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News Indirect Tax-GST

  • Jul 16, 2019
  • GST collection of states, union territories increased to Rs 5.18 lakh crore in FY19, says Nirmala Sitharaman

    GST collection of states and union territories increased to Rs 5.18 lakh crore in the financial year 2018-19, a significant rise from Rs 2.91 lakh crore in 2017-18, Union Finance Minister Nirmala Sitharaman said in Parliament on Monday. In a written reply to a question in the Lok Sabha, the Finance Minister said the Centre government released Rs 81,177 crore compensation to the states during the fiscal year 2018-19 against Rs 48,178 crore released in FY18.

  • Jul 15, 2019
  • Two traders arrested for Rs 50 crore IGST refund fraud

    The Belapur Central GST Commissionerate arrested two traders for allegedly floating over 50 shell companies to fraudulently to avail IGST refunds after GST council recently issued guidelines to curb refund related frauds, people in the know told ET. Sources said Ajay Gopinath Mishra and Ramesh Chandra Bhatt availed IGST refund by showing export of textile goods over Rs 350 crore and collected IGST refund of over Rs 50 crore between January and May. The said amount was refunded by the customs to these exporters at the port of export.

  • Jul 13, 2019
  • IT department vetting GST, civic licences in Madhya Pradesh, Chhattisgarh to widen tax net

    To widen the tax net, the income tax department has begun scrutiny of the data of traders registered with GST network as also with municipal corporations in Madhya Pradesh and Chhattisgarh. The department has also written to municipal corporations in the state and the neighbouring Chhattisgarh, which is also under the MP income tax zone, to introduce a column for PAN in the application form for getting a shop and establishment licences. "After scritinising the GST registration data, it has been found that 37,000 traders were not filing the income tax returns in the past years. We will now find out that how many of them would come under the income tax net," principal chief income tax commissioner for MP and Chhattisgarh Ajay Kumar Chouhan told reporters Friday.

  • Jul 12, 2019
  • GSTR-3B: Blowing hot and cold

    The landmark Goods and Services Tax (‘GST’) has completed two years. The one-nation, one-tax revolution is witnessing many legal issues, but it’s settling down gradually. Recently, the Hon’ble Gujarat High Court has pronounced its judgement on the convoluted saga of the last date of availing ITC relating to invoices issued during the period from July 2017 to March 2018. In the benevolent decision, the High Court has held that GSTR-3B is not a return in lieu of that required to be filed in Form GSTR-3. The return in Form GSTR-3B is only a stopgap arrangement till due date of filing the return in Form GSTR-3 is notified. Meaning, that businesses can still avail ITC of missed invoices issued during the mentioned period till the date of filing of Annual Return in form GSTR-9.

  • Jul 09, 2019
  • Breather for exporters as Centre to pay ITC refund for State GST

    In a major relief to exporters, the Centre will now pay the input tax credit (ITC) refunds of state taxes, thereby reducing transaction time and costs, and manual interface in claim processing. As per industry, there is a huge difference in the amount claimed, state goods and services tax (SGST) sanction amount received from central tax authority and the amount actually disbursed. “The central government has been authorised to pay the amount of refund towards state taxes the taxpayers,” according to the 2019-20 budget.

  • Jul 04, 2019
  • No Input Tax Credit for GST paid on expenses incurred on promotional schemes, rules AAR

    Input Tax Credit (ITC) will not be available on the Goods and Services Tax (GST) paid on expenses incurred towards promotional schemes, an order by the Maharashtra Authority for Advance Ruling (AAR) has said. Although AAR rulings are applicable for the applicant and the jurisdictional tax officer in a particular matter, the same can be used a persuasive tool in similar matters. Accordingly, tax experts feel that the ruling can be important for automobile or FMCG companies which give gifts as a part of promotional schemes or as brand reminders.

  • Jul 04, 2019
  • Service providers may now opt for composition scheme till July 31

    The tax department has extended by three months till July 31 the deadline for service providers with turnover of up to Rs 50 lakh to opt for the composition scheme and pay six per cent goods and services tax (GST). The GST Council, chaired by Finance Minister and comprising state counterparts, has permitted such service providers to opt for composition scheme and pay taxes at reduced rate of six per cent beginning April 1, 2019. This is against the higher rates of 12 and 18 per cent levied for most services under GST.

