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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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Nirmala Sitharaman holds meeting on GST simplification

Nirmala Sitharaman holds meeting on GST simplification

Finance Minister Nirmala Sitharaman on Saturday held meeting with chartered accountants, traders and other stakeholders as part of efforts to further simplify Goods and Services Tax (GST) forms and make the filling process more user-friendly.

To highlight the problems faced by GST filers, the stakeholders attempted to file specific returns on a real-time basis in the meeting and tried to show where they are facing difficulties.

The finance minister assured the stakeholders that their suggestions on simplification of GST filing will be implemented soon, Revenue Secretary Ajay Bhushan Pandey said after the meeting here.

The minister also suggested to hold similar exercises in the entire country next month to understand the issues and concerns of GST filers, the secretary further said.

“Commissioner of a circle will call in some of assesses who will file in return and give suggestions. It was also decided that the GSTN and CBIC will interact regularly after December 7 as this is an evolving system and this kind of interaction are required for further improvement of the system,” he said.

New GST return is available on the portal for trial and consultations will be held all across the country on December 7 to get feedback on the new system, he said, adding about 85,000 returns on a voluntary basis have been filed so far although the new form becomes mandatory from April 1, 2020.

As a part of the ongoing efforts to address a concern raised on the process of filling GST forms, the finance minister invited Rajasthan Tax Consultants’ Association, ICAI, CAIT and Laghu Udyog Bharti and they attempted to file specific returns on a realtime basis and tried to present where they are having difficulties.

Some of the suggestions were with regard to change or amendment to entries in the filing, credit and debit note, he said.

“This meeting was fruitful. In some cases they were not aware of the existing instructions, in some cases they pointed out to confusion and some suggestion with regard to further easing were made,” he said, adding that some clarificatory circular would be issued wherever required and other suggestions would be implemented.

No major issues were found in the basic filing of return, he said.

CBIC Chairman, GSTN CEO, Member (Tax Policy), CBIC, AS (Revenue), Joint Secretary (Revenue), JS (TRU-1) and EVP- GSTN were also present in the meeting.

Source: India-Today

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No GST returns, no E-way bills! Centre to crack down on non-filers

No GST returns, no E-way bills! Centre to crack down on non-filers

Concerned with the dipping monthly collections of Goods and Services Tax (GST), the government and indirect tax department are now planning stricter measures against non-compliant taxpayers.

According to sources, the tax department is now planning to block the facility to generate e-way bill for taxpayers who do not file two consecutive GSTR-3B returns with effect from 17 November 2019. Once the taxpayer has filed one of the pending returns, the facility to generate e-way bill will be automatically restored.

GSTR-3B is monthly return that every registered GST payer has to file. It contains details of sales and purchases made by a business.

Sources told Business Today that the required connectivity between GST Network (GSTN) and the e-way bill system and development of an application to block and unblock facility has been developed and tested between two systems.

While a decision to this effect was taken by the GST Council in April, the reason for the ‘extreme’ step could be to check leakages of taxes. Non-filing of returns is still high and the tax department thinks this is a major cause for falling GST collections.

“With a continuous dip in revenue for the last few months, this is a step towards curtailment of tax leakage. Businesses need to ensure disciplined filing of GSTR-3B to avoid business disruption,” says Anita Rastogi, partner, indirect taxes, PwC.

According to the indirect tax department, as of 8 November 2019, 21.99 lakh taxpayers have been found to have not filed GSTR-3B returns of August and September 2019.

These defaulters now face possible blocking of the facility to generate e-way bill from 17 November. The department, however, is planning to send alert messages to such taxpayers if they come to e-way bill website, and ask them to file their returns by the 17 November.

The problem though is that integration testing of backend applications of few states with GST System is not yet completed. Unless the facility to unblock the e-way generation facility is developed, the department cannot go ahead with blocking the facility.

Rajat Mohan, a partner in chartered accountancy firm AMRG & Associates, said that deferment of implementation of tax provisions on the premise that technology is not ready indicates that the tax authorities are still not ready to identify and capture the culprits (evading tax) on a real-time basis.

