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No GST on CXO salaries: Government set to clarify

No GST on CXO salaries: Government set to clarify

The government is looking to clarify that goods and services tax (GST) should not be applicable on salaries of chief executives sitting in head offices, two people in the know said.

This comes after the tax department started raising queries on how companies have dealt with this issue. ET had first written on November 14 that some of the top companies headquartered in Pune, Mumbai and New Delhi have started receiving queries from the tax department on cross-charging of CEO and CFO salaries.

According to a person close to the development the Central Board of Excise and Customs (CBEC), is set to clarify that common function like Human Resources should be out of the GST gamut.

“The intention of the GST law was never to tax salary and any other interpretation should be avoided as this would lead to prolonged litigation. Salary cannot be under the GST net and there is an urgent need for a clarification around this,” said Rohit Jain, partner, ELP, a law firm.

The tax department has started questioning top companies and banks if they were passing on some of the common costs like salaries of chief executives to their branch offices.

The department wants companies to proportionately distribute common costs from head office to branch offices and treat this as a supply. Once this is treated as a supply, 10% of it has to be added to the cost and 18% GST could be levied on the total amount.

Industry trackers say that ideally this would be a revenue neutral transaction but still impact the cash flows of the company.

Source: Economic-Times

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Source: Business-Standard.
GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you

GST taxpayers alert! CBIC is going to use this unique number from Friday, here’s how it will benefit you

In order to protect GST taxpayers from any harassment at the hands of errant tax officials, the Central Board of Excise and Customs (CBEC), is going to use a unique number in every communication with taxpayers from Friday. Initially, the department will use this unique document identification number (DIN) mostly for investigation related communications such as arrest warrants and search authorizations and it will be later expanded to cover all the communication issued by the officers of the board. All the communication issued on or after November 8 without a computer-generated document identification number will be invalid and deemed to have never been issued, said the CBIC in a letter issued to all the top officers on Tuesday.

The new document identification number to be used by the CBIC is similar to the one used by the CBDT since October 1 this year. GST taxpayers and recipients of summons, search warrants will be able to verify the genuineness of the document by visiting the CBIC’s website.

“The board in exercise of its powers under section 168(1) of the CGST Act, 2017 and Section 37B of the Central Excise Act, 1944 directs that no search authorization, summons, arrest memo, inspection notices and letters issued in the course of any inquiry shall be issued by any officer under the Board to a taxpayer or any other person, on or after the 8th day of November, 2019 without a computer generated Document Identification Number (DIN) being duly quoted prominently in the body of such communication,” said the CBIC in a letter issued on November 5, which was reviewed by the Financial Express Online.

The letter which was issued by the GST Investigation wing under the department of revenue, ministry of finance also made it clear that no communication issued on or after November 8 will be valid without a system-generated DIN number.

“The board also directs that any specified communication which does not bear the electronically generated DIN and is not covered by the exceptions mentioned in para 3 shall be treated as invalid and shall be deemed to have never been issued,” said the CBIC.

What is Document Identification Number (CBIC-DIN) in GST
1. In order to prevent the harassment of genuine taxpayers at the hands of tax officials, the government has decided to create a proper audit trail of all the communications issued by the Central Board of Indirect Taxes and Customs.

2. The 20 digit unique Document Identification Number (DIN or CBIC-DIN) will be computer generated and it will be prominently displayed in the body of the document issued by the officers under the board.

3. Only authorised officers will be entitled to generate CBIC-DIN from the utility developed by the Directorate of Data Management (DDM) hosted on the online portal of the CBIC.

4. Use of CBIC-DIN will be compulsory from November 8, 2019 and no communication without it will be valid.

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Source: Financial Express.
Expedite GST practitioners’ registration: CBIC chief

Expedite GST practitioners’ registration: CBIC chief

The Goods and Services Tax (GST) came into effect in the country nearly a year ago. GST: CBIC chief Vanaja SarnaBut several indirect tax experts find that they still haven’t been approved as GST practitioners, despite having applied for registration months ago via the GST portal.

