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GST Council to discuss waiver of late fee for August 2017 to January 2020

GST Council to discuss waiver of late fee for August 2017 to January 2020

The GST Council in its next meeting will discuss waiver of late fee for non-filing of GST returns for August 2017 to January 2020 period.

In a tweet, the Central Board of Indirect Taxes and Customs (CBIC) said, “Issue of GST late fee for the past period (August 2017 to January 2020) to be discussed in the next GST Council meeting.”

The next meeting of the GST Council is likely to be held on June 14.

The CBIC said there have been demands for waiver of late fee for returns which were required to be filed from the beginning of Goods and Services Tax, that is August 2017.

For helping small businesses, having turnover of less than Rs 5 crore, in the current situation arising out of COVID-19, Finance Minister Nirmala Sitharaman had already announced extension of GST returns of February, March, April and May 2020 till June 2020. No late fee will be charged for this period, it said.

The CBIC said late fee is imposed to ensure that the taxpayers file return in time and pay taxes on the amount collected from buyers and due to the government.

This is a step to ensure that a certain discipline is maintained regarding compliance. Honest and compliant taxpayers would be discriminated negatively in the absence of such a provision, it added.

“In GST all decisions are taken by the Centre and the state with the approval of the GST Council. It would not be possible or desirable for the Central government to unilaterally take a view on this issue and therefore, the trade is informed that the issue of late fee would be taken up for discussion in the next GST Council meeting,” it said.

Source: Economic-Times

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GST Council Likely To Meet In Second Week Of June

GST Council Likely To Meet In Second Week Of June

The GST Council is likely to meet in the second week of June according to media reports. The Council meeting will discuss the impact of the coronavirus pandemic on the economy of states, among other things.
The meeting of the GST council comes in the wake of repeated requests from state chief ministers in their video interactions with the Prime Minister for releasing dues to the states.

The GST council meeting is likely to discuss steps to raise compensation collections to clear the dues of the states. It is also likely to take up GST revenue trends which have hit rock bottom during the lockdown period following the outbreak of the coronavirus pandemic.
The GST Council is an apex member committee which was formed to modify or reconcile any law based on goods and services tax in the country. The council is headed by Union Finance Minister Nirmala Sitharaman and comprises finance ministers of all the states of the country.

The scheduled GST Council meeting could turn out to be a stormy one in the light of the fact that several states have been batting for higher allocations. Chief Ministers of several states had also stressed on the need to release GST dues in their video interactions with Prime Minister Narendra Modi.

Source: The-Hans-India

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GST compensation to states pending for Dec-March FY20

GST compensation to states pending for Dec-March FY20

Finance Minister Nirmala Sitharaman on Sunday said GST compensation is due to all the states for the four-month period of December-March. “We are periodically talking about it. GST dues are very clearly explained in the GST Council. It is not for selective states… All states’ GST dues which we recognise for December, January, February, March have not been paid,” Sitharaman told reporters here.

Under GST law, states are guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16.

Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss. There were no differences between the Centre and states with regard to compensation payment in 2017-18, 2018-19 and in the first four months (April-July) of the previous fiscal (2019-20).

However, with revenue mop-up from compensation cess falling, the Centre held back fund transfer to states beginning August. Following this, states raised the issue with the Centre and in December 2019, Rs 35,298 crore was released as compensation for August-September, while Rs 34,053 crore was released in two instalments in February and April as compensation for October-November.

The Centre has, so far, released over Rs 2.45 lakh crore as GST compensation to states since the implementation of the new indirect tax regime on July 1, 2017. During July 2017-March 2018, Rs 48,785 crore was released, while between April 2018-March 2019, Rs 81,141 crore was paid to states.

For April-May and June-July last year, Rs 17,789 crore and Rs 27,956 crore were released. Further, Rs 35,298 crore was paid to states as compensation for August-September and Rs 34,053 crore for October-November 2019.

Source: Times-now-news

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Govt set to release Rs 20,000 cr pending GST compensation to states soon

Govt set to release Rs 20,000 cr pending GST compensation to states soon

The finance ministry is set to release Rs 20,000 crore in pending goods and service tax (GST) compensation to states soon, Business Standard has learnt. This will not be from the compensation cess, but from the Consolidated Fund of India, and comes days after the Centre disbursed Rs 17,287 crore to states as devolution and disaster funds.

The finance ministry and the Prime Minister’s Office are also working on another stimulus package, which is expected to be announced soon. There is no definitive number yet on the quantum of the package, which will again be aimed at the urban and rural poor, micro, small and medium enterprises and the sectors most affected by the coronavirus disease (Covid-19) pandemic and the subsequent 21-day nationwide lockdown.

