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2018-07-05T11:54:06

26th GST Council Meet held on 10th March 2018 Key Decisions Taken in the 26th GST Council Meet: 1. GST Return Simplification: Current GST Return filing system to continue for next 3 months 2. On the E-Way Bill Front : -Inter-state implementation of E-way bill to be implemented from 1st April 2018 -Intra-state implementation of EWB to kick-off from 15th April 2018 in a phased manner. States to be divided into 4 lots to execute this phased rollout 3. Reverse Charge Mechanism (in case of supplies made by unregistered persons to registered persons) delayed till 1st July 2018 4. TDS & TCS applicability postponed until 30th June 2018 5. Tax exemption for Exporters extended by 6 months till 1st October 2018 & the Council has advised the GSTN to expedite the export refund claims 6. No GST rate changes were announced Read 26th GST Council meet page to know more about what was expected of this meet 25th GST Council Meet held on 18th Jan 2018 Key Decisions Taken in the 25th GST Council Meet: 1. Late fee reduction: • For GSTR-1, GSTR-5, GSTR-5A and GSTR-6 the late fees is reduced to Rs. 50 per day • In case of Nil return filed for GSTR-1, GSTR-5, GSTR-5A late fee is reduced to Rs. 20 per day 2. Cancellation of registration by voluntary registrants can be applied before the expiry of 1 year from the date of registration 3.Cancellation of registration (REG – 29) by migrated taxpayers extended till 31st March 2018. 4. On successful implementation of e-Way bills, the E-way bill portal to be shifted to ewaybillgst.gov.in 5. Certain modification to e-way bill rules to be notified soon. 6. Recommendations made by Handicraft committee has been accepted by the council: The rates are to be worked out later. 7. GST Rates for 29 Goods and 53 Services have been reduced. These rates will come into effect from 25th January 2018. GST Rate Changes for Goods: Nil Rated Goods: 1. Vibhuti 2. Parts and accessories for the manufacture of hearing aids. 3. De-oiled rice bran Rates reduced from 28% to 18% 1. Old and used motor vehicles [medium and large cars and SUVs] with a condition that No ITC is availed 2. Public transport Buses that run on Biofuel Rates reduced from 28% to 12% For Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed Rates reduced from 18% to 12% 1. Sugar boiled Confectionery 2. Drinking water packed in 20 litres bottles 3. Biodiesel 4. Drip irrigation system including laterals, sprinklers 5. Mechanical Sprayer 6. Certain listed Bio-pesticides (12 in nos) 7. Fertilizer grade Phosphoric acid 8. Bamboo wood building joinery Rate reduced from 18% to 5% 1. LPG supplied to Household Domestic Consumers 2. Raw materials and Consumables needed for Launch vehicles, Satellites and Payloads (Both CGST and IGST Rates) 3. Tamarind Kernel Powder 4. Mehendi paste in cones Rates reduced from 12% to 5% 1. Articles of straw, of esparto or of other plaiting materials 2. Velvet fabric [with a condition that no refund is claimed on ITC] Rates reduced from 3% to 0.25% Diamonds and precious stones GST Rate increased from 12% to 18% Cigarette filter rods Rate increased from 0% to 5% Rice bran (other than de-oiled rice bran) Compensation cess is reduced to 0% for following motor vehicles : 1. Old and used motor vehicles [medium and large cars and SUVs]with a condition that No ITC is availed 2. Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed 3. Vehicle that is cleared as an ambulance (having all accessories necessary in ambulance) 4. 10-13 seater Buses and ambulances subject to specified conditions GST Rate Changes for Services: GST newly applicable on following: • GST Rate at 5% on small housekeeping service providers, notified under section 9 (5) of GST Act, who provide housekeeping service through ECO, without availing ITC • GST Rate at 28% on actionable claim in the form of chance to win in betting and gambling including horse racing Rate reduced from 28% to 18% Services by way of admission to theme parks, water parks, joy rides, merry-go-rounds, go-karting and ballet Rate reduced from 18% to 12% 1. Transportation of petroleum crude and petroleum products with ITC Credit. 2. Metro and monorail projects (construction, erection, commissioning or installation of original works) 3. Works Contract Services by Sub-contractor to the Main contractor under the following scenario: Where the main contractor provides WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity at the rate of 12% Note: Similarly, GST Rate for Sub-contract services to the main contractor shall attract 5% where the Main contractor is providing services to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity at the rate of 5% 4. Common Effluent Treatment Plants services for treatment of effluents 5. Mining or exploration services of petroleum crude and natural gas and for drilling services in respect of the said goods Rate reduced from 18% to 5% 1. Tailoring Services 2. Transportation of petroleum crude and petroleum products without ITC Credit. 3. Job-work services for manufacture of leather goods(Chapter 42) and footwear (Chapter 64) Following Services are exempted : • Providing information under RTI Act, 2005 from GST. • Legal services provided to Government, Local Authority, Governmental Authority and Government Entity. • Transportation of goods from India to a place outside India by air or sea until 30th September 2018: • Life Insurance to personnel of Coast Guard (under the Group Insurance Scheme of the Central Government) by the Naval Insurance Group Fund, retrospectively w.e.f. 1.7.2017 • Dollar-denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or any financial regulatory authority, to a person outside India • Pure services provided to Government entity by a Panchayat/ Municipality. Composite supply involving predominantly supply of services (i.e. up to 25% of the supply of goods) is also exempted. • Lease of land: 1. By government or local authority to governmental authority or government entity 2. Supply as a part of specified composite supply of construction of flats, etc • Admission to, or conduct of examination provided to all educational institutions including any service of conducting entrance examinations on collection of entrance fees • Reinsurance services in respect of following insurance schemes : 1. General insurance