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GST Rate Cut
‘Pass on GST cut to consumers or be prepared for action’

‘Pass on GST cut to consumers or be prepared for action’

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The state-level screening committee of antiprofiteering of GST has warned traders, manufacturers that if they do not pass on benefits due to a decrease in GST on certain goods to consumers, action will be initiated.

Principal commissioner and member, State Screening Committee, M Srinivas had even issued a public notice on January 25 in this regards.

“GST Council on December 22, 2018, has recommended a reduction in GST rates of several goods and services. As per Section 171 of the GST Act, any reduction in the rate of tax or benefit of the input tax credit shall be passed on to the recipient by way of commensurate reduction in prices,” Srinivas told TOI.

Consumers could file a complaint regarding suspected profiteering or refusal to pass on the benefit of the input tax credit with the state-level screening committee or directly on the website naa.gov.in.

The complainants should produce basic documents like invoice or proof of purchase, packing material containing declared price and bills or documents pertaining to purchase prior to reduction and after reduction. The application after scrutiny at the state-level would be forwarded to the national-level committee.

Vegetables uncooked or cooked by steaming or boiling in water, frozen, branded and put in a unit container, GST of 5% has been waived off. GST on power banks of Lithium-ion batteries was reduced from 28% to 18%, while GST on digital cameras, video camera recorders, video game consoles, retreated pneumatic tyres of rubber, monitors and TVs up to 32 inches, pulleys and gearboxes has been reduced from 28% to 18%.


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Source: Times Of India.
NAA
Proposal to encourage taxmen to file GST profiteering complaints on anvil

Proposal to encourage taxmen to file GST profiteering complaints on anvil

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The GST officials are working out a mechanism to prompt taxmen to initiate profiteering complaints, which could be taken up for further investigation by the Directorate General of Anti-Profiteering.

Currently, only consumers file complaints against businesses for not passing on the benefits of reduction of the rates of Goods and Services Tax (GST) on various products.

Under the standard operating procedure (SoP) being worked out by the GST officials, the Central and state government tax officers will be encouraged to take up suo moto the issue of profiteering by businesses, sources said.

Once the tax officers find that GST benefits have not been passed on to the consumers, they will refer the case for further investigation to the Directorate General of Anti-Profiteering (DGAP).

As per the procedure, the DGAP submits its investigation report to the National Anti-Profiteering Authority (NAA), which decide on the final quantum of profiteering and the monetary penalty.

In 2018, the NAA received 80 investigation reports from the DGAP and issued final orders in 29 cases. Of this, 9 businesses were found to have not passed on benefits of rate cuts of about Rs 559.90 crore to consumers.

So far in 2019, the NAA has passed orders in 3 cases.

Sources said as consumers often are reluctant to file complaints, the GST officials and the NAA are keen to rope in the field formation for filing complaints of profiteering against businesses.

Sources further noted that consumers usually lag the expertise to ascertain whether the GST rate cut benefits have been passed on to them by way of reduction in prices. The tax officials, they said, will be able to find out with greater certainty, whether the tax cut benefits have been passed on to the consumers.

The proposed mechanism will also act as a deterrent for businesses who show reluctance in passing on GST benefits.

The GST has replaced a tangle of local taxes and entry levies. Since its rollout on July 1, 2017, GST Council has reduced tax rates on a host of items.

Of the 1,216 commodities being used at present, broadly 183 are taxed at zero rates, 308 at 5 percent, 178 at 12 percent, 517 at 18 percent and 28 items in the 28 percent slab.

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Source: Money Control
GST
Consumers feel restaurants are not passing benefits of GST rate cut benefits: Survey

Consumers feel restaurants are not passing benefits of GST rate cut benefits: Survey

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Eating out hasn’t become any cheaper despite a big cut in Goods and Service Tax (GST) rates on restaurant bills more than a year ago, consumers feel.

Little over a fourth of the consumers feel that they are yet to receive the benefit even as the GST Council in November, 2017 slashed tax rate on restaurants to 5 percent (minus the option of availing input tax credit) from 18 percent (with the chance of availing the benefit of input tax credit), a survey said.

