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GST mop-up in July at Rs 87,422 crore, slips from June collections

GST mop-up in July at Rs 87,422 crore, slips from June collections

The government collected goods and services tax (GST) of Rs 87,422 crore for July, lower than that collected in June, indicating a stability in collections, analysts said.

“During the previous month, a large number of taxpayers also paid taxes pertaining to February, March and April 2020 on account of the relief provided due to COVID-19,” the finance ministry said in a statement Saturday.

“Taxpayers with turnover less than Rs 5 core continue to enjoy relaxation in filing of returns till September 2020,” the ministry added.

The revenues for July 2020 are 86% of the GST revenues in the same month last year. During the month, the revenues from import of goods were 84% and the revenues from domestic transaction (including import of services) were 96% of the revenues from these sources during the same month last year.

“A collection approximate to 86% of last year does showcase quite a significant economic recovery from the pandemic though a bit of it could be on account of pent up demand. With economic activities increasing, the collections should hopefully witness aligning with estimates soon,” said Abhishek Jain, Tax Partner.

Of the total collections in July, Central Good & Services Tax CGST is Rs 16,147crore, State GST is Rs 21,418 crore, Integrated GST is Rs 42,592 crore (including Rs 20,324 crore collected on import of goods) and Cess is Rs 7,265 crore (including Rs 807 crore collected on import of goods).

Source: Economic-Times.

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GST: CBIC notifies Schema for E-Invoice, SEZ units are excluded from E-Invoicing

GST: CBIC notifies Schema for E-Invoice, SEZ units are excluded from E-Invoicing

The Central Board of Indirect Taxes and Customs ( CBIC ) on Thursday notified the Schema for E-Invoice for implementing e-invoicing, a form of electronically-authenticated invoices, from October 1 only for businesses with a turnover of Rs 500 crore or more under GST.

The Government empowered under Rule 48(4) of the Central Goods and Services Tax Rules, 2017, on the recommendations of the Council, amended the Notification No.13/2020-Central Tax, dated the 21st March, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 196(E), dated the 21st March, 2020.

In the said notification, in the first paragraph, before the words “those referred to in sub-rules”, the words “a Special Economic Zone unit and” shall be inserted.

Further, for the words “one hundred crore rupees”, the words “five hundred crore rupees” shall be substituted.

As per the earlier notification, a certain class of registered persons (insurance company, banking company, financial institution, non-banking financial institution, GTA, passenger transportation service etc.) to be exempted from issuing e-invoices or capturing dynamic QR code. The Notification said that “an invoice issued by a registered person, whose aggregate turnover in a financial year exceeds five hundred crore rupees, other than those referred to in sub-rules (2), (3), (4) and (4A) of rule 54 of said rules, and registered person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017, to an unregistered person (hereinafter referred to as B2C invoice), shall have Dynamic Quick Response (QR) code: Provided that where such registered person makes a Dynamic Quick Response (QR) code available to the recipient through a digital display, such B2C invoice issued by such registered person containing cross-reference of the payment using a Dynamic Quick Response (QR) code, shall be deemed to be having Quick Response (QR) code.”

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Source: TaxScan.


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Centre unable to pay GST dues to States: Union Finance Secretary

Centre unable to pay GST dues to States: Union Finance Secretary

Finance Secretary Ajay Bhushan Pandey told the Parliamentary Standing Committee on Finance, headed by BJP MP Jayant Sinha, at a meeting on Tuesday that the government is in no position to pay the GST share of States as per the current revenue sharing formula, sources said.

According to at least two members who attended the meeting, Mr. Pandey’s comments were in response to a question on the revenue shortfall due to the pandemic. The members then questioned him on how the government could renege on the commitment to the States. At this, “he [Mr. Pandey] pointed out that the GST Act has provisions to rework the formula for paying compensation to the State governments if the revenue collection drops below a certain threshold,” one of the members said on condition of anonymity.

The Finance Ministry on Monday said the Centre had released the final instalment of ₹13,806 crore of GST compensation for the financial year 2019-20.

The GST Council was scheduled to meet in July to try and work out the formula to rework the compensation to the States. However, the meeting has not been convened so far.

The opposition members meanwhile were up in arms, as the committee which was meeting for the first time since the nationwide lockdown instead of discussing the State of Indian economy, took up the topic “Financing the innovation ecosystem and India’s growth companies”.