Officials working on the stimulus package say that a lot of ever-changing factors are still under consideration. These include active cases of Covid-19, hotspots, and the status of the lockdown after April 14.

“The revenue department has been authorised to clear Rs 20,000 crore in GST compensation dues to states,” said a top government official.

“We can only disburse compensation to states from the compensation cess fund. Since it is not available, approval has been given for releasing it from the Consolidated Fund,” said a second official.

Even with the Rs 20,000 crore distributed among states, it will still be a fraction of what they have been demanding in financial support and clearance of pending dues. Central government officials say there is a resource crunch, but more will be given. States have also been allowed to borrow 50 per cent of their total 2020-21 limit in April itself.

Maharashtra had sought a special package worth Rs 25,000 crore from the central government and asked it to release pending dues worth Rs 16,654 crore under various heads by March 31, to fight the economic crisis. Tamil Nadu has sought a special assistance of Rs 4,000 crore and a slew of other financial support measures. West Bengal has sought a package of Rs 25,000 crore and clearance of dues worth Rs 36,000 crore. Additionally, all states have sought relaxation of their borrowing limits.

With only 65 per cent of compensation due for October and November at Rs 19,950 released last month, the total disbursal has been Rs 1.2 trillion as against full-year collection of just Rs 95,000 crore. It is, in fact, Rs 3,000 crore short of the revised estimate of Rs 98,327 crore.

Compensation cess, to be released on a bi-monthly basis, has been pending for about five months. With compensation of over Rs 60,000 crore still pending, some states are even planning to drag the Centre to the Supreme Court.

“Never in the history of India has there been such a callous attitude of the Centre towards the states. There is no option other than the states approaching the Supreme Court,” Kerala Finance Minister Thomas Isaac told Business Standard.

The central government was of the view that it would only release compensation out of collections through levy of cess on luxury and sin items like automobiles, tobacco, and aerated drinks.

In her Budget speech, Finance Minister Nirmala Sitharaman said it was decided to transfer to the GST Compensation Fund balances due out of collection in 2016-17 and 2018-19 in two instalments.

Source: Business-Standard.

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GST filing deferment no relief for mobile phone makers after recent rate hike

GST filing deferment no relief for mobile phone makers after recent rate hike

The deferred filing of Goods and Services Tax returns won’t provide much of a breather for mobile phone manufacturers, which face a 6 percentage point rate increase on handsets from April 1 and a further drag on demand, already plunging amid the Covid-19 outbreak.

“Though returns can be filed till June 30, any phone sold after April 1 (including inventory) will be billed at 18% GST (from 12% currently),” said Abhishek Rastogi, a partner at law firm Khaitan & Co.

What the sector needed was an allowance to pay this tax in a deferred way over the next six months, otherwise it is hardly any relief, Rastogi said.

According to market research firm International Data Corporation, even after the 21-day nationwide lockdown ends in mid-April, it will take at least two quarters for demand to revive. Realme and Samsung have already said the increase in GST will be passed on to consumers.

An intelligence firm that tracks the smartphone market has cut this year’s growth estimate to 5.5% from 8% earlier. Realme has estimated that phone prices could go up by 12-15% for reasons including fluctuation in rupee-dollar exchange rates, impact of Covid-19 on the supply chain for components, an increase in memory prices of smartphones, and higher GST.

“At Realme, we are trying to absorb the first three impacts. However, it will not be feasible for us to absorb GST increase impact,” it had said.

The GST Council increased the rate on mobile phones to 18% from 12% on March 14 to correct an inverted duty structure that taxed components at a higher rate than the device.

“While Samsung and Realme have written to us about their decision to pass on the new rates, others have communicated verbally,” Arvinder Khurrana, president of the All India Mobile Retailers Association, told ET. Xiaomi and Vivo said they are yet to take a call on this.

ET had reported that the decision could lead to job losses and nullify efforts to make India a smartphone manufacturing hub.

In the wake of the Covid-19 crisis, finance minister Nirmala Sitharaman said on Tuesday that traders with an annual turnover of less than Rs 5 crore can file GST returns for March, April and May by June 30 without late fees or penalties.

Source: The-Economic-Times

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All you need to know from the 39th GST Council meet

All you need to know from the 39th GST Council meet

The 39th GST Council took an array of decisions, including an increase in the tax rate on mobile phones and specified parts to 18 percent from 12 per cent. GST on handmade, machine-made matchsticks has been rationalised to 12% while GST on MRO (maintenance repair overhaul) services of aircraft has been slashed to 5% from 18%.