According to a survey conducted by LocalCircles, white goods and fast moving consumer goods (FMCG) have shown an improvement in trend in rate reduction benefit being passed, while the trend for restaurants passing these benefits is not encouraging.

GST

There have been five rounds of rate cuts and rationalisation exercise since the rollout of GST from July 1, 2017. Out of this, major rate cuts were implemented in November, 2017, July, 2018, with the last one effective January 1, 2019.

In order to ensure that the benefit of GST rate cut is passed on to the consumer, the Council had approved setting up of a quasi-judicial body National Anti-Profiteering Authority (NAA). However, NAA can only begin investigation based on complaints received.

The survey shows that 51 percent respondents feel restaurants are not passing on the benefit of the GST rate cut on restaurants, as on January, 2019, up from 45 percent in October, 2018.

Only 29 percent of them feel that they have received the benefit of lower tax and number has been constant during polls in October as well as January, signaling there has no change in consumer experience despite the rate cut.

 

GST

In case of FMCG items such as shampoo, grocery, among others, 44 percent of the consumers say that products have not become cheaper, as of January, 2019. However, there has been an improvement in this trend as during June, and October, 2018, 61 percent and 49 percent buyers felt that these items have not become cheap post rate cut in November 2017.

Similarly, in case of white goods such as home appliances, televisions, among others, 47 percent respondents in October, 2018 felt that they have not received the benefit of the rate cut in July 2018. The number, however, fell to 38 percent in January.

Over 60,000 consumers across India are connected through India’s anti-profiteering community founded by NAA and hosted on LocalCircles. To gauge the consumer pulse on how GST rate reductions are reaching consumers, LocalCircles conducted a three-point poll. Over 23,000 votes from 15,000 consumers was received from across the country.


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Source: Money Control
GST
State authorities told to check if companies passing on GST cut benefits

State authorities told to check if companies passing on GST cut benefits

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In a drive to ensure companies passed on the reduction in Goods and Services Tax (GST) to consumers, the Centre has directed state metrology controllers to assist GST officers to cross-verify revised sales price (MRP) of pre -packaged commodities and consumer authorities will undertake a drive to check labelling.

In the latest round, the GST Council cut tax rates on a host of white goods to 18% from 28% and exempted sanitary napkins from any tax effective July 27.

The government is keeping a close tab on the price scenario on the products that saw rate cuts to ensure the benefit is passed on to consumers and not pocketed by companies.

The anti-profiteering machinery is also keeping a close watch on whether companies are passing on the benefit or not. ET had reported earlier this month that authorities were looking into instances of consumer durables companies not passing on the benefit to customers.

The consumer affairs secretary had informed the GST Council about the directive, according to an office memorandum issued by the council.

“The memorandum on GST officers collaborating with state legal metrology controllers clearly demonstrates government’s seriousness to ensure that the impact of rate reduction and additional input tax credit reaches the intended beneficiaries that is the end consumers”

The consumer affairs ministry had earlier issued a directive under the Legal Metrology Act permitting companies to affix pasting or stamping of new prices on old when the rates were slashed in November last year and again in July this year.

As per the directive, revised MRP declaration can be by way of stamping or putting sticker or online printing provided original MRP continues to be displayed.

Companies also had to advertise price changes and circulate notices to dealers.

“With this explicit directive by the government, industry, and specifically the consumer goods industry, should revisit and ensure passing on of any tax benefits which have accrued to them with implementation of GST.”


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Source: economictimes.indiatimes
20% cashback on GST likely on RuPay, BHIM using QR codes

20% cashback on GST likely on RuPay, BHIM using QR codes

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The government is working on a proposal whereby citizens could avail of the proposed 20% cashback on goods and services tax (GST) on payments made through RuPay cards and BHIM app if they make the transactions using QR codes.

The idea is to automatically capture all transaction details including GST rate and the cashback accordingly, a senior government official told ET.

For those who are not comfortable scanning QR codes for digital transactions, the alternative will be to compile all the receipts and then claim GST refund from the government in the same way as income-tax returns and refunds are filed, the official said.

Last month, the GST Council approved the recommendations for incentivising digital payments through RuPay card network and BHIM Unified Payments Interface system through cashbacks.