Congress MPs Manish Tewari, Ambika Soni, Gaurav Gogoi and NCP MP Praful Patel, according to sources, vociferously, demanded that the Committee discuss the current state of economy which has suffered a huge set back because of the pandemic. Mr. Tewari in a letter to Chairperson, Mr. Sinha, had earlier pointed out that the people will consider the Committee to be “delusional” to discuss the chosen topic in a hour of crisis.

According to sources, Mr. Tewari pointed out that even the Budget passed by Parliament on March 23 may no longer be relevant since it was based on certain assumptions about the revenue collections. There is no clarity so far from the government on overall revenue shortfall, he pointed out. Congress MP Gaurav Gogoi said the panel must also scrutinise the efficacy of the government’s rescue package.

It is learnt that Mr. Sinha, the Committee Chairperson, said most of the questions posed by the members were political in nature and cannot be answered by Finance Ministry officials. These can only be replied to by Finance Minister Nirmala Sitharaman and can be taken up when Parliament meets during debates on the subject. in either houses of Parliament.

To this Mr. Praful Patel said if the Standing Committee on Finance cannot discuss even the basic question of the state of economy, then it is better to disband the panel, sources added.

Sources: The-Hindu

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Central Government Released Rs 1.65 Lakh Crore As GST Compensation To States In FY20

Central Government Released Rs 1.65 Lakh Crore As GST Compensation To States In FY20

The central government’s payout to states as compensation towards goods and services tax for the year ended March more than doubled over the last year as a result of slowing economic activity.

The compensation to states was Rs 1,65,302 crore, the Ministry of Finance said in a statement, adding the GST compensation cess, collected by the Centre, stood at Rs 95,444 crore. In 2018-19, the GST cess collected and compensation released to states were Rs 95,081 crore and Rs 69,275 crore, respectively.

The virus outbreak and the world’s most stringent lockdown lasting over more than two months aggravated an already-slowing economy by obliterating consumption—which nearly contributes 60% to the economy. As a result, India’s economy is widely expected to witness its first contraction in nearly four decades.

The central government compensates states bi-monthly as they lost powers to levy taxes such as value added tax with the rollout of GST. The compensation is guaranteed for five years, and is calculated at a growth rate of 14% keeping 2015-16 as the base year. With declining GST collections last year following a demand-led slowdown, the government had stopped releasing compensation bi-monthly due to inadequate collections from GST compensation cess that’s levied on sin or demerit goods.

Since the cess collected was about Rs 70,000 crore less than the requirement to compensate states, the amount collected as excess in 2017-18 and 2018-19 of about Rs 47,271 crore was used for the same. Besides, Rs 33,412 crore—that was transferred to Consolidated Fund of India—as balance IGST in 2017-18, was also utilised to compensate states, the statement said.

The amount of compensation to be given to the states is going to increase substantially this year, Rajat Bose, a partner at Shardul Amarchand Mangaldas & Co., said. That, he said, would be on account of muted GST collections as the Covid-19 pandemic has impacted consumption.

The government may have to resort to market borrowing to fulfill its commitment towards compensating states for losses due to GST, Bose told BloombergQuint.

The government is exploring various options to adequately compensate states that involve raising money from the markets with a guarantee from the central government or by extending compensation levy beyond five years and continuing to compensate states with the collections.

No Compensation For Five States
Maharashtra received the highest compensation of Rs 19,233 crore in 2019-20 followed by Karnataka that got Rs 18,628 crore, the statement said. Meghalaya received the lowest compensation of Rs 157 crore. States such as Manipur, Mizoram, Sikkim, Nagaland and Arunachal Pradesh reported surplus collection and didn’t need compensation from the Centre.

Source: Bloomberg-Quint

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GST Rates Can Be Reduced Further As Tax Base Increases: Finance Secretary

GST Rates Can Be Reduced Further As Tax Base Increases: Finance Secretary

GST rates can be reduced further once the tax base increases and everyone pays taxes properly, Finance Secretary Ajay Bhushan Pandey said on Thursday.

“Once the tax base increases and if we are able to enforce our tax laws and everyone pays taxes properly, there will be definitely scope for further reduction of taxes,” he said.

Addressing a session on ”Digitisation in Governance” at CAPAM 2020, he said the ultimate aim should be that to collect minimum taxes at minimum rates.
“The government should collect taxes which are absolutely necessary and to that extent, we need to increase our tax base,” he said.

Mr Pandey said the government is also working on reducing the number of forms under the GST.

He said that there were 495 forms in the pre-GST era with 17 different taxes which were levied by various states.

