ranjan said that GST has also aided in cutting the logistics cost for businesses, while successive rounds of rate cuts in the new tax indirect tax regime reduced prices and helped keeping inflation under check.

GST has reduced the average tax incidence as well as prices, and was an important determinant in ensuring that inflation remained under control, he said.

“Prior to GST, about 14% of the total cost of goods accounted for logistics (in India), a large cost and friction in doing business, while it was 10-11% for Brazil, Russia, India, China and South Africa (BRICS nations) and 9-10% for developed countries,” Ranjan said quoting a 2014 study.

Now, logistics cost in India is about 10-12% of the value of goods, Ranjan said in his presentation.

“In pre-GST era, trucks used to cover about 225 kilometers a day and now it is 300-325 kilometers,” said Ranjan, adding that GST has ensured that there is no need to have a fragmented market.

Source: Live-Mint

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23% GST payers can file returns via SMS from April

23% GST payers can file returns via SMS from April

One in five GST payer will get away without having to file monthly or quarterly returns from April. Instead of filling up the form online, all that those with ‘Nil’ returns will have to do is to send an SMS to a specified number and confirm it using a one-time password.

The move is part of the overall exercise to simplify compliance as many of the ‘Nil’ return filers, who account for almost 23% of the 1.2 crore GST base, had registered to be eligible for contracts from government and other agencies but do not undertake any business.

Once the new returns kick in from April, over 70% of those registered for GST can make do with quarterly filing of returns as their turnover is less than the specified level of Rs 5 crore. “Only 7% of the taxpayers with annual turnover of over Rs 5 crore will have to file monthly returns,” said Prakash Kumar, chief executive of GST Network that provides the IT backbone for the indirect tax regime and has developed the new forms.

More than 51% of the taxpayers can use the SMS-based compliance tool or opt for Sahaj, the form meant for those entities with B2C transactions and have an annual turnover of less than Rs 5 crore.

GST, which was launched over two years ago, had faced severe criticism as businesses, especially the smaller ones, complained of stiff compliance burden that required three-stage filing. Through the new forms, the government has sought to reduce the compliance burden with smaller businesses required to file quarterly returns, although taxes will have to be paid on a monthly basis.

Source: Times-of-India

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Stern action if GST returns are not filed, warns Chief Commissioner

Stern action if GST returns are not filed, warns Chief Commissioner

Taxpayers should file their GST returns for 2017-18 by August 31 and failure to do so will attract very severe consequences, including hefty penalty, Chief Commissioner of Customs and CGST Visakhapatnam Zone, Naresh Penumaka, has said.

Though only 15 days of time was left, 80% of traders have not filed it so far. It involved a consolidated filing of the monthly returns filed by them and the date had been extended several times and would not be extended further, he said at a press conference here. They should approach the nearest Central Excise officials for hand-holding and filing the returns, he suggested.

Besides, not passing on the benefit of GST to customers or indulging in any fraud in input tax credit or any attempt to use it as working capital or not remitting GST collected from consumers might lead to imprisonment, he warned traders. Traders should also issue a bill collecting GST as per the reduction effected by the GST Council from time to time, he said. The Directorate General of Analytics and Risk Management was analysing bulk data to check GST fraud. The National Anti-Profiteering Authority would also investigate it.

He denied that cumbersome process was the reason for the delay in filing returns citing 90 % compliance at the national-level and some States reporting as high as 70%. “Some are deliberately delaying payment,” he said.

Also the Central Excise and Service Tax dues pending for the past two years also should be paid in two weeks, Mr. Naresh said warning of imprisonment of it was not complied with.

With the modifications in GST returns from October and January 2020 new returns should be filed and GSTR 3B would be done away with, Nr. Naresh revealed.

Target
The current year’s target for Andhra Pradesh was ₹58,222 crore against which so far only ₹16,037 crore was collected, Mr. Naresh said adding the previous year’s collection was ₹50,000 crore. Traders should file returns and pay the tax to improve collection, he said.

