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GST: Evasion, returns and revenue boosting measures to feature at officers’ meet Monday

GST: Evasion, returns and revenue boosting measures to feature at officers’ meet Monday

Tax officers from the states and the Centre will get together for a day-long meeting on Monday to discuss administrative, legal, revenue and implementation-related issues under the indirect tax regime.

This will mark a first of its kind interaction between central and state tax officers, delinked from the agenda of the Goods and Services Tax (GST) Council meeting. Usually, officer-level meetings have always taken place a day before the GST Council meetings, mainly to discuss measures outlined in the Council’s meeting agenda.

As slowing revenues under the GST have become a concern, officials from the states and the Centre will discuss measures for anti-evasion, revenue augmentation, compliance, returns filing and online system, officials said. The rates of goods and services will, however, not be discussed since those pertain to the GST Council, they said.

Officials said this meeting would be more broad-based, wherein states and the Centre would have a common platform to discuss measures to streamline and regularise many pending issues under the GST. The tax officials are expected to take up issues related to e-way bills, delay in filing returns, IT matters, pending legislative changes, and methods to ensure greater coordination between states and Centre under GST, they said.

“This method to have a common platform for discussion between states and Centre is being tried for the first time. The idea was not to club it with a GST Council meeting and have an open agenda meeting. This was felt necessary so as to develop a mechanism for similar discussions going ahead. The officer-level meetings before Council meetings, otherwise, have too many agenda items and not everything gets discussed in detail,” one of the officials said.

Apart from the administrative- and implementation-related issues, pending legal changes would also be discussed. Another official said many states have not followed up on the amendments in the Central GST (CGST) Act with changes in their respective State GST (SGST) Acts, so much so that in some places there is a time lag of six months. “Such issues need to be prioritised since they are creating a hurdle in proper implementation of GST and would be raised in the meeting,” the official said.

The plan to hold this meeting comes even though the Council last month constituted a committee of officials from states and the Centre for revenue augmentation and looking into wider range of reforms such as systemic changes in the GST, including checks and balances to prevent misuse, measures to improve voluntary compliance, improved compliance monitoring and anti-evasion measures. The committee, which was earlier supposed to submit its report within 15 days, has so far met only once and is now likely to be given an extension of 1-2 months, officials said.”The committee has a wide range of topics in its terms of reference, so it would take time,” an official said.

GST collections in October contracted by 5.29 per cent to Rs 95,380 crore from Rs 1,00,710 crore in the year-ago month, marking the third instance of a contraction since the July 2017 roll-out of the indirect tax regime.

Source: indian-Express

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Indirect tax board removes circular on GST, but confusion remains.

Indirect tax board removes circular on GST, but confusion remains.

The indirect tax board had removed a “controversial” circular that imposed goods and services tax (GST) on post-sale discounts by dealers, but it has done little to clear the confusion around the many issues that arose with the circular.

In June, the Central Board of Indirect Taxes and Customs (CBIC) had issued a circular which said that dealers will have to pay 18 per cent GST on the post-sale discount that they get from the suppliers of goods, if the supplier asks them to pass on the concessions to the end consumer.

The circular came out with different situations where GST should be paid and where it should not.

For instance, imagine that a company sells a car to a dealer for Rs 10 lakh and later gives a discount of Rs 50,000. In doing so, the firm did not put any obligation on the dealer to pass on the benefit. So, the dealer need not pay any GST on Rs 50,000. However, if the company asks the dealer to pass on the benefit to the customer, then the dealer has to pay GST on the entire amount, including Rs 50,000.

The Confederation of Indian Industry (CII) had said This had irked industry, particularly the auto sector, which has already been reeling under the pressure of subdued demand.

this circular violated the cardinal principle of GST that the tax cost is to be borne by the ultimate consumer.

“This principle means that the supply of goods or service should suffer the tax only to the extent of consideration paid by the ultimate consumer,” the CII had said, demanding that this provision in the circular be changed.

It said additional discounts are generally given to liquidate the old inventories or push products under weak market conditions.

Following the hue and cry, the CBIC recently said: “Numerous representations were received expressing apprehensions on the implementation of the said circular. In view of these apprehensions… the Board… hereby withdraws, ab initio, the circular.”

But even after the withdrawal of the circular, the controversy over it has not ended. Experts demanded that a clarification be issued that there would be no GST on post-sale discounts as field officers continue to harass dealers.

Abhishek Jain, partner at EY, said industry expects that with the withdrawal of the circular, the government has accepted the industry’s position and this would put an end to the investigations and litigation at the field level.

Also, there is the issue of input tax credit.

ClearTax chief executive officer Archit Gupta said now there is confusion over how the situation of post-sale discounts should be dealt with.

The tax on the original invoice could have still been claimed as input tax credit and be adjusted using the credit note. This is now not perceived so by the withdrawal of the circular, he said.

“The festive season is here, and hence, there is a dire need for the CBIC to come back with a clear message for the businesses and the dealers in the supply chain to deal with the circular,” he said.

Source: Business-Standard.

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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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Revenue department plans linking e-way bill with FASTag, logistics data bank to check GST evasion

Revenue department plans linking e-way bill with FASTag, logistics data bank to check GST evasion

The revenue department is planning to integrate e-way bill with NHAI’s FASTag mechanism and DMICDC’s Logistics Data Bank (LDB) services, to facilitate faster movement of goods and check GST evasion.

The proposal, according to officials, will improve operational efficiencies across the country’s logistics landscape.

Currently, lack of harmonization under the ‘track and trace’ mechanism in terms of sharing information among different agencies is affecting the ease of doing business in the country. Besides, it is also impacting the logistic costs of the companies.

