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Bring GSTR with invoice matching for all by January: Bengal FM

Bring GSTR with invoice matching for all by January: Bengal FM

West Bengal finance minister Amit Mitra has sought a probe into rampant goods and services tax evasion. In a letter to finance minister Nirmala Sitharaman, dated August 27, Mitra also sought the introduction of the new return system with invoice matching by October for large taxpayers and by January, 2020, for all tax payers.

Mitra further wrote that he had forewarned that giving up invoice matching would lead to widespread tax frauds and hawala transactions.

Citing the Minister of State for Finance Anurag Thakur’s response in Rajya Sabha, Mitra said that the fraud worth Rs 45,682 crore was not only alarming, but also understated. The figure did not include SGST frauds, and should they be included, the figure would cross Rs 1lakh crore, Mitra claimed.

“At the time of GST introduction, neither the statutory forms including GST Return were ready, nor the IT system was tested,” he said. The widespread tax fraud took place due to lack of veracity of claimed GST via input tax credit, Mitra said.

Source: Economic-Times

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No GST on everyday items like milk and meat

No GST on everyday items like milk and meat

Bollywood actor Rahul Bose tweeted how a Chandigarh-based five-star hotel billed him a staggering ₹442, including GST (goods and services tax), for just two bananas. The GST amount was ₹67.50—a 9% central GST of ₹33.75 and a 9% Union Territory GST of ₹33.75. The news seem to have fizzled out, but as a consumer, it’s important to know what’s the right GST amount you need to pay, and which items are exempt from GST altogether. Here are a few everyday items, across three categories, on which you don’t need to pay GST.

Food items: There is no GST on fresh or pasteurized milk, butter milk, curd, chena or paneer, and non-vegetarian items like eggs, chicken, fresh meat, and fresh or chilled fish. Fruits, vegetables, as well as unit container-packed frozen branded vegetables (uncooked or steamed) are also exempt.

Other items on this list include natural honey, hulled cereal grains like barley, wheat, oat and so on. Palmyra jaggery, all types of salt, flours like gram or pea flour, coconut, fresh or dried, whether or not shelled or peeled, all kinds of whole spices like seeds of anise, fennel, coriander, cumin or caraway, are exempt. Even items like papad, except when served for consumption, bread (branded or otherwise), and pizza bread are exempt. Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed containers) have no GST.

Personal items: Several personal items too feature on the zero GST list. For instance, sanitary pads, kajal (other than kajal pencil sticks), glass and plastic bangles, hearing aids, slates, pencils, chalk sticks, passenger bags, bindi, and all types of contraceptives, including condoms.

Miscellaneous items: These mostly include stationery items and items bought from the government. For instance, picture, colouring and drawing books for children, music books, manuscripts, postal items like envelope and post cards sold by the government, newspapers, journals and periodicals, whether illustrated or containing advertising material. Maps and hydro graphic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, that are printed are also included. Cheques, loose or in a book form, printed books, including Braille books, judicial and non-judicial stamp papers, court fee stamps when sold by government treasuries or vendors authorized by the government, and rupee notes when sold to the Reserve Bank of India are part of the list.

Religious routine ritual items like rudraksha attract no GST. Even items like earthen pots, clay lamps are not in the GST list. Medical items like blood from blood banks attract no GST either.

Remember that some items may attract zero GST only if they are not packaged.

Source: LiveMint
Written By: Bindisha Sarang

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Poorer states leave industrialised peers behind in GST collection rates: Report

Poorer states leave industrialised peers behind in GST collection rates: Report

Heartland states such as Bihar, Uttar Pradesh, Madhya Pradesh and Odisha showed improved performance in goods and services tax (GST) collection for 2019, as compared to the previous year, reports the Times of India.

Their performance stood out against that of industrialised states, with only West Bengal bucking the trend, the report said.

Delhi, with a 2 per cent drop, reported the worst collection of Rs 12,700 crore for April-July 2019, compared to Rs 13,000 crore a year back, it said, adding that the overall GST collection for the period rose by 9 per cent to Rs 3.56 lakh crore.

The top performers in terms of collection rates were Nagaland (39 per cent), Arunachal Pradesh (35 per cent) and Sikkim (32 per cent). Their GST collection volumes, along with Meghalaya, were between Rs 370 crore and Rs 680 crore, the report said.

