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News Indirect Tax-GST

  • Jul 05, 2022
  • Highest 28% GST on luxury, sin goods to continue: Revenue Secy

    The government intends to continue with the top GST slab of 28 per cent for luxury and sin goods, but is open to discuss narrowing down the three slabs of 5, 12 and 18 per cent into two, Revenue Secretary Tarun Bajaj said on Monday. Addressing the industry leaders, Bajaj said the rate rationalisation exercise of the GST Council is a result of introspection of GST, five years after its rollout, and the policymakers do not have a “fetish” to raise the tax rates to the revenue-neutral level of 15.5 per cent.

    On the industry demand for bringing petroleum products under GST net, he said since fuel constitutes a larger part of their revenues, both the Centre and states have some apprehension. “We will have to wait for some time.” “Of the 5, 12, 18 and 28 per cent, we would have to continue with 28 per cent because in a developing economy, in an economy with so much of income disparity, there would be some luxury and sin items that w

  • Jul 01, 2022
  • 5 years of GST: The irritants that we need to iron out

    The noble intention of GST legislation was to replace multiple indirect taxes into single uniform tax law across the nation so as to relieve tax payers from hassles of multiple taxation, high tax incidence, ambiguous tax laws, unfair tax administration, prolonged litigations, huge compliance burden, harassment, corruption etc. The curbing of revenue leakage and tax avoidance was also one of the avowed objective of bringing GST. Let us introspect whether nation has achieved the avowed objectives in GST journey of 5 years.

    In spite of nation achieving buoyancy in tax revenue, can Government boast of bringing ease of doing business, reduction of harassment and corruption? The answer to this may be “No”. Unless certain unreasonable and unfair provisions are diluted and irritants are removed, GST may not achieve the objectives for which it was brought in. Some of such irritants are as under:

    Multiple proceedings and overlapping jurisdiction
    There are multiple proceedings such as scrutiny of returns, summary assessments, investigations by Anti-Evasion authorities, Departmental audit, access to business premises, inspections of records and accounts, inspection and interception of vehicle and goods in transit. Further, there could be investigation by Director General of GST Intelligence. It is indeed stressful for tax payers to attend multiple proceedings and the grind. This results into voluminous compliance, hampers ease of doing the business and also brings unnecessary interface between tax payer and department resulting into harassment and corruption.

  • Jun 30, 2022
  • GST relief for transport and tourism sectors, small online businesses

    The Goods and Services Tax (GST) Council slashed tax rates on transportation through ropeways and renting of goods carriage and exempted foreign component of tour packages from the tax, providing significant relief to transport and tourism sectors.

    The council also offered relief to small businesses selling through the ecommerce route by waiving compulsory GST registration.

    It recommended that GST on the transport of goods and passengers by ropeways be reduced from 18% to 5% with an input tax credit.

    It recommended GST on renting goods carriage with operators where the cost of fuel is included in the consideration be reduced to 12% from 18%.

    The council argued that the reason for lower rates on the transport of goods and passengers is that petrol, diesel, and aviation fuel are outside the GST.

  • Jun 30, 2022
  • GST Council defers tax on casinos, lottery; no decision on extending GST compensation to states

    The GST Council deferred the decision on levying a 28% tax on casinos, online gaming, horse racing and lottery pending more consultations with stakeholders. Further, no decision was taken on extending the mechanism to compensate states for the revenue lost from the implementation of GST beyond June 30.

    Sources have told ET that the Centre has indicated that all the rate changes are likely to come into effect from July 16.

    A two-day meeting of the panel considered a report of the GoM but deferred a decision as Goa and some others wanted to make more submissions. The GoM had recommended that online gaming should be taxed at the full value of the consideration, including the contest entry fee paid by the player on participating in the game.

