Browsed by
Tag: GST software

Dept suspects GST Software Loopholes liable for Evasion, Likely to approach ICAI to investigate Involvement of CA

Dept suspects GST Software Loopholes liable for Evasion, Likely to approach ICAI to investigate Involvement of CA

The Goods and Services Tax department recently unearthed a scam of Rs 230 crore in Tamil Nadu and suspected that the evasion is due to the loopholes in the GST software.

The State Department is investigating a scam involving Salem-based steel traders Mahendra Kumar Singhi and wife Suman, owners of Steel Hypermart India Pvt Ltd, and chartered accountant Mukesh Surana, who allegedly claimed several crore rupees as an input tax credit by producing fake invoices of steel trading, Times of India reported.

The scam is believed to be one of the biggest GST evasion in the State. The department has sealed the offices and residential premises of the accused in Hosur, Bengaluru, and Salem.

“Around Pongal, we found that the invoices of some companies were suspicious and searched their offices and residences of their promoters in Salem and Bengaluru. The searches revealed that a CA was the mastermind behind the fraud. It was going on since 2017 when the GST was rolled out,” a senior commercial tax official told TOI.

‘Loophole in GST software reason for malpractice’ “The modus operandi is in the form of a circular ‘trade’ of steel and some byproducts using just invoices. It was started by Mahendra Kumar Singhi and his wife Suman Singhi, owners of Steel Hypermart India Pvt Ltd. They were operating in Salem, Hosur, and Bengaluru,” said the official. The Singhi’s were helped by chartered accountant Mukesh Surana, who also owns a company dealing in steel.

“Surana was helping them claim the input tax credit in the name of five companies. Some companies which were actually trading in steel also used fake invoices, our investigation revealed,” the official said. The department has sealed the offices and residential premises of the accused in Hosur, Bengaluru, and Salem. “The Singhis obtained anticipatory bail, fearing arrest. We will take action against the accused as per the GST Act,” he said.

The department is likely to lodge a complaint with the Institute of Chartered Accountants of India (ICAI) against Surana for his involvement in the racket. At present, GST software does not match purchases and sales. “This loophole has been one of the main causes for traders claiming input tax credit using fake invoices.

For every sale, there should be a purchase. But at present, we are not able to ascertain it using the software. We are trying to fix this problem and by June, the new software will be rolled out,” said the official.

The commercial taxes department has also developed its own software to scrutinize returns filed by assessees periodically. “The Statistical Analysis Software helps us analyze the returns and throw up suspicious entries. All assessing officers have been instructed to use this software to detect suspicious returns,” he said.

XaTTaX – World Class Automated eSolution for Return filing and e-Waybill

Source: Tax Scan
Industry demands 5 per cent GST on all sports goods

Industry demands 5 per cent GST on all sports goods

Sports goods manufacturers Wednesday demanded a lower GST of 5 per cent for the sector from the existing 12-18 per cent, noting that the government had promised to keep the new tax rates similar to earlier VAT rates. The existing 18 per cent and 12 per cent GST on sports goods should be reduced to 5 percent, the convenor of sports industry body Khel Udyog Sangharsh Samiti (KUSS), Ravindra Dhir, said while addressing mediapersons here.

The central government had assured before implementing GST on July 1 that the GST slab would be around that of the value-added tax (VAT) on related items, the KUSS claimed.

On the contrary, it imposed 28 per cent GST on physical fitness, gymnastic and athletic goods and 12 per cent GST on other sports goods whereas VAT on all sports goods had been nil in Uttar Pradesh, Jammu and Kashmir and only 5 per cent in Punjab, Dhir contended.
Sports industrialists especially those located in Jalandhar have formed KUSS and have been spearheading the agitation against the Centre for a cut in GST on sports goods to 5 per cent, he added.
He noted that the Centre a few month ago reduced GST on physical fitness, gymnastic and athletic goods from 28 per cent to 18 per cent, but the industry is asking for a uniform 5 per cent GST for all sports goods.
The industry group has intentionally selected Dharamshala for holding their press conference a day before Prime Miinister Narendra Modi’s rally here so that their demand of reducing GST on sports goods may be heard properly.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Sources: Economic Times
GST Council met 30 times, took 918 decisions in 2 years: Finance Ministry

GST Council met 30 times, took 918 decisions in 2 years: Finance Ministry

The all-powerful GST Council, chaired by Finance Minister Arun Jaitley, has met 30 times and taken 918 decisions related to laws, rules and rates for the new tax regime within a span of just over two years, the Finance Ministry said Sunday.