business provided under schemes such as Pradhan Mantri Suraksha Bima Yojna and others listed in Notification 12/2017-CGST Rate 2. Life insurance business provided under schemes such as Pradhan Mantri Jan Dhan Yojana and others listed in Notification 12/2017-CGST Rate • Services by way of fumigation in a warehouse of agricultural produce • Services of admission to planetarium where consideration charged is below Rs.500 • Subscription of online educational journals/periodicals by educational institutions who provide degree recognized by any law • Renting of transport vehicles to a person providing services of transportation to an educational institution (students, faculty, and staff) providing education upto higher secondary or equivalent. • Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-20 World Cup in case the said event is hosted by India. Changes in Exemption limits in the following cases: • The exemption limit of Rs 5, 000 per month per member in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution is enhanced to Rs 7500/-. • The exemption limit of the amount of cover of Rs. 50, 000 enhanced to Rs. 2 lakhs in respect of services of life insurance business provided under life microinsurance product approved by IRDAI • The exemption limit of Rs.250 for services with respect to all the theatrical performances like Music, Dance, Drama, Orchestra, Folk or Classical Arts and all other such activities in any Indian language in theatre increased 500 per person Others Recommendations to Note: • To allow ITC of input services in the same line of business at the GST rate of 5% in case of tour operator service • To extend the period of Viability Gap Funding (VGF) with respect to the construction of RCS Airports from 1 to 3 years from the date of commencement of RCS Udan Airport. • Proposal to not to include the Value of deposits, loans or advances on which interest or discount is earned in the Value of exempt supply under sub-section (2) of section 17 (Not applicable to Banking company, Financial Institutions, NBFC extending deposits, loans or advances) • To defer the liability to pay GST in case of TDR against consideration in the form of construction service and on construction service against consideration in the form of TDR to the time when the possession or right in the property is transferred to the landowner by entering into a conveyance deed or similar instrument (eg. allotment letter). No deferment in point of taxation in respect of cash component. • Changes in Valuation of Lottery, Betting and gambling Services: 1. To insert a provision that the value of lottery shall be 100/112 or 100/128 of the price of lottery ticket earlier notified. 2. To insert a provision that the Value of supply of Betting & Gambling shall be 100 % of the face value of the bet or the amount paid into the totalizator. • Recommendations made regarding Reverse Charge Mechanism 1. To include Renting of Immovable property by government or local authority to a registered person under reverse Charge while renting of immovable property by government or local authority to unregistered person shall continue under forward charge 2. To define insurance agent in the reverse charge notification to have the same meaning as assigned to it in clause (10) of section 2 of the Insurance Act, 1938, so that corporate agents get excluded from reverse charge Clarifications GST Rate Clarifications are given for the following goods: 1. GST at 18% to be charged only on the net quantity of “Poly Butylene Feed Stock & Liquefied Petroleum Gas” retained for the manufacture of “Poly Isobutylene or Propylene or di-butyl para cresol” subject to specified conditions. 2. With Respect to Rail coach industry: • GST at 5% on Chapter 86 Goods (with condition that no Refund of unutilized ITC) • GST to attract at applicable rates for the rest of the Goods supplies to Indian Railways 3. With Respect to Coal Rejects falling under HSN Code 2701: • GST at 5%
2018-07-05T11:53:10

A difficult reform across different levels of the federal system is rarely easy, but perhaps the least difficult in this moment before the next election. As we approach the first anniversary of the goods and services tax (GST) reform, it is a good time to take stock of the problems in the system. Introducing GST in India was no small feat, but it has become increasingly clear that the system is too complicated and has led to a lot of confusion for taxpayers. India has five different GST rates—0, 5%, 12%, 18%, and 28%. According to the World Bank India Development Update 2018, of the 115 countries with GST regime, 40 countries use a single rate and 28 countries use two rates. India keeps rather poor company with Italy, Ghana, Pakistan, and Luxemburg—countries with four or more rates. India does worse still, because in addition to these five tax rates, there are some exceptions. Some goods are categorized as luxury and sin goods, deserving a special cess in addition to the GST rate. There are some special goods taxed at low rates like gold (3%) and precious gemstones (0.25%). One might think five different rates is not so bad, once there is a clear code of classifications, and people get enough time to get used to the new system. After all, the government did a remarkable job of producing a detailed list of classifications in the Harmonised System of Nomenclature (HSN)—an eight-digit code for goods classification—which tries to provide and stipulate a code for every conceivable product category. One year into the GST regime, the HSN code-book for GST classification contains 18, 306 entries in 438 pages. Even after doing such a detailed job, there is confusion. What happens when a good or service could fit in two different categories, taxed at two different rates? For instance, should Pepsi’s Nimbooz be classified lemonade (taxed at 28%) or as pulp juice (taxed at 12%)? Most firms provide a canteen, but most firms also have the food prepared outside the premises, often by a third party. Should they be taxed at 5% or 18%, because canteen service is taxed at 5%, while outdoor catering is taxed at 18%. A few months ago, members of the industry reached out to the finance ministry and the GST council to clarify the matter. The opposite problem also exists, where variations of a good are taxed under different rates. Last year there was a sweets dispute. Plain