Parliament Archives | XaTTaX GST Blog

GST: Employers may be able to claim input tax credit on food, transport

July 12, 2018 admin Comments 0 Comment

The government has proposed 46 broad categories of amendments in laws related to the goods and services tax (GST) that include allowing taxpayers to make changes in returns GST has positive impact on overall biz: CFOs survey to rectify inadvertent mistakes along with doing away with reverse charge mechanism.

As per the proposed amendments, employers will be able claim input tax credit on facilities like food, transport and insurance provided to employees under any law.

The amendments to the GST laws — Central GST, State GST, Integrated GST and Compensation of States Act — have been placed in public domain for comments from stakeholders by July 15, following which they will be presented in the GST Council for final approval. After that, the amendments would need approval from the Union Cabinet before being tabled in the upcoming Monsoon Session of Parliament and corresponding state legislatures.

The amendments also provide for modification of reverse charge mechanism, separate registration for companies having different business verticals, cancellation of registration, new return filing norms and issuance of consolidated debit/credit notes covering multiple invoices.

However, the amendments disallow transitional credit for pre-GST cesses.

As per the draft amendments, employers will be allowed to claim input tax credit (ITC) for supply of food, beverages, health services, life insurance, travel benefits renting or hiring of motor vehicles, given to employees, provided it is obligatory for them under any law. It, however, would not be available on membership of a club, health and fitness centre, and travel benefits extended to employees on vacation such as leave or home travel concession.

The amendments will increase the threshold for the composition scheme as was approved earlier by the GST council to Rs 1.5 crore from RS 1 crore. Also, manufacturers and traders supplying services will be eligible for the scheme if they supply services of value not exceeding 10 per cent of the turnover or Rs 5 lakh, whichever is higher in the preceding financial year. “This is a taxpayer-friendly measure and it is believed that small taxpayers would immensely benefit from this amendment,” the draft said.

Abhishek Jain, partner, EY, said, “Amendments like deletion of general reverse charge provisions on procurements from unregistered dealers, enabling provisions for new GST return filing process, allowing single debit/ credit note for multiple invoices, etc would aid in bringing quite an ease to businesses from a GST perspective. However, transactions like denial of credit on repair and maintenance, general insurance, etc for motor vehicles, transition of cess credits, and some more may need a revisiting of tax position adopted by some businesses.”

The amendments are being viewed as being beneficial for all businesses, especially small ones. “The expansion of the input tax credit provisions and the beneficial changes in compliance provisions such as issue of consolidated Debit/ Credit Notes, the proposed new return filing process, extension of the bill to ship to concept for goods to cover cases where the recipient of service is different from the payer etc would benefit all businesses,” M S Mani, partner, Deloitte said.

Source :  The Kashmir Monitor

GST rollout on 1 July likely as Rajya Sabha clears bills

April 7, 2017 admin Comments 0 Comment

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The decks are cleared for the roll-out of the goods and services tax (GST) from 1 July after the Rajya Sabha signed off on all four supporting bills on Thursday without making any amendments.

The fact that they were passed without any changes is important as it reflects political consensus around this ambitious tax reform that aims to unite the country into a common market by removing existing tariff barriers.

The Rajya Sabha passed the four draft laws—the central GST Bill, the integrated GST Bill, the Union territory GST Bill and the GST (Compensation to states) Bill—after they were all tabled as money bills.

With the Lok Sabha passing these bills last week, they will be enacted once they receive the President’s assent.

The passage of these bills in Parliament brightens the prospects of a GST roll-out meeting the 1 July deadline—the only major task now left to be resolved is for the GST council to fit various goods and services into different tax slabs. The GST council is the representative body of the states and the central government and is schedule to meet in Srinagar on 18-19 May to resolve this task.

The bills were passed after a few opposition parties led by the Trinamool Congress failed to push through amendments to the bills in the absence of support from the Congress party.

However, the government did come under criticism over some of the provisions in the bills, including the powers allocated to the GST council, the private ownership of the GST Network, and provisions for anti-profiteering, and search and seizure.

Defending the provisions, finance minister Arun Jaitley said the GST council is an example of deliberative democracy where decisions are taken by consensus.

“What you decide in the council becomes a federal arrangement between the centre and the states and between the states themselves. But Parliament and state assemblies have plenary powers. GST council recommended these bills and they have come for Parliament’s approval,” he said.

“When GST council fixes the rates, every state will have to place it in the budgetary provisions. If assemblies have concerns, then they can bring it to the GST council,” he added.

Jaitley also defended the constitution of the GST network (GSTN) and said the government had no plans to review the existing structure—the centre and the states together hold a stake of 49% with the balance held by private banks and other financial institutions.

“There are billions of vouchers that have to be processed. Will you be able to have the flexibility inside the government to hire the best talent in terms of pay and conditions of service,” Jaitley said. He pointed out that despite GSTN being a private body, “there is a deep and pervasive government control in the management structure.”

In a 14-member board, the government has seven seats, while three belong to the private institutions and the remaining four are independents, Jaitley pointed out.

Earlier in the debate, Sitaram Yechury of the Communist Party of India (Marxist) stressed that Parliament cannot be ignored and bypassed.

“GST council’s decisions should come to us for our consideration and approval,” he said while pressing for the council to be brought under the purview of the Comptroller and Auditor General of India.

He also voted for a rate structure that does not burden the lower and middle class.

Congress MP Kapil Sibal pointed out that the anti-profiteering provision along with search, seizure and arrest powers will increase instances of abuse of powers by the taxmen. At the same time, he pointed out that prices are not dependent only on the tax rates but also factor in other things like input prices and market conditions.