The Goods and Services Tax (GST) Council, which comprises state finance ministers and Union Minister of State in charge of Revenue as members, was set up on September 15, 2016, as the country’s first ‘federal institution’.

“Till date, GST Council has taken 918 decisions related to GST laws, rules, rates, compensation, taxation threshold etc. More than 96 per cent of the decisions have already been implemented through 294 notifications issued by the Central Government,” the ministry said in a statement.

The remaining decisions are under various stages of implementation. Almost equal number of corresponding notifications have been issued by each state, it added.

The working of GST Council has ushered in a new phase of cooperative federalism where the Central and state governments work together to take collective decisions on all issues relating to indirect tax regime of the country, it said.

Besides, tax officers of the Centre and states met ahead of the GST Council meetings to enable the council members to fully discuss the issues under consideration.

The Council has held discussions in a “harmonious and collaborative spirit” in the 30 meetings that have taken place so far, it added.

The detailed agenda notes for the 30 GST Council meetings ran into 4,730 pages, while the minutes of the meetings ran into 1,394 pages, the statement said.

After 17 tumultuous years, a nationwide GST was rolled out at the stroke of the midnight hour on July 1, 2017, overhauling India’s convoluted indirect taxation system.

The GST, which replaced 17 central and state levies including factory-gate, excise duty, service tax and local sales tax or VAT, is India’s biggest tax reform in 70 years of independence and will help modernise Asia’s third-largest economy.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Sources: Economic Times



Are GST norms posing hurdle in listing of RVNL, other PSUs?

Are GST norms posing hurdle in listing of RVNL, other PSUs?

The definition of a ‘government entity’ under the goods and services tax (GST) regime is proving to be an impediment for stock market listing of companies such as Rail Vikas Nigam (RVNL) and could also hit similar plans of a clutch of other entities such as the National Highways Authority of India (NHAI), which executes construction works awarded by the government.

As per the conditions, an entity in which the government stake is above 90% is liable to pay 12% GST for work contracts executed on behalf of the Central government, state government or any local authority. However, if the government holding goes below 90%, the applicable GST rate is 18%.

So, in the case of RVNL, a company which executes only Indian Railway contracts, while 10% equity shares will be offered to the public under its proposed IPO. An additional around 0.5% will be offered to employees, as has been done in the case of another railway PSU Ircon International, effectively bringing the government holding in the firm to less than 90%.

 So, when RVNL gets listed since it raises bills to the railways, the cash-starved transporter’s cost of projects will go up by 6 percentage points. This will add to the operational cost of the railways which reported its worst operating ratio since 2000-2001 last fiscal at 98.5.

According to sources, even if no shares are offered to employees and the government holding is kept at 90% for now, the percentage of public holding has to be increased to 25% within three years once a company is listed, as per the Securities and Exchange Board of India (Sebi) norms, eventually increasing the cost of projects.

“The ministry of railways has written to DIPAM (department of investment and public asset management) to request the finance ministry to sort the issue,” a source said.

DIPAM, part of the finance ministry, oversees the disinvestment process of government PSUs.

While railway arms RITES and Ircon have already been listed during the current financial year, plans to list RVNL and Indian Railway Finance Corporation (IRFC) is in limbo. “RVNL and IRFC were scheduled for the third quarter (of the current financial year), but they may get listed as of now,” said the source.

