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Forthcoming changes in E-Waybill system

Forthcoming changes in E-Waybill system

1. Auto calculation of route distance based on PIN code for generation of EWB

Now, E-waybill system is being enabled to auto calculate the route distance for movement of goods, based on the Postal PIN codes of the source and destination locations. That is, the e-waybill system will calculate and display the actual distance between the supplier and recipient addresses. The user is allowed to enter the actual distance as per his movement of goods. However, it will be limited to 10% more than the displayed distance for entry. That is, if the system has displayed the distance between Place A and B, based on the PIN codes, as 655 KMs, then the user can enter the actual distance up to 720KMs (655KMs + 65KMs). In case, the source PIN and destination PIN are same, the user can enter up to a maximum of 100KMs only. If the PIN entered is incorrect, the system would alert the user as INVALID PIN CODE. However, he can continue entering the distance. Further, these e-waybills having INVALID PIN codes are flagged for review by the department.

Route distance calculation between source and destination uses the data from various electronic sources. This data employs various attributes, for example: road class, the direction of travel, average speed, traffic data etc. These attributes are picked up from traffic that is on National highways, state highways, expressways, district highways as well as main roads inside the cities. A proprietary logic is then used for approximating the distance between two postal pin codes. The distance thus derived is then provided as the motorable distance at that point of time.

2. Blocking of generation of multiple E-Way Bills on one Invoice/document

Based on the representation received by the transporters, the government has decided not to allow generation of multiple e-way bills based on one invoice, by any party – consignor, consignee, and transporter. That is, once E-way Bill is generated with an invoice number, then none of the parties – consignor, consignee or transporter – can generate the E-Way Bill with the same invoice number. One Invoice, One E-way Bill policy is followed. The change will come in the next version.

3. Extension of E-Way Bill in case Consignment is in Transit

The transporters had represented to incorporate the provision to extend the E-way Bill when the goods are in transit. The transit means the goods could be on Road or in Warehouse. This
the facility is being incorporated in the next version for the extension of E-way Bill. During the extension of the e-way bill, the user is prompted to answer whether the Consignment is in Transit or in Movement. On selection of In Transit, the address details of the transit place need to be provided. On selection of In Movement, the system will prompt the user to enter the Place and Vehicle details from where the extension is required. In both these scenarios, the destination PIN will be considered from the PART-A of the E-way Bill for calculation of distance for movement and validity date. Route distance will be calculated as explained above.

4. Blocking of Interstate Transactions for Composition dealers

As per the GST Act, the composition taxpayers are not supposed to do Interstate transactions. Hence next version will not allow generation of an e-way bill for inter-state movement, if the supplier is composition taxpayer. Also, the supplies of composition taxpayers will not be allowed to enter any of the taxes under CGST or SGST for intrastate transactions. In the case of Composition taxpayer, document type of Tax Invoice will not be enabled.


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Above article was posted on the E-way Bill Government Website Click here to read more

Source: Ewaybillgst.gov.in
Telangana State GST collections soar

Telangana State GST collections soar

Telangana continues to register impressive growth in the collection of Goods and Services Tax (GST) in the current year, maintaining more than 20 per cent growth till the end of February. Interestingly, the State collected a whopping Rs 1,040 crore of State GST (SGST) in February when the national level GST collections were Rs 97,246 crore, down from Rs 1.02 lakh crore collected in January.

In GST era, February 2019 has been the best month for the Commercial Taxes Department of Telangana government. The officials collected Rs 1,040 crore of SGST in last month, beating previous best of Rs 1,021 crore collected in April last year. The officials could achieve the targets and collect nearly Rs 3,000 crore of GST including SGST, Central GST (CGST) and Integrated GST (IGST) in February.

“Despite a nation-wide drop in GST collections, we could achieve the growth due to consistent pursual of pending cases of GST arrears. We hope to beat the February collections during March as the financial year comes to an end,” said an official in the Commercial Taxes department, which issued notices to traders who failed to pay their arrears.

The State’s growth in tax collection has been one of the highest in the country. The State collected Rs 904 crore State Goods and Services Tax (SGST) in March 2018, a record of sorts after the implementation of GST from July 2017. The State registered nearly Rs 22,700 crore GST collection between April 2018 and February this year. Except for July when the collections were down by over Rs 250 crore, the State’s GST collection has been consistently above the previous year’s monthly collection.

