LIVEMINT.COM : 15 May 2019

Income tax department defers GST reporting in tax audit report

The income tax department Tuesday deferred for the second time the requirement for companies to include in their tax audit report the details of Goods and Services Tax (GST) and GAAR.

The reporting requirement of these details in income tax audit form has been kept in abeyance till March 31, 2020 — meaning that all income tax audit reports need not include details on GST and General Anti-Avoidance Rules (GAAR) till March 2020.

Business entities having a turnover of more than 1 crore (or 2 crore if they have opted for presumptive taxation) and professionals with gross receipts of more than 50 lakh have to comply with the tax audit requirements.

The due date for its filing is September 30 and if the taxpayer is covered by transfer pricing provisions, the due date is November 30.

The Central Board of Direct Taxes (CBDT) in an order issued Tuesday, said the Board has received representations that implementation of reporting requirements under clause 30C (pertaining to GAAR) and clause 44 (pertaining to GST compliance) of the Form No 3CD may be deferred further.

“The matter has been examined and it has been decided by the Board that the reporting under clause 30C and clause 44 of the Tax Audit Report shall be kept in abeyance till March 31, 2020,” the CBDT said.

In July 2018, the I-T department had changed the tax audit form – 3CD, seeking details under GST as well as GAAR, which seeks to prevent companies from routing transactions through other countries to avoid taxes. The changes were to come into effect from August 20, 2018.

With stakeholders complaining that the change is onerous and a burden on companies, the CBDT had then deferred the implementation of the change in I-T audit form till March 31, 2019.

With Tuesday’s order, its implementation has been further deferred till March 31, 2020.

Nangia Advisors (Andersen Global) said Managing Partner Rakesh Nangia said: “It is anticipated that there would be a fair and detailed guidance on aspects such as no GAAR certification – an area devoid of precedence and largely characterised by interpretational issues, before the reporting requirement is made operative post March 31, 2020”.

Ashok Maheshwary & Associates LLP Partner Amit Maheshwari said this deferment comes as a relief to the auditors.

“Currently, the requirements are difficult to comply with and the practitioners are not properly prepared. The lack of clarity in these clauses has made it very difficult to comply with,” Maheshwari added.

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GST filing to get simpler! New single tax returns form to be rolled out in July

The new simplified returns filing format, approved by the GST Council last July, is finally ready to be rolled-out after being deferred twice. Under the new format, taxpayers will be required to file one monthly return, except small taxpayers and a few exceptions. Those with no purchases, no output tax liability and no input tax credit in any quarter of the financial year will have to file one ‘Nil’ return for the entire quarter while taxpayers with turnover of up to Rs 5 crore in the last fiscal can file quarterly return with monthly payment of taxes on self-declaration basis.

Government officials familiar with the matter told the Hindustan Times that the simplified form is now ready and could be launched by July, soon after the new government takes over. The format was first expected to be implemented by January 2019 and then on a pilot basis in April 2019 but the switch reportedly got delayed because the back-end, the GST network (GSTN), was not yet ready for it. It was also speculated that the new format was actually deferred on the Centre’s concerns that any glitches in the rollout close to the general elections could disproportionately amplify public disgruntlement and fan anti-incumbency sentiments.

But with the election juggernaut coming to a stop next week, the stage seems set for the launch of the single monthly return system, which addresses complaints about the difficulties in filing multiple returns as well as the higher cost of compliance.

The three-stage plan reportedly envisages a six-month transition phase where businesses would continue to file two returns, GSTR 1 (for sales) and GSTR 3B, a summarised return form. Thereafter, they would move to a single filing on a new form. Sources told the daily that July will see a trial run of this second phase. For consumer-facing businesses, the simplified form would be about total sales while for B2B businesses, the form would incorporate invoice details. The third phase will involve invoice matching.

They added that the introduction of the new forms will reduce the annual compliance burden of traders from 24 GST returns (GSTRs) to just 12, apart from one return for the entire financial year. This is expected to benefit small and medium enterprises to be GST compliant. Actually, traders technically have to file 36 returns currently but the second form, GSTR 2, is not filed by the majority.

“The new return mechanism should help the industry as multiplicity of filings is avoided, with a single monthly return in place. However, it also means that greater control would need to be exercised on vendor’s compliances as [after a transition period] input credit will be limited to the extent of GST amount reflected on the portal,” Pratik Jain, partner and leader-indirect tax, PwC, told the daily. According to him, the reconciliation between the company’s purchase records and that reported by the vendors would need to be performed on a regular basis and can’t be the year-end exercise. “The government, on the other hand, would expect significant reduction in tax leakage once the new mechanism is fully implemented,” he added.