barfis were taxed at 5%, but barfis with dry fruits could be taxed at 12%, and chocolate barfis at 28%. The GST council had to clarify that chocolate barfis would be taxed at 5% as barfis and not as chocolate. If one goes to the GST council website, there are a few hundred notifications, more than one for each day in existence. And that is just the Central government notifications. Each state has its own set of notifications. There is a constant process of raising disputes and questions, and the government trying to clarify classifications and solve problems. Then there are the legal challenges in courts. And this is only about the current stock of goods and services. It does not account for new products and services that will enter the market in the future. Some blame the government for not doing a good enough job of detailing and specifying various classifications. Actually, it has done a remarkable job, but that is hardly the point. The problem is that it is an impossible task. No matter how detailed the classification code-book, there will be disputes and confusion, because we live in a world with interesting, complicated and customized goods and services with many dimensions and serving many needs. The finance ministry and the GST council are asking the wrong question. The point is not how best to classify each good, but to realize the impossibility of successfully classifying each good. Therefore it is best to do away with the need to classify each good. A single GST for all goods and services needs no classification system. Every individual and firm simply pays the same rate, and the government and the legal system can use valuable time and resources resolving other problems. As the world around us grows in complexity, there is a tendency for governments to think we need more detailed rules and systems to regulate the dynamic nature of our economy and society. Counter-intuitively, the greater the complexity, the more we need simple rules to guide us through the maze of choices. The title is borrowed from the book by Richard Epstein, one of the best-known legal theorists in the world. His idea is that the simplicity of the rule will better help individuals and firms deal with many choices and the changing condition of the world around us. A complex tax system, on the other hand, adds burden to the human ability to navigate the numerous choices in a dynamic world. The greater the number of goods and services in the economy, the better it is to have fewer classifications and rates. In fact, a single rate does the job quite well. If the government can simplify the GST rates to a single rate and do away with the need for classification, it would reduce uncertainty, resources spent on resolving disputes, and compliance costs. However, the GST council needs to agree to a single rate. In a unique moment in India, 21 states, with almost 70% of the population, are currently governed by the Bharatiya Janata Party (BJP). A difficult reform across different levels of the federal system is rarely easy, but perhaps the least difficult in this moment before the next election. If anyone can accomplish this, it is Prime Minister Narendra Modi.
2018-06-27T17:58:26

Impact of Goods and Services Tax on Job Work Business Implication of Goods and Services Tax on Job Work in Manufacturing Industry In this article, we are going to discuss the tax implications in case of goods sent for job work before and returned after the appointed date. Topics: • What is job work? • ITC on goods sent for job work • Accompanying documents o Accounts & records o Challan o Form ITC-04 What is job work? Job work means processing or working on raw materials or semi-finished goods supplied by the principal manufacturer to the job worker. This is to complete a part or whole of the process which results in the manufacture or finishing of an article or any other essential operation. For example, big shoe manufacturers (principals) send out the half-made shoes (upper part) to smaller manufacturers (job workers) to fit in the soles. The job workers send back the shoes to the principal manufacturer. As per GST Act, job work means any treatment or process undertaken by a person on goods belonging to another registered person. The person doing the job work is called job worker. Note: Value of goods sent by the principal will not be included in the aggregate turnover of the registered job worker ITC on goods sent for job work The principal manufacturer will be allowed to take credit of tax paid on the purchase of goods sent on job work. However, there are certain conditions. A.Goods can be sent to job worker: 1. From principal’s place of business 2. Directly from the place of supply of the supplier of such goods ITC will be allowed in both the cases. Is there a time limit for the principal manufacturer to receive back the goods? Yes. The principal manufacturer must receive the goods back within the following period: 1. Capital Goods- 3 years from effective date 2. Input Goods- 1 year from effective date Please refer our article on impact of GST on job work for more details. What happens if the goods are not received within the specified time? In case goods are not received within the period as mentioned above, such goods will be deemed as supply from effective date. The principal manufacturer will have to pay tax will on such deemed supply. The challan issued will be treated as an invoice for such supply. Can the principal directly sell from the job worker’s place? The principal manufacturer can supply the goods from the place of business of a job 1. Sent from principal’s place of business- Date of goods sent out 2. Send directly from the place of supply of the supplier of such goods- Date of receipt by job worker Effective date is important because it will help to determine the point of taxation if the goods are not returned back within the specified time (see point C below) C. The goods sent must be received back by the principal manufacture within the following period: 1. Capital Goods- 3 years 2. Input Goods- 1 year D. In case goods are not received back within the period mentioned above, such goods will be treated as supply from the effective date and tax will be payable by the prinicpal. For more details, please refer our article on Input Credit on Job Work and ITC-04. Accompanying documents