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GST helped you save Rs 320 per month: Analysis

GST helped you save Rs 320 per month: Analysis

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You are saving up to Rs 320 every month on your common-used daily item including soaps, food items, cosmetics after implementation of GST since July 2017, a finance ministry source said citing an analysis.

According to an analysis of household expenditure on before and after implementation of GST, the tax rates have come down on 83 common used items including food and beverages as well as daily use goods like hair oil, toothpaste, soap, washing powder, and footwear.

As per analysis, a household would be saving Rs 320 every month on their monthly spend of Rs 8,400 on 10 goods — cereals, edible oil, sugar, chocolates, namkeen and sweets, cosmetics and toiletries, washing powder, tiles, furniture and coir products, and other household products, the PTI quoted a source referring to the expenditure analysis.

In comparison, the analysis highlights that the GST on the Rs 8,400 spending comes out to be Rs 510, which is less than Rs 830 charged before the implementation of GST, resulting into a saving of Rs 320 every month.

As per the analysis, an array of items like spices, wheat, rice, nutrition drinks like Horlicks/Bournvita, pasta, idli dosa batter, mineral water, milk powder, curd, and buttermilk are currently taxed at a lesser rate under the GST than previously.

In the old tax system before GST, the central government would levy excise duty when a good is produced in a factory and the state governments would charge VAT on top of this. This meant that consumer not just paid VAT on the basic price of the good but also on the excise duty charged by the center.

With the introduction of GST, that pattern was eliminated. The GST is levied at the consumption end or when the final consumer buys the product or service.

After the introduction of GST in many other countries, it was seen that the inflation rose post-GST rollout due to change in tax structures, but the trend has not seen in the Indian case as the GST council has revised rates on numerous occasions.

wheat and rice have been exempt from tax under the GST as against 2.50-2.75 percent tax incidence previously. Similarly, tax on milk power is down to 5 percent from the previous 6 percent.

Similarly, sugar confectionery is taxed at 18 percent post-GST, as against 21 percent in the earlier indirect tax regime.

The tax rate on sugar and edible oil has come down to 5 percent under the new tax system, from 6 percent earlier. Also, namkeens and sweets are now taxed at 5 percent, as against 12 per cent/7 percent earlier.

Also, the tax rate on washing powder and tiles has come down to 18 percent from 28 percent earlier.

In the case of furniture, 5/18 percent GST is applicable on various kinds of products, while in the earlier regime the tax rate was 12/28 percent.

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Source: Economic Times.India
GST
Over 2 lakh assessees who migrated from VAT regime opt out of GST net

Over 2 lakh assessees who migrated from VAT regime opt out of GST net

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The turnover of these assessees is below the prescribed threshold of ₹20 lakh: official

Over 2 lakh assessees have opted out of the Goods and Services Tax (GST) registration as their turnover is below the prescribed threshold. This will benefit both the taxpayers and the GST Network, the IT backbone of the new indirect tax regime.

These are assessees who migrated from the VAT (Value-Added Tax) regime to the GST regime. A senior Finance Ministry official told BusinessLine: “Turnover of these assessees are below the threshold of ₹20 lakh (₹10 lakh in some States), which means they are not required to continue under the new regime, though they think otherwise.” During the pre-GST regime, States had different slabs for registration under VAT/ST, which was as low as ₹1 lakh and could go up to ₹10 lakh: the thresholds for Service Tax and Central Excise were ₹10 lakh and ₹1.5 crore respectively.

With the universal threshold, it was obvious that some old assessees will opt out. This meant if the turnover of the entity is less than the GST threshold and the assessees were not willing to go for voluntary registration they had the option to get the provisional registration cancelled and move out of the GST net.

However, many assessees failed to complete the process, and so they continued to be a part of the GST-assessee base.

Originally, 88.61 lakh applied for migration and got the provisional certificate. Once all the formalities were completed, the provisional certificate was confirmed. The official said over 24.5 lakh did not complete the formalities and out of these 2.34 have opted for de-registration.

This meant there are over 64 lakh migrated taxpayers now. At present, GST has over 1.16 crore assessees which are a combination of migrated and new assessees.

Tax base

Another Finance Ministry official felt that with de-registration, the tax base will be effective. This kind of a tax base will serve two purposes — it will lighten the burden on the GSTN and will give a real picture of the indirect tax regime.

Tanushree Roy, Director – GST at Nangia Advisors LLP, said with a high number of assessees opting out of the GST registration it would enable them to focus more on business operations simultaneously reducing the costs and burden of undertaking the GST compliances.

This would also help the GSTN in efficient management of the portal and reduction in cost for maintenance of servers.