  • Jun 30, 2022
  • GST Council waives mandatory registration for small businesses selling via e-commerce

    Ease of Doing Business for MSMEs: More small businesses are likely to sell on e-commerce platforms as the Goods and Services Tax (GST) Council on Wednesday waived the mandatory registration for businesses supplying goods with turnover up to Rs 40 lakh. Currently, sellers selling goods or services online have to be GST-registered despite their turnovers below Rs 40 lakh or Rs 20 lakh threshold respectively in contrast to offline sellers who are exempted from the registration.

    “Waiver of requirement of mandatory registration under section 24(ix) of CGST Act for person supplying goods through E-Commerce Operators (ECOs), subject to certain conditions, such as first, the aggregate turnover on all India basis does not exceed the turnover specified under sub-section (1) of section 22 of the CGST Act and notifications issued there under. Second, the person is not making any inter-State taxable supply, according to the recommendations of 47th GST Council Meeting.

  • Jun 29, 2022
  • GST council clears proposal to remove tax exemptions on some items

    The GST Council on Tuesday approved changes in tax rates on some goods and services while allowing states to issue an e-way bill for intra-state movement of gold and precious stones, officials said.

    The Council, chaired by Finance Minister Nirmala Sitharaman and comprising state counterparts, also cleared a host of compliance procedures for GST-registered businesses along with a GoM report on high-risk tax payers to check evasion.

  • Jun 29, 2022
  • Council approves GST rate hikes

    The Goods and Services Tax (GST) Council on Tuesday decided to remove a host of tax exemptions and hike rates for an even larger number of mass-consumption items. It approved a proposal to impose a 12% tax on hotel rooms costing below `1,000 per day and a 5% levy without input tax credit on hospital rooms with rent above `5,000. A clutch of ‘unbranded’ prepackaged and labelled food items will attract 5% tax.

    The Council approved the reports of three ministerial panels (GoMs) on rate rationalisation, system reforms and e-way bills on intra-state gold movement “in full” after a brief discussion, according to three state finance ministers FE spoke to. The report of the Fitment Committee of the Council for developing a margin scheme for tour operators was also accepted by the Centre-state Council.

  • Jun 29, 2022
  • 5 Years Of GST – III: Administrative systems get strong after initial lapses

    While keeping land & immovable property and electricity outside the purview of the Goods and Services Tax (GST) has impaired its construct, a series of steps taken after the legislation’s July 2017 launch, including addition to the list of exemptions, levy of tax without input credit in certain areas, “composition scheme” for small taxpayers and delays in correction of duty inversions in many segments have made the tax more complex. Further, undue leeway was given to taxpayers for long periods on filing of returns in such a manner that invoices can be matched, before the system was made robust and strictly implemented.

  • Jun 29, 2022
  • Pre-packed labelled food items to attract GST, states pitch for continuation of compensation

    Pre-packed and labelled food items like meat, fish, curd, paneer and honey will now attract GST, a tax that will also be levied on the fee that banks charge for the issue of cheques.

    This after the GST Council - the highest decision-making body on the levy of goods and services tax - accepted most of the recommendations of a group of ministers from states on withdrawing exemptions with a view to rationalising the levy, officials said.

    The panel headed by Union Finance Minister Nirmala Sitharaman and comprising representatives of all states and UTs, on the first day of the two-day meeting accepted the GoM's recommendation for reviewing the exemption from GST that packed and labelled food items currently get.

    So pre-packed and labelled meat (except frozen), fish, curd, paneer, honey, dried leguminous vegetables, dried makhana, wheat and other cereals, wheat or meslin flour, jaggery, puffed rice (muri), all goods and organic manure and coir pith compost will not be exempted from GST and will now attract a 5 per cent tax.

  • Jun 27, 2022
  • 28% GST likely on casinos, online gaming, horse races on gross revenue

    The GST Council in its meeting this week is likely to vet a proposal of the panel of state finance ministers on levying 28 per cent GST on online gaming, casinos and horse racing, sources said.