Accounts & records The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal. Challan • All goods sent for job work must be accompanied by a challan. • The challan will be issued by the principal. • It will be issued even for the inputs or capital goods sent directly to the job-worker. • The details of challans must be shown in FORM GSTR-1. • Details of challans must also be filed through Form GST ITC – 04. The challan issued must include the following particulars: 1. Date and number of the delivery challan 2. Name, address and GSTIN of the consigner and consignee 3. HSN code, description and quantity of goods 4. Taxable value, tax rate, tax amount- CGST, SGST, IGST, UTGST separately 5. Place of supply and signature Form ITC-04 FORM GST ITC-04 must be submitted by the principal every quarter. He must include the details of challans in respect of the following- • Goods dispatched to a job worker or • Received from a job worker or • Sent from one job worker to another
2018-06-21T14:42:47

GST trouble: Assessees told to explain mismatch of ITC claimed in GSTR-3B, GSTR-2A Taxmen cite mismatch of ITC claimed in GSTR-3B and GSTR-2A, give 10 days to explain. The tax department’s move of using GSTR-2 was expected among assessees and tax practitioners. A large number of assessees under the GST have received notices from the tax department asking them to explain the mismatch of input tax credit (ITC) claimed in the self-declared summary return GSTR-3B and the auto-generated, but currently suspended, GSTR-2A. The notices have granted a period of 10 days to explain discrepancy, failing which proceeding would be initiated against the taxpayers. Although the department has intensified its enforcement effort in the last month which is reflected in the spurt of notices received by taxpayers, it is the first time they have used a return form, which is not being used by taxpayers since it was suspended in November last year. GSTR-2A is generated by the system on the basis on information received from GSTR-3B and GSTR-1 (sales details). When the sellers of assessees file GSTR-1 in any particular month, its details are captured by GSTR-2A thus providing the details of purchases of the assessee concerned. Since ITC claimed in GSTR-3B should ideally match ITC available on all the purchases made by an asseessee, a mismatch can be detected by comparing the details in these two forms. However, experts say that a mismatch doesn’t necessarily implicate a taxpayer and several other factors could be responsible for the same. “Numerous reasons could be attributed to these discrepancies which include, contradicting circulars over a period of time, frequent changes in law, suspension of GSTR-2, technical incompetence at GSTN. Policymakers need to assure that tax officers pursue such notices in a non-coercive manner and appreciate the practical difficulties faced by taxpayers in filing of tax returns, ” Rajat Mohan, partner, AMRG & Associates, said. In the past month, taxpayers have received notices for non-filing of GSTR-3B, and mismatch in details between GSTR-3B and GSTR-1. The latest batch of notices suggest that tax department is using all possible tools at its disposal to detect evasion, a tax official said. The tax department’s move of using GSTR-2 was expected among assessees and tax practitioners as reported by FE earlier. These assessees had also started using GSTR-2 and GSTR-2A to ensure that the ITC claimed in GSTR-3B was being reconciled. GSTR-2 helps them provide evidence of tax contents in the goods and services they consumed, and thereby validate the credits claimed. The GSTR-2 form provides a business details on the status of suppliers’ tax filing and gives the entity greater control over choosing a vendor. This also allows a firm to ensure that its suppliers are paying taxes on time so that it can claim ITC without any hurdle. Taxpayers are now mandated to file only the outward-supply return GSTR-1 and a simple summary interim return GSTR-3B, with which they pay tax and claim input tax credits. Filing of comprehensive returns with attendant invoice-matching facility was suspended following complaints. Taxpayers had complained of huge compliance burden and also the GST Network’s inability to handle the traffic. The widespread use of GSTR-2 is despite the GST Network not providing the facility of filing
2018-06-21T14:37:42

A difficult reform across different levels of the federal system is rarely easy, but perhaps the least difficult in this moment before the next election. As we approach the first anniversary of the goods and services tax (GST) reform, it is a good time to take stock of the problems in the system. Introducing GST in India was no small feat, but it has become increasingly clear that the system is too complicated and has led to a lot of confusion for taxpayers. India has five different GST rates—0, 5%, 12%, 18%, and 28%. According to the World Bank India Development Update 2018, of the 115 countries with GST regime, 40 countries use a single rate and 28 countries use two rates. India keeps rather poor company with Italy, Ghana, Pakistan, and Luxemburg—countries with four or more rates. India does worse still, because in addition to these five tax rates, there are some exceptions. Some goods are categorized as luxury and sin goods, deserving a special cess in addition to the GST rate. There are some special goods taxed at low rates like gold (3%) and precious gemstones (0.25%). One might think five different rates is not so bad, once there is a clear code of classifications, and people get enough time to get used to the new system. After all, the government did a remarkable job of producing a detailed list of classifications in the Harmonised System of Nomenclature (HSN)—an eight-digit code for goods classification—which tries to provide and stipulate a code for every conceivable product category. One year into the GST regime, the HSN code-book for GST classification contains 18, 306 entries in 438 pages. Even after doing such a detailed job, there is confusion. What happens when a good or service could fit in two different categories, taxed at two different rates? For instance, should Pepsi’s Nimbooz be classified lemonade (taxed at 28%) or as pulp juice (taxed at 12%)? Most firms provide a canteen, but most firms also have the food prepared outside the