Odisha saw collection rate spike by 20 per cent to Rs 9,264 crore for April-July 2019 from Rs 7,666 in April-July 2018, Uttarakhand by 19.9 per cent (Rs 3,676 from Rs 3,067); Bihar by 17.8 per cent (Rs 11,625 – Rs 9,869) and Madhya Pradesh by 14.6 per cent from Rs 14,024 to Rs 12,240.

Assam recorded a 14.1 per cent rise (Rs 6,197 – Rs 5,433), Uttar Pradesh (12 per cent from Rs 34,783 to Rs 31,056), Karnataka 10.7 per cent (Rs 29,789 – Rs 26,908), Tamil Nadu – 10 per cent (Rs 27,959 – Rs 25,425), Andhra Pradesh – 9.1 per cent (Rs 14,482 – Rs 13,271), and Telangana – 8.7 per cent (Rs 16,121 – Rs 14,832).

Maharashtra rose by 7.2 per cent (Rs 54,208 – Rs 50,557), West Bengal 6.4 per cent (Rs 19,014 – Rs 17,862), Gujarat 6.2 per cent (Rs 24,663 – Rs 23,221) and Kerala 4.7 per cent (Rs 14,542 – Rs 13,888).

MS Mani, a partner at consulting firm Deloitte, told the paper that the above-average collections in consuming states were “expected even prior to GST launch as it is structured as a destination-based consumption tax”.

“However, originating states, where the collection growth has been slower, would need to consider the fact that the compensation mechanism comes to an end in 2022, unless extended,” he said.

Anticipating this development, Gujarat, Maharashtra and Tamil Nadu had demanded that the Modi-led government begin negotiations for implementing GST – demands that the BJP-rules states later dropped.

As per stipulations, states with less than 14 per cent annual growth would be compensated by the Centre for five years. However, some of these states – going by the GST numbers – would not require the support, the paper pointed out. The compensation is paid out of cess imposed on soft drinks, tobacco and automobiles among others.

Experts told that paper that the development has been good for poorer states and would augur well for states with high production and consumption base as well, such as Maharashtra.

However, states with lower populations such as Haryana and Punjab could be adversely affected as the various taxes subsumed into GST would affect their monies.

Source: Money-Control.

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Source: Live-Mint

GST collection grows 5.8% in July to ₹1.02 trillion

GST collection grows 5.8% in July to ₹1.02 trillion

Central and state governments have collected Rs. 1,02,083 crore from Goods and Services Tax (GST) in July, 5.8% more than what they mopped up in the same month a year ago, an official statement said here.

This is the third time the combined central and state GST receipts crosses ₹1 trillion mark so far this fiscal. The union government is bound to compensate states for any shortfall in their revenue collection below an agreed 14% annual growth every year in the first five years of GST regime. Tax collected in July pertain to the transactions in June. After showing a 10% annual growth in April GST receipts, collections remained rangebound between 6.6 and 5.8% in subsequent months.

The statement said the union government collected ₹17,912 crore, while states collected ₹25,008 crore. Receipts from integrated GST (IGST) on inter-state sales stood at ₹50,612 crore and from GST cess at ₹8,551 crore. On account of the revenue shortfall in FY19 and the growth rate remaining below 14% so far in FY20, the central government’s requirement to compensate states continues and raises questions about states revenue position after the first five years of GST if the current trend continues. Central and states collected and average RS 93,114 crore a month last fiscal against a ₹1 trillion combined monthly target.

The GST shortfall could make the union government more dependent on cesses and surcharges on various taxes to find resources for compensating states for their revenue shortfall.

The Controller General of Accounts (CGA), the government’s internal auditor, said on Wednesday the central government’s gross tax revenue in the June quarter grew at a slow pace of 2.7% to ₹1.86 trillion from the year ago period. (ends)

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Source: Live-Mint.
GST collection of states, union territories increased to Rs 5.18 lakh crore in FY19, says Nirmala Sitharaman

GST collection of states, union territories increased to Rs 5.18 lakh crore in FY19, says Nirmala Sitharaman

GST collection of states and union territories increased to Rs 5.18 lakh crore in the financial year 2018-19, a significant rise from Rs 2.91 lakh crore in 2017-18, Union Finance Minister Nirmala Sitharaman said in Parliament on Monday. In a written reply to a question in the Lok Sabha, the Finance Minister said the Centre government released Rs 81,177 crore compensation to the states during the fiscal year 2018-19 against Rs 48,178 crore released in FY18.