Once implemented, customers making payments using RuPay card or BHIM app will get a cashback of 20% of the total GST amount, subject to a maximum of Rs 100. There has been a series of discussions between the ministry of electronics, National Payments Corporation of India (NPCI), GST Council and Goods and Services Tax Network on how to offer this cashback to consumers, the government official said. “The option to use QR codes is an evolved solution but also a best bet, since it will capture all the details which is not possible in other modes,” the person said. The plan includes working out an average rate of tax for different categories of products since it varies greatly in some cases such as hotel bills.

“The proposal needs further refinement from NPCI,” the official said. The finance ministry will give it final go-ahead.

NPCI said the initiative is at the proposal stage and GST Council is working to draft the scheme and its modalities. “We would be in position to share further details if the proposed cashback scheme is implemented and operationalised,” the corporation said in a statement to ET.


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Source: economictimes
GST benefits
MSMEs may not receive additional GST benefits before 2019 general elections

MSMEs may not receive additional GST benefits before 2019 general elections

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Micro, small and medium enterprises (MSMEs) may not receive more benefits under the Goods & Services Tax (GST) regime before the 2019 general elections as there has been a consistent fall in collections, The Financial Express reported.

The GST structure might not see any major change and even the new return filing system may not be implemented until the Lok Sabha polls are concluded and the new government assumes office. The report said, The government feels rolling out such benefits closer to the 2019 general elections could create technical hassles

“Tax officials and the political dispensation are wary of implementing new measures close to general elections. Apart from revenue considerations, we also have to factor in the income tax-related issues that may arise after implementation,” a source told the paper.

The government had earlier proposed additional sops to MSMEs. It, however, feels that the rolling out such benefits closer to elections could create technical hassles. The inconvenience may, in turn, offset political benefit the National Democratic Alliance (NDA) government could garner through tax sops for small businesses.

The Centre has also decided to stick to its FY19 fiscal deficit target of 3.3 percent of GDP. Amid declining GST revenues, offering additional benefits to MSMEs may hurt government’s fiscal deficit target.

Revenue collection from GST declined to Rs 93,960 crore in August from Rs 96,483 crore in July, the lowest in the current fiscal.

The decline may have been due to a rate cut on several items that was announced to provide relief to MSMEs and customers. On July 21, the GST Council had cut rates on more than 80 items across various tax slabs. The rate cut was effective from July 27.

The GST Council had set-up a Group of Ministers (GoM) on August 4 to formulate a plan for further relief to MSMEs, but the panel hasn’t met even once, the report said. The GoM is unlikely to submit an interim report during the next GST Council meeting scheduled on September 28, the report said.

The government had earlier decided to provide MSMEs additional relief as small taxpayers, who were exempt from excise duty in the pre-GST regime, are now liable to pay excise duty and Value Added Tax. The move is said to have taken away the competitive advantage from these enterprises. The sops were aimed at reducing tax burden as well as giving these firms a bit of a competitive advantage.


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Sources : moneycontrol

HUL offers government third tranche of GST benefits

HUL offers government third tranche of GST benefits

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Hindustan Unilever GST

Hindustan Unilever (HUL) has offered another tranche of GST benefits amounting to Rs 36 crore for the month of January. A significant portion of this amount includes benefits accrued on stocks, which were lying with HUL’s distributors during the time of transition on November 15, 2017. With this third tranche, the total combined (HUL plus distributors) GST benefits offered by the company of its own accord to the government amounts to Rs 155 crore.

A company spokesperson said benefits accruing directly to HUL that needs to be passed on to consumers have come down significantly from that in November and December as most of the company’s revised pricing networks have now landed in the market. “A communication to this effect has been sent to the government. Authorities have commended this pro-active approach taken by HUL,” the spokesperson said.

The company said implementation of the revised GST rates (November 15, 2017) was initiated immediately. However, there was a lag on account of the time required to change artworks on the various products, order packing material, production and ensuring availability in stores between GST rate reduction and the new packs being produced and supplied to the market. “Hence, it was not possible to immediately pass on the benefit of the November 15 GST rate reductions to the end consumers,” said the spokesperson.For the period November 15-November 30, the company estimated the amount at Rs 60 crore and in early December, the company met with government officials of its own accord and offered to deposit this amount into the Consumer Welfare Fund. In the same communication, the company also informed the government that it would deposit monthly the benefits that would be accrued to it, and which would need to be passed on to consumers until the transition would be completed, or until the company is informed by the government of an alternative action.

