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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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Govt extends FY20 GST return filing date for composition dealers till Aug 31

Govt extends FY20 GST return filing date for composition dealers till Aug 31

The government has extended the due date for filing annual return by composition dealers for 2019-20 till August 31.

The Central Board of Indirect Taxes and Customs (CBIC) issued a notification, extending the deadline for filing GSTR-4 annual returns for 2019-20 by composition dealers from July 15 to August 31.

GST composition scheme can be opted by any taxpayer whose turnover is less than Rs 1.5 crore. Under the scheme, manufacturers and traders are required to pay GST at 1 per cent, while it is 5 per cent for restaurants (which do not serve alcohol).

Source: Economic-Times.

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FM asks GST officers to proactively address issues faced by biz in tax compliance

FM asks GST officers to proactively address issues faced by biz in tax compliance

Finance Minister Nirmala Sitharaman on Wednesday asked GST officers to foresee the issues faced by domestic businesses and address them proactively so that they can compete on a global scale and build a self-reliant India.

In a message to tax officers on the third anniversary of Goods and Services Tax (GST), Sitharaman also said there is scope for easing compliance further for taxpayers, especially MSMEs.

Asking taxmen to focus on the clarion call by Prime Minister Narendra Modi for an ‘Atmanirbhar Bharat’, she said for this motto of self reliance tax, especially GST, administration will have a large role to play.

“We must foresee the issues faced by our business community and proactively address the same to enable them to compete on a global scale. Only by this proactivity can we ensure much needed economic growth in near future,” she said in the message on the occasion of GST Day, 2020.

GST, which subsumed over a dozen local taxes, was introduced on July 1, 2017. Since then the GST process has been simplified and return filing made easy especially for small businesses.

The GST administration has also introduced SMS-based return filing system for ‘NIL’ filers.

Sitharaman said more efforts are required to ease tax compliance further for taxpayers and made an assurance that the government is committed to continuing these reforms in future as well to facilitate taxpayers.

“We must strive to make the tax administration so simple that taxpayers find it easy to comply with all their tax obligations. This is the true essence of ‘ease of doing business’ as far as tax administration is concerned,” she said.

The Minister also said the COVID-19 pandemic has led to some disruptions in the economic activities in the country.

She also congratulated Central Board of Indirect Taxes and Customs (CBIC) and its officers for handholding taxpayers during this crucial time and disbursing record amount of refunds to ease their cash flow.

Source: Economic-Times.

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Government rolls out facility of filing of Nil GST return through SMS

Government rolls out facility of filing of Nil GST return through SMS

In a bid to make compliance easier for taxpayers, the Government on Monday allowed filing of Nil GST monthly return in FORM GSTR-3B through SMS.

This would substantially improve ease of GST compliance for over 22 lakh registered taxpayers who had to otherwise log into their account on the common portal and then file their returns every month.

Now, these taxpayers with NIL liability need not log on to the GST Portal and may file their NIL returns through a SMS. According to a statement, the functionality of filing Nil FORM GSTR-3B through SMS has been made available on the GSTN portal with immediate effect.

The status of the returns so filed can be tracked on the GST Portal by logging in to GSTIN account and navigating to Services>Returns>Track Return Status. The procedure to file Nil returns by SMS is as follows: –

“This is a good move by the Government to ease the compliance burden for taxpayers with nil liability. India ranks a lowly 115 out of around 190 countries in ease of paying taxes, and such initiatives are definitely needed to make the compliances easy, less time consuming and in line with global best practices,” said Harpreet Singh, Partner, KPMG India.

Similarly, MS Mani, Partner, Deloitte India says, “Filing Nil returns through an SMS would significantly help smaller businesses as they can now focus on businesses revival.”

Source: Economic-Times.

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Nandan Nilekani gets govt summons over persisting GSTN glitches

Nandan Nilekani gets govt summons over persisting GSTN glitches

The government has asked Infosys chairman Nandan Nilekani to explain why the IT major has failed to fix glitches in the GST Network.

According to TNN, Nilekani will have to make a presentation when the GST Council meets next.

The government recently staggerred the deadline for filing returns as Infosys executives were unable to address the concerns. These include a slow platform, log-in errors, as well as delays in getting one-time passwords (OTPs).