In this backdrop, the chairperson of the Central Board of Indirect Taxes and Customs(CBIC — earlier known as CBEC), Vanaja Sarna, recently wrote to officials to expedite the process. Her letter dated May 4 says, “I would urge the officials to expedite the process of approval of GST practitioners. A proactive approach in facilitating the enrolment and helping the applicants in case they have committed any bona fide mistakes while making the application will only further our cause of achieving a trade-friendly image for the department.”

Rajeev Khandelwal, chartered accountant and an indirect tax expert, says “I applied on December 7, 2017. Since the last five months, there was no news on the same and the status was shown as ‘pending for processing’ on the GST portal. Recently, I received a letter (not a digital intimation) from the department stating that, due to some problems in the GST portal, it has been decided that the GST practitioner certificates will be given manually.” He was asked to submit documents such as educational qualifications and address proof by May 4. The letter was also dispatched by the authorities on the same date. He finds it mind boggling that he was also asked to produce a certificate or a declaration that he is a “person of sound mind”. “Will anyone admit to being of unsound mind?” he asks.

Government officials TOI spoke to admit that there are a few conditions for being a GST practitioner: He/she must be a citizen of India, must be of sound mind, should not have been adjudged as an insolvent and should not have been convicted of an offence with imprisonment of two years or more. They agree that it is unclear who should be giving a certificate that an applicant is of sound mind (whether a recognised hospital or a professional institution, if the applicant is a member of one).

Officials add that the self-declaration in this regard was meant to speed up the application process. A Mumbai-based chartered accountant says, “The application had to be made online, the enrolling authority can be Centre or state. In my experience, several applications where the enrolling authority was at state level faced delays.”

On a CA discussion portal, the general advice being given to participants is: The best option is to apply again for registration as a GST practitioner, but with a different email and phone number, and also selecting the enrolling authority as Centre.

There are other professionals who have been lucky enough to have got registered within one-three weeks. In the backdrop of the CBIC chief’s letter, those waiting anxiously have revived their hopes.

Once registered as a GST practitioner, an individual can file various forms on behalf of clients, make deposits for credit into the electronic cash ledger and appear as an authorised representative. He or she can, after confirmation from clients, also file a refund claim or an application for amendment or cancellation of the registration. Registration does not require a chartered accountancy qualification. Even certain graduates — say, from the commerce field — or certain retired revenue officials can register to be GST practitioners.

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Source: Times of India
Indirect taxes collection could fall short of target due to GST

Indirect taxes collection could fall short of target due to GST

GST-Penalty-and-Fine

Indirect taxes collection by the government may fall short of the target during the current financial year due to disruption caused by the GST rollout, Central Board of Excise and Customs (CBEC) chairperson Vanaja Sarna said on Sunday. For the fiscal year ending March 2018, the government had fixed a target of Rs 9.68 lakh crore for revenue collections from customs and goods and service tax. However, the CBEC chairperson said there was no plan to revise the revenue collection target for the year. The CBEC is the apex body for the administration of indirect taxes and forms part of the revenue department of the Ministry of Finance. The revenue collection target from customs and GST, which put together is Rs 9.68 lakh crore for the current fiscal, seems difficult for the department to achieve at the moment, keeping in view the recent GST rollout, the CBEC chairperson said in Mumbai.

Also Read: GST Council may fix single tax rate for similar product categories

She was talking informally to journalists on the sidelines of the half marathon organised by the customs department. Finance Minister Arun Jaitley also attended the event. However, Sarna said the government has made it clear that it has no plans to revise the target. Rather, it will wait for the GST rollout to settle down over the next five to six months. Goods & Service Tax was rolled out on July 1 Moreover, the department will not penalise traders for any default on tax payment at the moment, she said. Customs has done well but we have to wait till the GST rollout settles down, she added. In reply to a query, Sarna said close to Rs 200 crore has been disbursed by the department in the form of refunds to exporters so far. Right now, she said, the department wants to be a facilitator for the GST implementation. It is not our job to penalise traders at the moment. This is despite the fact that our intelligence officials are constantly keeping a close watch on the entire development related to goods and service tax, she added.


