Browsed by
Tag: GST Rates

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

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

Textile bizmen relieved after GST Council stays tax hike

Textile bizmen relieved after GST Council stays tax hike

City businessmen into textiles and garments have heaved a sign of relief after the GST Council, in its meeting held on Saturday, did not hike the rate of 5% GST applicable on some fabrics and garments costing below Rs1,000. Earlier, there were hints from the central government that the 5% slab of GST would be abolished, and the minimum GST on fabrics and garments would be 12%.

Welcoming the decision, Knitwear Club finance secretary Harish Kairpal said, “We are thankful to the GST Council for not going ahead with the proposed hike in the rate of GST on certain fabrics and garments up to Rs1,000. Had the GST been hiked to 12%, it would have destroyed the textile and garment manufacturers, who are already struggling to cope with the current scenario, where there is a huge drop in demand, both locally and internationally. We also request the union government to bring out a package for our industry to face this recession, which is getting worse day by day.”

According to Atul Saggar, general secretary of Apparel Manufacturers Association of Ludhiana, “It’s nothing less than a big relief for us, as had the GST been hiked by 7%, it would have hiked our cost of production significantly, and we would have been forced to hike the rates of our products, and that too at a time where we are already short of orders.”

According to Sukhwinder Singh — another garment manufacturer, and member of the Ludhiana Business Forum, “The currently applicable GST of 5% on certain fabrics and garments costing up to Rs1,000 is already non- refundable, and when the same rate is into force for more than three years now, why did the government want to change it now. The stand taken by GST Council is really appreciable, as the hike of 7% GST would have definitely hit the garment industry hard, and our already low sales would have dropped further had the new rate of 12% GST been imposed on us.”

Source: Times-of-India

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

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

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

GST rates may rise on mobiles, footwear

GST rates may rise on mobiles, footwear

Ahead of the Goods and Services Tax (GST) Council meeting on Saturday, the government is pushing for a review of the levy on mobile phones, footwear, fertiliser and man-made fibres to correct a major discrepancy that has crept in where the duty on the finished product is lower than those on inputs.
The “inverted duty structure” is resulting in massive refund claims on tax paid on inputs, although the government does not allow credit for levies on input services and capital goods, making the tax regime inefficient. Estimated annual refund on account of inverted rate structure was estimated at around Rs 20,000 crore.

At least four items — mobile phones, footwear, manmade fabrics and fertiliser — have been identified for a possible change in levies, which may rise in a phased manner. The move is part of a review of the wider duty structure where several items such as utensils and renewable energy equipment were also flagged, although their volume is much lower.

The proposals have been discussed by a committee of officers on augmentation of revenue, which was also on the agenda for the last GST Council meeting. Sources said that there is little justification in retaining a 12% levy on mobile phones when many electronic items such as TV, water heaters and mixers are taxed at a higher rate. Besides, before the launch of GST, the levy was higher.

The issue is a little complex in case of fertilisers as the government will have to increase the subsidy to correct the inverted rate structure to ensure that farmers are not impacted. But officials reckon that a corrected GST rate structure would go a long way in refining the indirect tax system. Against taxes of around 9.75% before GST, the government had put fertilisers in the 12% bracket. But states got the GST Council to reduce the levy to 5%, creating a situation where Rs 6,000 crore have been claimed as input tax credit refund on fertilisers.

For man-made fibres, the textiles ministry has made a strong pitch for correcting the duty structure, arguing that differential rates and slow-refunds of accumulated input tax credit have affected the competitiveness of the industry and hit investment. The ministry has demanded that man-made fibres and yarns need to be brought under a uniform tax slab as it will benefit the spinning and power loom sectors.

Source: Economic-Times

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

Parliamentary panel calls for lower GST rates for troubled auto sector

Parliamentary panel calls for lower GST rates for troubled auto sector

A parliamentary panel suggested lower GST rate for the automobile segment at least till the revival of the sector, and uniform road tax across all states against the backdrop of negative growth in the automobile production since July 2018.

A parliamentary panel had examined the Demands for Grants 2020-21 of Department of Heavy Industry (DHI) and tabled its report in Parliament.

The automobile industry in India is one of the largest and fastest-growing sector and constitutes 27 per cent of industrial gross domestic product (GDP) and 49 per cent of manufacturing GDP. It provides about 37 million direct and indirect jobs and 15 per cent of total GST collection amounting to Rs 1.5 lakh crore.

“But, the committee observes that of late, there is a negative growth in the automobile production since July 2018,” said the report.

The committee noted that some of the factors that contributed to slowdown are non-availability of credit facility to consumers, stringent rules for loan sanction by banks, rise in price due to the upfront payment of third-party insurance for 5 years, introduction of BS-VI vehicles from April 2020; and higher rate of GST on automobiles and components.

Amid slowdown in the sector, the committee, among other things, recommended to either suspend or postpone the upfront payment of insurance for 5 years for the time being and reduction in GST rate to a lower slab “at least till the revival of the auto sector”.