The GST rate on mobile phones was increased from 12% to 18% allowing a full claim of input tax credit; Relief given to domestic service providers of maintenance, repair and operations.

Addressing the media after the meeting, Finance Minister Nirmala Sitharaman also said that a better GSTN system should be ensured by Infosys by July 2020.

Here are the major decisions taken

* GST on mobile phones, specified parts increased to 18% from 12%.

*GST on MRO (maintenance repair overhaul) services of aircraft slashed to 5% from 18%

*GST on handmade, machine-made matchsticks rationalised to 12%.

*Delayed GST payment to attract interest on net tax liability from July 1.

Important change on GSTR-1:

The GST Council decided to stagger the GSTR-1 filing for taxpayers with:

*Turnover more than Rs 1.5 cr -to file before 10th of the following month
* Turnover up to Rs 1.5 cr -to file before 13th of the following month
* The GSTR-2A can be generated on 14th of following month
*GSTR-9 and 9C due date pushed to 30th June 2020 for FY 2018-19 from 31 March 2020; Increases the turnover limit from Rs 2 cr to Rs 5 cr for the mandatory annual return filing
*The GST Council defers the proposal on the taxability of economic surplus of brand owners of alcohol for human consumption.

Mr. MS Mani, Partner, reacted to GST Council meet- “ the approach of the GST Council to proceed with changes in returns, e-invoicing etc on an incremental basis would permit businesses to embrace these changes in a calibrated manner. Introduction of multiple changes from 1st April, as was proposed earlier , would have put added pressure on businesses, who have been grappling with multiple business and regulatory headwinds.”

Souce: Economic-Times

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GST globally acknowledged as silent revolution: Finance Minister Nirmala Sitharaman

GST globally acknowledged as silent revolution: Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Sunday said GST and direct benefit transfers (DBT) are the two silent revolutions in India’s public finance system which are now being globally acknowledged and over Rs 1 lakh crore have been saved because of the DBT.

“Today GST and DBT are being talked of as the silent revolution globally. We have shown public finance is not opaque and is efficient and responsive to the public. This is the biggest revolution,” said Sitharaman.

Sitharamana said while presiding at the 44the Civil Accounts Day in the national capital.

“At one time we talked about GST and the Rs 1 lakh crore you saved for this country (through DBT). It is not just symbolic. The amount of Rs 1 lakh crore is being saved for the country by efficient use of technology and without telling anyone that you are not entitled (to benefits),” she said.

Praising the accounting officials’ role, she said: “You have proven that corruption and wrongdoing can be just moved out of the system, cleansing it,” Sitharaman said.

The FM said DBT was adopted with the aim of cutting down middlemen and facilitating benefits to reach the target people without any leakages.

According to the government data, the cumulative DBT is at Rs 2,31,927 crore in the current fiscal so far and the total number of transactions are 355 crores.

The data states 427 schemes of 56 ministries are on DBT. Key welfare programmes such as MGNREGS, PDS, PAHAL, Scholarship schemes among many are on DBT. The Rural Development Ministry’s estimated gains are Rs 170,377 crore”, as per the DBT website.

Source: New-Indian-Express

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GST Council will revise rates yearly, says FM Sitharaman

GST Council will revise rates yearly, says FM Sitharaman

GST Council, the federal indirect tax body, is set to make changes in tax rates of goods and services a yearly affair, moving away from frequent rate revisions to remove ‘uncertainty’ for businesses and the government, finance minister Nirmala Sitharaman said on Sunday.

Sitharaman said that frequent changes in GST rates have led to an inverted duty structure, where the raw materials ended up becoming costlier than the finished product, in some cases which also created problems with tax refunds.

“Therefore, when the rate of tax of one item is brought down, a whole lot of other ripple effects are created. With that ripple effect, refund is affected,” Sitharaman said at a post budget interaction with reporters in Kolkata.

As a result, businesses claimed that they are not able to plan how much they need to keep aside for taxation in a whole year. Similarly, governments (states and Centre) are not able to make an assessment of what they will earn from GST in the whole year, she said.

“Rate revision every three months brings in uncertainty…We have also discussed it in the GST Council. We have proposed to the GST Council—can we consider a situation, where once in a year alone, we would do any rate rationalization and not every three months,” she said.

This is the first time that the Centre has spoken about going slow with the frequency of GST rate cuts. There have been more than half a dozen rounds of rate cuts since the implementation of GST from 1 July 2017, which also impacted the Centre’s revenue. Besides, being a sensitive issue, rate cuts would often snowball into a political issue, putting pressure on government to revise rate, ahead of the elections.