Meanwhile, the nation-wide GST collections have reduced over the past few months and GST revenues of the Central government stood at Rs 97,246 crore in February against Rs 1.02 crore collected in January this year. In all, the Central GST collections were Rs 17,626 crore, while the State GST collections were Rs 24,192 crore and integrated GST collections were at Rs 46,953 crore in February. Another Rs 8,476 crore was collected as cess under various accounts. During the corresponding period last year, the GST collections were Rs 85,962 crore which is 13.12 percent less than this year. As on February 28, the GST collections were Rs 10.7 lakh crore across the nation. The number is likely to increase by at least Rs 1 lakh crore.

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Source: Telangana Today
No arrest can be made without following procedures in GST evasion cases: HC

No arrest can be made without following procedures in GST evasion cases: HC

The Bombay High Court on Wednesday gave an ad interim relief that no arrest can be made without following the procedures in cases of GST evasion.

The court direction came in a matter involving allegations of evading GST by circular trading and claiming an input tax credit (ITC) through fake invoices.

The matter is based on Section 132 of the Central GST (CGST) Act. It clearly says that if the amount of tax evaded or ITC availed on the basis of fake invoices is less than ₹5 crore, then the offense would be bailable and non-cognizable. However, if the amount is more than ₹5 crore it would be non-bailable and cognizable. Though the matter presented before the court involved allegations of tax evasion amounting little over ₹3 crore, the petitioner highlighted other cases as well.

It was said that based on the circular trading and issuance of fake invoices, there have been various arrests in the country.

However, it was alleged that, in few cases where the proceedings had been initiated by the authorities, there were procedural irregularities and the offense falls clearly within the category of ‘non-bailable and cognizable offense’. Criminal writ petitions have been filed in the Bombay High Court to ensure personal liberty.

One of the petitioner’s firms, during February-October 2018, received metallic scrap from a vendor. It was substantially consumed on the manufacturing process and roughly 1.86 percent of the quantum of metallic scrap received was sold as such to other persons on account of the inferior quality of the products. The petitioner claimed that GST amounting to ₹3.2 crore was paid on such supply, out of which ₹33 lakh were reversed through debit note due to poor quality. All these transactions were duly reported in the GST returns filed.

However, the tax authority alleged, during the course of an investigation, that the petitioner had availed input tax credit on invoices without actually receiving the supply. As per the purported allegations it seeks to dispute all the quantum of input tax credit availed during February-October 2018 without any basis and accordingly qualify the offense as ‘cognizable’ and ‘non-bailable.’

No loss of revenue
“Section 132 of the CGST Act provides that offenses prescribed become non-bailable and cognizable offenses only when the loss to the exchequer is more than ₹5 crore and the relevant provisions of the GST Act have been contravened,” Abhishek A Rastogi of Khaitan & Company said. He argued a couple of such criminal writ petitions in the Bombay High Court on Wednesday while emphasizing that no arrest should be made when there is no loss of revenue to the exchequer.

Risk of judicial custody
“There is a high risk of judicial custody in various cases and hence the accused should seek an ad interim protection with a court direction that the proceedings should be conducted in a fair manner after following all the procedures and the judicial custody is ordered only in those cases which clearly fall within the offenses prescribed as non-bailable and cognizable,” Rastogi said.


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Source: The Hindu Business Line
EC gives go-ahead to GST Council meeting on March 19

EC gives go-ahead to GST Council meeting on March 19

The Election Commission has given approval for holding the upcoming GST Council meeting on March 19 to consider various issues including the implementation of lower GST rates for the real estate sector.

The next meeting will be held through video conferencing, sources said.

Following the approval from the Election Commission, sources said, notices have been sent from the GST Council Secretariat to states for the 34th meeting of the Council on March 19, they said.

The nod from the Election Commission was required as the Model Code of Conduct has been in force since Sunday.

The meeting will be held to discuss only transition provision and related issues for the implementation of lower GST rates for the real estate sector, the sources said.

In the previous meeting, the high-powered GST Council slashed tax rates for under-construction flats to 5 percent and affordable homes to 1 percent, effective April 1.

Currently, the goods and services tax (GST) is levied at 12 percent with an input tax credit (ITC) on payments made for under-construction property or ready-to-move-in flats where completion certificate is not issued at the time of sale. For affordable housing units, the existing tax rate is 8 percent.

GST collections in February dropped to Rs 97,247 crore from Rs 1.02 lakh crore in the previous month.

Of this, Central GST was Rs 17,626 crore, State GST (SGST) stood at Rs 24,192 crore, Integrated GST Rs 46,953 crore and cess was Rs 8,476 crore.