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Source:  Business Today
Huge gap between GST returns, filing and eligible taxpayers: Survey reveals reasons why

Huge gap between GST returns, filing and eligible taxpayers: Survey reveals reasons why

gst-economic-survey

A survey by the revenue department has detected multiple reasons for the glaring gap between the number of eligible taxpayers on the Goods and Services Tax Network (GSTN) and the tax returns being filed in each month. Apart from lack of internet connectivity with some of the taxpayers and GSTN’s technical glitches, lack of funds for paying taxes and a notion that no returns are needed to be filed in case of nil supplies caused returns trailing the eligible taxpayer base, Mahender Singh, member (GST), Central Board of Excise and Customs, told FE. The problems encountered differed depending on the taxpayers’ profiles, he said, adding that the department would continue its outreach programme, including hand-holding of small taxpayers to ensure more returns are filed. Even after several weeks have passed after the deadline for filing the interim return GSTR-3B for July, at least 10 lakh of the 65 lakh eligible taxpayers haven’t filed it so far. Similar gaps existed in the subsequent two months as well.

Some assessees haven’t filed returns as they are below the GST threshold (Rs 20 lakh annual turnover) but have migrated to GSTN from the earlier VAT regime, which had a lower threshold. A section of these assesses is awaiting de-registration from the portal. Assessees dealing in exempt supplies have also chosen not to file returns. “We didn’t find any common theme (for the slow filing of returns)… Instead, there are myriad reasons for the same. However, these issues can be resolved by continuing our outreach programme effectively,” Singh said.The government had waived late fee for filing returns for July. It extended the waiver to August and September also on Tuesday.

Also Read: More relief for SMEs as GST Council set to reduce late filing penalties

Although, nearly 95% of GST revenue comes from less than 5% taxpayers, the government needs data from all eligible taxpayers to analyse the impact of GST more efficiently and accurately. However, with many taxpayers not filing returns, the vital GST feature which matches sales and purchases of businesses to check tax avoidance could be difficult to implement. Revenue secretary Hasmukh Adhia had told FE earlier that the department could look at non-coercive ways to improve compliance. The revenue department is keenly watching the first cycle (July) of filing comprehensive returns (GSTR-1, GSTR-2 and GSTR-3) which ends on November 10.

The uncertainty over tax filings has prevented the GST Council from announcing dates for filing the detailed returns for subsequent months. “We will make a decision on dates for later months after the experience from July results,” Singh said. Even among businesses that filed the interim returns, a large segment (40% in July) paid no tax in cash. Although the government is reconciled to this given that in the initial two months after GST roll-out the accumulated transitional credit was high and was to be legitimately used. It is another matter that the credit would be allowed in a staggered manner (up to December) to avoid a temporary revenue shortfall. Also, there are players who deal with exempted (zero tax) goods and items outside the GST ambit. Still, the government feels that the gap between the eligible taxpayers and GSTR 3 B filings is still large.


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Source : Financial Express
Tracking the GST that you pay is now at your fingertips!

Tracking the GST that you pay is now at your fingertips!

GST Track Mobile

A mobile app to help consumers verify the rate of GST levied on the product they purchase, or the service they access, and to assist the tax authorities in the crackdown on enterprises retaining the tax they collect, is to be launched soon by the Telangana government.

The Commercial Taxes Department and IIT-Hyderabad have developed the TGST app and its beta version is available, Principal Secretary-Commercial Tax and Excise Somesh Kumar said here on Thursday.

Keep track of the GST you payExplaining the benefits, Mr. Somesh Kumar said a consumer needs to merely upload a photo of the bill issued to them by an enterprise on the app. The photo gets “automatically uploaded to the server and then (the bill) is processed by us. The consumer gets a feedback on whether the enterprise was enrolled under goods and service tax and was charging the correct rate.”

Read: Are businesses really facing problems or is it just another political stunt with GST?