In September 2019, the GST collection fell by 5.3% to Rs 95,450 crore as compared to a year-ago period. In August, the GST collections fell to Rs 92,000 crore, which was lower than the previous year collection by over 4%. With the average monthly collections so far this year at around Rs 98,000 crore, way below the required Rs 1.20 lakh crore, the government is looking at a large shortfall in GST collection.

With five more months to go in this financial year, the latest move is probably a last-ditch attempt by the government to revive GST collections.

Source: Business-Today.

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Industries struggle to file GST annual returns, seek time

Industries struggle to file GST annual returns, seek time

With the deadline (August 31) nearing for businesses to file GST annual returns for the previous year, industries need more time, say micro, small and medium-sector enterprises here.

“We are sending a memorandum to the Government appealing to it for time to file the annual returns. Not even 30% to 40 % of the MSMEs here have the filed the returns. It is a cumbersome process and the industries need time and support of Chartered Accountants. But, the CAs are already having so many files to handle that they cannot help all the SMEs here,” said president of Coimbatore District Small Industries Association (CODISSIA) president R. Ramamurthy.

K. Jalapathi, secretary of the Southern Region council of the Institute of Chartered Accountants of India (ICAI) told The Hindu the Government fixed August 31 as the deadline after postponement of the deadline several times.

However, the required forms were made available to the industry only recently. Nation-wide it is said that just 10 % of the assessees have filed the annual returns.

This is because the returns requires details (GST rates, HSN code, etc) for all the goods purchased and sold. Not all companies will have these details or they have to compile all the information.

It takes two to three days to file each return.

According to Rani (name changed), a micro unit owner here, the system does not accept even minor discrepancy in the numbers. Some of the customers or suppliers do share the GST details.

But, they might not have filed the monthly returns. Not all industries will have every transaction bill details. Further, for the monthly returns only the summary of the transaction is needed. For the annual returns, every small detail should be filed. Initially there was no clarity on the system.

Chartered Accountant G. Karthikeyan, who is also former chairman of The Indus Entrepreneurs (TiE), Coimbatore, says that there are 18 categories under which there should be no discrepancy in the annual filings.

If there is, it should be set right. Monthly filing and annual filing of the returns are not the same. This increases the compliance cost for even small-scale industries.

The GST Commissionerate here has opened help desks at its offices from August 21 to 31 to help the assessees with filing of the annual returns (GSTR – 9).

It will also conduct a workshop on August 22 on its premises at 2 p.m.

Source: The-Hindu.

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Taxman to ‘vigorously pursue’ non-filers of GST

Taxman to ‘vigorously pursue’ non-filers of GST

The Central Board of Indirect Taxes & Customs (CBIC) intends to ‘vigorously pursue’ non-filers of Goods & Services Tax (GST) in a move to help boost GST collections.

“I would urge all field officers to vigorously pursue with the non-filers amongst Centre’s assessees and get the due revenue deposited,” CBIC Chairman Pranab Kumar Das said in a letter to all his colleagues. His statement comes at a time when, on an average, 20 per cent assessees are not filing their returns thus impacting the revenue collection. This has been happening with both Centre’s and States’ assessees.

The Centre’s assessees are 10 per cent of taxpayers having turnover below ₹1.5 crore and 50 per cent taxpayers having turnover above ₹1.5 crore. The remaining 90 per cent and 50 per cent taxpayers belonging to both the categories are called States’ assessees.

Meanwhile, a senior official dealing with indirect taxes said vigorous persuasion does not mean adversarial environment. “Effort would be to convince non-filers to file returns and deposit tax as this will benefit them,” another official said. From August 21, non-filing of returns for two consecutive tax periods will result in a bar from generating e-way bills.

GST filing

According to the law, every person registered under the GST will have to file returns in some form or the other. A registered person will have to file returns either monthly (normal supplier) or on a quarterly basis (supplier opting for composition scheme). An ISD (Input Service Distributor) will have to file monthly returns showing details of credit distributed during the particular month. A person required to deduct tax (TDS or Tax Deducted at Source) and persons required to collect tax (TCS or Tax Collected at Source) will also have to file monthly returns showing the amount deducted/collected and other specified details. A non-resident taxable person will also have to file returns for the period of activity undertaken.

As of now, there are more than 1.20 crore GST assessees, of which nearly 1.02 crore have to file returns on a monthly basis, while the remaining file on a quarterly basis.