  • Jul 02, 2019
  • GST completes two years: Fewer rates, wider net key to economic gains

    As the Goods and services tax (GST) completed two years on Monday, it has barely become the good and simple tax that it was meant to be, but has nevertheless proved to be a system significantly superior than what it replaced. In the place of a complex system that included multiple taxes at the Central, state and local levels, there is now a comprehensive tax subsuming most of the important indirect taxes. Also, the tax cascades have been reduced with a more seamless system for businesses to reduce their tax liability by claiming credits for input taxes.

  • Jul 01, 2019
  • Government to introduce further reforms in GST on Monday to mark 2 years of rollout

    Kicking off celebration to mark two years of the GST implementation, the finance ministry will on Monday come up with further reforms in the indirect tax system with introduction of new return system, rationalisation of cash ledger system and a single refund-disbursing mechanism, among others. Minister of State for Finance and Corporate Affairs Anurag Thakur will preside over the event alongside key secretaries and officials of various departments, the finance ministry said in a release on Sunday.

  • Jul 01, 2019
  • GST may become two-tier tax with merger of 12%, 18% slabs: Arun Jaitley

    Former Finance Minister Arun Jaitley Monday said the 12 and 18 per cent tax slabs in goods and services tax (GST) could be merged going forward as revenues increase, thereby effectively making it a two-tier tax. Penning a Facebook post on the second anniversary of GST rollout, Jaitley said as many as 20 states are already showing more than a 14 per cent increase in their revenues and do not require the centre to compensate them for revenue loss arising out of GST implementation.

  • Jun 29, 2019
  • Additional discount given by a company to a dealer will attract GST, says Finance Ministry

    The Finance Ministry on Friday said the additional discount given by a company to a dealer in certain cases will be liable to Goods & Services Tax (GST). The GST Policy Wing of the Central Board of Indirect Taxes & Customs (CBIC) under the Finance Ministry issued a clarification on various doubts related to treatment of secondary or post-sale discounts for applicability of indirect tax. It said where the discount is linked to specific activities to be done by the dealer such as advertisement, exhibition, etc, it would qualify as a supply by the dealer to the company and the dealer would have to pay GST.

  • Jun 27, 2019
  • Ambiguity remains over GST on service charge

    The devil lies in the details and this could be true even in the case of restaurant bills. One such case is the applicability of tax on service charge and ambiguity remains on whether it can be taxed under Goods & Services Tax (GST) or not. Technically GST can be levied on service charge, if it is part of the total bill, as rules make it clear that any fee or charge, until exempted, will be taxable. However, the problem is with the legal character of service charge. The government has always maintained that it does not have any legal status and is purely voluntary in nature. This argument is contested by restaurants owners, who say that it is legal as it is mentioned along with the price list or in the menu. Interestingly, many consumers confuse service charge as a tax and believe that the S in GST stands for the same. But, it is not so. Seeking clarity on the issue, BusinessLine contacted officials in the Finance Ministry and found that there is ambiguity even among the officials. While one official said that to club service charge with food and beverage bill for calculation of GST is correct, another senior official said “service charge is not taxable.”

  • Jun 27, 2019
  • GST audit for small assessees to be desk-based

    Small Goods & Services Tax (GST) assessees will not have tax officials paying them a visit for the first audit of annual indirect tax return. According to the Audit Plan for 2019-20, prepared by the Directorate-General of Audit (Indirect Taxes) under the Central Board of Indirect Taxes & Customs (CBIC), small taxpayers mean assessees with turnover below Rs 7.5-10 crore and medium category includes taxpayers with turnover between Rs 7.5-10 crore and Rs 30-40 crore. Beyond this, assessees will fall under the category of large taxpayers. The turnover includes total taxable, exempt and zero rated clearances of goods and services, but excludes supplies during the year. The last date for filing the first annual GST return is August 31 and then the audit will begin.

  • Jun 24, 2019
  • Simplified GST, timely credit can help small units go overseas, feel experts

    With the emerging global trade war expected to throw up tremendous opportunities for Indian companies, representatives of trade bodies, small industry associations, banks and corporates felt a right ecosystem with a simplified Goods and Services Tax regime, lower taxes and greater lending support will help Indian SMEs tap the export potential. Speaking at a panel discussion, ‘Tapping into Global Trade — Challenges and Opportunities,’ at the SME Growth Summit presented by ICICI Bank and BusinessLine, the panellists urged the government to provide financial assistance to SMEs, assured orders for a minimum period of 3-5 years, availability of bank credit, tax rebates for Research and Development (R&D) and enhanced export incentives.