In case of IRFC, while the corporate ministry has given a clearance that all future deferred tax liabilities starting 2018-19 will be counted in the company’s net worth, there is still no decision on the backlog of around Rs 6,000 crore of deferred tax liability already in its books.

The government’s disinvestment target for FY19 is Rs 80,000 crore, but mid-way through the year, it is woefully short of the target and has managed a meagre Rs 10,000 crore.

Deferred tax liability is kept aside for payment of future tax liability. So, though a company has money, it cannot be shown in its net worth. It affects IRFC as its borrowing capacity is assumed to be 10 times its net worth, a deferred tax liability impedes its borrowing capacity.

“The above-mentioned GST rule will not affect the company as it will pass on the applicable tax to the contract owner. So, while the government will be the ultimate beneficiary, the railways will be affected as it manages its own finances. And since RVNL is 100% dependent on railway work contracts, the transporter may think of contracting other government entities in order to save cost,” the source said, adding that companies which will be hit most by the rule will be those which only execute government work contracts.

Ease Your GST Return Filing & Invoice with XaTTaX- GST Software

 Sources: Financial Express
GST: 1 year on, firms yet to set up infra for compliance

GST: 1 year on, firms yet to set up infra for compliance

‘There is a need to transform outlook’

Corporates are now realizing that coming to terms with GST means a more drastic change to their tax infrastructure than the basic compliance-related changes they have made so far, Vishal Parekh, regional head, South Asia, Thomson Reuters said in an interview.

“In the last several months, we have had discussions with CFOs and tax heads, and post one year of GST, there is a very different mood around tax and finance,” Mr. Parekh said.

“The entire focus was in just trying to get an infrastructure in place so that there was compliance in GST.”



Using tech teams

Most IT companies had either people on the bench to help them get their returns in place or had utilized their existing bandwidth and teams in their technology departments to help get them through the compliance process.

“Now that the one year has passed, there is a growing realization that without having a systematic way to deal with this in terms of processes, workflows, and technology, this is not sustainable,” Mr. Parekh added.

“That’s where we have seen a growing awareness, that where they are today is good for the first year of GST, but that they really need to start thinking about a transformation in the way they look at tax.”

This transformation, he explained, means different things to different companies.

Mid-to-large segment companies, for example, could be looking at simply upgrading the GST module of their existing tax and finance infrastructure.

“Some others, which are fairly global in scale, are looking at their entire workflow and seek to upgrade their entire tax workflow, be it direct tax, transfer pricing, indirect tax, compliance, and they want to automate all of that in one go, even if it takes two years to do so,” Mr. Parekh said. Compliance in India is likely not a harder process than in other major tax jurisdictions, Mr. Parekh added.

“The US and Brazil when it comes to indirect tax and sales tax, are probably some of the most complex jurisdictions I have seen,” he said. “Tax in today’s world is complex everywhere. In India, with GST coming in, I think a lot of people would argue that it has become easier as they don’t have to deal with excise duty, checkpoints, octroi tax.”


XaTTaX – World Class Automated eSolution for Return filing and e-Waybill

Sources: The Hindu
GST policy on e-commerce may make life difficult for cab startups: Experts

GST policy on e-commerce may make life difficult for cab startups: Experts

A Bengaluru-based startup has filed an appeal questioning a July 27 ruling by GST authorities in Karnataka which said app-based cab aggregators must pay GST on trip fares collected by private cab drivers/owners tied to their e-commerce platforms.

Opta Cabs, a startup that plans to offer app-based cab hailing services, has preferred an appeal to the ruling by the GST Authority on Advance Ruling in Karnataka. Its founder Chandrakaladhar Reddy (44) said: “This kind of regulations impose huge legal costs, and create an entry barrier for startups like us. The policy needs to change.”

Sections of GST experts believe the GST policy requiring aggregators to pay GST on fares collected by cab drivers will hurt startups as “it affects their liquidity and increases their operational risks and costs.”