Further, it made a case for introduction of incentive-based scrappage policy for creating purchase demand for new vehicles, reduction in import duty on lithium-ion cell battery which is used for operating the e-vehicles and levy of uniform road tax across all states.

The report said the committee “is pleased to note” that the Delhi-Chandigarh highway has been declared as the first e-vehicle friendly expressway of the country.

It desires that other expressways, including Delhi-Jaipur and Mumbai-Pune expressways, may also be made completely e-vehicle friendly soon with charging infrastructure in place at regular and frequent intervals.

Source: Business-Today.

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

CBIC notifies GST Rate of Lottery

CBIC notifies GST Rate of Lottery

The Central Board of Indirect Tax & Custom (CBIC) has notified the GST Rate of Lottery. 28%  Uniform rate of GST will be applicable to all lotteries.

The amendment will be effective from March 1st 2020.
Through this amendment, there is no distinction for lottery authorized by State Governments and lottery run by State Governments for the purpose of taxability and, hence, the standard rate of 28% shall apply.

The notification was issued in the name of Pramod Kumar, Director of Government of India. Further, the Central Government on the recommendation of the Council of Ministers exercised their power under Section 9(1) and Section 15(5) of the Central Goods and Services Tax (CGST), 2017 seeks to amend the Notification No. 1/2017-Central Tax (Rate) which was issued on June 28, 2017, for the purpose notifying the rate of Goods and Service Rates (GST) on the supply of lottery.

In the Notification No. 1/2020-Central Tax (Rate), the following amendments are done:
1.In the Schedule II of Notification No. 1/2017-Central Tax (Rate): 6% for S. No. 242 was omitted through this notification.
2.In the Schedule IV of Notification No. 1/2017- 14% for S. No. 228 and the related entries, and the following was substituted namely:
Entry No. Chapter Subject
228 Any Chapter Lottery
Therefore, through this amendment in Schedule II S. No. 242 was omitted and in Schedule IV, the government introduce the Goods and Service Tax Rates (GST) rates pertaining to the lottery.
Further, a notification consisted of a note, which pertained to the Principle Notification No. 1/2017-Central Tax (Rate) that was published on the Gazette of India on June 28, 2017, Extra-ordinary, Part II, Section 3(i) vide number G.S.R. 673(E), dated 28th June 2017 and last amendment by Notification No. 27/2019-Central Tax (Rate) dated December 31, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3(i) vide number G.S.R. 961(E) dated December 30, 2019.

Source: TaxScan

Get Your GST Returns Filed Easily and
Effortlessly!!!

Our GST software enables you to file your GST returns free of any hassle. Get more details by writing to us at gst@xattax.in.

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

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

States seek real-time access to GST returns, e-way bills

States seek real-time access to GST returns, e-way bills

Certain states have sought real-time access to annual Goods and Services Tax (GST) returns and e-way bills in order to check tax evasion, which can potentially address the ongoing fund crunch and help compensate states for their revenue shortfall, two officials aware of the matter said requesting anonymity.

Currently, these data are stored in the GST Network, which compiles reports and sends them to all the states and Union territories with a time lag.

Kerala finance minister Thomas Isaac confirmed the development and said,“Kerala may not require compensation cess at all if it is permitted to have real-time access to annual returns and e-way bills, so that tax evasion could be curbed,” Isaac said.

According to Isaac, ineffective tax collection is one of the three key reasons for tardy GST revenue collections across the country and real-time information would help many states nab evaders through the use of data analytics. The other two reasons, according to him, are the economic slowdown and steep cuts in GST rates.

“I will raise this issue in the GST Council,” he said. The GST Council is the apex decision-making body of the federal indirect tax structure that was rolled out on July 1, 2017. It is chaired by the Union finance minister and has finance ministers of states and Union territories as members.

Officials said states’ access to real-time data could be possible if they formally raised the issue at the council. Several states have been raising the issue of large-scale GST evasion at the council. In August last year, West Bengal finance minister Amit Mitra estimated GST evasion at ₹1 lakh crore and demanded an exclusive meeting on the issue.

Owing to inadequate compensation cess funds, the Centre has not yet compensated states for their revenue shortfall over two months – October and November. Ideally, that should have been paid by the second week of December. Even in the past, there was a delay of about two months in paying compensation for August and September, which was paid just two days ahead of the 38th GST Council meeting on December 18, 2019.

An amount of ₹35,298 crore was released on December 16 to pay states for their dues in August and September. The GST law assures states 14% growth in their revenue for five years and the Centre is committed to meeting any shortfall in revenue through cess money, which is levied on luxury goods and sin products such as liquor, cigarettes and tobacco products.

The finance minister of another state, who did not wish to be named, said that there was scope for improvement in GST compliance but that would not be able to meet the entire revenue gap. Commenting on the proposal on real-time access to GSTN data, the minister said, “I doubt this will eliminate the revenue deficit. The ball is always in our court , provided those at the helm allow it to be dealt with efficiently.”

