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News Indirect Tax-GST

  • Jun 17, 2021
  • BEST liable to pay GST to operator of mini-AC buses, holds AAR

    The GST-Authority for Advance Rulings (GST-AAR), Maharashtra bench, held that BEST would be liable to pay Goods and Services Tax (GST) at the rate of 12% to the operator of a Mumbai-based company, which had ‘rented’ out its mini-AC buses.
    This rate on services came into force from October 13, 2017, the earlier rate of GST on services was 18%.
    BEST had invited tenders in August 2019, for operation of 500 mini-AC buses in Mumbai and its suburbs. The tender of MP Enterprises and Associates was accepted.

  • Jun 16, 2021
  • New GST rates for Covid items notified

    The union government has notified reduced central goods and service tax (CGST) rates for Covid medicines and other related medical essentials.

    The GST Council on Saturday decided to slash GST rates for Covid drugs, testing kits, medical equipment and even ambulances to provide relief to people amid the pandemic, but kept the tax on vaccines unchanged at the lowest slab of 5%. The new rates will be effective till September 30, 2021.

  • Jun 14, 2021
  • Tax Relief: GST cut for Covid-19 test kits, drugs; no waiver for vaccines as vaccination is free in govt sector

    The Goods and Service Tax Council on Saturday decided to slash GST rates for Covid drugs, testing kits, medical equipment and even ambulances to provide relief to people amid the pandemic, but kept the tax on vaccines unchanged at the lowest slab of 5%. The new rates will be effective till September 30.

    While some state finance ministers including West Bengal’s Amit Mitra and Punjab’s Manpreet Singh Badal pitched for a temporary waiver of tax for all Covid drugs, vaccines and equipment, a group of ministers led by Meghalaya chief minister Conrad Sangma recommended slashing of GST rates for items other than vaccines.
    The Union government has been of the view that tax concessions for vaccines are redundant, given that these are mostly made available free to people via government channels, while there is no guarantee that the private sector will pass on the tax reliefs to the intended beneficiaries.

    The council, however, exempted immunosuppressant Tocilizumab and mucomycosis (black fungus) drug Amphotericin B from GST. “There was a lot of substance in the recommendations made by the GOM…the Council naturally agreed to go with GOM recommendations subject of course to slight tweaking,” finance minister Nirmala Sitharaman said.

  • Jun 11, 2021
  • GST Council to meet on Jun 12 to discuss tax cut on COVID essentials, black fungus medicine

    The all-powerful GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on June 12 to decide on GST rate cut for COVID essentials and black fungus medicine, according to officials.

    In the previous meeting on May 28, the Council, which has state ministers as members, a Group of Ministers (GoM) was set up to recommend tax relief on COVID essentials, including PPE kits, masks and vaccines, to the GST council. The GoM submitted its report on June 7.
    Officials said the GST Council would be meeting on June 12, to discuss the GoM report as well as consider tax rate cuts for black fungus medicine.

    Some state Finance Ministers in the GoM are understood to have pitched for a rate cut on COVID essentials.

    Uttar Pradesh Finance Minister Suresh Kumar Khanna, who is also a member of the GoM, on Wednesday said that the state is in favour of cutting taxes on COVID essentials to facilitate patients, but will accept the decision of the GST council on tax rates.

    The GoM on GST concessions on COVID relief items was mandated to examine whether a GST rate cut or exemption is required for medical-grade oxygen, pulse oximeters, hand sanitizers, oxygen therapy equipment like concentrators, ventilators, PPE kits, N-95 and surgical masks and temperature checking equipment. Besides, the panel also looked into COVID vaccines, drugs, and medicines for COVID treatment and testing kits for COVID detection.