The provisions of law and notifications are detrimental to the interest of e-commerce players, especially startups, engaged in the business of providing taxi hire services through marketplace model, said M.A.Maniyar, GST consultant and former Deputy Commissioner of Commercial Taxes, Karnataka. A former tax commissioner, not willing to be identified, too felt the GST policy approach seemed to skew in favor of deep-pocketed aggregators, and not budding platforms.

PV Srinivasan, a mentor for indirect tax expert committee at Bangalore Chamber of Industries & Commerce (BCIC), felt the GST policy, in this case, militates against the government’s policy of encouraging self-employment. “The policy looks discriminatory against small entrepreneurs, and imposes a tax cost on e-commerce cab aggregators on a consideration that they don’t collect.”

The GST legislation has indirectly led to taking away the benefit of the GST exemption available to individual/small taxi operators for annual turnovers below Rs 20 lakh, said Vivek Pachisia, tax partner at EY. According to Maniyar, aggregating the fare collected by all the taxi drivers/owners and subjecting the same to tax at the hands of the e-commerce operator is unreasonable.

Like it does with e-commerce retailers, the GST policy could have asked app-based cab aggregators too to collect 1% TCS (tax collected at source), instead of transferring the entire burden on the e-commerce company, Srinivasan said. “When the transport sector is already paying steep taxes with fuel price steadily increasing, I think if this additional GST on e-commerce platforms needs a relook.”

EY’s Pachisia, however, said the government has in a way expanded the tax-base by indirectly including even small service providers within the GST net because they provide the services through an e-commerce platform while the same service would not be taxable if they were to provide it without platform support. “Eventually, the impact of GST is borne by the customers and taxi-operators and not e-commerce platform operator,” he said.HG Kumar, former Additional Commissioner of Transport, Karnataka, clarified that small e-commerce players with less than 100 cabs can operate just with a radio taxi license while those above 100 cabs require aggregator license. Only Uber, Ola and Utto have taken aggregator license in Karnataka.

An Uber spokesperson, in an email, said: “Basis the legal requirements as stipulated and verified with the concerned authorities, Uber ensures GST compliant receipts are generated for every trip taken. Separately, as a company, Uber also makes the relevant GST payments and complies with the requirements and necessary disclosures.”

XaTTaX – World Class Automated eSolution for Return filing and e-Waybill

Source: economictimes.indiatimes
Last date to file IT returns is Oct 15: Know what all documents you need

Last date to file IT returns is Oct 15: Know what all documents you need

It is now essential for every business or professional, to provide GST details in their income tax returns. While the compliances are relatively less for proprietors and individual businessmen, companies have been asked to give a split of their expenses, between payments made to GST registered and not registered entities for the FY 2017-18.

This makes the financial statements and GST filings inter-connected. There is substantial cross-reporting between the two, let’s understand this further.

The GSTIN and turnover/gross receipt as per GST must be reported while filing ITR-4. This, of course, applies only if you are registered under GST. Details of CGST and SGST or IGST paid on Sales/ Purchases/ Expenses must be given in the profit and loss account, by all those who are filing ITR-3, ITR-5 and ITR-6. Additionally, the amount of input tax credit remaining unclaimed as of 31st March 2018 should be disclosed in ‘Schedule OI'( Other Information ) of the ITRs listed above.

As per the Income Tax Act, 1961, companies are required to furnish their returns in the ITR – 6 form, except for those earning income from property held for the charitable purpose, who must file ITR-7. These companies while filing the ITR-6, have to disclose the break-up of their total expenditure including purchases from entities which may or may be not registered under GST.

This requirement is applicable to all companies whether or not required to get their books of accounts audited under section 44AB. Earlier, GST related reporting in Form 3CD was relaxed until 31st March 2019. But this relaxation has not been extended to ITR-6. Being the first filing season post the GST implementation, an interim relief was expected until the GST system settles in.

