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News Indirect Tax-GST

  • Sep 25, 2018
  • GST relief for MSMEs: Disappointing news – Sector may not get more benefits before 2019 polls

    A persistent shortfall in the goods and services tax (GST) collections has forced the GST Council to move slowly on the plans to give more sops to micro, small and medium enterprises (MSMEs). Till the next elections, the GST structure might not see any major change, sources said, adding that even the new return filing system may have to wait till the polls are concluded and the new government assumes office. The government reckons that the rolling out the proposed additional sops to MSMEs — one suggestion was to refund a portion of the taxes paid by these units to reduce their tax liability without upsetting the GST chain — closer to elections could create technical hassles.

  • Sep 25, 2018
  • CERC allows GST as 'Change in Law' for solar projects, recovery of tax paid

    Putting an end to the confusion over the cost of new solar power projects under the goods and services tax (GST) regime, the Central Electricity Regulatory Commission (CERC) has allowed it to be covered under the 'Change in Law' clause of power contracts. The GST paid by the project developers can be recovered as a separate element on "one-time basis in a time-bound manner". The order comes in response to the applications filed by Azure Power and Prayatna Developers, a subsidiary of Adani Power. Adani had petitioned CERC to declare GST as a change in law so that future bids could consider this in their cost structure.

  • Sep 22, 2018
  • Already late, e-wallet to miss October deadline

    The roll-out of an e-wallet mechanism for exporters under the goods and services tax (GST) regime may be delayed again beyond the proposed date of October 1, as the required systems are not yet in place, according to trade and official sources. As per the proposed e-wallet mechanism, a notional credit would be transferred to exporters’ accounts based on their past record and the credit can then be utilised to pay taxes on inputs. Once the e-wallet is in place, exporters do not have to pay taxes first and then seek refunds. It will typically act as a virtual payment system whereby the exporters will pay only notional duty and get notional refunds later.

  • Sep 22, 2018
  • From Rs 2 cr to Rs 10 cr – CBIC think-tank for raising revenue limit for GST returns

    A think-tank within the Central Board of Indirect Taxes and Customs (CBIC) has recommended that the revenue threshold for annual GST return be raised to Rs 10 crore from Rs 2 crore currently to avoid burdening smaller taxpayers. The tax department recently issued the format for GSTR-9C, which is required to be furnished by taxpayers with revenue of above Rs 2 crore. These assessees are also required to get their books audited by a chartered accountant. “Filing of annual returns will involve compiling of lots of information/data and for small taxpayers it will be a huge burden.

  • Sep 22, 2018
  • CERC allows GST relief for solar projects

    Providing a relief to solar power developers, the Central Electricity Regulatory Commission (CERC) has held that the introduction of the GST would be considered as ‘change in law’. However, the regulator said solar tariffs discovered through reverse auctions cannot be changed due to GST implications and the relief for ‘change in law’ should be allowed as a separate element “on one-time basis in a time bound manner”. The GST rate on solar power generating systems and raw material used including modules is at 5%. However, other goods such as inverter, cement and cables have been kept under the 18% bracket.

  • Sep 22, 2018
  • State appellate body upholds GST on liquidated damages

    In a ruling that may have an impact on several construction and renovation contracts and contract cancellations, Maharashtra Appellate Authority for Advance Rulings (AAAR) has upheld a levy of GST on liquidated damages collected by a power generation firm for a delay in project completion. Liquidated damages are fines levied by the owner of a project to the contractor in case of cancellation or delay of trial operation within the specified time period in the contract.

  • Sep 21, 2018
  • GST: E-commerce firms to collect 1% tax at source from October 1

    The Finance Ministry on Thursday notified that e-commerce operators shall collect an amount at the rate of one per cent as tax collected at source (TCS) under the Goods and Services Tax (GST) on the supplies made by them. Of the amount collected, half will go to the Centre and half to the State where the supply takes place. TCS along with TDS (Tax Deducted at Source) are two mechanisms to levy taxes on income. There is basic difference between the two. While under TCS, the payment receiver collects additional money at a certain rate over and above the value of supply or purchase and deposits it with the government, under TDS the person making payment deducts certain percentage of total value paid and deposits it with the government.

  • Sep 21, 2018
  • Centre favours additional cess under GST to help flood-hit Kerala

    Finance Minister Arun Jaitley has proposed additional cess on select commodities under GST to raise funds to help Kerala tide over the damages caused due to floods, a state minister said Friday. The proposal of levy of cess is expected to come up for discussion at the GST Council meeting on September 28."Kerala welcomes the suggestion of hon'ble FM for a national level cess on selected commodities for a specified period to help such states. GST Council to discuss," Kerala Finance Minister Thomas Isaac said in a tweet.Isaac was of the view that GST should be made flexible to take care of "unforeseen urgent demand for resources as in the case natural calamities".

  • Sep 20, 2018
  • Revenue shortfall may limit the scope of GST rate cuts

    The rising gap between goods and services tax (GST) targets and actual revenue collections may limit the scope for large-scale rate cuts, with states favouring stabilization in revenues before any further rate reduction. As a result, the next meeting of the GST Council on 28-29 September is unlikely to feature major rate cuts to accommodate demands from the micro, small and medium enterprises (MSMEs). The central government, concerned about the revenue shortfall, is also reaching out to states to understand the reasons behind it.

  • Sep 20, 2018
  • Foreign ecommerce companies rush to register for GST in all states

    Amazon, Google, Apple and other foreign companies operating in the ecommerce space will have to register themselves for goods and services tax (GST) in all the states in the next 10-12 days. The government has said ecommerce companies need to collect tax at source from October 1. To comply with tax collected at source (TCS) rules, ecommerce players need to register with every state. This provision applies to foreign players as well to cater to Indian consumers.

