Finance minister Nirmala Sitharaman on Tuesday told the industry that suggestions for lowering the 28% goods and services tax (GST) on cement will be looked into as a step toward easing construction costs.

The minister said this in response to a suggestion made at a post-budget interaction organised by the Confederation of Indian Industry (CII). The industry suggestion was that lowering GST on cement could help both government infrastructure projects as well as projects by the private sector and by individuals.

India will not overhaul its Goods and Services Tax (GST) regime in the next fiscal year, a senior official said on Monday, delaying a move it has been considering for more than a year to simplify its tax structure and reduce the burden on consumers.

The country currently has five tax rates for GST, which was introduced in 2017, bringing numerous state taxes under one umbrella. They range from 0% to 28%.

In 2021, the government considered overhauling the tax by merging two of the tax rates, and lowering the levy on a host of items. Some have criticised the five-year old regime for having too many tiers.

"Right now, we are just looking to maintain stability (in tax rates), a stable tax regime. Minor changes will always be there... major taxation change like merger of tax rates, we are not contemplating in 2023/24," Revenue Secretary Sanjay Malhotra said in an interview.

India’s biggest tax reform, the Goods & Services Tax (GST) was introduced on 1 July 2017. The journey of GST in India has been a roller-coaster ride with many hits and misses. Since its inception, the Government has considered several legal and procedural changes to simplify the tax system for the smooth functioning of GST in the country. GST has also brought with it a paradigm shift in the use of technology in tax administration and compliance. However, even 5 years and multiple policy amendments, it seems that not everything has unfolded as planned.

GST compliances which were envisaged to be easier and less complex, have turned out to be a compliance nightmare with multiple and frequent changes in the tax returns and reporting requirements. Further, the GST portal has been a puzzle and cause of concern for many taxpayers since its inception. Harmony between the provisions of the law and the functionality offered on the GST portal remains elusive. It took months to update the portal on account of changes in the law and process and still, it continued to face technical glitches.

The Goods and Service Tax (GST) has been one of the most complex yet progressive indirect tax reforms implemented in the history of India. The reform involved the integration of the nation’s diverse indirect tax horizon into a single indirect taxation code bringing about a massive responsibility of developing a robust, unified and interactive IT architecture to not just integrate the taxation platform of 36 States, Union Territories and the Union Government, but also to sculpt a single interface structure for all the taxpayers for compliances and reporting.

The Goods and Services Tax Network (GSTN) was entrusted with the complex and herculean task of building the platform to service the needs of diverse stakeholders, be it taxpayers, tax authorities or other governmental agencies, featuring interoperability with other systems such as that of Customs authorities. The responsibilities included the taxpayer migration from the erstwhile regime to GST, registrations, filings, tax remittance, refunds, validating appropriateness of Input Tax Credit (ITC), etc.

After record goods and services tax (GST) collection, the Central Board of Indirect Taxes and Customs (CBIC) is preparing a roadmap to widen the tax base with stricter audits and scrutiny.

There is much scope to widen the tax base and check tax evasion with active use of digital forensic tools and use of data integration and artificial intelligence, CBIC chairman Vivek Johri said in a post-budget interaction with ET.

So far, the board has detected a revenue shortfall of ?22,000 crore from the tax audits of 51,000 GST return filings and ?2,200 crore from tax scrutiny of 31,000 GST returns. "We are looking at actively using audits and scrutiny for improving compliances. We have been able to achieve a big breakthrough in return filing percentage but it is not enough," Johri said. "We also need to look at the quality of data that the values taxpayers are putting in the return."

The indirect tax proposals announced by the Finance Minister Nirmala Sitharaman aim to reduce tax burden and improve tax administration. On the customs front, several rates have been rationalised. Some of the major proposals of the Finance Bill under the GST law have been summarised below

The Budget on Wednesday proposed certain amendments in GST Act and said that input tax credit cannot be claimed on goods/ services used or intended to be used for Corporate Social Responsibility (CSR) activities. The amendments in the Central GST Act has been brought through the Finance Bill, 2023.

The amendments propose to decriminalise certain offences under the indirect tax law and double the threshold for launching prosecution under the tax law to Rs 2 crore. It, however, retained the limit at Rs 1 crore for fake invoicing cases.

KPMG in India Partner, Indirect Tax, Abhishek Jain said the Finance Bill proposes to restrict input tax credit paid on goods and services used for CSR activities.

The Goods and Services Tax (GST) was introduced with a stated objective to rationalise the indirect tax ecosystem of India creating a common national market for goods and services. ‘Ease of doing business’, economic growth and price rationalisation were the cornerstones of this ‘one nation-one tax’ initiative. The success and effectiveness of tax reforms largely depend upon a robust dispute settlement system, which caters to efficiency in the disposal of disputes, while keeping litigation costs low.

Under GST, disputes arise from differences in tax paid by the assessees and the computation of tax liability by authorities. Such tax disputes can arise due to various reasons during assessment, audit and/or scrutiny of records/accounts, viz. rate of tax, a claim of tax exemption, the claim of an input tax credit, incorrect determination of place of supply, nature of supply (composite or mixed supply), classification of goods and services, etc. While GST is touted to remedy the proliferation of tax disputes and simplify tax administration, early experiences point to the contrary.

Recently, a functionality of "Automated Drop Proceedings" of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is available for the taxpayers who have filed their pending returns i.e. 6 monthly or 2 Quarterly returns.

If such taxpayers have filed all their pending returns, the system will automatically drop the proceedings and revoke suspension.

