Finance Minister Nirmala Sitharaman on Saturday directed the Goods & Services Tax (GST) administration to hold a special filing demonstration session for new return system. This exercise is aimed to get the feedback before the new filing mechanism comes into effect from April 1, 2020. Till date, there are over 1.20 crore tax assesses and each one of them has to file return either on monthly or quarterly basis, based on their turnover. It is mandatory as per the law. “Select assesses along with their accountants will be invited in each of the circle (of Central Board of Indirect Taxes & Custom) on December 7,” Revenue Secretary Ajay B Pandey told reporters here. The Finance Minister met tax assesses in five group to discuss and find ways to further simplify GST forms and make the existing filling process (GSTR 1, GSTR 3B, GSTR 9, GSTR 9c etc) more user friendly.

The Goods & Services Tax (GST) Administration plans to act tough with non-filers of returns and cancel their registration. It has also decided to update the progress made in this regard on a daily basis. Filing of returns helps tax authorities to estimate the tax liability and find out how much tax has been paid. The problem here is that nearly 20 per cent of assessees do not file their returns, which affects GST collections. The Central Board of Indirect Taxes & Customs (CBIC) held a meeting with the Principal Chief Commissioner and Commissioner of GST & Customs on November 13. According to sources, PK Dash, Chairman, CBIC, expressed his displeasure in the progress of cancellation of registration of non-filers who have not filed GSTR 3B (showing tax payments) returns for six or more than six return periods and are liable to action under GST law.

The Central Board of Indirect Taxes & Customs (CBIC) on Friday clarified that salaries are not subject to GST, and said that department has not demanded any tax on salaries paid to chief executives or employees. It was responding to media reports. “CBIC emphasised the GST law position which clearly states under Section 7(2) read with Schedule III of the Central Goods and Services Act, 2017 (CGST Act) that the salaried services by an employee to the employer shall be treated neither as a supply of goods nor as a supply of services,” a statement said. It added that salaries as such cannot be subject to GST, and no notice has been issued to any companies demanding GST on salaries whatsoever. Experts said that under GST, salaries paid to executives by the head office is considered to have been paid by all the branch offices of the organisation situated in different states in lieu of services.

The goods and services tax collections are falling — the rate of annual growth was negative in both September and October — but that doesn’t seem to make the authorities any stricter in enforcing compliance and closing the avenues for evasion. On Thursday, the government not only extended yet again the due dates for filing Form GSTR-9 (annual return) and Form GSTR-9C (reconciliation statement) by one and three months, respectively, to December 31 and March 31, but also undermined the utility of these returns by virtually removing its crucial anti-evasion features. As the GSTR-9 and GSTR-9C forms have now been ‘simplified’, taxpayers won’t require to provide the split of input tax credit availed on inputs, input services and capital goods. Also, they won’t need to provide HSN-level information of outputs or inputs, etc, for 2017-18 and 2018-19. The changes are attributed to the government’s recognition of the ‘challenges’ faced by taxpayers in furnishing these details, but experts point out that with the latest relaxations, the authorities would find it difficult to match the invoices of buyers and suppliers to check evasion, even after the annual returns are filed.

The tax department has started questioning top companies and banks if they were passing on some of the common costs like salaries of chief executives to their branch offices. The department wants companies to proportionately distribute common costs from head office to branch offices and treat this as a supply. Once this is treated as a supply, 10% of it has to be added to the cost and 18% Goods and Services Tax (GST) could be levied on the total amount. Some of the top companies headquartered in Pune, Mumbai and New Delhi have started receiving queries from the tax department on cross-charging. Under the GST framework, nothing is for free, including some of the common functions carried out at a company’s or a bank’s head office like human resource, IT functions, audit and legal fees paid. “The interpretation adopted by the tax authorities is that an employee of an organisation should be considered as an employee of a particular office only (not the organisation as a whole) for GST-related purposes.