  • Jun 09, 2021
  • Table-12 of GSTR-1 (Advisory on PDF)

    Table-12 of GSTR-1 pertains to the data related to the HSN-code wise supplies of goods & services declared in the aforesaid GSTR-1. It has been reported that in the GSTR-1 for the tax period of May 2021, the ‘Total Invoice value’ field in the preview PDF is displaying a value as ‘0’ (zero) instead of N.A, in the cases where the taxpayer has not reported any value in the concerned Table-12 of GSTR-1.

  • Jun 09, 2021
  • The ITC tangle on Covid-19 related expenses

    With India continuing to reel under COVID-19 infections, the term essentials not just imply ‘Roti, Kapda and Makaan’ but has likewise brought within its sphere masks, sanitizer, gloves and many other protective equipment. Corporates are being urged to undertake welfare measures for employees thereby ensuring their well-being and to also support society at large in fighting against this pandemic by providing donations in COVID relief reserves, clinical helps and so forth. This has prompted a sharp rise in expenses of corporates involved in this endeavor.

    Regardless of whether it is incurred for employees or social causes, Input Tax Credit (ITC) being the backbone of GST is a major matter of concern for taxpayers incurring COVID-19 related expenditure. The aforesaid scenario has put questions in mind of organizations that whether ITC can be availed of such expenditure incurred? The question that remains largely unanswered has been the subject of widespread debate in the current context.

    Analysis of ITC eligibility of said expenses requires deliberation on two fundamental angles, one being whether said expenses can be accounted as incurred “in course or furtherance of business” and second, whether there is any specific forbiddance under ITC provisions of GST law.

  • Jun 08, 2021
  • Centre’s new covid vaccine policy resolves states’ GST grievance

    The central government’s decision to procure vaccines and supply to states free of cost has resolved a grievance many opposition-ruled state governments had raised over the 5% Goods and Services Tax (GST) rate on vaccines which they had to pay under the earlier policy.

    The Centre will provide free covid-19 vaccines to all adults from 21 June, Prime Minister Narendra Modi announced on Monday, in a revision of the government’s much-touted strategy of ‘liberalized and accelerated" vaccination.
    The central government will now buy 75% of vaccines and give them free of cost to states, Modi said.

    With the Centre agreeing to procure three-fourth of domestic production of covid vaccines, this tax liability falls on the union government. Half of the GST collected on any item goes to the Centre and the rest to the consuming state. Also, 41% of the Centre’s overall tax collection goes to states. The shift in covid vaccination policy from 21 June removes the tax burden on states under the current arrangement of states having to procure a quarter of domestic vaccine production.

  • Jun 08, 2021
  • Cut GST on Covid drugs and other items, retain rate for vaccines at 5%: GoM

    A group of ministers (GOM) led by Meghalaya chief minister Conrad Sangma is learnt to have recommended no change in the 5% goods and service tax (GST) rate for Covid vaccines while suggesting reduction of the GST rate temporarily to 5% for both commercial imports and domestic supply of most other Covid medicines and materials. It also recommended exemption from GST for the black fungus medicine Amphotericin B for three months.

    The GOM, which had time till Tuesday to submit its report, gave it to the Council on Monday itself, a state government official said.
    The Council’s fitment committee had earlier recommended retaining a 5% GST on both commercial import and domestic supply of vaccines.

    At present, oxygen concentrators, medical grade oxygen, pulse oximeters and Covid testing kits attract 12% GST on commercial imports and domestic supplies. Ventilators and a slew of medicines for Covid ,including Remdesivir, Doxycycline, Ivermectin, Faviflu and Tocilizumab, attract 12% GST. GST is 18% on RT-PCR machines, protective garments, digital thermometers, laboratory sanitisers/disinfectants, paper bed sheets and road transport tanks. The GST rate is 5% on N95 mask/surgical masks.

    “Many goods suffer BCD (basic customs duty) ranging up to 20% and IGST up to 18% besides a social welfare surcharge of 10%. As IGST is charged on taxable value that includes import duties, the effective burden exceeds by another 2-3%,” Punjab finance minister Manpreet Singh Badal had written to Union finance minister Nirmala Sitharaman seeking relief ahead of the last GST Council meeting on May 28.