The CBIC chief’s appeal has come at a time when average revenue collections during the current fiscal is over ₹1 lakh crore. Certainly, this is sufficient to meet the scaled down target of GST collection as projected in the Budget. Finance Minister Nirmala Sitharaman scaled down the GST collection target to ₹6.63 lakh crore, from ₹7.61 lakh crore. Accordingly, combined with State GST (SGST), the average monthly collection is now estimated at nearly ₹1 lakh crore as against ₹1.14 lakh crore (based on the data of Interim Budget).

However, scaling down the target does not mean that the government wants less revenue. It needs more funds to meet the rising expenditure and contain fiscal deficit. Data show that net tax collections (direct as well as indirect) have not been exceeding exceptions. Net tax collections during the first three months (April-June) have been just 14.7 per cent of the Budget Estimate while overall expenditure was nearly 26 per cent of the Budget Estimate which means the fiscal deficit is nearly 61 per cent of the Budget target.

Source: The-Hindu-Busness-Line.

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Anti-profiteering in GST: Caught in litigation, extension in tenure may not be enough

Anti-profiteering in GST: Caught in litigation, extension in tenure may not be enough

Anti-profiteering provisions have been in force for nearly two years and at the recent GST Council meeting the tenure of the National Anti-Profiteering Authority (NAA) has been extended for two more years, till November 2021. Although the key reason given for this extension was the large pendency of complaints (around 350) which still needs to be investigated, it is fair to say that the presumption is that GST benefits are still not being passed on to consumers. But is the extension of tenure all that is required to ensure compliance with these provisions?

There are also reports that the GST Council, along with the extension of the tenure of the NAA, has approved a new mechanism to check profiteering. Tax officers have been empowered to conduct anti-profiteering checks in their jurisdictions. This clearly signals that complaints and investigations on profiteering will increase and the NAA will be around for much longer than the recent two-year extension. A new penalty may also may be imposed if the profiteered amount is not surrendered within a prescribed time limit.

Given that anti-profiteering related investigations will increase and impose heavier fiscal penalties there is an urgent need to address three key issues:

Introduce an appellate mechanism, within the GST law, for appealing the orders of the NAA;
Broaden the membership of the NAA to include a judicial member; and
Define methodologies/frameworks for compliance.

This will ensure that the core objective of ensuring that benefit of GST is passed on to consumers, is achieved in an efficient and timely manner.

It is worth noting that when NAA was originally constituted in November 2017 for a period of two years, it was set up primarily as a deterrent to big businesses and hence envisioned that its actions would be restricted. This is far from reality and the actions of the NAA have been far more widespread and have impacted almost all sectors and all sizes of businesses.

Considering that there is no appellate mechanism prescribed under the GST laws against an order of the NAA, can it be assumed that the government had not expected challenges on such orders? Whatever may have been the thinking on this aspect, the legal view adopted is that the law does not provide a statutory mandate to appeal orders of the NAA before the Tribunal, High Court or the Supreme Court. Hence, the only recourse for taxpayers is to file a writ petition in the High Court.

Almost all orders of the NAA where profiteering has been alleged, are being challenged in various High Courts. In most cases the courts have stayed the orders and the litigation is in progress. With most NAA orders being embroiled in litigation, the key purpose of the existence of the NAA, which is to ensure that the GST benefit is passed on to the consumer, is yet to be achieved. An alternative form of recourse is required which should assist in the faster resolution of cases.

Some of the writ petitions have challenged the constitutional validity of anti-profiteering provisions. While this challenge is being deliberated by the courts, the government may be able to address some of the other concerns/issues that have been raised.

In the absence of a statutory appellate process, the decision of the High Courts on anti-profiteering matters, will very likely be sent back to the NAA for implementation. This may create a conflict, as the authority that has passed the original order will have to review the orders based on directions of the High Court and then pass a revised order. This is likely to give rise to further litigation. One option to address could be to induct a judicial member on the NAA to ensure that a legal view is also taken into consideration while deliberating on High Court orders. Another option may be to create a body within the NAA to review and implement the orders of the High Court. There may be other options as well and the government should explore all possible alternatives to address this issue. In all such cases, the focus of the NAA should be to resolve the matter, pass on the benefit to the consumer and not litigate further.