  • Sep 19, 2018
  • GST can do a lot without troubling taxpayers

    There is a saying in Hindi which, roughly translated, means hit the snake with a stick in such a way that the ‘snake dies but the stick does not break’. A similar situation is being faced by the administrators of indirect taxation in the country: how to raise revenues without making things more difficult for the tax payers. The government puts the average monthly GST collections in the last financial year at Rs.89,885 crore, way below the informal target of Rs.1 lakh crore.

  • Sep 17, 2018
  • Streamlining of GST compliance fast becoming a long row to hoe

    A slew of contradictory advance rulings by the various tax benches has made the already complicated world of goods and services tax (GST) more complex. A bunch of varied interpretations of the GST law by different Authorities for Advance Ruling (AAR) on the same subject is the latest addition to compliance challenges for businesses. For instance, recently, the Maharashtra AAR said that the process of installing solar equipment would attract 18% GST, while the Karnataka bench ruled that a 5% rate would apply. In another matter on taxing printed advertisement materials, the Telangana AAR and West Bengal AAR not only gave conflicting verdicts, but also used different methodologies to arrive at their conclusions.

  • Sep 17, 2018
  • GST audit certificate is required by the taxpayers with turnover over Rs 2 cr

    The Government has notified the GSTR-9C form for annual GST audit under which every taxpayer above Rs 2 crore turnover in a financial year would need to fill up a reconciliation statement and also obtain a certification of audit. The Government through the notification No. 49/ 2018 - Central tax has notified the format for GSTR-9C. Under GST, annual return is to be furnished in GSTR-9. In addition, as per Section 35 of CGST Act, 2017, every tax payer whose turnover exceeds Rs 2 crore during a financial year, is required to submit audited annual accounts and a reconciliation statement in GSTR-9C.

  • Sep 15, 2018
  • 22.5 crore e-way bills generated since rollout: GSTN

    Around 22.5 crore e-way bills have been generated across India till September 13 since the new electronic billing system was introduced on April 1, the Goods and Services Tax Network (GSTN) said on Friday. It added that July 31 accounted for the highest 21.77 lakh e-way bills generated in a single day. The e-way bill system kicked off as part of the new GST regime for transporting goods worth more than Rs 50,000.

  • Sep 15, 2018
  • Fresh blow for Indian PV with 18% GST rate verdict

    Hot on the heels of the recent Supreme Court ruling in favor of the 25% safeguarding duty on imported solar panels, India’s PV industry has suffered a fresh blow with the imposition of an 18% goods and services tax (GST) rate for solar projects. The news prompted a swift response from the domestic PV industry, which has lobbied government to intervene and lower the tax burden, and has threatened lengthy legal action if the federal authorities stand firm. Dismissing a demand from developers to be taxed at 5%, Maharashtra state’s appellate authority for advance ruling (MAAR) set 18% as the GST level for solar projects, following the example of its Rajasthan counterpart.

  • Sep 13, 2018
  • Uttar Pradesh becomes 1st state to make RFID tag must for e-way bill

    Uttar Pradesh has made it mandatory for vehicles operating in the state to use the radio frequency identification device (RFID) tag along with e-way bill from November 1. Though the e-way rules require the use of RFID tag, no other state has made it mandatory since the rollout of the e-way bill in April. E-way rules mandate that a vehicle carrying goods worth over Rs 50,000 must furnish the details electronically on the common portal and generate e-way bill.

  • Sep 11, 2018
  • Last date for filing GSTR-1 for July 2017 to Sep 2018 extended till Oct 31

    The Finance Ministry Monday extended the last date for filing final sales return GSTR-1 for July 2017 to September 2018 period till October 31 and also waived the late fee for the delayed filing of returns. It said that the number of taxpayers who have filed summary sales return GSTR-3B is substantially higher than the number of taxpayers who furnished GSTR-1. "In order to encourage taxpayers to furnish Form GSTR-1, a one-time scheme to waive late fee payable for delayed furnishing of GSTR-1 for the period from July 2017 to September 2018 till October 31, 2018, has been launched," the ministry said.

  • Sep 11, 2018
  • Suppliers liable to pay penalty for not passing GST rate cut benefits: NAA

    In a first of its kind ruling, the National Anti Profiteering Authority (NAA) Monday ruled that suppliers will be liable to pay penalty for not passing the benefits of GST rate reduction on sale of goods. The NAA gave its ruling in a case against Jaipur-based Sharma Trading Company, wherein it was alleged that the supplier had not reduced the price of 'Vaseline' in line with the reduction of GST rate and thus indulged in profiteering in contravention of Scetion 171 of CGST Act.

  • Sep 10, 2018
  • September last month to fix GST filing errors, claim credit for FY18

    September is crucial for taxpayers under the new goods and services tax (GST) regime, as it will be the final month for taxpayers to claim credit for invoices issued in 2017-18 as well as to rectify errors in their tax return forms for the year. GST was implemented on 1 July 2017, and with taxpayers still getting used to the new return filing system under this indirect tax regime, there have been instances of errors including incorrect or inflated claims of credit or in some cases under-reporting of tax credit claims. There are also instances of omissions in reporting of transactions. All these can be corrected in the September tax return form.

  • Sep 07, 2018
  • GST revenue may be Rs.90,000 cr short in FY19

    West Bengal Finance Minister Amit to over Rs.90,000 crore of shortfall in Mitra said on Thursday that the Goods GST revenue for the full year. and Services Tax is yet to fully stabilise “The shortfall was projected at even a year after its rollout and revenue Rs.55,000 crore in the GST Council. The from the levy could Centre will have to pay see a possible shortfall. the money. It is a mess .“In 2017-18, States fell that they have created,” short of more than said Mitra, who is also a Rs.43,000 crore, which the GST Council member.