premises, often by a third party. Should they be taxed at 5% or 18%, because canteen service is taxed at 5%, while outdoor catering is taxed at 18%. A few months ago, members of the industry reached out to the finance ministry and the GST council to clarify the matter. The opposite problem also exists, where variations of a good are taxed under different rates. Last year there was a sweets dispute. Plain barfis were taxed at 5%, but barfis with dry fruits could be taxed at 12%, and chocolate barfis at 28%. The GST council had to clarify that chocolate barfis would be taxed at 5% as barfis and not as chocolate. If one goes to the GST council website, there are a few hundred notifications, more than one for each day in existence. And that is just the Central government notifications. Each state has its own set of notifications. There is a constant process of raising disputes and questions, and the government trying to clarify classifications and solve problems. Then there are the legal challenges in courts. And this is only about the current stock of goods and services. It does not account for new products and services that will enter the market in the future. Some blame the government for not doing a good enough job of detailing and specifying various classifications. Actually, it has done a remarkable job, but that is hardly the point. The problem is that it is an impossible task. No matter how detailed the classification code-book, there will be disputes and confusion, because we live in a world with interesting, complicated and customized goods and services with many dimensions and serving many needs. The finance ministry and the GST council are asking the wrong question. The point is not how best to classify each good, but to realize the impossibility of successfully classifying each good. Therefore it is best to do away with the need to classify each good. A single GST for all goods and services needs no classification system. Every individual and firm simply pays the same rate, and the government and the legal system can use valuable time and resources resolving other problems. As the world around us grows in complexity, there is a tendency for governments to think we need more detailed rules and systems to regulate the dynamic nature of our economy and society. Counter-intuitively, the greater the complexity, the more we need simple rules to guide us through the maze of choices. The title is borrowed from the book by Richard Epstein, one of the best-known legal theorists in the world. His idea is that the simplicity of the rule will better help individuals and firms deal with many choices and the changing condition of the world around us. A complex tax system, on the other hand, adds burden to the human ability to navigate the numerous choices in a dynamic world. The greater the number of goods and services in the economy, the better it is to have fewer classifications and rates. In fact, a single rate does the job quite well. If the government can simplify the GST rates to a single rate and do away with the need for classification, it would reduce uncertainty, resources spent on resolving disputes, and compliance costs. However, the GST council needs to agree to a single rate. In a unique moment in India, 21 states, with almost 70% of the population, are currently governed by the Bharatiya Janata Party (BJP). A difficult reform across different levels of the federal system is rarely easy, but perhaps the least difficult in this moment before the next election. If anyone can accomplish this, it is Prime Minister Narendra Modi. … …
2018-05-17T11:54:38

26th GST Council Meet held on 10th March 2018 Key Decisions Taken in the 26th GST Council Meet: 1. GST Return Simplification: Current GST Return filing system to continue for next 3 months 2. On the E-Way Bill Front : -Inter-state implementation of E-way bill to be implemented from 1st April 2018 -Intra-state implementation of EWB to kick-off from 15th April 2018 in a phased manner. States to be divided into 4 lots to execute this phased rollout 3. Reverse Charge Mechanism (in case of supplies made by unregistered persons to registered persons) delayed till 1st July 2018 4. TDS & TCS applicability postponed until 30th June 2018 5. Tax exemption for Exporters extended by 6 months till 1st October 2018 & the Council has advised the GSTN to expedite the export refund claims 6. No GST rate changes were announced Read 26th GST Council meet page to know more about what was expected of this meet 25th GST Council Meet held on 18th Jan 2018 Key Decisions Taken in the 25th GST Council Meet: 1. Late fee reduction: • For GSTR-1, GSTR-5, GSTR-5A and GSTR-6 the late fees is reduced to Rs. 50 per day • In case of Nil return filed for GSTR-1, GSTR-5, GSTR-5A late fee is reduced to Rs. 20 per day 2. Cancellation of registration by voluntary registrants can be applied before the expiry of 1 year from the date of registration 3.Cancellation of registration (REG – 29) by migrated taxpayers extended till 31st March 2018. 4. On successful implementation of e-Way bills, the E-way bill portal to be shifted to ewaybillgst.gov.in 5. Certain modification to e-way bill rules to be notified soon. 6. Recommendations made by Handicraft committee has been accepted by the council: The rates are to be worked out later. 7. GST Rates for 29 Goods and 53 Services have been reduced. These rates will come into effect from 25th January 2018. GST Rate Changes for Goods: Nil Rated Goods: 1. Vibhuti 2. Parts and accessories for the manufacture of hearing aids. 3. De-oiled rice bran Rates reduced from 28% to 18% 1. Old and used motor vehicles [medium and large cars and SUVs] with a condition that No ITC is availed 2. Public transport Buses that run on Biofuel Rates reduced from 28% to 12% For Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed Rates reduced from 18% to 12% 1. Sugar boiled Confectionery 2. Drinking water packed in 20 litres bottles 3. Biodiesel 4. Drip irrigation system including laterals, sprinklers 5. Mechanical Sprayer 6. Certain listed Bio-pesticides (12 in nos) 7. Fertilizer grade Phosphoric acid 8. Bamboo wood building joinery Rate reduced from 18% to 5% 1. LPG supplied to Household Domestic Consumers 2. Raw materials and Consumables needed for Launch vehicles, Satellites and Payloads (Both CGST and IGST Rates) 3. Tamarind Kernel Powder 4. Mehendi paste in cones Rates reduced from 12% to 5% 1. Articles of straw, of esparto or of other plaiting materials 2. Velvet fabric [with a condition that no refund is claimed on ITC] Rates reduced from 3% to 0.25% Diamonds and precious stones GST Rate increased from 12% to 18% Cigarette filter rods Rate increased from 0% to 5% Rice bran (other than de-oiled rice bran) Compensation cess is reduced to 0% for following motor vehicles : 1. Old and used motor vehicles [medium and large cars and SUVs]with a condition that No ITC is availed 2. Old and used motor vehicles [other than medium and large cars and SUVs] with a condition that No ITC is availed 3. Vehicle that is cleared as an ambulance (having all accessories necessary in ambulance) 4. 