Accordingly, for the month of December 2017, the company estimated this amount to be Rs 59 crore, and in early January 2018 the company on its own offered to deposit Rs 119 crore for November and December 2017. This amount was not recognised as revenue and was accounted as a liability as on December 31, 2017.

In the absence of clear legal provisions on this subject, the request was forwarded to the Director General of Safeguards. The company said it is awaiting advice from them so that it can deposit the cheques at the earliest.

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Source :  The Times of India
National Pension Scheme benefits: Tax saving, GST advantage, partial withdrawal and more

National Pension Scheme benefits: Tax saving, GST advantage, partial withdrawal and more

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National Pension Scheme benefits: Tax saving, GST advantage, partial withdrawal and more

Last month, the Pension Fund Regulatory and Development Authority (PFRDA) increased the maximum age of joining the National Pension Scheme (NPS)-private sector from 60 years to 65 years. This move, now allowing a larger segment of senior citizens to adequately plan for retirement, matters because research shows that by 2050, 20% of our population will be above 60. Moreover, coming on the heels of the tax incentives announced in Budget 2017, it is yet another step by the pension regulator to make NPS more attractive for investors.

Yes, the National Pension Scheme does offer several tax benefits, which unfortunately gets sidelined in the face of the fact that only 40% of the NPS corpus is tax free on maturity, unlike other retirement options like EPF and PPF, which are fully exempt. Here are four advantages that you need to know about, apart from the fact that NPS returns are likely to beat those from the EPF:

Tax benefits beyond Section 80C

Under Sections 80C, 80CC and 80CCC of the Income-Tax Act, investments up to Rs 1.5 lakh are deducted from the taxable income of salaried as well as self-employed individuals. Those investing in NPS can claim an additional deduction of Rs 50,000 under Sec 80CCD(1b).

Moreover, under Section 80CCD(2), any NPS contribution made by the Central Government or any other corporate employer on your behalf is eligible for deduction up to 10% of your basic salary plus dearness allowance, irrespective of the amount.

Ability to manage taxation better

According to Hemant G. Contractor, a well-structured withdrawal strategy coupled with prudent tax planning can effectively reduce your NPS tax liability to zero. “Last year, 40% of the maturity corpus was made tax free. Another 40% of the corpus escapes tax when put in an annuity to earn a monthly pension. However, 20% of the corpus is still subject to tax at maturity, though there are tax-saving options available to the investor,” he said to The Economic Times Wealth. According to Contractor, if the balance 20% corpus is also put in the annuity (along with the mandatory 40%), it will not be taxed. For the record, an annuity is a contract aimed at generating steady income during retirement, in which you make a lump sum payment or a series of payments and, in return, receive regular disbursements.

Tax-free partial withdrawals

Though the National Pension Scheme (NPS) has a locking period of 60 years-with the option of postponing lumpsum withdrawal till 70 years-you are allowed to make up to 3 premature withdrawals in between. You can withdraw up to 25% of your NPS contribution for medical emergencies and life events like marriage, education etc. These withdrawals are now tax-free and, according to media reports, will come into effect from assessment year 2018-2019.

GST benefits

According to Contractor, another tax friendly feature is that GST is waived on annuities purchased with the NPS corpus. Normally, there is 1.8% GST payable on the value of the annuity, but NPS investors are exempt.

Those new to the workforce need to understand that National Pension Scheme (NPS) was started in 2004 with the objective of providing retirement income to citizens. Initially, it was introduced for new government recruits, barring the armed forces but since May 2009, it has extended its reach to all citizens, including the unorganised sector workers on a voluntary basis.

There are two types of retirement accounts under NPS: Tier I account, which is the one that will fetch you the above-mentioned tax benefits, and Tier II Account, which is simply a voluntary savings facility. The minimum contribution in Tier I account is Rs 1,000 per financial year and there is no upper cap on it.

Source :  Business Today in