The Punjab and Haryana High Court has permitted filing or revising Form TRAN I for transitional credit by November 30, 2019, irrespective of whether the form was filed, incorrectly filed or not filed at all. “Article 300A provides that no person shall be deprived of property saved by authority of law. While right to the property is no longer a fundamental right but it is still a Constitutional right,” the court said while disposing the petitions. Further it said CENVAT (Central Value Added Tax) credit earned under the erstwhile Central Excise Law is the property of the writ applicants and it cannot be appropriated for merely failing to file a declaration in the absence of Law in this respect.

Goods and services tax (GST) collections in October — concerning mostly September transactions — came in at Rs 95,380 crore, 5.29% lower than in the year-ago month, amplifying concerns over a likely big deficit in revenue from this comprehensive indirect tax and cementing the notion that economic slowdown is barely being reversed. The September GST collections were just Rs 91,916 crore, a 19-month low, and these were 2.7% lower than the year-ago month. There was only one more occasion since GST’s April 2017 launch the collection for any month declined from the year-ago month — in August 2018. The low October GST mop-up was despite the fact that as the month that follows the middle point of the fiscal, October is believed to be a high-revenue month for the government, rivalled only by April, that follows the end of fiscal year. Collections in October 2018 was Rs 1,00,710 crore and there were only six more months when the overall GST revenue crossed the Rs 1 lakh crore threshold.

Uttar Pradesh has estimated that the state will suffer a loss of Rs 13,500 crore in 2022-2023 due to implementation of the Goods and Services Tax. Presenting its estimated expenditure plans for the next five years to the 15th Finance Commission recently, the state said its revenue in subsequent years too will be hit because of GST. “The GST collection of UP is estimated to be Rs 65,000 crore in 2022-2023, therefore the compensation will be around Rs 18,000 crore. But the Union government will provide compensation only till June 2022, five years from the date of implementation of GST. Thus, in the last three quarters of 2022-2023, the loss of revenue is expected to be about Rs 13,500 and the revenue in the subsequent years may also be affected. Such losses in the post compensation regime need to be looked into by the finance commission,” the state government said in its submission to the commission last week.

Millions of GST payers are eagerly awaiting clarity over the new rules notified early this month that restricted the refund of input tax credit to 20% of the total claimed amount.

Sridhar (name changed) got a pleasant surprise on Monday morning when he got a message from an online travel aggregator regarding a booking for Varanasi hotel made in September for stay in November. "This is an important update regarding your upcoming hotel stay at XXX Hotel. The amount of tax applicable on this hotel booking has now been reduced in keeping with the new GST (Goods & Services Tax) reduction mandated by the GST department. We have therefore initiated a refund of ?XXXX.X which will reflect in your account in 7-12 working days. Wallet and UPI refunds will take only 1-2 days,” the message read. Sridhar’s friend Arnab too got a similar message for a hotel booking in Shimla. There could be many Sridhars and Arnabs who are pleasantly surprised by this move as a refund has been initiated, probably for the first time, after GST rate lowered for hotel sector.

The landmark Goods and Services Tax (‘GST’) has completed two years. Businesses have already gained experience to file the monthly return GSTR-3B for the month of September in the year 2018. Notably, the September month return invites various actions and adjustments by the taxpayers unlike other monthly returns. Here are the points which businesses must keep in mind for filing the monthly return GSTR-3B for the month of September: So far, the businesses are availing full ITC on the invoices received by them from the suppliers even if the suppliers have not uploaded the same on the GST portal and therefore, not reflecting in GSTR-2A. This is for the reason the matching mechanism has been kept in abeyance. Recently, vide CGST Sixth Amendment Rules, 2019 published on 9th October 2019, the Government has amended the CGST Rules to provide that the recipient shall avail ITC only to the extent of 20% of eligible credit available, in respect of invoices, details of which have not been uploaded by the supplier in its GSTR-1.