10-13 seater Buses and ambulances subject to specified conditions GST Rate Changes for Services: GST newly applicable on following: • GST Rate at 5% on small housekeeping service providers, notified under section 9 (5) of GST Act, who provide housekeeping service through ECO, without availing ITC • GST Rate at 28% on actionable claim in the form of chance to win in betting and gambling including horse racing Rate reduced from 28% to 18% Services by way of admission to theme parks, water parks, joy rides, merry-go-rounds, go-karting and ballet Rate reduced from 18% to 12% 1. Transportation of petroleum crude and petroleum products with ITC Credit. 2. Metro and monorail projects (construction, erection, commissioning or installation of original works) 3. Works Contract Services by Sub-contractor to the Main contractor under the following scenario: Where the main contractor provides WCS to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity at the rate of 12% Note: Similarly, GST Rate for Sub-contract services to the main contractor shall attract 5% where the Main contractor is providing services to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity at the rate of 5% 4. Common Effluent Treatment Plants services for treatment of effluents 5. Mining or exploration services of petroleum crude and natural gas and for drilling services in respect of the said goods Rate reduced from 18% to 5% 1. Tailoring Services 2. Transportation of petroleum crude and petroleum products without ITC Credit. 3. Job-work services for manufacture of leather goods(Chapter 42) and footwear (Chapter 64) Following Services are exempted : • Providing information under RTI Act, 2005 from GST. • Legal services provided to Government, Local Authority, Governmental Authority and Government Entity. • Transportation of goods from India to a place outside India by air or sea until 30th September 2018: • Life Insurance to personnel of Coast Guard (under the Group Insurance Scheme of the Central Government) by the Naval Insurance Group Fund, retrospectively w.e.f. 1.7.2017 • Dollar-denominated services provided by financial intermediaries located in IFSC SEZ, which have been deemed to be outside India under the various regulations by RBI, IRDAI, SEBI or any financial regulatory authority, to a person outside India • Pure services provided to Government entity by a Panchayat/ Municipality. Composite supply involving predominantly supply of services (i.e. up to 25% of the supply of goods) is also exempted. • Lease of land: 1. By government or local authority to governmental authority or government entity 2. Supply as a part of specified composite supply of construction of flats, etc • Admission to, or conduct of examination provided to all educational institutions including any service of conducting entrance examinations on collection of entrance fees • Reinsurance services in respect of following insurance schemes : 1. General insurance business provided under schemes such as Pradhan Mantri Suraksha Bima Yojna and others listed in Notification 12/2017-CGST Rate 2. Life insurance business provided under schemes such as Pradhan Mantri Jan Dhan Yojana and others listed in Notification 12/2017-CGST Rate • Services by way of fumigation in a warehouse of agricultural produce • Services of admission to planetarium where consideration charged is below Rs.500 • Subscription of online educational journals/periodicals by educational institutions who provide degree recognized by any law • Renting of transport vehicles to a person providing services of transportation to an educational institution (students, faculty, and staff) providing education upto higher secondary or equivalent. • Services provided by and to Fédération Internationale de Football Association (FIFA) and its subsidiaries directly or indirectly related to any of the events under FIFA U-20 World Cup in case the said event is hosted by India. Changes in Exemption limits in the following cases: • The exemption limit of Rs 5, 000 per month per member in respect of services provided by Resident Welfare Association (unincorporated or nonprofit entity) to its members against their individual contribution is enhanced to Rs 7500/-. • The exemption limit of the amount of cover of Rs. 50, 000 enhanced to Rs. 2 lakhs in respect of services of life insurance business provided under life microinsurance product approved by IRDAI • The exemption limit of Rs.250 for services with respect to all the theatrical performances like Music, Dance, Drama, Orchestra, Folk or Classical Arts and all other such activities in any Indian language in theatre increased 500 per person Others Recommendations to Note: • To allow ITC of input services in the same line of business at the GST rate of 5% in case of tour operator service • To extend the period of Viability Gap Funding (VGF) with respect to the construction of RCS Airports from 1 to 3 years from the date of commencement of RCS Udan Airport. • Proposal to not to include the Value of deposits, loans or advances on which interest or discount is earned in the Value of exempt supply under sub-section (2) of section 17 (Not applicable to Banking company, Financial Institutions, NBFC extending deposits, loans or advances) • To defer the liability to pay GST in case of TDR against consideration in the form of construction service and on construction service against consideration in the form of TDR to the time when the possession or right in the property is transferred to the landowner by entering into a conveyance deed or similar instrument (eg. allotment letter). No deferment in point of taxation in respect of cash component. • Changes in Valuation of Lottery, Betting and gambling Services: 1. To insert a provision that the value of lottery shall be 100/112 or 100/128 of the price of lottery ticket earlier notified. 