As it is likely that anti-profiteering related investigations will increase going forward, there is also an urgent need to introduce an appellate mechanism, within the GST law, for challenging the orders of the NAA. This will ensure that going forward, writ jurisdiction is not the only option for challenging orders of the NAA and may also result in faster resolution of cases.

One key and outstanding demand of tax payers is for a specific mechanism/methodology to calculate profiteering. This may minimise the subjectivity in the investigation process and therefore litigation. The NAA’s position has been, and remains, that a standard methodology cannot be prescribed for all sectors and hence none is being prescribed. This position needs to be revisited urgently, more so as the NAA now has the benefit of experience from over a hundred investigations. The contradictory positions being adopted in some orders has also added to the complexity of complying with the provisions. One option could be to reconstitute sector-specific committees, set up during GST implementation, which were headed by senior tax officers. These committees can provide guidance on prescribing methodology for compliance with the anti-profiteering provisions.

With the focus once again on initiatives for improving Ease of Doing Business in India, anti-profiteering related concerns of taxpayers do need to be addressed on a priority. The trust deficit between the business and tax administration on this subject needs to be reduced to ensure that the key purpose of the consumer benefiting by GST implementation, is served.

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Source: Economic-Times.
Quicker one-form GST filing process ready for roll-out

Quicker one-form GST filing process ready for roll-out

The Union finance ministry is finally ready to move ahead with the single monthly return system for the Goods and Services Tax (GST), a move that will simplify the process of filing returns and also getting input tax credit.

The three-phase plan was announced last May to address complaints about the difficulties in filing multiple returns (and the higher cost of compliance). According to that plan, for six months, in a transition phase, businesses would continue to file two returns, GSTR1 (for sales) and GSTR 3B , a summarised return form. After six months, they would move to a single filing on a to-be-introduced form. For consumer-facing businesses, the simplified form would be about total sales while for business-facing businesses, the form would incorporate invoice details.

That move was delayed while the back-end, the GST network (GSTN), was being made ready for this. Now, government officials directly familiar with the matter say the simplified form is ready, and could be launched by July, soon after the new government takes over.

No further clearances are required because the GST Council already cleared the three-phase plan last May.

The third phase will involve invoice matching.

The introduction of the new forms will reduce the annual compliance burden of traders from 24 GST returns (GSTRs) to just 12, apart from one return for the entire financial year, the officials said requesting anonymity. Technically, they would have had to file 36, but the second form GSTR 2 is not filed by most .

July will see a trial run of the second phase, the officials cited above said.

One of the major criticisms of GST was the compliance burden of filing returns. This was one of the reasons for the principal Opposition, the Congress party, to criticise the new tax regime. Traders, too, have been demanding a reduction in the number of returns to be filed.

“The new return mechanism should help the industry as multiplicity of filings is avoided, with a single monthly return in place. However, it also means that greater control would need to be exercised on vendor’s compliances as [after a transition period] input credit will be limited to the extent of GST amount reflected on the portal,” said Pratik Jain, partner and leader-indirect tax, PwC.

“The reconciliation between the company’s purchase records and that reported by the vendors would need to be performed on a regular basis and can’t be the year-end exercise. Government, on the other hand, would expect significant reduction in tax leakage once the new mechanism is fully implemented,” he added.

Parag Mehta, partner, NA Shah Associates LLP, said that the single return would allow the trader to verify before filing the returns whether the vendor has uploaded the invoices. “Hence Input Tax Credit (ITC) will be allowed based on the same. It will also ease the compliance as various reporting tables of GSTR 1, 2 & 3 will be combined in one single form. Number of returns will come down from originally proposed 36 to 12 per year. Will benefit small and medium enterprises to be GST compliant,” he said.

Rahul Dhuparh, DGM – GST, Taxmann said: “We can hope that single GSTR will reduce the compliance burden and there will be less cases of mismatch in the data reported to the authorities. However, whether it will be helpful or not will depend on the information sought by the government in the new form from the taxpayers. If this will happen, the biggest issue of credit mismatch will be resolved as the data is getting auto populated to the supplier and recipient. This will eventually reduce the time of a supplier to file his statement of output supplies and returns for making payment of taxes.”