  • Jun 07, 2021
  • Why the distortions built into GST are coming undone

    At a time when most nations have suspended regular safeguards to expedite responding to Covid-19, the Goods and Services Tax (GST) Council in India is still engaged in a “discussion” on whether life-saving and hard-to-come-by products should be taxed. A consensus on a zero per cent GST rate on products essential to fight Covid-19 remained elusive at the Council meeting on May 28. Council members (ministers) of some states argued for a continued tax levy on such products, sometimes vociferously and repeatedly. This seeming lack of compassion can largely be explained by the distorted design and incentive structure of the GST itself.

    The GST Council has representatives from 31 states. The taxes collected under GST (from states) are accumulated by the Union government and a portion is transferred back to each state under a formula. As is the case with most federal countries, there is a large imbalance in the collection and distribution of taxes between states, and this holds true also for income accrued to, and distributed, from the GST pool. Four states — Maharashtra, Tamil Nadu, Karnataka, and Gujarat contribute nearly as much (~45 per cent) as the remaining 27 states combined. Most federal countries exhibit this characteristic where a few large, rich, provinces or states contribute disproportionately. For example, in the US, six states contribute as much to federal tax revenues as the remaining 44 states combined.

  • Jun 07, 2021
  • May Mop-up: GST collection above Rs 1 lakh crore; revenues 65% higher than that in May last year

    Gross Goods and Services Tax (GST) receipts came in at Rs 1,02,709 crore in May, markedly lower than the record Rs 1,41,384 crore mopped up in the previous month, yet a decent sum given the second Covid wave. May collections mostly pertained to the transactions conducted in April, so it reflected the lockdown’s impact only marginally; the collections could be much lower in June (May transactions).

    The government said GST collections reported for May included the returns filed till June 4, as taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed returns filing for 15 days in the wake of the second Covid wave. The actual revenues for May would be higher since all the extended dates were yet to expire, it added.
    In recent months, the government’s GST revenue has been robust — it has crossed the Rs 1 lakh crore mark for the eight straight month in May, thanks to steps taken to curb evasion and also a shift of business away from the informal sector, in addition to a nascent economic recovery that appears to have been quickly disrupted by the pandemic’s second surge.

    For the second year in a row, the Centre will borrow under special, relatively low-cost mechanism in 2021-22 to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans, sans any consequent fiscal cost to states.

    While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore — there was still a shortfall, Rs 60,000-Rs 70,000 crore by one estimate — the idea is to borrow some Rs 1.58 lakh crore in 2021-22.

  • Jun 04, 2021
  • CBIC notifies five percent GST for DEC tablets, MRO services for ships

    The Central Board of Indirect Taxes and Customs (CBIC) notified a reduction in goods and service tax (GST) rate of diethylcarbamazine (DEC) tablets from 12% to 5%, on Wednesday.

    DEC tablets are used for treatment of Lympahtic Filarisis, an endemic, the elimination programme of which is being conducted in collaboration with the World Health Organisation.

    The Board also lowered the GST rate on maintenance and repair operation services for ships and vessels to 5%. It also clarified that the point of service for business-to-business supply of MRO services for ships and vessels would be the location of the recipient of service.

    The GST Council had announced the rate changes last week. In case of MRO, the government wants to extend the same dispensation as provided to MRO units of the aviation sector so as to provide a level playing field to domestic shipping MROs compared to foreign MRO service providers.

  • Jun 03, 2021
  • Extension in dates of various GST Compliances for GST Taxpayers

    Government has extended the dates of various compliances by Taxpayers under GST vide Notn No 12/2021-CT, dated 1st May, 2021, r/w Notn No 17/2021 CT dated 1st June, 2021, Notn No 14/2021-CT, dated 1st May, 2021,r/w Notn No 24/2021-CT, dated 1st June, 2021, Notn No 25/2021-CT, dated 1st June, 2021, Notn No 26/2021-CT, dated 1st June, 2021.