The proposal, being worked out by the revenue department, will also help in preventing goods and services tax (GST) evasion by unscrupulous traders who take advantage of the loopholes in the supply chain, an official told PTI.

Touted as an anti-evasion measure, e-way bill system was rolled out on April 1, 2018, for moving goods worth over Rs 50,000 from one state to another. The same for intra or within the state movement was rolled out in a phased manner from April 15.

Transporters of goods worth over Rs 50,000 would be required to present the e-way bill during transit to a GST inspector if asked

“The integration of the e-way bill system with FASTag and LDB is expected to help boost tax collections by clamping down on the trade that currently happens on a cash basis,” the official said

The National Highways Authority of India (NHAI) has put in place the FASTag system for collection of toll electronically on national highways. FASTag also offers non-stop movement of vehicles through toll plazas

Integration of e-way bill with FASTag will help revenue authorities track the movement of vehicles and ensure that they are traveling to the same destination as the transporter or the trader had specified while generating the e-way bill.

It will also help the suppliers locate the goods through the e-way bill system. Transporters, too, would be able to track their vehicles through SMS alerts that would be generated at each toll plaza.

Similarly, Delhi-Mumbai Industrial Corridor’s (DMIC’s) container tracking services, also called LDB programme, would be integrated with the e-way bill to improve the logistics ecosystem.

The official said that the implementation of the proposal would require inter-ministerial coordination as integration would have several operational and technical challenges.

The new indirect tax regime GST was rolled out on July 1, 2017. With GST systems now stabilizing, the focus of the Central Board of Indirect Taxes and Customs is now on increasing compliance and checking evasion.

The government has also set up the Directorate General of GST Intelligence (DGGSTI) to investigate cases of tax evasion and conduct search and seizure operations under the GST Act, and erstwhile the Excise and Service Tax Act.


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Source: Economic Times.India Times
Over 2 lakh assessees who migrated from VAT regime opt out of GST net

Over 2 lakh assessees who migrated from VAT regime opt out of GST net

The turnover of these assessees is below the prescribed threshold of 20 lakh: official

Over 2 lakh assessees have opted out of the Goods and Services Tax (GST) registration as their turnover is below the prescribed threshold. This will benefit both the taxpayers and the GST Network, the IT backbone of the new indirect tax regime.

These are assessees who migrated from the VAT (Value-Added Tax) regime to the GST regime. A senior Finance Ministry official told BusinessLine: “Turnover of these assessees are below the threshold of 20 lakh (10 lakh in some States), which means they are not required to continue under the new regime, though they think otherwise.” During the pre-GST regime, States had different slabs for registration under VAT/ST, which was as low as 1 lakh and could go up to 10 lakh: the thresholds for Service Tax and Central Excise were 10 lakh and 1.5 crore respectively.

With the universal threshold, it was obvious that some old assessees will opt out. This meant if the turnover of the entity is less than the GST threshold and the assessees were not willing to go for voluntary registration they had the option to get the provisional registration cancelled and move out of the GST net.

However, many assessees failed to complete the process, and so they continued to be a part of the GST-assessee base.

Originally, 88.61 lakh applied for migration and got the provisional certificate. Once all the formalities were completed, the provisional certificate was confirmed. The official said over 24.5 lakh did not complete the formalities and out of these 2.34 have opted for de-registration.

This meant there are over 64 lakh migrated taxpayers now. At present, GST has over 1.16 crore assessees which are a combination of migrated and new assessees.

Tax base

Another Finance Ministry official felt that with de-registration, the tax base will be effective. This kind of a tax base will serve two purposes — it will lighten the burden on the GSTN and will give a real picture of the indirect tax regime.

Tanushree Roy, Director – GST at Nangia Advisors LLP, said with a high number of assessees opting out of the GST registration it would enable them to focus more on business operations simultaneously reducing the costs and burden of undertaking the GST compliances.

This would also help the GSTN in efficient management of the portal and reduction in cost for maintenance of servers.

R Muralidharan, Senior Director at Deloitte India, said de-registration of over 2 lakh assessees will marginally reduce the traffic on GSTN as this is merely 3 per cent of the total return filers. Most of these assesses are likely to be below the threshold limit for registration.


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Source: The Hindu BusinessLine
Commerce Ministry sets up ‘GST Facilitation Cell’ to address GST related issues

Commerce Ministry sets up ‘GST Facilitation Cell’ to address GST related issues

commerce ministry India

The commerce ministry has constituted a GST facilitation cell with a view to address issues regarding the new indirect tax regime in respect of foreign trade policy.

The cell is set up in the Directorate General of Foreign Trade (DGFT). In a notice to all its regional offices, DGFT said: “to ensure smooth and successful roll out of Goods and Services Tax (GST), it is decided to constitute a GST facilitation cell”.

The cell will be headed by Additional DGFT Nikunj Kumar Srivastava. It would have two Joint DGFT officials as members. The regional authorities have also been advised to establish similar cells in their respective offices.

The government on Thursday said foodgrains, flour, milk, vegetables and fruits will get cheaper by up to 5 per cent once the Goods and Services Tax is rolled out.

The government has exempted cereals, pulses, atta, maida and besan from the GST, which will be implemented from July 1.

Milk, vegetables and fruits, puffed rice, salt, organic manure, animal feed, fire wood, raw silk, wool, jute and hand-operated agriculture equipment too will be zero-rated under the new indirect tax regime.

However, branded foodgrains and flours with registered trade mark will attract 5 per cent tax under GST.

While items like foodgrains, milk and vegetables do not attract any central tax at present, some states levy VAT of 4 -5 per cent on these goods.

The GST would be rolled out from July 1. It will subsume a host of central and state taxes like excise duty, service tax and VAT.

 

 

Source :  Business Today
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