Meanwhile, in a strongly worded letter to Infosys on March 5, the ministry said some of the problems highlighted as early as 2018 are still unresolved and failures month after month lead to genuine taxpayers “getting frustrated”.

According to the report, the failure happened despite summons to senior company executives by revenue secretary A B P Pandey, prompting the finance ministry to take up the issue with Nilekani over a month ago. Finance minister Nirmala Sitharaman has also held discussions on the issue, discussing the GST Network, as well as Infosys’s role.

The IT company has developed the software for GST Network (GSTN) — which provides the technology backbone for Goods and Services Tax (GST).

The GST Council, headed by Sitharaman, is scheduled to meet on Saturday.

Officials admitted that the IT platform has not stabilised even two and a half years after GST was rolled out. Even earlier, a ministerial panel had ticked off Infosys as it believed that the IT major had not deputed senior executives across states to tackle glitches that had emerged, prompting the Bengaluru-based company to deploy better quality manpower.

Repeated problems with the platform, which taxpayers claimed often delay filings beyond the deadline and lead to penalties, have also led to the Supreme Court recently asking the government to resolve technical difficulties.

Source: Economic-Times

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Union Budget 2020: Fake invoicing under GST a non-bailable offence

Union Budget 2020: Fake invoicing under GST a non-bailable offence

In order to crack down on fake invoicing and fraudulent input tax credit (ITC) refunds under the goods and services tax (GST), the Budget has introduced strict penal provisions under the GST legislation, making it a non-bailable offence. The move has already been approved by the GST Council.

Besides, Finance Minister Nirmala Sitharaman announced that the new GST return framework and e-invoicing would be implemented from April 1, to improve compliance and plug the tax revenue leakages.

According to the government, the masterminds of fraudulent ITC rackets involve people like daily wagers, rickshaw pullers etc. As per the changes in the law, those fraudulently availing ITC without invoice or bill in cases where the amount of tax evaded or the amount of ITC wrongly availed or utilised or refund claimed worth over Rs 5 crore will be punishable with imprisonment for a term which may extend to five years and with fine and shall be cognizable and non-bailable.

“Further, the scope of Section 132 has been expanded by extending the provisions to a person who causes to commit and retains the benefits arising out of different offences,” said Abhishek
GST collections touched Rs 1.11 trillion in January, the second highest monthly collection since the roll out, the third straight month of GST receipts crossing the Rs 1-trillion mark.

“With an eye on the future of Indirect tax regime in India, this year’s Budget has aimed at simplification of tax compliances. New GST return framework and E-invoicing would be implemented from April 1, 2020, primarily in an attempt to plug the tax revenue leakage on account of fake invoicing and fraudulent claims of input tax credit,” said Anita Rastogi – Partner, Indirect Tax & GST.

Source: Business-Standard.

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Central government, states to get tough on GST refund claims

Central government, states to get tough on GST refund claims

Central and state government officials on Tuesday decided to scrutinize goods and services tax (GST) refund claims more diligently, compulsorily investigate all fake claims and step up coordination between income-tax and GST authorities.

The move to tighten enforcement measures comes amid the continued shortfall in GST revenue collections.

The decision to deal with fake tax refund claims by businesses and traders with no leniency was taken at a meeting of central and state officials in the capital.

At the meeting, led by revenue secretary Ajay Bhushan Pandey, it was decided to set up a panel of officers to recommend quick measures to curb “fraudulent refund claims, including the inverted tax structure refund claims and evasion of GST”, said an official statement. The panel will give its advice within a week, which may be implemented across the country by January-end, it added.

With lower-than-expected revenue collection leading to friction between Union and state governments, primarily over delays in compensation payments to states, the authorities have decided to become more strict in their approach to enforce provisions of the law. In the first two years since the indirect system was introduced, the government had taken a lenient view to help businesses make a smooth transition to the new tax regime.

On Tuesday, officials also explored ways of sharing data among the GST Council, Central Board of Indirect Taxes and Customs (CBIC), Central Board of Direct Taxes (CBDT), the revenue department and the various enforcement agencies under the government.