    The Group of Ministers, headed by Meghalaya Chief Minister Conrad Sangma, has recommended that online gaming should be taxed at full value of the consideration, including contest entry fee paid by the player on participating in the game.

  • Jun 27, 2022
  • Indirect tax reforms: A job half done; GST underperforms for its faulty design, rate hike agenda regressive

    As India’s goods and services tax (GST) completes five years on June 30, it has, at best, just begun to exhibit flashes of innate brilliance. Revenues have been very buoyant in recent months, so the Centre now expects receipts from this main indirect tax in the current financial year to be a fifth higher than the Budget Estimate (BE) announced in February. In the last financial year, the collections grew a robust 30.5%, albeit on a contracted base (-7%).

    GST, however, produced sub-optimal outcome over the half-decade, primarily because of its serious design flaws and policy ad-hocism. The period nevertheless bore testimony to the fact that even an imperfect GST can be decidedly superior to the system of assorted indirect taxes with wider cascade effect it replaced.

  • Jun 27, 2022
  • GST at 5: Accountants still confront major issues in filing returns

    In July 2017, India ushered in the Goods and Services Tax (GST) for levy and collection of taxes on inter-state supply of goods and services.

    Almost five years on, accountants complain of multiple glitches in the system hailed as the single biggest tax reform in post-independence India when it was introduced.

    For instance, the GST Act has failed to provide a system to address Centre-state and inter-state disputes, they said.

    Article 279A (11) of the Constitution enables the GST Council to institute a mechanism to resolve inter-state disputes, but no such system has been seriously contemplated so far.

  • Jun 27, 2022
  • GST Council May Discuss Changes In Law To Set Up Tribunals; GoM Report On Online Gaming, Casinos

    The GST Council, which is scheduled to meet next week in Chandigarh, is likely to discuss changes in law to facilitate provision for setting up GST Tribunals. The Council will also discuss the group of ministers’ (GoM) report on online gaming, casinos and race courses, sources told CNBC-TV18. The GoM met on June 17 and discussed issues like tax slabs and rates, among others.

    The GoM, which was appointed by the GST Council last year to suggest ways for augmenting revenue by rationalising tax rates and correcting anomalies in the tax structure, has recommended that the imposition of GST on casinos, race courses, online gaming and lottery should be uniform both in rates and valuation norms, the sources told CNBC-TV18.

    It also recommended that no distinction should be made on grounds of game of skill or game of chance for the purpose of the levy of GST. The panel added that the rate of GST on all such activities should be 28 per cent, they said.

  • Jun 27, 2022
  • GST council expected to focus on improving revenue collections and plugging leakages

    The Goods and Services Tax (GST) council is likely to take up a proposal for stricter scrutiny and verification of highrisk taxpayers ahead of the next level of reforms in the indirect tax framework that completes five years of roll-out on July One.

    A group of ministers (GoM) headed by Maharashtra finance minister Ajit Pawar, which is scheduled to give its report on reforms on the GST system to the council, has recommended public disclosure of information of unregistered bogus traders and provision of information on transactions through Point of Sale (POS) by banks, among others.

    The council meeting this week on June 28-29 in Chandigarh is expected to focus on ways to improve revenue collection and plug leakages as compensation to the states ends this month.

  • Jun 25, 2022
  • GST dept may soon clarify on exemptions to IVF, tax on honorarium paid to guest anchors

    The GST department may soon issue a host of clarifications on certain vexed issues in tax rates, including exemptions to assisted reproductive technology (ART) or in vitro fertilization (IVF) as well as applicability of GST on payment of honorarium to guest anchors.

    A committee of tax officers from the Centre and states, referred to as the Fitment Committee, has informed the GST Council that healthcare services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempt under Goods and Services Tax regime and a clarification be issued regarding GST exemptions to ART/IVFs.

    GST law defines healthcare services as any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India.

    It also includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.