GST collections in the current fiscal till February totaled Rs 10.70 lakh crore.

The government has lowered the GST collection target for the current fiscal to Rs 11.47 lakh crore in the Revised Estimates, from Rs 13.71 lakh crore budgeted initially.

GST collection stood at Rs 1.03 lakh crore in April, Rs 94,016 crore in May, Rs 95,610 crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August, Rs 94,442 crore in September, Rs 1,00,710 crore in October, Rs 97,637 crore in November, Rs 94,725 crore in December 2018 and Rs 1.02 lakh crore in January 2019.

For the next fiscal 2019-20, the GST collection target has been fixed at Rs 13.71 lakh crore.

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Source: Economic Times
New GST rules to boost tax payments in cash

New GST rules to boost tax payments in cash

A new rule on businesses adjusting their final GST liability against credit for taxes already paid on raw materials and services is pushing up their tax payments made in cash, experts say.

The amendments to central and state GST laws made in 2018 and brought into effect from February 2019 have the unintended consequence of certain tax credits getting piled up without getting used for meeting the final tax liability of businesses, they said.

The amendments prescribe the order in which credits for past payment of various components of GST can be adjusted against the tax liability on the final output of a business. The new norms restrict using credits for central and state components of GST (CGST and SGST) unless credits for taxes paid on inter-state transactions are fully used.

GST involves two equal components on any transaction—Central and state GST—that go to the respective governments. Inter-state supplies attract integrated GST (IGST), which is eventually apportioned between the union and state governments.

According to the new norms, credit for IGST has to be exhausted before using credit for central or state GST paid in the past for meeting CGST and SGST liability, respectively.

This, in many cases, leads to a situation where the more flexible IGST credit is used up for paying CGST liability fully, forcing businesses to pay at least part of SGST liability in cash. It takes away the flexibility in the utilization of tax credits.

Unlike credits for IGST, the same for CGST and SGST can’t be cross-utilized. This results in tax payment in cash while tax credits remain on the books of the company.

Experts said that although unintentional, the move is pinching businesses.

“This amendment has become a point of worry for most industry players as they may now have to pay SGST liability in cash even in scenarios where prior to this amendment it could be paid by utilizing credits. What led to this is the introduction of this new rule of utilization of IGST credit,” said Abhishek Jain, tax partner, EY.

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Source: Live Mint
GST collections drop to Rs 97,247 crore in February

GST collections drop to Rs 97,247 crore in February

GST collections in February dropped to Rs 97,247 crore in February from Rs 1.02 lakh crore in the previous month, the Finance Ministry said on March 1.

The number of sales return or GSTR-3B filed for the month of January up to February 28, 2019 is 73.48 lakh. “The total gross GST revenue collected in February 2019 is Rs 97,247 crore of which Central GST is Rs 17,626 crore, State GST (SGST) is Rs 24,192 crore, Integrated GST (IGST) is Rs 46,953 crore and Cess is Rs 8,476 crore,” the ministry said in a statement. Goods and Services Tax (GST) collections in the current fiscal till February totalled Rs 10.70 lakh crore.

The government has lowered the GST collection target for current fiscal to Rs 11.47 lakh crore in the Revised Estimates, from Rs 13.71 lakh crore budgeted initially. For the next fiscal 2019-20, the GST collection target has been budgeted at Rs 13.71 lakh crore.

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Source: Money Control.
Companies stare at cash flow problems on account of GST credits

Companies stare at cash flow problems on account of GST credits

A tweak in the rule on availing goods and services tax (GST) credits may create cash flow problems for some companies starting this month. The change is in the way companies can set off tax paid on raw material against those levied on the goods they sell, which is meant to avoid double counting of taxes.

According to the credit utilisation mechanism announced late last year, companies can set off their tax liabilities by first utilising their integrated GST (IGST) credits before availing of their central GST (CGST) and state GST (SGST) credits. Previously, companies could set off IGST credits against both CGST and SGST.

Tax experts said this has started to result in situations where companies end up paying GST in cash even though they have credits on their books. “This amendment has become a point of worry for most industry players as they may now have to pay SGST liability in cash even in scenarios where prior to this amendment, these could be paid by utilising credits. The reason being the introduction of this new rule of utilisation of IGST credit,” said Abhishek Jain, tax partner at EY India. IGST credits are accumulated by companies that import goods or source them from vendors in other states. Collections under IGST are shared between the central and the state governments. Tax experts said the regulation change could result in litigation.