Considering that fraudulent claims for input tax refunds are made on raw material of products allegedly exported, officials explored the possibility of linking GST refund for risky and new exporters with the foreign exchange remittances they receive.

The other proposal was to insist on a single bank account for foreign remittance receipt and GST refund disbursements.

Verification of tax credits availed by taxpayers that do not match with what their suppliers have disclosed was also discussed, the statement said.

Source: live-Mint

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GST Council votes for a change, shifts lotteries to highest slab

GST Council votes for a change, shifts lotteries to highest slab

The Goods and Services Tax (GST) Council on Wednesday departed from its practice of consensus-based decision-making, opting the first time for a vote to settle differences among states over the taxation of lotteries.

The council also deliberated upon a presentation made by a committee of officers set up to study revenue augmentation, but refrained from any generalised rate increase or removal of exemptions.

“The council has decided to impose a single rate of 28% on state-run and authorised lottery,” union finance minister Nirmala Sitharaman said after the 38th meeting of the GST Council.

It decided to put the matter to vote following wide divergence over whether there should be a single rate or dual rates.

“Every attempt was made to keep the set tradition alive … Every attempt was made to convince … But, eventually the council was reminded that the rules allow (for voting) and that tradition is not part of the rule book,” Sitharaman said. “I took the sense of the house … and we went ahead with the decision to have a vote. So, it is not enforced by the council, or by me as the chair.”

All decisions in the previous 37 meetings of the GST Council, headed by the union finance minister with state ministers as its members, had been taken unanimously.

Some Steps Against Tax Evasion
These included crucial ones on the finalisation of the GST law as well as the rates for goods and services.

On Wednesday, 21 states voted in favour of the single rate of 28% on lotteries, while seven voted against, an official said. The GST Act had prescribed two rates — 12%, if the lotteries are sold within the same state, and 28%, if a state sells its lottery tickets outside its jurisdiction.

Tax experts said hopefully the council wouldn’t have to resort to voting frequently and Wednesday’s remained an exception.

“For the success of GST, it’s important that the Centre and states work together and take decisions with consensus as they have been doing till now,” said Pratik Jain, leader of indirect taxes at PwC.

REVENUE IN FOCUS
The council gave “necessary guidance” to officers for analysing the impact of tax exemptions and concessions, the tax base and compliance measures needed to keep pace with revenue needs, a government statement said.

The officers’ committee, which made a presentation of GST data before the council, didn’t make any direct or indirect suggestions on tax rates. The minister said it would further analyse the data and come up with a report with its recommendations, which would be taken up at the next council meeting.

Maximising GST revenue has been one of the focus areas for the government. Collections remained below Rs 1 lakh crore for three continuous months, before it crossed the mark in November.

The council, meanwhile, took certain steps against tax evasion. It slashed the input tax credit to 10% from 20% of eligible credit if invoices or debit notes were not reflected in filings. To check fake invoice, it allowed officers to take suitable action to block credits that they believed were fraudulently claimed.

COMPENSATION FOR STATES
States raised the issue of a delay in the release of compensation that they were promised against any revenue loss from the implementation of GST. Some of them were apprehensive about the availability of funds to be distributed in the future.

“The Centre will not have appropriate funds to compensate states after February,” West Bengal finance minister Amit Mitra said. He said the government withheld payment to states despite having Rs 42,000 crore in its kitty.

Asked about the issue, Sitharaman said that during the discussions everyone recognised that an instalment of the compensation was released a few days ago.

The Centre had on Monday released Rs 35,298 crore as compensation to states. “There’s no gap (in communication) within the council. In the council and in the Rajya Sabha, I have explained in detail how we remain committed to cooperative federalism and to honour the promises given on GST,” she said.

CHANGES IN A FEW RATES
Sitharaman said the council decided to tax woven and non-woven bags at 18%, compared with 12% at present.

It exempted from tax the upfront amount payable for long-term lease of industrial and financial infrastructure plots by any entity that is owned 20% or more by the Centre or state governments.

On lotteries, the new unified rate of 28% will be applicable from March 1, 2020, revenue secretary Ajay Bhushan Pandey said.

The tax is levied on the face value of the lottery tickets, inclusive of the prize money to be distributed to the winners, margin of agents, retailers and distributors.