If the status of the GSTIN does not automatically turn ‘ACTIVE’, then taxpayers are advised to revoke the suspension once the due returns have been filed, by clicking on ‘Initiate Drop Proceeding’ for which navigation is as follows:

"Log on to GST Portal > Services > User Services > View Notices and Orders > Initiate Drop Proceeding"

In case the system does not automatically drop the proceedings or taxpayer is unable to revoke the suspension by clicking on ‘Initiate Drop Proceeding’, then taxpayer is advised to contact Jurisdictional Officer.

As an outcome of the recent 48th GST council meeting, the manner of dealing with difference in liability reported in statement of outward supplies (GSTR-1) and that reported in return (GSTR-3B) has been codified in the form of Rule 88C of the CGST Rules. This rule is likely to affect the taxpayers in case of any discrepancies between the supplies reported in GSTR-1 and GSTR-3B. The onus will be on the taxpayers to ensure compliance.

The first question that arises in mind is whether this rule has got a statutory backing. The answer to this question apparently seems to be a yes. Section 75(12) of the CGST Act provides for direct recovery of unpaid or short-paid self-assessed tax as per GSTR-3B without following the demand procedures laid down under the CGST Act.

Incentives paid by the government to banks for promoting RuPay debit cards and low-value BHIM-UPI transactions will not attract GST, the Finance Ministry said.

Last week the Cabinet cleared a Rs 2,600-crore incentive scheme for banks to promote RuPay debit cards and low-value BHIM-UPI transactions in the current fiscal.

Recently, a functionality of Automated Drop Proceedings of GSTINs suspended due to non-filing of returns has been implemented on the GST Portal. This functionality is for the taxpayers who have filed their pending 6 monthly or 2 Quarterly returns.

Such taxpayers are advised to revoke the suspension once the due returns have been filed by clicking on “INITIATE DROP PROCEEDING” for which navigation is as follows...

Various new functionalities are implemented on the GST Portal, from time to time, for GST stakeholders. These functionalities pertain to different modules such as Registration, Returns, Advance Ruling, Payment, Refund and other miscellaneous topics. Various webinars are also conducted as well informational videos prepared on these functionalities and posted on GSTNs dedicated YouTube channel for the benefit of the stakeholders.

Businesses now-a-days are adopting new and innovative promotional schemes to attract customers. With increased competition, making space for a new business or even surviving in the market has become a challenge. However, for implementation of such schemes, tax implications are very critical and have been a matter of dispute under indirect tax regime.

One of the important issues related to promotional schemes is availability of input tax credit (ITC) of tax paid on procurements made for promotional schemes. While the term ‘business’ has been defined under the Central Goods and Services Tax Act, 2017 (the CGST Act), there is no definite yardstick to find out whether an activity is carried out ‘in course or furtherance of business’.

The advance ruling in M/s. Myntra Designs Private Limited (Myntra)case is an important example of such an anomaly in law. Myntra hadsought advance ruling on availability of ITC on vouchers and subscription packages procured from third-party vendors. Myntra proposed to run a loyalty program, by way of issuing loyalty points to the customers on fulfilment of certain terms and conditions. Such loyalty points, which are non-transferable, and have no monetary value, are redeemed by customers for vouchers and subscription packages. The Karnataka Authority for Advance Ruling (AAR)heldthat redemption of loyalty points by customers for receiving vouchers from Myntra implies that the vouchers are issued free of cost to the customers and amounts to disposal of vouchers by way of gift, which is blocked credit under Section 17(5)(h) of the CGST Act.

The Central Board of Indirect Taxes and Customs (CBIC) said on Saturday those applying for Goods and Services Tax (GST) registration need not give their mobile phone number and email address.

Instead, their permanent account number (PAN) will be verified through a separate one time password to be sent to the mobile number and e-mail address linked to it. PAN is issued by the Income Tax department.

In a move that will help assesses, the Andhra Pradesh High Court has said the Goods and Services Tax (GST) department cannot keep the taxes paid by them due to inadvertent error on their part while filing the GST forms. In a recent ruling on a writ petition, a division bench of Justices C Praveen Kumar and AV Ravindra Babu held that amounts that were paid by the taxpayer furnishing incorrect details cannot be taken as tax dues to the department. The department cannot claim that the taxpayer is barred by limitation.

Concessionaires who receive annuities from the National Highways Authority of India and state authorities for construction and maintenance of roads and highways will now have to pay goods and services tax (GST) on the toll amounts received. Effective January 1, 2023, an exemption has been removed.

A recent notification by the Central Board of Indirect Taxes and Customs has omitted section 23A and related entries dealing with this. The provision had exempted “service by way of access to a road or a bridge on payment of annuity”.

The Gujarat bench of GST Authority for Advance Rulings (AAR) held in a recent ruling that a 5% rate is applicable for dining in, takeaways and even doorstep deliveries by a stand-alone restaurant.
The AAR held that, irrespective of whether customers of Riddhi Enterprises (the applicant, which is a stand-alone restaurant) consumed food & beverages prepared and supplied to them in the restaurant itself or by way of a takeaway, it would qualify as a ‘restaurant service’. This attracts GST at 5% without input tax credit, it said.

The collections from Goods and Services Tax (GST) grew by 15 per cent to over Rs 1.49 lakh crore in December 2022, indicating improved manufacturing output and consumption demand, besides better compliance.

This is the 10th month in a row that the revenues have remained above the Rs 1.4 lakh crore mark. The collection in November was about Rs 1.46 lakh crore.

Goods and services Tax will not have to be paid by a proprietor of a registered proprietorship on a housing unit rented for his residential usage.

This, along with a number of tax changes, will come into effect from the New Year effective January 1, after notifications by the Central Board of Indirect Taxes and Customs (CBIC).