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Source: Hindustan Times.
Companies get notices for seeking input tax credit on GST paid by their vendors

Companies get notices for seeking input tax credit on GST paid by their vendors

Many companies are reportedly under the scanner of the tax department with authorities beginning to quiz input tax credit claimed by firms in lieu of Goods and Services Tax (GST) paid by their vendors.

Tax sleuths have issued notices to companies in several states, including Gujarat, Telangana, Andhra Pradesh, and Haryana, confirming apprehensions that inspection will intensify in the new financial year as the government looks to plug the leaks, says an Economic Times report.

It may be noted that the GST rule allows a reversal of input tax credit claimed by a company if its vendor has not paid the tax for which credit is being claimed. At present, there is no procedure to determine if vendors have paid GST. The return-filing status of a registered person can only be viewed on the GST Network Portal, but payment of tax cannot be determined. Buyers can only validate whether vendors have included the invoice in their GST filings, the report mentioned.

A company may have actually passed on the tax to a vendor for which it wants to claim credit, it may not be possible to determine if the vendor has deposited the GST. “In such a situation, requiring the buyers to forgo their input credits when they have already paid the GST to vendors and exercised due diligence to the extent possible does not seem like a fair proposition,” Pratik Jain, national leader indirect tax at PwC, told ET.

Given the stakes involved, the issue may result in litigation, he mentioned, adding that the government should review the law and modify if they consider deem it appropriate, and there should be some clarity provided to the taxpayers as to how the government expects them to confirm that vendors have indeed paid tax.

The financial daily quoted M S Mani, a partner at Deloitte India, as saying, “Adequate safeguards to check misuse of the facility such as a time limit to complete the pending compliance/reconciliation can also be prescribed to protect revenue.”

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: Times Now News.
Govt extends deadline for GST sales return for March until Apr 23

Govt extends deadline for GST sales return for March until Apr 23

The government has extended the last date for filing summary sales return, GSTR-3B, for March month by three days until April 23.

“Due date for filing GSTR-3B for the tax period March 2019 has been extended to April 23, 2019,” a ticker on GST portal ‘gst.gov.in’ said.

The last date for filing summary sales return and payment of taxes for March is April 20, 2019.

AMRG & Associates Partner Rajat Mohan said, “Glitches in GSTN is leading to frequent extensions in the filing of tax returns. Tax filers also need to improve the habit of filing at the last date, leading to burden on the servers resulting in the collapse of the same.”


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Source: Economic Times
Businesses with turnover over Rs 2 cr can now start filing GST audit reports for FY18

Businesses with turnover over Rs 2 cr can now start filing GST audit reports for FY18

Businesses with an annual turnover of over Rs 2 crore can now start filing GST audit reports for fiscal 2017-18 as GST Network (GSTN) has made its format available on its portal.

The audit report for 2017-18, the first year of the goods and services tax (GST) implementation, is to be filed by June 30.

The ministry on December 31, 2018, notified the annual returns forms GSTR-9, GSTR-9A, and GSTR-9C. The GST Council in December extended the last date for filing these forms by three months to June 30.

GSTN has now made available offline utility of GSTR-9C which can be filled up by the taxpayer and uploaded on the portal.

GSTR-9 is the annual return form for all taxpayers registered under GST, GSTR-9A is for composition taxpayers.

GSTR-9C is a reconciliation statement, duly verified and signed by a chartered accountant or a cost accountant, and required to be furnished along with the filing of annual return by the taxpayer whose turnover is above Rs 2 crore during a financial year.

EY Tax Partner Abhishek Jain said the industry was long awaiting the offline utility and the mechanics of filing the GSTR-9C online.

“Clarifications like digital signature of auditor being required, balance sheet and profit/loss account being attached, etc, should help businesses plan well for executing this compliance,” Jain said.

AMRG & Associates Partner Rajat Mohan said timely availability of the utility for filing GST annual audit report is a great assistance to taxpayers, especially those having a multi-locational places of business.

“Taxpayers have more than 75 days to file GST annual audit reports and in case they start early then there would be no need for any extensions on the last day,” Mohan added.

XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: Money Control.

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