State governments and the lottery industry had represented to the council on the issue and it had set up a group of ministers to examine it. The council, which had considered the issue in its July meeting, then referred it to the attorney general for his view. But, divergences continued among states, prompting the decision by vote.

Source: Economic-Times

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GST: CBIC notifies E-Invoice System, Mandatory for Businesses with Rs 100cr Turnover from April 1, 2020

GST: CBIC notifies E-Invoice System, Mandatory for Businesses with Rs 100cr Turnover from April 1, 2020

The Central Board of Indirect Taxes and Customs ( CBIC ) has notified E-Invoice System mandatory for business with Rs. 100 crores turnover from April 1st, 2020.

The E-invoice will be mandatory for both these businesses categories. For businesses having turnover less than 100 Crore, it would remain voluntary and on trial basis from 1st April 2020.

The upcoming ‘E-invoicing’ system will be a boon to MSMEs as it will open the facility of instant bank loans for MSMEs. With the new system of E-invoicing, banks may not require a plethora of physical documents and their validation processes rather they can do MSMEs’ ratings for the loan on the basis of their e-invoicing. Also, the E-invoicing will bring in ease of doing business as it will pre-populate the GST returns besides reducing the reconciliation problems.

In the Notification, the CBIC has also notified the GST electronic portals for the generation of e-invoice and E-Invoice Rules.

Having done a full preparation for last 6 months to introduce E-invoicing system, the government has decided to start ‘E-invoicing’ in a phased manner for generating business to business (B2B) invoices on a voluntary basis. It has been decided by the government that businesses having a turnover of Rs.500 Crore or more would take up E-invoicing from 1 st January 2020 on voluntary and trail basis while the businesses with a turnover of Rs.100 Crore or more would start E-invoicing on voluntary and trial basis from 1st February 2020. However, from 1st April 2020, the E-invoicing will be mandatory for both these businesses categories. For businesses having turnover less than 100 Crore, it would remain voluntary and on trial basis from 1st April 2020.

The basic aim behind the adoption of the e-invoice system is to facilitate convenience to the taxpayers by further simplifying the GST Return system. Through E-invoicing the tax department would help the businesses and taxpayers by pre-populating the returns and this would also result in reducing the reconciliation problems. Actually the fundamental principle behind introducing the e-invoicing is to put the technology at the service of the people to create ease of living and ease of doing business.

The E-invoicing system would help to generate invoice in a standard format so that invoice generated on one system can be read by another system and reporting of e-invoice to a central system becomes possible. The adoption of these standards would not impact the users of invoice; however, all the accounting software would adopt the new e-invoice standard wherein they would re-align their data access and retrieval in the standard format.

The generation of e-invoice will be the responsibility of the taxpayer who will be required to report the same to Invoice Registration Portal (IRP) of GST. This portal will generate a unique Invoice Reference Number (IRN) and digitally sign the e-invoice and also generate a QR code. The QR Code will contain vital parameters of the e-invoice and return the same to the taxpayer who generated the document in the first place. The IRP will also send the signed e-invoice to the recipient of the document on the email provided in the e-invoice.

E-invoice would not mean the generation of invoices from a central portal of the tax department. The taxpayer would continue to use his accounting system/ERP or excel based tools or any such tool for creating the electronic invoice as s/he is using today. To achieve this goal there would be a need to standardize the format in which electronic data of an Invoice will be shared between various stakeholders to ensure interoperability of the data.

Source: TaxScan.

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CBIC enables RESET option for GSTR-3B in GST Portal

CBIC enables RESET option for GSTR-3B in GST Portal

The Central Board of Indirect Taxes and Customs ( CBIC ) has enabled RESET option for GSTR-3B in Goods and Services Tax ( GST ) Portal.

This facility can be used in GST Portal where GST Return submitted but it is not filed.

GSTR-3B is a monthly return. All regular taxpayers need to file this return till March 2019. You can file your return on GST Portal.

The Goods and Service Tax (GST) mandates the filing of GSTR 3B return even by those taxpayers with nil returns. It is a monthly self-declaration form that has to be filed by all taxpayers irrespective of the returns.

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Source: TaxScan.