“After the introduction of GST, the number of forms have reduced to 17-18 and we want to further cut down the number of forms in GST,” he added.

He said that with IT-enabled platforms there is no inspector raj now and GST regime has become faceless.

Elaborating on the new measures for income tax assessment, including the faceless assessment of taxpayers, he said that the government is working on promoting self-compliance.

He added that the government is also working on providing tax profile of each taxpayer.

“We have all the information and if it can be shared in a secure manner, protecting the privacy of the individual, this will also help in securing loans from banks. The entire digital exercise is being undertaken across various government departments. We are making all that information available and providing it to each taxpayer,” Mr Pandey said.

He also said that all the information is getting integrated for the benefit of the citizens, including ease of doing business, ease of living and is enhancing capabilities.

Stressing on the importance of digitisation, Pandey said that India is the only country to have Aadhaar, Aadhaar-enabled payment system, direct benefit transfer scheme and UPI payment scheme. “Use of digitisation in governance has improved our speed, effectiveness, efficiency and capabilities,” he added.

He noted that in the last three months, Aadhaar-enabled transaction have crossed Rs 50,000 crore and UPI transaction has taken over debit card transaction and cash withdrawals.

Referring to the revenue trend, he said all figures are giving an encouraging signal that the economy is coming back on track sooner than what was being anticipated when the lockdown started.

Source: NDTV.

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Govt dumps new GST return system; to continue with modified version of existing one

Govt dumps new GST return system; to continue with modified version of existing one

The government plans to improve existing GST return filing system instead of rolling out a new model. The new system was supposed to be launched on 1 October this year. Yogendra Garg, Principal Commissioner, GST Policy at CBIC, while speaking at a webinar hosted by Assocham, said that the move is aimed at making compliance much easier.

The GST Network, the IT support of the GST regime, is working on modifying and improving the current returns and will soon announce an advanced version of the existing system.

They are going to introduce a new form GSTR 2B, which like the GSTR 2A will have details of purchases of the company or business with added information on input tax credits. The existing GSTR 1 form, which captures sales-related information, will be more detailed. The Form GSTR 3B, which gives the tax computation, will be auto-populated.

New features likely to be added in the new improved version of the existing return system include matching tool for comparison of GSTR 2A with purchase register, communication channel between buyer and seller, and an improved comparison table of tax liability and input tax credit (ITC) after incorporating ITC on IGST paid on imports.

The GSTN is also looking to reduce error on part of taxpayers by improving the process of linking GSTR1 with GSTR3B and GSTR2A data with GSTR3B for flow of ITC.

Meanwhile, Garg also said that the e-invoicing, a form of electronically-authenticated invoices, will be implemented from 1 October only for businesses with turnover of Rs 500 crore or more. Earlier, it was planned to implement e-invoicing for businesses with turnover of Rs 100 crore or more in a year.

Source: Business-Today.

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GST e-invoicing for businesses with Rs 500-cr turnover from Oct 1

GST e-invoicing for businesses with Rs 500-cr turnover from Oct 1

The government will notify a new GST e-invoice scheme under which businesses with turnover of Rs 500 crore and above will generate all invoices on a centralised government portal starting October 1, an official said on Thursday. Earlier, the turnover threshold for businesses was set at Rs 100 crore.

CBIC Principal Commissioner (GST) Yogendra Garg said the existing Goods and Services Tax (GST) return filing system would be improved further by incorporating the features proposed in the new system.

“Yesterday, the GST Implementation Committee has recommended that we will go ahead with October 1 deadline (for e-invoice)… To begin with we will not do it for Rs 100 crore and above, as we had notified. We will soon come out with a notification to make it Rs 500 crore from October 1 and as they stabilise, we will bring a date for Rs 100 crore turnover people,” Garg said at an Assocham event here.

The new turnover threshold would be notified by next week, he added.

The e-invoice was aimed at curbing GST evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.

In November last year, the government had said that from April 1 electronic invoice (e-invoice) would be mandatory for businesses with turnover of Rs 100 crore. Later in March 2020, the GST Council extended the implementation date to October 1.

The Council also exempted insurance, banking, financial instituions, NBFCs and passenger transport service from issuing e-invoice.

It had also decided to introduce the new GST returns filing system in phases between October 2020 and January 2021.

Garg said in the last 3 years of GST, there has not been a single month which saw returns being filed by all the businesses registered under GST.

About 70-80 per cent of GST registered businesses file returns within the due date.