R Muralidharan, Senior Director at Deloitte India, said de-registration of over 2 lakh assessees will marginally reduce the traffic on GSTN as this is merely 3 per cent of the total return filers. Most of these assesses are likely to be below the threshold limit for registration.


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Source: The Hindu BusinessLine
About 1,800 businesses apply for migration from VAT to GST regime

About 1,800 businesses apply for migration from VAT to GST regime

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About 1,800 businesses that were registered under the earlier VAT and service tax regime have applied for migrating to the GST regime.

1,800 businesses apply for VAT to GST regime

The GST Council, in its meeting in July, had allowed businesses with provisional GST ID to migrate to the new GST regime.

The Central Board of Indirect Taxes and Customs (CBIC) had then asked these taxpayers to approach the jurisdictional nodal officer of the Central or state government on or before the August 31, 2018, along with provisional ID, registration number under the earlier law, reason for not migrating in the system, along with the contact details.

“About 1,800 businesses have migrated to GST regime availing the latest migration window. The number could go up as the state tax officers are still compiling data,” an official told PTI.

Currently, over 11.5 million businesses are registered under the GST regime, of which 6.37 million have migrated from the erstwhile service tax and VAT regime, and over 5.1 million are new registrants.

ALSO READ – CBIC to weed out a million assessees from GST tax net

“The migration window since November 2016 and closed after roll out of GST on July, 2017. Many taxpayers would have migrated when the window was open initially before GST roll-out. Hence the turnout for migration would have been less this time,” the official added.

The process of migration of existing assessees to the GSTN had started in a phased manner from November 2016.

Once a business migrates to the GST regime, it is given a provisional ID. After that, in the second stage, the business has to log in to the GSTN portal and give details of its business, such as the main place of business, additional place of business, directors and bank account details.

Thereafter, the business has to verify its registration through digital signature, or by generating an electronic verification code (EVC).

Many businesses, who were earlier registered with excise, service tax, VAT regime, had not completed the second stage of the migration process.

In the VAT regime, businesses with turnover upto Rs 500,000 were exempt. However, in Goods and Services Tax (GST) regime, the exemption threshold has gone up to Rs 20 lakh. Hence, all businesses who were registered under the erstwhile Indirect tax regime, need not migrate to the GST regime.


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: Business Standard
CBIC to weed out a million assessees from GST tax net

CBIC to weed out a million assessees from GST tax net

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The Central Board of Indirect Taxes and Customs (CBIC) has initiated a process to weed out approximately 12 lakh Goods and Services Tax (GST) assessees who have fallen off the tax map.

“The CBIC has communicated to field officers to take the process further. Now, field officers will issue show-cause notices, which is just a formality but a requirement under the law, and then complete the process for deregistration,” a Finance Ministry official told BusinessLine.

Currently, there are over 1 crore registered assessees on the GST Nework (GSTN), but the number of those who file returns is much less.

CBIC: Tax collection and GST return filing

Under GST rules, any entity registered under the previous Sales Tax–VAT (Value-Added Tax), Central Excise Duty of Service Tax regulations was required to be enrolled under the GST and get provisional certificates.

However, if the turnover of the entity is less than the GST threshold and he/she is not willing to go for voluntary registrations, such assessees had the option to get the provisional registration cancelled and move out of the GST net. However, many assessees fail to complete the process, and so they continued to be a part of the GST-assessee base.

Also Raed- GST returns: New system unlikely before next elections

GST was implemented from July 1 last year. In the very first year, the number of registered assessees increased by 72.5 per cent to 1.14 crore. Of these, 66.17 lakh were existing taxpayers, that is, those registered under previous VAT/Sales Tax, Central Excise or Service Tax regime; the remaining were new ones. The Government believes that the new assessees came into the net as a result of demonetisation, which resulted in the formalisation of the economy, prompting more and more people to get registered.

During the pre-GST regime, States had different slabs for registration under VAT/ST, which was as low as ₹1 lakh and could go up to ₹10 lakh: the thresholds for Service Tax and Central Excise were ₹10 lakh and ₹1.5 crore, respectively. Now the universal threshold is ₹20 lakh (or ₹10 lakh in some States), which means there will be fewer people paying tax and filing returns.

Another Finance Ministry official said that while a wider tax base is good, there is also a need to ensure an ‘effective’ tax base; the latest initiative will help achieve that. This kind of a tax base will serve two purposes: it will lighten the burden on the GSTN, and it will give a real picture of the indirect tax regime.