“The main objective of GST is that there should be no tax cascading, but the underutilized or non-utilised credit would lead to exactly that. The constitutional validity of this tax cascading could be challenged in court,” said Abhishek A Rastogi, a partner at Khaitan & Co.

The only way companies can solve this problem is by altering their supply chain structures. However, this may not be possible for most companies because supply chains cannot be determined merely to save taxes, industry experts said.

With the new regulation requiring utilisation of IGST credits first, industry experts said that many companies with a national presence will have credits accumulated in one state and taxes pending in other states.


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Source: Economic Times
Delayed filing of returns: Rs 4,172 crore late fee collected since GST launch

Delayed filing of returns: Rs 4,172 crore late fee collected since GST launch

Fee for late filing of returns is Rs 25 per day for CGST and an equal amount under State GST. A total of Rs 4,172.44 crore was collected by the government as late fee for the delayed filing of various goods and services tax (GST) returns since the implementation of the indirect tax regime on July 1, 2017, till February 4, 2019, Finance Ministry data showed.

GST-related laws provide for the levy of late fee to discourage delayed filings of returns, the fee for which has been brought down for various categories during the course of implementation of the indirect tax regime. The collections under late fee are net of reversals.

The fee for late filing of the returns is Rs 25 per day for Central GST (CGST) and an equal amount under State GST (SGST). However, those businesses who have to file returns but have ‘nil’ tax liability are required to pay a fine of Rs 10 under CGST law, and an equal amount under SGST law.

While providing the data on mop-up from levy of late fee in reply to a query in Lok Sabha recently, Minister of State for Finance Shiv Pratap Shukla, said: “Late fee is levied u/s 47 of the CGST Act, 2017 on any registered person who fails to furnish returns by the due date at the rate of Rs100 every day during which such failure continues subject to maximum amount of Rs 5,000.

To ameliorate the concerns of taxpayers and to smoothen the transition to new regime the government had reduced the late fee for delayed filing of details in Form GSTR-1 and returns in Form-GSTR-3B and Form GSTR-4 to Rs 25 for every day during which such failure continues, subject to maximum amount of Rs 5,000 under CGST and an equal amount under SGST, he said.

The GST Council in its 31st meeting held on December 22 had announced a one-time waiver for late filing penalty for those who are supposed to file GST returns till March 31 following demands for the same from several quarters. “Late fee shall be completely waived for all taxpayers in case of Form GSTR-1, Form GSTR-3B & Form GSTR-4 for the months/ quarters July 2017 to September 2018 are furnished after December 22, 2018, but on or before March 31, 2019,” the ministry statement had said. Also, the due date for filing of annual returns was extended up to June 30, 2019.

Under the GST regime, registrants are supposed to file GSTR-1 which is the final sales return and GSTR-3B return, which is the summary sales return filed by businesses. GSTR-4 is filed by businesses who have opted for composition scheme under the GST law.

As on December 27, 2018, 1,17,48,408 taxpayers were registered under GST which include 60,73,574 existing taxpayers who have migrated to GST and 56,74,834 newly registered taxpayers.

While revenue from direct taxes are estimated to exceed the initial budget target by Rs 50,000 crore to Rs 12 lakh crore in 2018-19, the goods and services tax collections have fallen short of the budget target by Rs 1 lakh crore, with revised estimate for 2018-19 pegged at Rs 6.44 lakh crore, according to interim Budget 2019-20 presented on February 1.

GST collections have remained below estimates, but average collections have improved in the current fiscal year over the previous year. The average monthly gross collection of GST in 2018-19 till the month of January is Rs 97,555 crore, as compared to last year average monthly collection of Rs 89,885 crore.


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Source: Indian Express.
Tax authorities to levy interest on cash, ITC component of GST paid after due date

Tax authorities to levy interest on cash, ITC component of GST paid after due date

Officials to conduct due verification of all cases of late filing of returns
Tax authorities have made it clear that interest will be levied on both cash and input tax credit (ITC) component of GST paid after the prescribed due date.

Although the standing order has been issued by the Principal Commissioner of Hyderabad GST Commissionerate, experts say the same will be applicable for all the regions as it draws an inference from C-GST (Central Goods & Services Tax)/S-GST (State Goods & Services Tax) Act. The order also made it clear that recovery of such interest will be recoverable arrears.