The assessees under the GST schedule of ITR-6 must declare the following:

  • Total summary expenditure: The assessee must state the total amount of expenses made during the year after GST was implemented; the break-up of the aggregate of the expenditure as reported in the schedule Part A – Profit & Loss/ Profit & Loss as per Indian Accounting Standards between July 2017 up to March 2018.
  • Purchases from or expenditure made to entities registered under GST must be reported. This is done by giving break up of expenses into 3 buckets – for goods and services exempt from GST, purchases from composition dealers and balancing figure will be reported purchases/expenses under ‘other registered entities’.
  • Expenditures relating to entities not registered under GST.
  • Companies need to report the breakup of the total purchase and expenses booked in the Profit and Loss Account (P&L) in the GST schedule. There should be a clear bifurcation of expenditure that attracts GST and those that do not attract GST. Such expenditure may include the purchase of inputs, consumables, freight, repairs, rents, audit fees, etc.
    These assessees are required only to give a summary of the expense details, and not report on the GSTIN level. The objective behind this is to gauge in total the transactions taking place under registered GST and unregistered GST entities.

With regards to the ITR to be filed by businesses opting for presumptive tax scheme, declaring GSTIN-4 will have significant relevance. An assessee opting to presumptive taxation scheme must have turnover below 2 crores if doing a business (Section 44AD) and under Rs 50 lakh if pursuing specified professions (under Section 44ADA). The GSTIN disclosure gives IT Department a source to verify the turnover with that declared under GST system.

In conclusion, company assessees are inconvenienced with little clarity on how this data may be used and what to expect in the coming months on compliance. The data so reported by assessees may be subject to changes later and this may need a revision too; this means that the data being reported in the income-tax returns and the GST returns must be aligned to avoid potential disputes in the future.

There is still time for GST return filing for the month of September 2018, which is due on 20th October 2018. But reconciliation for FY 2017-18 by businesses between GST returns and books of accounts is of utmost importance even before filing of Income tax returns for AY 2018-19 (now due on 15th October 2018). Since the management and the auditor will sign off on the financial statements which include GST numbers. Timely reconciliation will save assessees from pain and revisions later.

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software

Source: Economic Times
Deadline for filing GST returns extended

Deadline for filing GST returns extended

The due date for filing GSTR-1 for the months from July 2017 to September 2018 has been further extended up October 31 on the advice of the GST Council, the Commercial Taxes Department said.

Migration woes

This follows several registered dealers under the Goods and Service Tax Act, 2017, experiencing difficulties with the migration.

For filing GSTR-1 from October 2018 to March 2019, the due date is set as 11th of the succeeding month of filing the return.

Previously, dealers were supposed to furnish electronically the details of outward supplies of Goods & Services in Form GSTR-1 on or before the tenth day of the succeeding month.

However, the due dates for filing GSTR-1 were extended periodically considering the difficulties faced by dealers.

For dealers having an aggregate turnover in the preceding financial year or current financial year up to ₹ 1.5 crore and those having opted for filing of quarterly GSTR-1, the due dates for filing GSTR-1 from July 2017 through September 2018 are October 31, while for October-December 2018 it is January 31, 2019 and January-March 2019 is April 30, 2019.

Also, for registered persons whose principal place of business is in Mahe region of the U.T. of Puducherry and have opted for quarterly filing, the due date for filing GSTR-1 for the quarter from July, 2018 to September, 2018 is extended up to November 15.

Further, for those dealers who have migrated to GST through special procedure vide G.O. Ms. No. 39 dt. 10.08.2018, GSTR-1 for the months from July 2017 to November 2018 and for those who have opted for quarterly filing, GSTR-1 for the quarters from July 2017 to September 2018, shall be filed on or before December 31.

Dealers are requested to file GSTR-1 before the due dates as mentioned above to avoid penal action, G. Srinivas, Commissioner (ST) said.

Ease Your GST Return Filing & Invoice with XaTTaX- GST Software

Source: TheHindu
20% cashback on GST likely on RuPay, BHIM using QR codes

20% cashback on GST likely on RuPay, BHIM using QR codes

The government is working on a proposal whereby citizens could avail of the proposed 20% cashback on goods and services tax (GST) on payments made through RuPay cards and BHIM app if they make the transactions using QR codes.