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source: BusinessLine
Six lakh new traders registered in Maharashtra state as taxpayers under GST

Six lakh new traders registered in Maharashtra state as taxpayers under GST

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OVER 6 lakh new traders have registered themselves as taxpayers under the Goods and Services Tax (GST)OVER Six lakh new traders have registered themselves as taxpayers under the Goods and Services Tax (GST) in Maharashtra so far. in Maharashtra so far. These traders were earlier out of the tax net under the Value Added Tax (VAT) and excise duty system.

The GST, a comprehensive indirect tax system, was rolled out on July 1, 2017, and was expected to bring many new industries into the tax fold.

Data from the state GST department shows that most of the new traders registered under the new tax system are ‘works contractors’. They are traders who offer a combination of goods and services such as textile workers (dying, embroidery) and the printing press. In the one year since goods and service tax came into force, 32,302 such contractors have registered themselves as taxpayers. This is over 5 percent of the total number of new registrants which currently stands at 6.15 lakh.

“The works contractors are traders who supply both goods and services…,” said an official from the state GST department. He said the textile industry and the sugar industry in Maharashtra were the two big industries to have been brought into the GST net.

Apart from these, agency services are also new entries. In the state, over 26,000 agency services have registered as taxpayers. This means insurance agents, real estate agents, and employment agencies, among others, have come into the tax net, too. Over 15,000 business services have also registered, bringing into the fold services such as Information Technology, finance, shipping industries.

While construction activities are also a combination of goods and services, the industry has been identified as a separate entity and as pure service under the GST, said the official. Around 12,000 construction services have registered under Goods & Service Tax.

The new dealers registered on the GST portal are over and above the 7.4 lakh VAT registered dealers who made a swift switch to GST as soon as the new tax system came into force. Among other new entrants in the tax net are maintenance services, operator services, management services and consultancy services. The GST department is currently analysing the returns filed and the patterns noticed among these new entrants.

Source: Indian Express
GST refunds: Manufacturing units in hilly areas may move court

GST refunds: Manufacturing units in hilly areas may move court

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Taxpayers may move court against the revenue GST-Refunddepartment which sought reversal of transitional credit availed by them on account of cash balancelying in the ledger before Goods and Services Tax (GST) kicked in. This has led to the department blocking GST refund available to manufacturers operating in hilly states, which were given tax sops in the earlier regime under an area-based exemption scheme.

The department has argued that transitioning provision under GST was meant only for excess credit lying with a taxpayer, and it didn’t apply to cash balance in the ledger. “Cash credit cannot be transitioned into GST, only the ITC can be. They can claim refund for the same even now,” finance secretary Hasmukh Adhia told FE.

According to sources, over 200 manufacturing units in Jammu and Kashmir have received these notices and many of them are facing delays in GST refunds. Last year, the GST Council had resolved that all investment-linked indirect tax sops will take the form of refunds — rather than exemptions — for their residual periods in the GST regime. It was also decided that the Centre will refund only 58% of the cost of waivers of previous central taxes (like excise duty and countervailing duty) because the 42% of its share of GST is shared with states.

The scheme was meant for industrial units in three Himalayan and eight northeastern states during the residual period of the area-based tax sops. As many as 4,284 manufacturing units in these states, including several pharmaceutical, automobile and FMCG firms, will benefit from the scheme.

“While there is discussion on the refund due to the exporters, there are issues raised even for the units located in the tax preferred zones. There have been instances where the units located in J&K have not even seen a single rupee of refund under the budgetary support scheme. Further, refunds have been denied under the budgetary support scheme in cases of minor issues such as PLA transfer to the TranS1 has been disputed”, said Abhishek A Rastogi, partner at Khaitan & Co said.

Experts say many taxpayers had to opt for transitioning of ledger balance in GST as VAT and excise authorities had rejected refund demands as it would reflect poorly on their revenue targets.

Rajat Mohan, a partner with AMRG & Associates, said that tax authorities under erstwhile regime had a tendency to arm-twist the taxpayers for pre-depositing taxes so as to meet stringent revenue targets, much of which found their way in cash ledgers of the organisation without actually corresponding to a taxable event. This led to inflated ledger balance at the end of FY 17.

“On a policy level, government denying the carry forward of such cash balances in GST regime and coercing the taxpayers to apply for tax refunds under erstwhile regime would result into unease and exploitation,” Rajat Mohan, partner, AMRG & Associates said.

Source :  Financial Express
One year of GST: SME cash flows impacted, but story has a sunny side too

One year of GST: SME cash flows impacted, but story has a sunny side too

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GST is going to be one year old on July 1, and the journey over the past one year has been a mixed bag. While the objective of GST to eliminate the cascading effect of tax and gst_1_Yearto simplify indirect taxation in India is noble, implementation of the new regime has been easier said than done. There have been continuous challenges in coming to terms with transitional requirements, filing returns on the portal, and equipping one’s business for the increased compliance burden that GST brought along with it.