Saying the high-powered GST Council had made several efforts to improve tax compliance in the country, Sitharaman said: “The GST collection of the states/UTs has been showing steady improvement over the period of time. In addition, they have also assured the growth of 14 per cent for a period of five years through the payment of compensation by the central government.”

She said efforts like extensive automation of business processes, application of e-way bill mechanism, targeted action on compliance verification, enforcement based on risk assessment and proposed introduction of electronic invoice system had improved the GST revenue collection.

The GST collection figure dipped below the Rs 1 lakh crore mark for the first time in the current fiscal in June (Rs 99,939 crore). The indirect tax revenue for March was Rs 1,06,577 crore, Rs 1,13,865 crore in April, and Rs 1,00,289 crore in May. Goods and Services Tax (GST) was rolled out on July 1, 2017, after subsuming 17 local taxes.

Last month, the GST Council, chaired by Finance Minister Nirmala Sitharaman, met for the first time after the Modi government returned to power. The council extended the tenure of the National Anti-Profiteering Authority by two years till November 2021 and allowed the use of Aadhaar as proof for obtaining GST registration. The matter of tax cut on electric vehicles and their chargers was also sent to the fitment committee for further consideration.


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Source: Business-Today.
Over 2 lakh new registrations in Haryana under GST

Over 2 lakh new registrations in Haryana under GST

Haryana Finance Minister Capt Abhimanyu on Tuesday said that over two lakh new registrations have been added under the GST in the state since its roll-out to the existing base of 2.25 lakh payers under the erstwhile VAT.

The Finance Minister said the progress of implementation of GST right from its roll-out in July 2017 was constantly reviewed in the state. Extensive training programmes were conducted for the training of all stakeholders.

“Workshop, seminars, conferences and interactive sessions with the taxpayers are regularly organised. The State has particularly stressed upon the expansion of the tax base,” an official statement quoted Capt Abhimanyu, as saying.

He said that Haryana is contributing handsomely in the GST collections. A total of Rs 36,815 crore was collected from the State under State GST, CGST, IGST and cess for the eight months of GST implementation during 2017-18.

“It is Rs 4,601 crore per month on an average,” he added.

He said that with regard to the state collections under GST, the state collected Rs 10,178 crore including provisional IGST settlement in the financial year 2017-18.

Capt Abhimanyu said that the protected revenue of the state for the year 2017-18 was Rs 13,200 crore. The total shortfall of the state GST revenue after taking into consideration the recoveries of erstwhile Vat and CST was Rs 1,933 crore in the financial year 2017-18.

The state received Rs 1,199 crore from compensation and Rs 667 crore from provisional IGST settlement during this period.

The Finance Minister said that in the financial year 2018-19, the state collected Rs 55,231 crore under state GST, CGST, IGST, and cess contributing Rs 4,602.56 crore per month on an average.

The total collection for Haryana under all the GST Acts is Rs 55,231 crore as against Rs 11,77,370 crore for all the states in the country.

Source: Business-Standard.

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Homestays in Kochi to come under GST, service providers upset

Homestays in Kochi to come under GST, service providers upset

The state goods and service tax department on Monday issued notices to around 50 homestays in Fort Kochi area, stating that they should come under the purview of Goods and Service Tax (GST). There are 250 homestay service providers in the West Kochi and all of them will be issued notices in the coming days by the sales tax department.

Meanwhile, the homestay operators said this move would adversely affect their businesses and lead to the closure of homestays which were the livelihood of around 1,000 people in Fort Kochi area alone. “As per the GST norms, those running services below Rs 20 lakh a year are exempted from registration. But the notice issued by state GST department clearly states that we are liable for paying GST,” said Antony Kureethra, president, Tourism Promoters’ Association, an umbrella organization which has 140 members in Fort Kochi.

The state GST department has also asked homestay operators to come to its office in Kochi on July 17 for a hearing. The homestay owners should also produce the documents like the register of customers, bank statement for 2018-19 period, cash book and receipt book for 2018-19, ledgers and other books maintained by them and the licence issued by the local authority.

Meanwhile, officials with the state GST department said that they just conducted a survey for exploring the possibilities of bringing more establishments under GST. “We conducted the survey as per the direction of the state finance department. We haven’t given notices to the homestay owners seeking GST,” an officer with state GST department said. At the same time, the notice issued by state GST department, a copy of which has been procured by TOI, clearly stated that the homestays are liable for paying GST. “It is found that you are liable to get registered under Section 22 of the CGST/SGST Act, 2017. In order to finalize the enquiry relating to your registration liability, you are requested to furnish the following documents for verification within 7 days,” notice issued to one of the homestay owners stated.