  • Jun 02, 2021
  • CBIC notifies IGST waiver for Covid jabs, med supplies

    The Central Board of Indirect Taxes and Customs on Tuesday notified IGST exemption to Covid-19 vaccines, remdesivir injections and its raw materials and other medical supplies used in treatment till August-end.

    Imports of mucormycosis treatment drug Amphotericin B have also been exempted from IGST till the same period.

  • Jun 02, 2021
  • Imported O2 concentrators: SC stays HC order on levy of IGST

    The Supreme Court Tuesday stayed a Delhi high court order holding as "unconstitutional” the imposition of Integrated Goods and Services Tax (IGST) by the Centre on import of oxygen concentrators by individuals for personal use.
    A special bench of Justices D Y Chandrachud and M R Shah issued notice on the plea and sought response from the petitioner, who filed a PIL before the high court.

    “We are staying the operation of the Delhi high court order till further orders,” the bench said.

  • Jun 01, 2021
  • Industry hails relief for GST non-filers, demands no tax on health services

    Industry chambers on Saturday said the GST amnesty of reducing late fees for delayed monthly return filing will provide some relief to small taxpayers, and demanded complete waiver of the late fees and interest.

    They, however, expressed disappointment over no decision on demands of zero-rating of healthcare services, medical devices and equipment used in COVID-19 treatment.

    PHD Chamber President Sanjay Aggarwal said that small and medium businesses have been severely impacted due to the pandemic and allowing them to file pending returns with reduced late charges, will encourage them to file returns and ease their compliance burden.

    Industry body Ficci said the recommendation on the amnesty scheme to reduce the late fee will provide some relief to the small taxpayers. "However, Ficci recommends a waiver from the late fees and interest".

    The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, on Friday decided to come out with an amnesty scheme to provide relief to taxpayers in late fee for pending returns.

  • Jun 01, 2021
  • Monthly GST return filing deadline extended till June 26

    The government on Monday said the deadline for filing monthly GST sales returns for May has been extended by 15 days till June 26.

    The GST Council, chaired by the Union Finance Minister and comprising state counterparts, on May 28 had decided to extend certain compliance relaxations on account of COVID-19. The Central Board of Indirect Taxes and Customs (CBIC) in a series of tweets listed out the various relaxations extended by the Council.
    The due date for furnishing details of outward supplies in Form GSTR-1 for the month of May 2021 is extended by 15 days. The extended due date is June 26, CBIC said.

    Businesses file GSTR-1, giving details of supplies made during the month, by the 11th day of the subsequent month. For payment of Goods and Services Tax (GST), Form GSTR-3B is filed by businesses in a staggered manner between 20th-24th day of the succeeding month.

    The GST Council also approved extending by three months till July 31 the due date for filing annual returns for fiscal 2020-21 by composition dealers.

    “Due date for furnishing annual return in Form GSTR-4 for FY 2020-21 to be extended to July 31, 2021,” CBIC said, adding relevant notifications to give effect to these relaxations would be issued in due course.

  • May 31, 2021
  • Late fee relief to non-filers of GST returns to help small biz, add to revenue: Experts

    The rationalisation of late fees for delayed filing of monthly GST returns will give relief to small businesses and add to the government revenue, according to tax experts.

    The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising state ministers, on Friday decided to come out with an amnesty scheme to provide relief to taxpayers in late fee for pending returns.
    The late fee for non-furnishing of GSTR-3B for July 2017 to April 2021 has been capped at Rs 500 per return for those taxpayers who did not have any tax liability.

    For those with tax liability, a maximum of Rs 1,000 per return late fees will be charged, provided such returns are filed by August 31, 2021.

    Besides, the council has made it optional for taxpayers with turnover up to Rs 2 crore to file annual returns for 2020-21.