However, it is heartening to note that the government has taken cognizance of the various transition challenges, and has lent support by extending return-filing deadlines and deferring certain aspects of GST, so that the multitude of small businesses across India adopt to it easily.

Given the rollercoaster ride GST has been through, it certainly calls for an assessment of how exactly it has been beneficial to the heart of the Indian economy – the SME.

While GST essentially brought a lot of businesses under the tax net for the first time, the carrot of input tax credit flowing freely through the chain, would have been good news for most. The elimination of taxes such as central sales tax, for which credit was not available earlier, and elimination of the cascading effect of VAT being charged upon the excise component, has surely enhanced the credit pool for most businesses. As a result, working capital has had a positive impact.

However, a number of factors have also come into play, when one sees the other side of the coin. To begin with, the average trade credit cycle in the Indian market generally spans beyond the GST payment due date of the 20th of next month. This means that more often than not, businesses have to pay GST on value addition from their own funds. Speaking of businesses that operate out of several branches, stock transfers have become a taxable event under GST, which means that paying GST has become a more frequent occurrence for them. While one may argue that input tax credit is available to the recipient branch, the fact remains that the GST to be shelled out impacts the cash flow at the console level. And then there are certain sectors, such as the fertiliser industry, where an inverted duty structure resulted in blockage of cash for businesses.

One of the debatable aspects of GST from a working capital perspective has been the composition scheme. While the intention always has been to provide greater relief to the composition dealer, the absence of input tax credit for such a business is bound to increase cost of business. However, the saving grace is that the low-end flat rate of tax is expected to balance out the total outflow from such a dealer. Last but not the least, the issue of delayed export refunds has resulted in a significant cash blockage for exporters, and the government is trying its best to release such refunds as soon as possible.

However, irrespective of the hiccups GST has seen in the past one year, one cannot altogether ignore the positives. State boundaries have dissolved, the taxation structure has become simpler and the national e-way bill is well on its way to bind the entire nation into one market. With the simplified return filing model days away from implementation, it can be expected that GST will become a far smoother process than what it is right now, promising a golden future for the SMEs in India.

Source: Business Standard

Disclaimer: The author is Chief Financial Officer, Tally Solutions Pvt. Ltd. Views expressed are personal. They do not reflect the view/s of XaTTaX.
No pure GST on petrol, diesel; 28% tax plus VAT a possibility: Official

No pure GST on petrol, diesel; 28% tax plus VAT a possibility: Official

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If petrol and diesel – the two fuels of mass consumption – were to be brought under the GST- PETROLGoods and Services Tax (GST) regime, they would be taxed at the peak slab of 28 per cent, along with the Value Added Tax (VAT) which would be imposed by the states.

A top government official, while speaking to news agency PTI, said the ‘28% GST + VAT’ module is being contemplated by the government to bring fuel under GST. Although this would negate the concept of single taxation – which was the prime rationale implementing GST – it would ensure the states would not incur losses.

 There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT,” the official said.

With the imposition of VAT on top of GST, the fuel prices will hover at around the same rates at present even if they will be taxed under the GST module, claim experts.

At present, the tax on petrol and diesel is made up of the excise duty levied by the Centre, along with VAT imposed by states.

While the excise duty is kept fixed by the central government irrespective of the hovering prices, VAT is ad valorem — it is charged as a percentage of the fuel cost.

The incumbent excise rate on per litre of petrol and diesel is Rs 19.48 and Rs 15.33 respectively. Meanwhile, the VAT rate varies from state to state, with Mumbai imposing the highest – 39.12 per cent, whereas, Andaman & Nicobar charging the lowest at 6 per cent.

Experts have pointed out that the ad valorem nature of GST could further accelerate the fuel cost in case of crude oil facing an upward trend.

Source: PTI
One year of GST: Modi government lists 5 key benefits of landmark indirect tax reform

One year of GST: Modi government lists 5 key benefits of landmark indirect tax reform

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It’s been nearly one year since the new indirect tax regime came into existence on the 30th of June 2017, as GST: ‘One nation, One tax,’ in order to simplify the taxation on goods and services. Administered by both the center and states, Goods and Services Tax has subsumed several state and central indirect taxes such as State VAT, Central Excise Duty, Purchase Tax and Entry Tax. Positioned as one of the major structural reforms of the Narendra Modi-led government in the last four years since they came to power, the revenue department has released key benefits under the new regime. We take a closer look at the five key benefits.