“How will the extent of the price reduction be determined and who will do it?” Sibal said.

Source : http://www.livemint.com/Politics/VRd9bTp1bTQsq5lja2ABdN/Parliament-clears-decks-for-GST-rollout-from-1-July.html

Goods will become cheaper with GST: Finance Minister

March 30, 2017 admin Comments 0 Comment

Finance Minister Arun Jaitley on Wednesday said goods may become “slightly cheaper” once all other taxes are removed after implementation of the Goods and Service Tax.

Arun jaitley at Rajysabha

Replying to a debate on the four bills related to GST in the Lok Sabha, he said all other taxes like entry tax in states will be removed once the GST is in place.

“Once all other taxes are removed, goods will become slightly cheaper,” he said.

Noting that both the central and state governments are pooling their sovereignty to have this tax regime, he noted that India, despite being one political entity, remained different economic entities with states having different taxes.

“India remained different economic entity. Trucks could be seen waiting outside state border, there was no free flow of goods,” the minister said.

He also clarified that commodities like food items will have zero tax.

Source : TOI

GST To Result In Price Reduction For Consumers: Hasmukh Adhia

March 28, 2017 admin Comments 0 Comment

hasmukh adhia

The Centre and states have concurrent powers to levy GST and the new indirect tax regime will result in reduction of prices for consumers and broaden the tax base, Revenue Secretary Hasmukh Adhia said on Monday.

At a workshop on Goods and Services Tax (GST) organised under the Speaker’s Research Initiative (SRI) in Parliament Library Building on Monday, Adhia explained how the existing multiple taxes at the central and state level will be merged into a single tax.

“The workshop was designed to provide Members of Parliament an insight into the new tax regime being established in the country and give them a better understanding about GST, thereby enabling them to participate fruitfully in the upcoming Parliamentary discussions on the subject,” said an official statement.

Under the GST Constitutional Amendment Act, concurrent powers to levy GST has been provided to both the Centre and the states.

“Members were also apprised about the major decisions of the GST Council, compensation mechanism for the states and the future roadmap in rolling out the GST in the country,” the statement said.

Speaking about the benefits of GST, Adhia stressed that it will not only usher in a transparent tax system thereby reducing cascading of taxes, but will also result in reduction of prices for consumers and broaden the tax base in the country.

Earlier in the day, the government tabled 4 supplementary GST legislations in the Lok Sabha.

Discussion on the bills is expected to begin on Wednesday.

Source : http://profit.ndtv.com/news/economy/article-gst-to-result-in-price-reduction-for-consumers-hasmukh-adhia-1674132

Cabinet clears 4 GST supplementary legislations, to be introduced as Money Bills in Parliament

March 21, 2017 admin Comments 0 Comment

The Union Cabinet today approved four legislation to implement the Goods and Services Tax (GST), ahead of their introduction in Parliament this week to enable roll out of the tax reform from July 1.

Approval of the bills by Parliament and a separate one by all state assemblies will complete the legislative process for roll out of one-nation-one-tax regime by merging central taxes like excise duty and service tax and state levies like VAT.

The GST Council has already approved four-tier tax slabs of 5, 12, 18 and 28 percent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products. The work on for putting various goods and services in different slabs is slated to begin next month.

“The Union Cabinet chaired by Prime Minister Narendra Modi has approved the four GST related bills — The Central Goods and Services Tax Bill 2017 (The CGST Bill), The Integrated Goods and Services Tax Bill 2017 (The IGST Bill), The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill) and The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill),” an official statement said.

“These bills would be introduced as Money Bills in Parliament this week, could be even today,” a source said, adding that discussion on the four legislations could happen together.

The GST legislations were the only agenda in today’s meeting of the Union Cabinet. “The Government is committed to introduction of GST, one of the biggest reforms, in the country as early as possible. GST Council has decided July 1 as the date of commencement of GST,” the statement said.

These four legislations had been cleared by the Council in its last two meetings this month.

“The CGST Bill makes provisions for levy and collection of tax on intra-state supply of goods or services or both by the central government. On the other hand, IGST Bill makes provisions for levy and collection of tax on inter-state supply of goods or services or both by the central government,” the statement said.

The UTGST Bill makes provisions for levy on collection of tax on intra-UT supply of goods and services in the Union Territories without legislature.

Union Territory GST is akin to States Goods and Services Tax (SGST) which shall be levied and collected by the States/Union Territories on intra-state supply of goods or services or both.

The Compensation Bill provides for compensation to the states for loss of revenue arising on account of implementation of the GST for a period of five years.

While the four bills approved by the Cabinet today have to be passed by Parliament, the SGST law has to be approved by each of the state assemblies.

Finance Minister Arun Jaitley in his Budget for 2017-18 mentioned that country-wide outreach efforts will be made to explain the provisions of GST to trade and industry.

The biggest tax reform since independence is expected to boost the rate of economic growth by at least 0.5 percentage points, broaden the revenue base and cut compliance cost for firms.

Commenting on the development, Abhishek Rastogi, Partner, Khaitan & Co, said: “The GST plan is well on time and July 1 looks realistic!”

“The timely approval of the Bills by the Cabinet ensures that the industry would have reasonable time to peruse the details of the law impacting them. As a corollary, the assesses will be better prepared for implementation. It is hoped that all the State Assemblies clear SGST on time as well,” he added.

Source : http://www.firstpost.com/business/cabinet-clears-4-gst-supplementary-legislations-may-be-introduced-in-parliament-today-3342866.html