“2019-20 has been a year of consolidation of compliance requirement…. We took a call that instead of introducing the new return system which we had promised, we will carry out improvement in the existing return system and take it closer to what we had promised in the new return system to make the certainty of credit,” he said.

Garg said the GST administration is working on a proposal to make a system available to businesses about how much input tax credit (ITC) is available with a taxpayer.

“The endeavour is to make life simpler for taxpayer. The vision for 4th year of GST is compliance burden gets reduced and e-invoice would help in this,” he said.

With regard to GST audits, Garg said central tax officers have been training state officers on the audit experience, some of the states had some good strategies which we are working on.

“To the extent possible these arre not going to be physical audits, these are more going to be desk audits,” he added.

Source: Economic-Times.

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GST Network makes annual returns available online for composition dealers

GST Network makes annual returns available online for composition dealers

The GST Network (GSTN) has made the annual returns for composition tax payers available on the GST portal. Composition dealers are those with the annual turnover of Rs 1.5 crore and who opt for a flat tax rate in GST, but without input tax credit.

This will enable 1.7 million composition dealers to file their returns on an annual basis with effect from 2019-20. Prior to this period, the composition tax payers were required to file their returns every quarter. From 2019-20, only a statement is required to be filed in the relevant form.

The deadline for filing annual returns for the composition dealers for 2019-20 has been extended to August 31 this year.

Source: Business-Standard.

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CBIC gives nod to clear pending GST registrations under ‘special drive’ by July 30

CBIC gives nod to clear pending GST registrations under ‘special drive’ by July 30

In a move that will help in processing of a swathe of pending applications for goods and services tax (GST) registration, the Central Board of Indirect Taxes (CBIC) has issued directions to all field offices to clear all the pending applications by July 30 under a ‘special drive’. Applications which were pending till June 30, and have not been processed till July 15, will be granted deemed approval, while applications received from July 1, 2020 onwards and that remain pending till July 28, will be deemed as approved on July 31.

“The three days deemed approval of application of registration would be resumed from August 1, 2020,” the Board said in a communication to all principal commissioners and commissioners across various jurisdictions. ET has seen a copy of the communication issued on July 17 by the GST policy wing. “Accordingly, it is requested that all pending applications of registration be disposed of, on or before July 30 as a special drive,” the letter added. ET had written about the issue last month.

The move to fast track registrations follows that of complete stoppage as the government had decided against granting any deemed approvals for GST registrations since March 25 – the beginning of the lockdown to counter the spread of Covid 19 pandemic – for fear of possible misuse during the period where central or state tax offices were either closed or operating with skeletal staff.

Applications that would otherwise take only three working days to be processed were held up for months, as the government extended the lockdown for over two months till June 1, after which offices started to reopen. The Board has asked GST Network to provide a list of registration applications that got deemed approval during the lockdown period – because of technical glitches – to jurisdictional officers so as to conduct physical verification of business premises ‘wherever required.’

Source: Economic-Times.

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Govt blocks fraudulent GST refund claims worth Rs 1,875 crore

Govt blocks fraudulent GST refund claims worth Rs 1,875 crore

The government has blocked fraudulent Goods and Services Tax (GST) refund claims worth Rs 1,875 crore involving 1,377 exporters after their addresses could not be traced, a Union finance ministry official said.

“This number of risky exporters, also, includes seven exporters accredited as star exporters,” the official said requesting anonymity.

The government rates export houses on the basis of their performance and accord them one to five stars.

The Central Board of Indirect Taxes and Customs (CBIC) has instructed its officials to verify the correct refund of input tax credit (ITC) by such risky exporters on the basis of pre-defined risk parameters, he added.

According to the official, while CBIC is focusing on quick disbursal of pending refunds to exporters, it also uses data analytics to identify “risky” exporter entities that take input tax credit fraudulently and monetise it by paying Integrated Goods and Services Tax (IGST) and claiming a refund on that.

Imports of goods and services are treated as inter-state supplies and attract IGST.

“The verification exercise is aimed at preventing unscrupulous exporters from defrauding the state exchequer and bringing a bad name to the exporting community at large,” he said.

CBIC has, however, assured all genuine exporters that they would continue to get their refunds in a timely manner in a fully automated environment, he said.

The official said a total of 7,516 exporters figure in the risky exporters’ list to date. “IGST refund worth Rs 1,363 crore is suspended in respect of 2,830 risky exporters. Adverse reports have been received in respect of 2,197 risky exporters,” he added.

Source: Hindustan-Times.

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