Ease of doing business

According to the Revenue Department, GST has provided benefits to the small-taxpayers. Notably, under the GST, tax payers with an aggregate turnover in a financial year up to Rs.10 lakhs are exempt from tax. (Aggregate turnover shall include the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.). Further, the GST has helped to improve the ease of doing business due to common national market.

Decrease in inflation

According to the government, GST has led to a decrease in inflation due to the reduction in cascading effect of taxes and the overall reduction in prices. With an intent to curtail the inflation, the Government has taken various measures under the new regime including finalization of rates which are aligned to existing rate structure for most items and introducing an anti-profiteering clause in the GST law.

GST

A decrease in black transactions

Due to the ‘non-intrusive’ and transparent tax system, the GST has led to a reduction in black transactions, according to the Ministry of Finance. Notably, Goods and Service Tax is a self-regulating online tax system.

Boost to Make in India

The government’s initiative of Make In India has also received a big boost under GST, as IGST provides protection to the domestic industry. Further, certain taxable supplies are taxed at the rate of 0% rather than at the standard rate of 15%, in case of export-related businesses.

More informed customers

The ministry of finance states that goods & service tax has led to more informed consumers due to the simplified tax regime, and the reduction in the multiplicity of taxes.

Source: Financial Express
GST to enter Class X ICSE syllabus from 2020

GST to enter Class X ICSE syllabus from 2020

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The goods and services tax (GST) is set to make its way into textbooks. The ICSE board has decided to do away GST to enter Class X ICSE syllabus from 2020with the component on value added tax and replace it with GST in the Class X mathematics syllabus.

The Council For Indian School Certificate Examinations (CISCE) said the segment on VAT carrying four to six marks will be replaced with GST from 2020 as the earlier tax regime has been discontinued. The decision on introducing the new chapter was taken last year.

“Since VAT serves no purpose, it has been discontinued. Students who will be promoted to Class X in 2019 will be offered the new chapter and will be tested on it in 2020,” said Sujoy Biswas, principal of Rammohan Mission School.

But students who will appear in the ICSE exam in 2019, will not have to study either VAT or GST.

Nabarun De, principal of Central Modern School in Baranagar added, “The Council is always in favour of upgrading syllabus in the light of current happenings.”

Senior mathematics teachers pointed out that students who will pursue commerce or have commercial activities in mind will benefit from the change. “Even for a layman, it is important to understand the intricacies of GST. The change will help students learn the present indirect tax structure of the country,” said a school principal.

The National Council of Educational Research and Training (NCERT) has decided to include the topics related to GST and demonetisation in the existing syllabus of subjects, such as economics, business studies, accountancy, and political science, minister of state for human resource and development Upendra Kushwaha had informed the Rajya Sabha in August last year. He had added that while publishing the reprinted editions of their textbooks for the academic year 2018-19, NCERT will make the changes.

The reprinted editions of the NCERT books has been updated and relevant issues included. Most CBSE affiliated schools and Kendriya Vidyalayas follow the NCERT curriculum.

Assam Board has introduced GST from the Class XII curriculum while UP Board has decided to include GST in Class X syllabus.

“GST is a new introduction to the country’s tax structure. It is an important topic that is being introduced in MBA programmes, CA, costing and other professional higher study courses. If students have a strong base on the topic then it will help them to learn the topic at higher levels. Directly or indirectly, GST plays a role in our everyday life,” said Vivekananda Mission School principal Sarmistha Banerjee.

In a circular sent to all school heads on Friday, CISCE secretary and chief executive Gerry Arathoon wrote that VAT has become obsolete and has been replaced with GST from the ICSE 2020 Mathematics syllabus. “Considering the above facts the schools are being informed that VAT will not be tested in the ICSE 2019 mathematics syllabus,” reads the circular.

West Bengal Board of Secondary Education (Madhyamik) and West Bengal Higher Secondary Council (HS) are however tight-lipped on introducing GST. Sources said though GST is a revelant topic, it was unlikely to be introduced in either Class X or XII. “A state government directive is mandatory for bringing any change in the syllabus. With the state and centre being at loggerheads, any such decision is hard to be implemented,” a Madhyamik Board source said.

The syllabus which will be taught to the students from the 2019 -2020 academic session is likely to highlight the issue of demonetisation. “Students are still not aware of demonistisation. Introduction of GST in the syllabus will give students a brief idea about the newly introduced tax reforms,” said a teacher. “The ‘one nation one tax’ concept too will be much easily taught,” said another principal.

XaTTaX: Your automated E-Way bill compliance is just a click away!

Source :  The Times of India