“Many of the operators think that the GST department would come knocking their doors if there is a homestay board at their facilities. So, they have started to remove the boards on Monday night itself,” said one of the homestay owners.

The Tourism Promoters’ Association has decided to approach the top officials of the GST department. They made it clear that the association would move the court if needed.

Source: Times-Of-India.

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Advance Ruling Authority under GST: Does it really solve the taxpayer’s issues?

Advance Ruling Authority under GST: Does it really solve the taxpayer’s issues?

Since the advent of GST Laws, trade and industry have faced multifarious issues relating to uploading of returns, availing legacy Cenvat credit under TRAN-1 form, various confusions regarding the generation of e-way bills and many other such small issues.

When the Government introduced the Advance Ruling Authority under GST, it sought to provide a much wider coverage as compared to the earlier Excise and Service Tax Regime, in order to provide an early resolution of the potential tax dispute coming from the trade and industry. For the first time in any Tax Legislation, an appeal mechanism was provided against the orders passed by the Advance Ruling Authority which was absent under the earlier laws and also under the existing Income Tax Act.

This welcome step by the Govt was met with overwhelming support from the trade and industry and as a result, thousands of applications were filed before the Advance Ruling Authority seeking clarification on a variety of tax issues. Surprisingly, the Advance Ruling Authorities of various states had not only come up with contradictory rulings on the same subject but also most of the rulings were decided in favour of the revenue only. Further, the applicants rarely got any relief before the Appellate Authority of Advance Ruling as well.

Probably, the constitution of this forum, which consists only of revenue officers and not having an independent judicial member is one of the biggest reasons for this outcome. Hence, instead of getting relief, the trade and industry started facing this unique challenge.

This situation was further worsened by the recent order passed by the Bombay High Court in the case of JSW Energy Limited wherein it has been held that no appeal can be filed against an order of the Appellate Authority of Advance Rulings on “merits” since no appeal has been provided under the GST Act. Without going into the merit of this judgment, which seems to have ignored the well-settled proposition of law that a writ petition is indeed maintainable before the High Court, the order of the High Court has certainly created chaos in the Industry.

Seeing this trend, strong perception in the Trade and Industry is getting build as to why one should even approach the Advance Ruling Authority who is likely to decide the matter against the assessee and when practically there is no appeal mechanism against the said order. Whereas if the assessee opts the route of the adjudication, the doors of the tribunal as well as the courts would always be open to seek relief. Given this, it appears that the whole objective of creating this forum to provide speedy resolution of issues, instead of going through the long-drawn litigation route, is getting defeated.

Hence, it was a genuine wish and demand of the industry that the Government should bring some reform in the structure and give life to this forum. Appreciating the need of the industry, the newly elected government in this Budget tried to address this issue by introducing the National Appellate Tribunal for Advance Ruling (NATAR) under Section 101A of the CGST Act, 2017. The proposed NATAR will be presided upon by a retired Judge of the Supreme Court or any High Court and would be accompanied by two technical members representing both the central and the state government.

The composition of the NATAR appears to solve the issue of departmental bias, by introducing a judicial member and also introducing an option of appeal against orders of the Appellate Authority which was previously absent under the GST Laws. However, the wording of proposed Section 101B of CGST Act suggests that an appeal before NATAR would lie only in cases where the views taken either by the members of Appellate Authority of Advance Ruling constituted in the same state or in different states are contradictory.

Though this new proposal by the Government seems to provide relief in some aspects i.e. when there are contradictory views from either of the members of the same Bench or amongst the co-ordinate Benches of different states. However, there is no relief provided against the order of the AAAR if the ruling goes against the assessee. Therefore, the NATAR would have a limited utility and this brings the taxpayer back to square one.

As per the trend of the Advance Authority Rulings thus far, it has been seen that two co-ordinate benches of the Appellate Authority rarely differ in their views when it comes to a single issue. Similarly, a situation wherein the members of the same bench of the Appellate Authority (who are both departmental officers) differ in their opinions, is also rare. Therefore, the NATAR will be limited to addressing rare situations wherein conflicting views have been taken by two or more Appellate Authorities (of different states) or two members of the same Appellate Authority Bench. Thus, despite the introduction of NATAR, effectively there is still no appellate forum available to the assessee having an adverse order of the AAAR.