It would bring in more transparency and act like a feedback mechanism. The app would also provide information on whether the enterprise had opted for the composition scheme under GST, he said. Firms that have opted for the scheme are not supposed to levy tax, including a hotel, Mr. Kumar said in an interaction with presspersons on the sidelines of the conference on ‘GST – Post Implementation Issues’. Earlier, addressing the conference organised by industry body Assocham, the senior official said it has been 100 days since the roll-out of goods & service tax and revenue income was improving. The GST Council, he added, was addressing issues concerning the exporters as well as small and medium enterprises. In two months, Rs 2,800 crore had been collected in the State, he said.

Additional Commissioner-GST (Rangareddy) Manjula D. Hosmani said at the conference that the government was aware and reacting proactively to the concerns related to GST. As of October 5, of the 2.21 lakh registered assessees under Goods & Service Tax, around 1.37 lakh had filed their GSTR-3B, she said, advising them to avoid last minute rush in filing returns. Former Chairman of CBEC S. Dutt Majumder said GST is a work in progress and the glitches were being addressed.


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Source: The Hindu
48 hours to go: Only 6.9 lakh taxpayers file GST returns

48 hours to go: Only 6.9 lakh taxpayers file GST returns

Total registrants under GST is 85 lakh, which includes about 23.18 lakh new taxpayers and 62.25 lakh taxpayers who have migrated from the VAT, excise and service tax regime.

GST returnWith the deadline for filing Goods and Services Tax (GST) returns for August coming to an end in less than 72 hours, only 6.9 lakh taxpayers have filed their GSTR-3B- a short summary return, at the end of Monday, said sources familiar with the development. The government expects tax returns from about 64 lakh tax payers for the month of August. According to the data accessed by The Indian Express, about 4.99 lakh tax payers had filed 3B returns for August till September 17. The deadline for filing GSTR-3B will end on September 20.

GSTR-3B is a single page summary return form that is to be filled by all normal registered tax payers on self assessment basis. In the GSTR-3B, assessees need to furnish summary of information about sale and purchase, available input tax credit (ITC), tax payable and tax paid. The 3B tax return does not have to be filed by Input Service Distributor (ISD), a Non-Resident Person, Tax Collector at Source (TCS), Tax Deductor at Source (TDS) & Composition Dealers.

On Saturday, Sushil Kumar Modi, Deputy Chief Minister of Bihar, who is heading the newly-formed Group of Ministers to look into the glitches of the GST Network said that while 46 lakh taxpayers had filed their 3B returns for the month of July, for August, only 3.05 lakh GSTR-3B returns had been filed till Saturday. The total number of registrants under GST is 85 lakh, which includes about 23.18 lakh new taxpayers and 62.25 lakh taxpayers who have migrated from the earlier VAT, excise and service tax regime. About 11 lakh dealers have registered under the composition scheme, Modi had said.


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“Already decided that first cycle of GSTR 1,2,3 will be given a long rope…time for GSTR 1 is October 10, GSTR 2 will be October 31 and GSTR 3 will be November 10…In the meantime we have extended the time for GSTR-3B for six months. So, for 6 months people have to file their self-assessed summary return by 20th of the next month and there is not going to be any extension of time as far as 3B is concerned,” Revenue Secretary Hasmukh Adhia had said.

According to experts, the GSTN portal will get tested once again with the taxpayer rushing to file their August returns in the next last two days. In August, due to huge rush of July GSTR-3B return filing on the penultimate date, the GSTN software witnessed glitches and the last date of filing was extended.

“If 90 per cent of the assessees are going to attempt filing returns in the last two days of the deadline then it is definitely going to test the system. To that extent it will test the GSTN portal. Having said so , we can’t really blame the tax payers because most of them very busy in getting GSTR-1 done. I think it’s only in the last three or four days they have started working on GSTR- 3B,” said Uday Pimprikar , Tax Partner at EY India.

An email sent to Adhia seeking comment on the 3B filings by taxpayers for August, did not elicit any response.

Sources said the issue pertaining to the unexpectedly high transitional input tax credit claims of Rs 65,000 crore by businesses has not been resolved because of the non-availability of data from GSTN. CBEC has written to chief commissioners directing them to verify every input tax credit claim of over Rs 1 crore. The verification by the tax department may include matching credit claimed with closing balance in returns filed under earlier laws and checking eligibility of credit under the GST regime. The report is expected on September 20.