The idea is to automatically capture all transaction details including GST rate and the cashback accordingly, a senior government official told ET.

For those who are not comfortable scanning QR codes for digital transactions, the alternative will be to compile all the receipts and then claim GST refund from the government in the same way as income-tax returns and refunds are filed, the official said.

Last month, the GST Council approved the recommendations for incentivising digital payments through RuPay card network and BHIM Unified Payments Interface system through cashbacks.

Once implemented, customers making payments using RuPay card or BHIM app will get a cashback of 20% of the total GST amount, subject to a maximum of Rs 100. There has been a series of discussions between the ministry of electronics, National Payments Corporation of India (NPCI), GST Council and Goods and Services Tax Network on how to offer this cashback to consumers, the government official said. “The option to use QR codes is an evolved solution but also a best bet, since it will capture all the details which is not possible in other modes,” the person said. The plan includes working out an average rate of tax for different categories of products since it varies greatly in some cases such as hotel bills.

“The proposal needs further refinement from NPCI,” the official said. The finance ministry will give it final go-ahead.

NPCI said the initiative is at the proposal stage and GST Council is working to draft the scheme and its modalities. “We would be in position to share further details if the proposed cashback scheme is implemented and operationalised,” the corporation said in a statement to ET.

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software

Source: economictimes
Note on the Draft of Simplified GST Returns approved by GST council

Note on the Draft of Simplified GST Returns approved by GST council

GST council has approved the GST return design in its 27th meeting, however, Simplified GST Returnsthe key features and the drafted formats were approved in its 28th meeting.

The main features of these monthly returns would be:

1. Single monthly return for large taxpayers (20th of next month)

2. Quarterly NIL returns & facility to file quarterly returns by an SMS.

3. Small Taxpayers (Turnover less than 5 Crores) shall file quarterly return though payments shall be made on monthly basis.

4. Continuous uploading of invoices & Viewing facility

5. Self-admitted liability in case of return not filed through the invoices was uploaded.

6. Unidirectional flow of document to claim input tax credit

7. Missing Invoice reporting with interest and penalty after 2 tax periods

8. Offline IT tool in excel along with filtering facility

9. No automatic reversal of Input tax credit & recovery shall be made through a due process

10. Locking of invoices indicating acceptance of entering the transaction reported.

11. Rejection of Invoices by the taxpayer in case the recipient wrongly mention the GSTIN

12. Pending & amendment of Invoices

13. Deemed locking and Unlocking of invoices

14. Capturing HSN up to 4 or more digits in regular return

15. Two main tables in the return – one for reporting supplies and other for availing Input tax credit.

16. Payment of multiple liabilities

17. Amendment return to address human errors

18. Amendment of missing invoices and other details

19. Payment of liability arose due to the amendment & higher late fee for amendment return

20. Monthly accounting & assessment facility on the common portal

21. Facility of uploading Shipping bill in case of exports

22. Transmission of data to ICEGATE

23. Input tax credit on self-declaration basis till data transmits from ICEGATE to SEZ online

24. Supplier’s side control in the best interest of the recipient

25. Profile-based return to show him only a few types of supplies to report based on his profile

26. Purchase information in the annual return

27. Suspension of registration in case the registered person applied for cancellation of registration

28. Sahaj (B2C outward supplies) & Sugam returns (B2B + B2C outward supplies)

This simplification of GST returns would benefit by reducing the compliance costs for taxpayers. Minor/clerical errors would not lead to the initiation of legal actions. A questionnaire would be available for the taxpayers for checking the eligibility to opt for quarterly filing and to enable the profile based returns. The drafted returns were made available online & they would be made available once they get approved.

Taxpayers have to wait and see as to how this simplification process is going to help them. Hope it will not make the filing more cumbersome as the GSTN is tuned up to handle volumes of data & the network experienced frequent crashes. Ending up the note with several questions in mind as to how the invoices pertaining to deemed sales will be treated in the returns.