Experts said access to data would certainly help states in better compliance. Common access could be given to states through login IDs and passwords. Pratik Jain, partner and leader, indirect tax, said, “Logistically it should not be difficult.”

The Union government is making all-out efforts to plug revenue leakages of both central GST (CGST) and state GST (SGST). It will hold a national conference on January 7 to address the issue, the officials cited above said. This conference is being organised to curb fraud and evasion and check fake input-tax credits.

Source: Hindustan-Times

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

Finance panel wants three-tier GST structure: Report

Finance panel wants three-tier GST structure: Report

The Fifteenth Finance Commission (FFC) has recommended simplifying the GST structure into three slabs, according to a report in Hindustan Times.

The Finance Commission has suggested a uniform rate of 17 percent, sources told the publication. GST, introduced in July 2017, currently has four rates – 5 percent, 12 percent, 18 percent and 28 percent.

Other suggestions by the panel include a lower merit rate for items of common consumption and a higher rate on luxury and sin goods, the report said.

Moneycontrol could not independently verify the story.

The Finance Commission has forwarded the suggestions to the GST Council, which makes the final decision on the rates, Hindustan Times reports.

Some policymakers are in favour of rationalising the slabs to simplify the GST structure and boost revenue collections, which have recently seen a slump.

GST collection had crossed the Rs 1 lakh crore mark in November 2019 after three months of lower collections.

Finance Minister Nirmala Sitharaman also recently said there was a need to rationalise GST rates.

“Eventually, we will of course have to rationalise (the rates). Do we want so many slabs? Do we want to have just two or three slabs? Original intent was that we have just the three —merit, sin and the standard; just the three rates,” Sitharaman had said.

In another report in The Economic Times, the government is considering allowing companies to clear current GST dues without first clearing past pending payments.

Officials from the Ministry of Corporate Affairs (MCA) and Department of Revenue (DoR) have begun discussing the matter, the report said.

Source: Money-Control.

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

No possibility of GST rate hike till revenue stabilises: Sushil Modi

No possibility of GST rate hike till revenue stabilises: Sushil Modi

Days after the Goods and Services Tax (GST) Council refrained from hiking the tax rates, Bihar Deputy Chief Minister Sushil Kumar Modi said there was no possibility of any such move till revenue stabilised. He said the Council had decided to consider changes in the rates once a year, and not in each and every meeting.

A hike in GST rates, he said, would have hampered consumption amid the economic slowdown. “I want to assure you that not a single state, as well as the Union government, is ready to raise tax rates,” he said, speaking at FICCI’s 92nd annual convention. Also, there wasn’t scope to cut rates now till GST revenue stabilised, despite falling consumption, he said. “At a time when the economy is in a slowdown, if you cannot cut the tax rate, do not increase the rates, to boost consumption. At these times, you cut duties and tax rates, and not increase them,” he said.

The revenue augmentation panel in the Council meeting last week recommended revisiting and restructuring the GST rate slabs, besides correcting the inverted duty structure. The panel listed 24 items, including mobile phones, footwear, fabrics, LED light, medical equipment, utensils, agri machinery, pharma, and renewable components, which have an inverted duty structure, resulting in refunds of close to Rs 20,000 crore annually. Inverted duty structure refers to higher duties on inputs than those on the final goods and services.

On broadening and rationalising the GST rates, some of the suggestions compiled by the panel included hiking rate on precious metals from 3 per cent to 5 per cent, taxing higher segments of education and health.

Revisiting rates on certain items that went down from 28 per cent to 18 per cent was also on the list.

Compared to the pre-GST period, 99 per cent of the goods and services have less taxes levied on them post-GST, Modi said. However, he added that fake invoicing had become a major issue and the government was looking at ways to check the menace.

The Council meeting on Wednesday had decided to block the input tax credit for fake invoices in certain cases and further restricted the credit for invoices not uploaded in relevant forms to 10 per cent from the current 20 per cent of the eligible credit. Four of the eight months in the current financial year have yielded less than Rs 1 trillion. After plummeting to a 19-month low in September at Rs 91,916 crore, GST collection recovered to Rs 1.03 trillion in November, posting a 6 per cent year-on-year growth rate on the back of festive demand.

Despite that collection was lower than the rate needed to meet the steep target for FY20.The officers’ panel had red-flagged that the Centre may be staring at a compensation cess shortfall of at least Rs 63,200 crore this financial year, which may balloon to Rs 2 trillion by 2021-22. Here, it assumed a revenue growth of 5 per cent, while the actual growth in the April-November period is 3.7 per cent. The department of revenue had earlier this week pegged the target for GST collection at Rs 1.1 trillion a month for December-March 2019-20 with one of the months yielding Rs 1.25 trillion.

Source: Business-Standard

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

×

Hello!

Click one of our representatives below to chat on WhatsApp or send us an email to amul.patel@sailotech.com

× How can I help you?