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Source: http://indianexpress.com/article/business/goods-and-services-tax-72-hours-to-go-only-6-9-lakh-taxpayers-file-gst-returns/
160 companies to get notices on transitional GST credits

160 companies to get notices on transitional GST credits

Transitional GST credits

Several Indian companies, including some large entities, may start receiving notices from Monday on transitional tax credits in the run-up to the introduction of the single producer levy, two people with direct knowledge of the developments told ET.

The notices from the indirect-tax department follow last week’s direction from the Central Board of Excise and Customs (CBEC) that asked chief commissioners to verify all transitional credit claims beyond Rs 1 crore. About 160 companies, which collectively have claimed about Rs 65,000 crore in transitional tax credits, would be issued notices in the coming weeks.

“By Friday, chief commissioners had received the names of companies in their jurisdictions and asked for a basic report on the subject. Notices would be issued to companies and explanations would be sought for the amounts claimed in transitional credits,” said a person in the know.

In some cases, the indirect-tax department is also asking companies – particularly some Hyderabad-based infrastructure establishments — to produce the VAT returns of the past one year.
companies under GST Scanner


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The government is seeking these details to cross-check the transitional credit in GST. Transitional credits are basically tax credits accumulated before July 1 on pre-GST stock. According to the GST law, the credit can be set off against GST liability. Taxmen suspect that some companies are misusing the provision and have filed fake returns.

“The suspicion is that many companies have claimed credit when they do not have proper invoices to support them. Ideally, when this happens, companies could only claim 60% of transitional credit, but some companies seem to have taken 100% credits,” said a tax officer. Industry trackers say that this step by the government has spooked several companies.

“Large companies, with huge inventories, longer cycle time, and substantial monthly tax payments may rightfully have claimed significantly high transition credit,” said MS Mani, partner, Deloitte India. “Hence, all large claims should be evaluated after considering the size of the operations and attendant circumstances. There is an urgent need to define some processes based on which the transition credits are scrutinized, so that credits are not denied on frivolous grounds and unnecessary litigation is avoided.”

Individual companies under the lens could not be ascertained, but the tax officer quoted above said: “Most of these companies being scrutinised are major vendors of some of the biggest Indian companies. In most cases, the companies still have time to rectify their mistakes,” he said.

Some industry trackers say that Rs 65,000 crore as transitional credit in the total GST revenue of Rs 95,000 crore for July appears disproportionate.

“The amount of opening credit does look to be on the higher side, particularly because many companies have not yet filed the TRAN 1. In some cases, companies may have made genuine errors in credits. Many of these companies may revise in the coming weeks,” said Pratik Jain, Partner, National Leader – Indirect Tax – PwC India.

Experts said those scrutinising credits now time may be doing so prematurely as several companies are yet to file GST due to the extended deadline. “The deadline for filing Trans 1form is extended to October 3 and so the department will get final data only then,” said Sachin Menon, national head of indirect tax at KPMG.


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Source: ET
Two months of GST: Key decisions taken by government for smooth roll-out

Two months of GST: Key decisions taken by government for smooth roll-out

GST

 

The goods and services tax (GST) regime was rolled out on July 1 to replace multiple tax slabs across the country and ease trade. Indivjal Dhasmana takes a look at the several decisions the government took after the introduction of the indirect tax regime to ensure the roll-out was as smooth as possible:

July 18
GST Council holds out-of-turn meeting via video conferencing; raises cess on cigarettes. Earlier, cigarettes were taxed at the peak rate of 28%, along with a cess of 5%. This was lower than what was levied in the pre-GST era. The additional tax will give Rs 5,000 crore extra revenue to the exchequer that will be used to compensate the states.

August 2 
The Central Board of Excise and Customs (CBEC) clarifies integrated GST (IGST) will be levied only when goods are cleared by the Customs, in case of high-sea transactions; this clears ambiguity whether tax being levied for each leg of a transaction.