“Yearly revision of rates is a great approach as rates will be stable for at least a year and as a result it will be less cumbersome for businesses as they will not have to track rates after every GST Council meeting. However, there could be problem in case there is any urgent need to revise rate or fix anomalies,” said Abhishek Jain, partner . In December, Sitharaman who also heads the GST Council said the government is working on streamlining the GST regime to eventually have three slabs. Currently, there are four key tax slabs—5%, 12%, 18% and 28%. Besides, there have also been discussions on increasing tax rates on some items. However, in the last meeting in December, the Council abstained from raising rates, after official data showed that consumer goods output had shrunk 18% in October, its fifth straight month of contraction. Several state ministers also said the time was not right for raising GST rates.

Sitharaman urged industry to present their concerns pertaining to rate revisions to the states who can in turn take it up at the Council meetings.

“The Centre alone cannot say rates will be cut as it leads to the impression that when the businesses are located in the states, then why are states not talking about it…It will also be healthier if states through ministers voice their concern (at the Council meetings),” Sitharaman said.

Source: Live-Mint

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Nirmala Sitharaman hints at status quo on GST rates

Nirmala Sitharaman hints at status quo on GST rates

Union finance minister Nirmala Sitharaman on Sunday said she had sought an assessment of the full year collection of goods and services tax (GST) before rationalising rates, indicating that a proposal by a panel of officers to increase levies may wait until April.

The minister also advised against frequent change in rates, which had become the norm at every meeting of the GST Council, which is headed by the union finance minister, with states being members of the panel. The GST Council is the final decision-making body on rates and rules and has to meet at least once in three months.

There is a proposal for reworking the slab and increase rates on several items — ranging from branded food items to mobile phones and economy class air travel. But a decision was deferred as states wanted an assessment of the impact of the new indirect tax regime on various products. Besides, many states, including those ruled by BJP, were not in favour of increasing rates under various slabs.
At the Palkhiwala Centenary Celebration here, Sitharaman raised concerns over assessment of GST collections. “Ideally, everybody keeps telling that we must aim for one rate (GST), one tax, and one nation and so on. However, before we make such revisions, have we studied what the current rates have given us (collection) steadily for one full year?”

The minister indicated that there were suggestions for an annual revision. “We did consider if the revision of rates could be a yearly exercise, which will be done after due consideration. However, if the technical, law, and fitment committees come back saying that such reduction would lead to an inversion, then all of us must have the largeness of heart to say — sorry, this (rate revision) cannot happen.”

The FM raised complaints that every GST Council meeting, there is a big list of rate reduction on items, which even leads to discussions on changes in inverted duty structure.

‘Laws mustn’t look at biz with suspicion’

Sitharaman said the government is moving towards a direction where the law does not look at business enterprises with suspicion. She also said the industry and the government should work together to take the country’s economy to $5 trillion.

The FM said her earnest attempt is to decriminalise matters concerning the Companies Act or other related laws, and also cited Tata Group head N Chandrasekharan’s speech in Mumbai on Monday, where he had said the government should trust its own citizens.

Stressing further on the trust factor, Sitharaman said the government’s intention is not to distrust business houses and the road to $5-trillion economy will be much easier with mutual trust.

Source: Times-Of-India

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FM Nirmala Sitharaman tells traders GST will be ‘simplified’ further

FM Nirmala Sitharaman tells traders GST will be ‘simplified’ further

Finance Minister Nirmala Sitharaman on Tuesday said that the government will resolve issues concerning traders and that GST would be further simplified.

Speaking at the second day of the National Traders Convention of the Confederation of All India Traders (CAIT), Sitharaman assured them that the government is making all attempts to simplify and rationalise the GST tax structure to the extent that even an ordinary trader can comply with the Goods and Services Tax (GST) provisions.

“Under the chairmanship of the Revenue Secretary, a committee has been constituted, which is working day and night to explore the ways and means to simplify GST”, she said.

Traders from across the country are attending the three-day convention.

Sitharaman lauded the role of the trading community for increasing the GST tax data.

CAIT Secretary General Praveen Khandelwal said the body has set itself a target of enhancing the number of traders registered under GST to 2 crore.

Sitharaman said that Prime Minister Narendra Modi has placed the trading community as his priority and in line with this, various announcements have been made by the government to facilitate traders on growing their businesses.

The Finance Ministry is seized of the problems being faced by traders in the taxation system and the government would do its utmost for providing maximum relief to traders, she said.

According to Sitharaman, while traders bring in tax revenue earners and no prudent government would like to annoy them, they, however, also need to bring their businesses into system and modernise their existing business formats.

The government plans to hold big shopping festivals across the country and will involve CAIT so that traders may get more opportunities to showcase their products, she added.

Source: The-News-Minute

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