This issue will only be solved if the NATAR is given wider powers to adjudicate on “any” order passed by the Appellate Authority. Hence while passing the Bill, the Government should make suitable changes in the Bill to provide the much-anticipated relief to the Industry.

In summation, the introduction of the NATAR by the government only solves the issue of the assessee on the surface. However, the real issue of having an efficacious appellate remedy against the orders of the AAR still eludes the taxpayers.


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Source: Business-Today.
Breather for exporters as Centre to pay ITC refund for State GST

Breather for exporters as Centre to pay ITC refund for State GST

In a major relief to exporters, the Centre will now pay the input tax credit (ITC) refunds of state taxes, thereby reducing transaction time and costs, and manual interface in claim processing.

As per industry, there is a huge difference in the amount claimed, state goods and services tax (SGST) sanction amount received from central tax authority and the amount actually disbursed.

“The central government has been authorised to pay the amount of refund towards state taxes to the taxpayers,” according to the 2019-20 budget. At present, the taxpayers file refund claims with the central tax officer, who clears half the claims, and the rest are cleared by the state tax authorities, leading to higher time taken in claim processing and refund sanctioning.

Exporters also say that ITC refund is partly electronic and partly manual. The exporter files refund application at the portal, takes a printout along with acknowledgement and carries it to GST authorities in hard copy along with required documents, which too vary from authorities to authorities. The physical interface adds to the transaction time and cost.

“The states and Centre did their own respective approval of ITC refund but now only one will approve both. This is a relief for exporters as it would reduce transaction time and costs,” said Ajay Sahai, director general at Federation of Indian Export Organisations.

The breather comes as exporters grapple with tight credit norms amid slowing global trade growth. Total disbursement of export credit was Rs 7.38 lakh crore in December 2018, a decline of 20% on year.

Share of PSU banks in total disbursement of export credit declined from 65% in FY16 to 45% in FY18.

Exporters have said the number of refund applications filed on the portal are higher than those received in the state tax office.

“The ability for Centre to give the refund for both the CGST and SGST will ease the problems being faced currently specially by the exporters and remove the delay in getting the entire cash post the sanction of refunds,” said Bipin Sapra, partner at EY


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Source: Economic-Times
GST collections dip below Rs 1 lakh crore in June

GST collections dip below Rs 1 lakh crore in June

Goods and services tax (GST) collections dipped below the Rs 1 lakh crore mark in June for the first time in the current fiscal in what is seen as an impact of the sluggish demand across several sectors, with tax consultants also blaming evasion for the drop in the mop-up.

The numbers, released on the second anniversary of the indirect tax reform measure, coincided with a government warning to evaders, especially those generating bogus invoices to make fraudulent claims. “The menace of fake invoices needs to be checked as it affects honest taxpayers and causes a loss of revenue to the government. Imaandaar traders se Bair Nahin, fake invoice waalon ki Khair Nahin (we have nothing against honest traders, but there will no peace for those generating fake invoices),” junior finance minister Anurag Thakur said at the GST Day event.

‘Expect increased audit and scrutiny over the next few months’

Using technology, the government has detected thousands of traders, many of whom were using shell companies to generate fake invoices and claim tax credits and refunds. Sales of durables and cars, as well as consumer goods, have taken a beating in recent months, which analysts said is reflecting in tax data.

Although tax collections have dipped in June, Thakur said the government would meet the GST collection target set for the fiscal year. During 2019-20, the government is targeting to collect Rs 6.1 lakh crore through Central GST and a shade over Rs 1 lakh crore via compensation cess on luxury and sin goods such as cars, tobacco, aerated drinks, and coal. The IGST balance has been estimated at Rs 50,000 crore.

During June, Central GST collections were pegged at Rs 18,366 crore, while State GST mop-up was pegged at Rs 25,343 crore, the finance ministry said in a statement.

“More than the amount, it’s important to note that it (growth) is only 4.5% higher than the corresponding period of last year, which should be below the government’s expectations… (it) will be a concern and we should expect some tangible measures in the form of increased audits and scrutiny over the next few months. In addition, the government may explore options as to how consumers can be incentivized to be more vigilant on tax compliance,” said Pratik Jain, partner at PwC India.

EY tax-partner Abhishek Jain said the steps planned by the government in the coming days — such as up-gradation of e-way bills and launch of e-invoicing — will help check evasion even as revenue secretary Ajay Bhushan Pandey promised more reforms in the coming months.


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Source: Times-of-India.