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August 5

GSTThe Council cuts rate on job works for the textile sector to 5% from 18%, approves e-way bill without revising a threshold of Rs 50,000 and allows setting up of screening panels under the anti-profiteering measure. Rates on inputs specific to tractors cut to 18% from 28%, on government works contract cut to 12% from 18%. Rates on other services — including rent-a-car, job work in newspaper printing, entry to planetariums — reduced. Council recommends the Centre come out with an amendment in the compensation Bill to increase the ceiling on cess on luxury cars from 15% to 25%.

August 30 

Cabinet clears ordinance to increase ceiling on cess on luxury cars, SUVs up to 25% from 15%. CBEC notifies e-way bill; exempts items of mass consumption such as vegetables, fruits, foodgrain, meat, bread, curd, books, jewellery, judicial and non-judicial stamp papers, newspapers, khadi, raw silk, Indian flag, cheques, municipal waste, liquefied petroleum gas for cooking, kerosene, heating aids and currency.

Registrations

July 31
6 mn, excluding those under composition

Morning of Aug 29
9.1 mn, including those under composition

New assessees1.9 mn

Return filers
Morning of Aug 29 
3.8 million or 64.4% of assessees (for July) filed returns
collections for July
Collections under GST 
Rs 92,283 cr against target of Rs 91,000 cr
Composition scheme
July 21
Only 100,000 assessees, about 1.25% of registrations then, opts for composition scheme by this deadline; govt extends scheme by a month
Till August 20
Composition scheme takes off; 938,165 assessees or 11% of registrations sign up


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http://www.business-standard.com/article/economy-policy/two-months-of-gst-key-decisions-taken-by-govt-for-smooth-roll-out-117090100061_1.html
Govt collects Rs 65,000 cr GST, over 36 lakh businesses file returns so far

Govt collects Rs 65,000 cr GST, over 36 lakh businesses file returns so far

Govt collects Rs 65,000 cr GST

Over 36 lakh businesses have so far filed their first tax returns under the Goods and Services Tax (GST) regime, a top tax official said on Monday.

Tax collected in the maiden filings under the GST regime, which kicked in from 1 July, are still being compiled as the last date for filings under different rules is not yet over, he said.

The revenue department had estimated collection of around Rs 65,000 crore from maiden Goods and Services Tax, the official said.

The deadline for filing first monthly return and payment of taxes under GST – the new indirect tax regime that unifies over a dozen state and central taxes, including excise duty, service tax and VAT – ended on 25 August.

However, businesses that availed transitional credit were allowed to file returns till 28 August after paying taxes on self-assessment basis by 25 August.


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“At the start of the day today, over 36.32 lakh returns had been filed. Final tax collection numbers would be known once all the returns are in,” the official said.

Under GST, businesses are supposed to file monthly sales returns and pay due taxes online. Since this was the maiden return after GST was rolled out on 1 July, the government gave companies extra time to file returns and pay taxes.

Central Board of Excise and Customs (CBEC) Chairperson Vanaja Sarna, in her weekly letter to tax officials, had said the last date for payment of GST for July 2017 was extended up to 25 August.

But for those taxpayers who want to fill TRAN-I this month, the last date for filing GSTR-3B is 28 August, she had said.

GST Network, the company managing the tax filing apparatus, had uploaded form TRAN-1 last week on its portal for businesses to claim credit on taxes paid prior to GST rollout on 1 July.

Another official said businesses can continue to file returns and pay taxes even after the deadline ends, much like what happens in case of income tax returns and payment.

As per the Goods and Services Tax law, any registered person who fails to furnish details of outward or inward supplies or returns required by the due date will have to pay a late fee of Rs 100 for every day during which such failure continues subject to a maximum Rs 5,000.

Besides, every person who fails to pay the tax within the period prescribed will be required to pay interest at 18 percent from the day succeeding the day on which such tax was due to be paid.

While 72 lakh assessees of the old indirect tax regime have migrated to the GST Network portal, nearly 50 lakh have completed the migration process.

Besides, of the 15 lakh fresh registrations, as many as 10 lakh are expected to file returns for July.


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Source: http://www.firstpost.com/business/govt-collects-rs-65000-cr-gst-over-36-lakh-businesses-file-returns-so-far-3982569.html