It has also asked the officials to conduct due verification of all the cases of late filing of returns (which obviously involve payment of self-assessed tax after the prescribed due date) and ensure that the interest liability is paid not only on the cash component but also on the credit component.

The order also says that in case the interest was not discharged by any taxpayer, the concerned officer(s) should initiate prompt action for recovery of the same. It also states that a register will be maintained, in the divisions, in order to keep track of the cases and will be updated on a regular basis with proper abstract; and the unpaid interest amount shall be pursued for recovery by treating the same as recoverable arrears.

The order has recorded some irregularities like interest liability not being discharged by some taxpayers. It is possible that some taxpayers are discharging such interest liability, either at the instance of the officers of the department or on their own as convenient to them while filing subsequent returns. It is also possible that some taxpayers are paying such interest only on the cash component of the tax, but not on the ITC component.

On priority
“These irregularities are against the provisions of the GST law and need to be addressed on priority. In fact, the delay in payment of interest is a clear case of financial accommodation; and is absolutely against the interest of the revenue,” the order read while calling for prompt action to recover interest.

The law says, “Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made there under, but fails to pay the tax or any part thereof to the government within the period prescribed, shall, for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the government on the recommendations of the Council.” The provision is the base of this order.

Augmenting revenue
Commenting on the order, Anita Rastogi, Indirect Tax Partner at PwC, said in order to ensure revenue augmentation, the government is focusing on available data to figure out areas where the taxpayers have short paid. “Interesting they have noticed evasion of interest and that will be an area of further investigation,” she said.


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Source: The Hindu Business Line.
GST collections drop to Rs 94,726 cr in December, lowest in three months

GST collections drop to Rs 94,726 cr in December, lowest in three months

The government collected Rs 94,726 crore as goods and services tax (GST) in December, lower than the collection in the previous two months.

With a shortfall in seven of the nine months so far in 2018-19, GST collection in January, February and March has to be on average Rs 1.23 trillion to meet the budgeted target, according to calculations byBusiness Standard. While states are relatively safe due to compensation, the Centre’s fiscal position is in peril.

Against expectations of Rs 6.04 trillion from the Central GST (CGST) in 2018-19, CGST revenue stands at Rs 3.41 trillion in nine months (April-December), or 56 per cent of the annual target.

The Centre needs Rs 87,000 crore in January, February and March at least to recoup this shortfall. This includes tax collected as CGST as well as settlement towards CGST from IGST account. In comparison, the highest inflow as CGST was recorded in July 2018 stood at Rs 58,796 crore.

Admitting that the fiscal year would end with some shortfall, finance ministry officials said the amount would be near Rs 40,000 crore. Cuts in revenue and capital expenditure would be imperative, they said.

Experts said enhanced revenue from other indirect taxes and income tax would not be sufficient to make good the gap, and, as a result, anti-evasion measures would gain prominence.

“CGST collection so far suggests an impending shortfall relative to the budgeted estimate this fiscal year. A provisional settlement of the Integrated GST (IGST), as well as the residual GST compensation cess that remains after disbursal to states, will be key in augmenting the Centre’s cash flows in the coming months,” said Aditi Nayar, principal economist, ICRA.

The slowdown is surprising especially since Diwali fell in November, the month the December collection represents.

“The collections, while admittedly below the targets, seem to indicate the revenue is stabilizing at around Rs 95,000 crore a month, despite the rate reductions in the current fiscal year. A lower revenue than the target could lead to more compliance pressures on businesses and more focus on anti-evasion measures,” said M S Mani, partner, Deloitte India.

Recovering evaded GST would also be important for meeting the annual target, said Pratik Jain, partner, indirect tax, PwC India.

Tax evasion detected in April-November stands at Rs 12,767 crore, of which Rs 7,910 crore has been recovered, according to the data presented by the finance ministry in Parliament.

“We should expect greater enforcement and investigations of cases in the next few months,” said Jain.

The GST Council, in its December 22 meeting, slashed the rates of 23 items, of which six were in the top slab of 28 per cent. This would help in improving compliance, experts said.

December recorded the highest number of monthly returns (GSTR-3B) filed, at 7.24 million, 4 per cent more than 7 million filed in November.

However, this might make further rate cuts difficult, some experts said.

“The slight dip in GST revenue collections as compared to the last two months is a bit discouraging. This may deter the government from rationalising the rate of goods left in the 28 per cent category like cement and auto parts in the short term,” said Abhishek Jain, tax partner, EY India


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Source: Business-Standard