  • Jun 24, 2019
  • Anti-profiteering investigation: Mock purchases, premise visits planned to check B2B invoices

    Taxmen could carry out ‘mock purchases’, visit premises and check invoices issued by top 20 goods and services suppliers as part of anti-profiteering investigations in their respective areas under the new tightened framework under Goods and Services Tax. GST officers conducting antievasion verification, audits, inspections or search operations may also include checks from anti-profiteering perspective, according to the new stringent monitoring mechanism for taxmen to keep a check on companies for profiteering from reduction in tax rates or availability of seamless input tax credit endorsed by the Council.

  • Jun 22, 2019
  • GST Council: Anti-profiteering watchdog NAA’s term extended by 2 years

    The Goods and Services Tax (GST) Council on Friday extended the tenure of the anti-profiteering authority by two years to November 2021, in what went against its past assertions that the body will have only a transient existence and a non-intrusive character. The council also decided that in cases of profiteering, firms will have to pay a penalty of 10% of the amount cornered by not passing on benefits of GST rate cuts to consumers. It, however, deferred a plan to reduce tax reliefs for vehicles (EVs) and sent the proposals in this regard to its fitment committee. Also, the council extended by two months the last date for filing annual returns and audit forms (GSTR-9, 9A and 9C) for 2017-18 to August 31, 2019. The proposed simplified return-filing mechanism would be mandatory for businesses with turnover above Rs 5 crore from October, while it would be rolled out for all by January 1, 2020.

  • Jun 21, 2019
  • GST council meet: Rate cuts for electric vehicles, two-wheelers on agenda

    Finance minister Nirmala Sitharaman will chair her first GST Council meet on Friday as the Centre-state body is likely to deliberate upon slashing rates for electric vehicles (EVs) and other two-wheelers, and extension of tenure of the anti-profiteering body by another year. Sources said the Council could also extend the deadline for filing annual return form (GSTR-9) in the face of difficulty faced by taxpayers. Additionally, the Council in its 35th meeting would also consider granting approval for e-invoicing process that has been in the works since last month. The anti-evasion measure requires businesses to intimate a central portal at the time of issuing invoice to help the tax department keep track of transactions in real time.

  • Jun 21, 2019
  • FADA to GST Council: Charge late fine on net tax liability, not gross

    The Federation of Automobile Dealers Associations (FADA) has written to the GST Council, asking that the interest charged on automobile dealers in case of late GST payment, should be calculated on net tax liability instead of gross liability. The association said interest charged on gross amount in an event of late payment has led to undue hardship to dealers across the country, who are already under pressure due to poor sales and high interests on loans for operational purposes. FADA president Ashish Harsharaj Kale said many small businesses located in tier 2 and tier 3 towns face difficulties in GST compliances due to system mismatches. “We have requested that the interest provided should be calculated on net tax liability instead of gross tax liability which will help auto dealers in ease of doing business,” Kale said.

  • Jun 21, 2019
  • Manual check to only impact 3.5% ‘risky’ exporters in availing refunds

    The government on Thursday said the manual intervention introduced in the previously automated system of integrated GST refund to exporters would only apply to 3.5% of exprorters perceived to be ‘risky’ while the remaining exporters would continue to apply and receive timely refunds through the online system. As FE reported earlier, the Central Board of Indirect Taxes (CBIC) earlier this week instructed its Customs and GST formations to verify the correct availment of input tax credit (ITC) by few exporters who are perceived as “risky” on the basis of pre-defined risk parameters. Official sources said the government was matching turnover from exports with the income-tax returns filed them to detect discrepancy and foul play. This is being used to flag their consignment to the Customs database for additional checks.

  • Jun 20, 2019
  • Tax body seeks extension of GST return filing by four months

    Tax and legal consultants Wednesday complained about the time-limit of three months given to file the GST returns for 2017-18 as hundreds of amendments, notifications and circulars have made the Act very complex. Officials of the Tax Bar Association, a body of over 400 members of chartered accountants, company secretaries, cost advocates and tax consultants, said that the government has made the entire GST procedure and filing of returns very "confusing with hundreds of changes in the rules and taxes".