Mr. Naresh also urged importers and exporters to make use of the trade facilitation measures in Customs as only 51% of importers were using the Direct Port Entry and 6 % of the exporters Direct Port Entry schemes.

Principal Commissioner, Customs, Visakhapatnam Zone, D.K. Srinivas, said there was an exponential growth and for the first time the zone crossed ₹10,000 crore mark in customs duty collection in the previous year. It kept pace with the 20% increase in the target during the current year with ₹4,700 crore collected in the first four months. Besides IGST returns and ‘drawbacks’ of ₹400 crore was paid.

Principal Commissioner, GST of Visakhapatnam Zone, Faheem Ahmed, announced the schedule for awareness programmes in the city and divisions.

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Source: The-Hindu
80% Visakhapatnam traders yet to file GST returns 

80% Visakhapatnam traders yet to file GST returns 

With the August 31 deadline for filing central goods and service tax (CGST) returns only a fortnight away, CGST officials are in a fix as 80 per cent of traders in the city have not yet filed their returns.

“All taxpayers should file their GST returns for 2017-18 by August 31, else they would face severe consequences, including a hefty penalty,” said chief commissioner of Customs and CGST, Visakhapatnam Zone, Naresh Penumaka.

The chief commissioner denied that the cumbersome process is the reason for delay in filing returns and cited a 90 per cent compliance rate at the national-level, with compliance in some states as high as 70 per cent. “Some deliberately delay payment,” he said.

The process involves a consolidated filing of monthly returns filed by traders. The date had been extended several times in past and CGST officials said the deadline will not be extended further. “So the traders who are yet file the returns should approach the nearest central excise official for filing returns,” suggested Penumaka.

The chief commissioner warned that any fraud in input tax credit, attempts to use it as working capital or not remitting GST collected from consumers might lead to imprisonment. “Traders should also issue a bill collecting GST as per the reduction effected by the GST council from time to time,” he added. The target for 2018-19 in Andhra Pradesh has been set at Rs 58,222 crore, but till July 2019 only Rs 16,037 crore has been collected.

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Source: Times-of-India
Firms may get to raise prices after transferring GST cuts

Firms may get to raise prices after transferring GST cuts

Companies are free to raise prices of products and services as per their business cycle without fear of getting caught in the anti-profiteering provision in the Goods and Services Tax (GST) law once they have passed on the benefit of tax rate cuts to consumers, said a government official.

The clarification from the official, who has knowledge of how the National Anti-profiteering Authority (NAA) and its investigative arm work, comes at a time when ambiguity in the law and the recent extension of the profiteering watchdog’s tenure as well as an increase in penalty for violation have led to concerns that the pricing liberty of businesses stands curtailed.

Analysts said that due to lack of guidelines on how to implement anti-profiteering provisions in the Central GST Act, companies are not sure how long they are expected to maintain a price after they reduce price to pass on the benefit of a tax cut to consumers. This is also worrisome for companies that have faced charges of profiteering for specific periods in the past. The law is silent on how long companies have to maintain the reduced price after a tax rate cut. This open ended provision, in effect, results in price administration, they said. Under GST law, not passing on the benefits of tax rate reduction or availability of input tax credits to consumers by businesses and merchants amounts to profiteering.

The liberty to increase price as per the business cycle will come as a relief to companies, especially large fast-moving consumer goods (FMCG) manufacturers that have faced ‘profiteering’ charges under GST law.

“Whenever there is a reduction in GST rate, businesses have to pass on the benefit to consumers immediately. Thereafter, companies are free to follow their cycle of price adjustments as they deem fit in line with market forces. There is no lock-in period for maintaining reduced prices,” said the first official cited above, who spoke on condition of anonymity. If a company has increased prices of products in a particular month in the past, that is a valid explanation for a price increase subsequent to reducing prices in line with a tax rate cut. Businesses, however, should be in a position to defend themselves in case of a complaint, said the person.