The GST Council, on September 29, 2019, has approved the introduction of ‘E-invoicing’ or ‘electronic invoicing’ for business to business (B2B) transactions from January 1, 2020. Once implemented, it can help arrest tax evasion as it enables pre-populating of GST returns with the e-invoice details. Return filing will also become simpler with reconciliation becoming easier. Recently, a concept note explaining what e-invoice is and how it operates was released and made available on the GSTN website. The document allayed the concerns of the tax payers and reiterated that there is no requirement to generate the e-invoice on a government’s tax portal. The taxpayer can continue to use his accounting system such as ERP, Tally and excel based tools for creating the invoice. The only requirement is that the supplier’s software should be able to generate the invoice in a specified template in JSON format.

The country’s primary anti-smuggling intelligence agency has begun resending notices to exporters for availing GST exemptions where exports preceded imports. The Directorate of Revenue Intelligence (DRI) move followed a Supreme Court stay on a Gujarat High Court order favouring the exporters. The high court had quashed a revenue department notification allowing DRI to penalise exporters for allegedly not following “pre-import condition” and availing wrongful Goods and Services Tax (GST) exemptions.

Amid growing criticism of the imperfections of India’s goo-ds and services tax and the body blow it apparently dealt to small businesses and the informal sector, finance minister Nirmala Sitharaman on Friday came out in staunch defence of the destination-based consumption tax but hinted at an imminent overhaul of its structure. Since “all of us are party to (its making), let us own it up,” she said here, a day after an official release said a committee of officers would consider “a wide range of (possible) reforms” and suggest within 15 days measures to augment GST collections and improve the relevant administration. Saying that the criticism of GST is ‘harsh’, the minister said, “It might have its flaws and it might probably give you some difficulties but we can’t just damn it.. I honestly want each one of us to give solutions for better compliance”. Sitharaman was meeting industrial representatives, chartered accountants and cost accountants and entrepreneurs here as part of an outreach programme.

Officials of the central and state governments on Friday began exploring ways to step up revenue collection from the goods and services tax (GST) which has consistently remained below target.

As the declining GST collections continue to be a cause of worry for the tax authorities at the central and state levels, anti-evasion measures are being strengthened. The government on Thursday set up a committee of officers to suggest measures to augment GST revenue collections and administration and asked it to submit a report within 15 days to the GST Council Secretariat. “The committee should consider a wide range of reforms so that a comprehensive list of suggestions may emerge,” an official order said, adding that the panel’s terms of reference “include making suggestions about systemic changes”, including checks and balances to prevent misuse and steps to improve voluntary compliance. Separately, the government also amended GST rules to ensure that businesses can’t claim entire input tax credit (ITC) if their suppliers had failed to file returns and upload invoices.

The government has amended the goods and services tax (GST) rules to limit the provisional tax credits that businesses can claim, if invoices are not uploaded and the tax collected from the buyer not paid to the government, to 20% of the total taxes that they have paid on raw materials and services. The changes will come into force on the date of its publication in the official gazette, which is expected shortly, according to the notification by the Central Board of Indirect Taxes and Customs (CBIC).

Keen to plug revenue leakages, the government has decided to restrict input tax credit under the goods and services tax to 20% of the eligible amount for an entity if its supplier has not uploaded relevant invoices detailing the payments made.

Some Indian conglomerates and foreign banks are among those under the scanner for allowing subsidiaries or Indian entities to use brand names and logos they own for free. The indirect tax department wants these entities to put a valuation on the brand names and logos, charge fees from the subsidiary or group company and pay 18% goods and services tax (GST) on that, according to people with direct knowledge of the matter.

A host of back offices of multinational companies in the financial sector face a tax whammy, with Goods and Services Tax authorities denying them refunds of amounts paid on inputs, saying the work done for parent companies can’t be considered as exports and will be counted as a service for the same entity. GST authorities have rejected refunds on these grounds across states, including Haryana, Maharashtra, Tamil Nadu and Karnataka. The denial of refunds running into hundreds of crores of rupees to these outfits can derail their business model and may impact India’s attractiveness as the world’s back-office hub, especially with the emergence of low-cost sites in the Philippines and East Europe.