2. To insert a provision that the Value of supply of Betting & Gambling shall be 100 % of the face value of the bet or the amount paid into the totalizator. • Recommendations made regarding Reverse Charge Mechanism 1. To include Renting of Immovable property by government or local authority to a registered person under reverse Charge while renting of immovable property by government or local authority to unregistered person shall continue under forward charge 2. To define insurance agent in the reverse charge notification to have the same meaning as assigned to it in clause (10) of section 2 of the Insurance Act, 1938, so that corporate agents get excluded from reverse charge Clarifications GST Rate Clarifications are given for the following goods: 1. GST at 18% to be charged only on the net quantity of “Poly Butylene Feed Stock & Liquefied Petroleum Gas” retained for the manufacture of “Poly Isobutylene or Propylene or di-butyl para cresol” subject to specified conditions. 2. With Respect to Rail coach industry: • GST at 5% on Chapter 86 Goods (with condition that no Refund of unutilized ITC) • GST to attract at applicable rates for the rest of the Goods supplies to Indian Railways 3. With Respect to Coal Rejects falling under HSN Code 2701: • GST at 5% • Compensation Cess at Rs 400 Per Metric Ton
2018-05-16T10:37:02

First Kolkata GST fraud arrests in Rs 40 crore 'scam' KOLKATA: The Directorate General of GST Intelligence(DGGI) has arrested two persons, marking the first GSTfraud-related arrests from the city since the new tax regime rolled out last July. S K Bhuwalka and Neeraj Jain are in judicial custody for GST evasion to the tune of more than Rs 40 crore, but sources suggested that the real magnitude of the fraud could be well over Rs 100 crore. According to sources in the DGGI, the enforcement arm for GST-related frauds and irregularities, the GST evasion was carried out by creating 10-15 "dummy companies" with the same registered central Kolkata address. A GST expert said a dummy firm allegedly floated by the duo used to supply some material to an actual operat-ing company at a price that included the material's GST. Th-is was only on paper, with no real transaction taking place. Company used input tax credit to cheat government The buying company then used to show the GST paid as “input tax credit”. According to GST rules, this input tax credit, accrued to a firm, can be utilized to pay taxes. Through the fake transactions, the buying company then used to pay GST using their input tax credit, thus defrauding the government exchequer. We are conducting further investigations, not ruling out the existence of many more dummy companies that issued fake invoices, ” said a source. “Lot of documents have been seized. We shall question the accused further.” A lawyer at the Sealdah Civil & Criminal Court, where the accused had been produced, said the duo had claimed that they were not directors of any of the companies involved in the racket, and were thus not liable for GST evasion.
2018-05-05T08:21:06

GST Council approves principles for filing of new return design based on the recommendations of the Group of Ministers on IT simplification GST Council today in its 27th meeting approved principles for filing of new return design based on the recommendations of the Group of Ministers on IT simplification. The key elements of the new return design are as follows – 1. Onemonthly Return:All taxpayers excluding a few exceptions like composition dealer shall file one monthly return. Return filing dates shall be staggered based on the turnover of the registered person to manage load on the IT system. Composition dealers and dealers having nil transaction shall have facility to file quarterly return. 2. Unidirectional Flow of invoices: There shall be unidirectional flow of invoices uploaded by the seller on anytime basis during the month which would be the valid document to avail input tax credit by the buyer. Buyer would also be able to continuously see the uploaded invoices during the month.There shall not be any need to upload the purchase invoices also. Invoices for B2B transaction shall need to use HSN at four digit level or more to achieve uniformity in the reporting system. 3. Simple Return design and easy IT interface: The B2Bdealers will have to fill invoice-wise details of the outward supply made by them, based on which the system will automatically calculate his tax liability. The input tax credit will be calculated automatically by the system based on invoices uploaded by his sellers. Taxpayer shall be also given user friendly IT interface and offline IT tool to upload the invoices. 4. No automatic reversal of credit: There shall not be any automatic reversal of input tax credit from buyer on non-payment of tax by the seller. In case of default in payment of tax by the seller, recovery shall be made from the seller however reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc. 5. Due process for recovery and reversal: Recovery of tax or reversal of input tax credit shall be through a due process of issuing notice and order. The process would be online and automated to reduce the human interface. 6. Supplier side control: Unloading of invoices by the seller to pass input tax credit who has defaulted in payment of tax above a threshold amount shall be blocked to control misuse of input tax credit facility. Similar safeguards would be built with regard to newly registered dealers also. Analytical tools would be used to identify such transactions at the earliest and prevent loss of revenue. 7. Transition: There will be a three stage transition to the new system. Stage I shall be the present system of filing of return GSTR 3B and GSTR 1. GSTR 2 and GSTR 3 shall continue to remain suspended. Stage I will continue for a period not exceeding 6 months by which time new return software would be ready. In stage 2, the new return will have facility for invoice-wise data upload and also facility for claiming input tax credit on self declaration basis, as in case of GSTR 3B now. During this stage 2, the dealer will be constantly fed with information about gap between credit available to them as per invoices uploaded by their sellers and the provisional credit being claimed by them. After 6 months of this phase 2, the facility of provisional credit will get withdrawn and input tax credit will only be limited to the invoices uploaded by the sellers from whom the dealer has purchased goods. Content of the return and implementation: Return shall be simplified also by reducing the content/information required to be filled in the return. The details of the design of the return form, business process and legal changes would be worked out by the law committee based on these principles. Government is keen to introduce the simplified return design at the earliest to reduce the compliance burden on the trade in keeping with the philosophy of ease of doing business. Share this:
2018-03-06T10:19:29

First arrests for fraud made under GST Act In a first in the country, the Central Goods and Service Tax (CGST) department arrested two Mumbai-based dealers in two separate cases under the CGST Act for allegedly defrauding the exchequer and banks by showing fake transactions. The dealers have been identified as Sanjiv Mehta, director, Shah Brothers Ispat Private Limited at Trust House in Parel, and Vinaykumar D Arya, director of M/s VN industries at Darukhana in Sewri. Mehta and Arya have been arrested by CGST Mumbai Central Commissionerate for availing ineligible credit of Rs 5.20 crore and Rs 2.03 crore, respectively. The officials claimed that the duo was only exchanging invoices for the sale and purchases, but actual goods were not being bought or sold, and no physical transport of goods was taking place. “Prima facie, the investigations revealed that this was being done with mala fide intentions to defraud the exchequer and banks by opening letters of credit (LCs) on fake purchase transactions, ” said a CGST official. The official said, “The law is very clear that whoever commits the offence of issuing any invoice or bill without supply of goods or services or both in violation of the provisions of the CGST Act, or the rules made thereunder leading to wrongful utilization of input tax credit or refund of taxes, or using such invoices or bills, may be arrested. Our probe is still going in.” This is the first arrest in India after GST implementation for fraud under CGST Act. It has been approved by Commissioner KN Raghavan, Mumbai Central, and executed by additional commissioner Manpreet Arora, assistant commissioner Anand Gokhle and superintendent Sh Parecha.
2018-02-23T10:36:08

Buying a property? Know the GST rates first • The real estate sector was bought under the GST purview as it was burdened by various indirect taxes • However, ever since its implementation, there has been a lot of confusion regarding rates and benefits Real estate sector will invite GST at the rate of 12 per cent with full input tax credit. NEW DELHI: It is important to understand various Good and Services Tax (GST) rates if you are planning to buy a property. Read on to know how it affects you. In a bid to reduce tax evasion, make laws easier and remove unnecessary hurdles, the government rolled out Good and Services Tax (GST) in July last year. The real estate sector was also bought under its purview as it was burdened by various indirect taxes such as VAT, Service Tax, excise, stamp duty and registration fees. However, ever since its implementation, there has been a lot of confusion regarding rates and benefits. Let’s take a detailed look at the GST rates on real estate and under-construction properties. GST Rate On Real Estate: Real estate sector will invite GST at the rate of 12 per cent with full input tax credit. According to the schedule of GST rates for services as approved by the council, real estate sector will comprise “construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly. The value of land is included in the amount charged from the service recipient.” These will be charged @ 12 per cent with full input tax credit. In other words, it means all under-construction properties will invite a GST of 12 per cent. However, GST will not be applicable for ready-to-move-in properties. However, there are still some variations for under-construction properties and confusion regarding the same. There are various stages for under-construction properties and GST will be dependent on it. When You Have Bought A Property After The Completion Certificate Was Issued To The Builder: In such a situation, GST will not be applicable as it is considered a ready-to-move-in property and there is no transfer or supply of goods and services. Payment Made To The Builder In Part Or In Full Before The Roll Out Of GST Regime: Whether you paid in part or in full, if the payment is made before the roll out of GST regime, then it will not invite any GST tax. However, keep in mind that you will be charged applicable service tax rate of 4.5 per cent. GST On Under-construction Flats, Properties Or Commercial Properties: In this category, the actual GST rate is 18 per cent. But one-third of this 18 per cent is deemed as the value of land or undivided share of land supplied to the buyer of the property. Hence, GST rate lowers down to 12 per cent on under-construction flats, properties or commercial properties with full input tax credit. GST On Resale Properties Or Flats: As they are considered ready-to-move-in properties, they will not invite GST taxation. GST On Houses Purchased Under CLSS: The Credit-Linked Subsidy Scheme (CLSS) is meant to provide affordable houses to the lower and weaker sections of the society. The GST rates on such houses will be effectively 8 per cent and not 12 per cent as one-third will be deduction towards the cost of the land. How GST Will Benefit Both Builders And Buyers? A builder pays various indirect taxes and duties during the construction of a property – house or complex. He passes on this cost to the end users. But with the roll out of GST, all these taxes have been combined into one, and thus has resulted in lowering the cost of the property. The move is expected to boost home sales. For buyers, though GST of 12 per cent is on a higher side, there is clarity and uniformity in taxation which they would appreciate and hopefully embrace GST fully.
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