Experts said it may not be a very easy task for businesses to defend price increases considering the complexities in the overall business environment and pricing. They said past price trends may show movement both ways and may not be sufficient to justify a price increase in case of a profiteering investigation.

“Businesses may at times want to increase margins on a better selling product to offset losses in other products. There is still an ambiguity on whether that increase in margin for some products would be acceptable by the authorities as a justification for a price increase. Separately, industry has also been looking forward to detailed guidelines on calculating the amount of benefit to be passed on and in specific, the duration for which the reduced price is to be continued,” said EY tax partner Abhishek Jain.

The other factor that has got businesses worried is the perpetual nature of the anti-profiteering provision in the CGST Act although the tenure of the NAA is defined. The provision which mandates immediate price reduction of goods and services commensurate with the tax cut, does not specify a sunset clause. A second government official, who also spoke on the condition of anonymity, said that the anti-profiteering provision may be administered by any designated government official or agency in a less elaborate way after NAA’s term ends as the tax system would have stabilised by then. The GST Council extended the term of NAA by two years in June, which enables it to continue to work till end of 2021. The Council had also in June decided to let NAA impose a penalty equivalent to 10% of the profiteered amount on those who pocket the tax benefit meant for consumers.

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Source: LiveMint
GSTN releases offline tool of new GST return for trial run

GSTN releases offline tool of new GST return for trial run

Goods and Services Tax Network (GSTN) on July 30 released trial version of offline tools of GST forms related to supply of goods and services. The offline tools have been released for Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2), GSTN, which is the IT backbone of the indirect tax regime, said in a statement.

These two forms would be part of the proposed GST Return filing system under which a taxpayer would have to file FORM GST RET-1 (Normal) or FORM GST RET-2 (Sahaj) or FORM GST RET-3 (Sugam) on either monthly or quarterly basis.

GSTN provides offline tools that can be downloaded for filing GST returns.

All the outward supplies will be detailed in GST ANX-1 while GST ANX-2 will contain details of inward supplies auto-populated mainly from the suppliers’ GST ANX-1.

It will also contain details auto-populated from Form GSTR-5 and Form GSTR-6.

“The taxpayer will be required to take action on details of inward supplies contained in Form GST ANX-2 by accepting or rejecting the entries. The taxpayer can also keep the invoice pending by marking the entry accordingly,” the release said.


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Source: Money-Control
GST: Steady decline in number of return filers in last four months

GST: Steady decline in number of return filers in last four months

Total number of entities filing GST returns has seen steady declined in the last four months for which data is available. Between February and May this year, the number of entities filing GST return has declined by almost 8 lakh, which is nearly 10% of the total GST return filed in the country. According to latest official information, the number of entities that are required to file GSTR-3B form is around 1.03 crore while the number of entities that have filed return in May this year is little over 75 lakh. It means nearly one fourth of the businesses that are required to file return under the GST law have not done that.

The government admitted in the Rajya Sabha all the taxpayers admitted under GST were filing returns.

“The government is considering to put in place an extensive plan to hunt for these missing GST payers,” Anurag Thakur, minister of state for finance told the Rajya Sabha in response to a question adding that the measures will include tax officers visiting the concerned premises.

It’s bit ironical that during the same period the total number of businesses registered under the GST has gone up by 23 lakhs to 1.03 crore while the number of GST return filers (GSTR-3B) declined by over 10%.

While in February this year, almost 84 lakh of the total over 1 crore businesses registered under the GST had filed their returns, the number of filers declined to 82.5 lakh in March.

The same trend of decline in the number of GST filers further declined to 79 lakh business in April this year while in April it further declined to little over 75 lakh.

In February this year, the government’s gross GST collection was Rs 97,247 lakh crore, then it went up to Rs 1,06,577 crore in March and it an all-time high of Rs 1,13,865 crore in April this year before again declining to Rs 1,00,289 crore in May this year.

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Source: Financial Express
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