  • Jun 25, 2022
  • GST Council may consider changes in monthly GST payment form

    The GST Council in its meeting next week is likely to consider a proposal for making changes in the monthly tax payment form — GSTR-3B, which would include auto-population of outward supplies from sales return and non-editable tax payment table, officials said.The move would help curb the menace of fake billing, whereby sellers would show higher sales in GSTR-1 to enable purchasers to claim input tax credit (ITC), but report suppressed sales in GSTR-3B to lower GST liability.

    Currently, GSTR-3B of a taxpayer includes auto drafted input tax credit (ITC) statements based on inward and outward B2B supplies and also red flags any mismatch between GSTR-1 and 3B. As per the changes proposed by the Law Committee of the GST Council, there will be auto-population of values from GTSR-1 into GSTR-3B in specific rows to establish one-to-one correspondence to a large extent between rows of the two return forms, thereby providing clarity to the taxpayer and tax officers.

  • Jun 24, 2022
  • Relief for the moment: Proposal for GST on crypto related activities may be deferred

    The GST Council is likely to defer the issue of taxability on activities related with virtual digital assets (VDAs) or cryptocurrency. The meeting is scheduled to take place next week in Chandigarh.

    If deferred, it will give some relief, to crypto-investors at least for the time being. These investors took to the micro-blogging site twitter on Thursday to express their anger on Income Tax Department’s June 22 notification for compliance of TDS (Tax Deducted at Source) with effect from July 1.

    A senior government official confirmed to BusinessLine about a proposal before the council “to clarify the nature and applicability of GST on various supplies related with crypto.” Besides identifying all supplies, proposal also aims to determine activities whether they are goods or services, and accordingly finalise rate of GST. Activities related with crypto include mining, exchange services, wallet services, payment processing, barter system, and other different transactions etc.

  • Jun 24, 2022
  • GST council to consider making e-way bill mandatory for gold, precious stones

    The GST Council is likely to consider making an e-way bill mandatory for intra-state movement of gold or precious stones worth Rs 2 lakh and above and also e-invoicing mandatory for certain B2B transactions.

    The council in its meeting on June 28-29 is likely to consider the report of the panel of state finance ministers on the feasibility of implementation of e-way bill requirement for the movement of gold and precious stones and having annual aggregate turnover above Rs 20 crore.

    Also the GoM suggested that GST Network, in consultation with NIC, will work out the modalities and timelines for implementation of e-invoicing for gold/precious stones.

  • Jun 24, 2022
  • Tour operators set to get GST relief under new ‘margin scheme’

    To reduce the tax incidence in the tour and hospitality sector, the fitment committee of the Goods and Service Tax (GST) Council has suggested levying tax on the margins made by tour operators at a suitable rate.

    Currently, a 5% GST is levied on gross tour cost without the facility of input tax credit.

    The panel also suggested “regularising” 5% GST paid by ice-cream parlours without input tax credit (ITC) before October 2021. The GST on ice-cream parlours will, however, remain at 18% with ITC. There will not be any refund for parlours which have paid the tax at 18% in the period till October last year.

    These recommendations will be considered by the GST Council which will meet in Chandigarh on June 28-29.

    Given the adverse impact on the tourism sector due to the pandemic, the panel has suggested a ‘margin scheme’ for tour operators under which GST has to be paid on value arrived at on a deemed value basis as a certain percentage of the gross tour cost representing fair competitive margin.

  • Jun 24, 2022
  • GST council to approve 6th e-invoice generation portal

    The government is increasing the number of portals for registering e-invoices from just one to six as it takes the digital route to plug indirect tax collection leakages in the run-up to a meeting of the Goods and Services Tax Council next week.

    The portals are the latest step in a move to expand the scope of e-invoicing — beginning with making it mandatory for companies with a revenue of 500 crore in 2020, the criteria is now down to businesses with 20 crore revenue.

    Having benefited from burgeoning tax revenue as a result of enforcement and compliance measures, the government is now expanding the e-invoicing infrastructure to facilitate higher volumes of transactions as its scope widens going forward.

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