Experts also point out that the single return would not only allow the trader to verify, before filing the returns, whether the vendor has uploaded the invoices but also address the issue of mismatch in the data reported to the authorities. Significantly, the new format would ensure that very large part of the return is automatically filled based on the invoices uploaded by the buyer and the seller, thereby making the entire process less cumbersome. The single return format furthermore is expected to bolster the tax authorities’ efforts to curb evasion and detect false claims.

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KNNINDIA.CO.IN : 11 May 2019

GST Council to introduce new tax returns filing system to simplify the compliance procedures for MSMEs

The GST Council will introduce a new tax returns filing system to simplify the compliance procedures for micro, small and medium enterprises, said GST Commissioner.

Speaking at an interactive meeting organised by All India Association of Industries (AIAI) and MVIRDC World Trade Center Mumbai ,I AS, Commissioner of State Tax, Department of Goods and Service Tax, Government of Maharashtra, Rajeev Jalota said “The new system will be introduced after testing it on pilot basis.”

He said, “India has successfully embarked on a major indirect tax reform since Independence without creating high inflation or shortage of commodities in the market. The current GST regime has consolidated 17 taxes and 23 different statutes under one indirect tax system.

He added, taxes on most goods have been reduced to 18% slab and today 65% of GST revenue comes from this slab. The government has forgone more than Rs 2 lakh crore because of input tax credit under GST. In the last two years, the GST Council has held 30 meetings and resolved major challenges faced by the industry.

The GST regime has reduced tax burden on service industry (because of input tax credit) even though the tax rate has risen from 15% to 18%, explained Jalota.

Also he offered to partner with AIAI and WTC Mumbai for re-launching its skill development programme on GST for professionals.

Speaking on the occasion, Commissioner of Central Goods and Services Tax, Mumbai, Sanjay Mahendru assured that the government will further simplify the GST compliance procedure as tax collection improves in the days to come.

He said “GST System in India is entering into a consolidation phase in a short span of two years from the date of introduction as the industry and the tax department are adapting to this new indirect tax system. The tax administration is addressing the challenges faced by the industry at a fast pace. Any inconvenience faced by the industry will equally affect the tax department.”

Therefore, GST Council has set up the Law Committee and Fitment Committee to study the representations received by the industry and take timely action on them. In future, we can see more rationalization of this tax regime as tax collection improves, he added.

Earlier in his welcome remarks President of All India Association of Industries (AIAI) Vijay Kalantri called for a rational and simplified tax system to promote tax compliance and accelerate the economy’s growth rate to more than 7%.

Kalantri raised concerns about the impact of GST reform on unorganized sector and called for lower tax rate to address tax evasion and enlarge tax base.

“Redressal of GST complaints must be fast-tracked by the authority. Government of India must reduce the number of tax slabs under the GST to two from the existing four slabs. Also, there is a need to reduce GST rates in order to discourage tax evasion”, he said.

He added, the average tax rate under GST is 14%, while, in India, the peak slab is 28%. In order to provide relief to MSMEs, the government must raise the turnover threshold for GST to Rs 1 crore from the current level of Rs 40 lakh. Gradually, petroleum products and real estate must be brought under the GST regime. The government must promote a business-friendly and balanced tax system.”

Also he suggested policymakers to reform regressive tax laws and avoid prosecution as a solution to address tax non-compliance.

During the event, representatives from trade and industry raised queries and sought clarifications on filing of tax returns, claiming input tax credit, rectifying errors in form submission, incidence of double taxation etc.

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MERINEWS.COM : 12 May 2019

GST collection is increasing by simplifying GST provisions

The government collected the highest Goods and Service Tax (GST) in March, 2019. GST collections in March stood at Rs 1.06 lakh crore. It was the fourth month in the whole year when the GST collection crossed 1 lakh crore rupees. For the fiscal year 2018-19, the government had set a target of GST recovery of Rs 1 lakh crore every month.
According to the finance ministry, the monthly GST revenue in the financial year 2018-19 was 981 billion rupees, which is 9.2 per cent more than the financial year 2017-18. This indicates that in recent months, revenue growth has been increased. In March, the total GST collection was 16 per cent higher than the same period of last year, with central GST of Rs 203 billion, SGST Rs 275 billion and IGST Rs 504 billion rupees. Apart from this, the Central Government has received Rs 82 billion in the cess item. According to experts, there are many reasons for the increase in GST collection like the ease of business, reduced tax evasion, continuous GST payments by the traders etc.

Every year, GST revenue is estimated to increase by 14 per cent in the states. However, if there is no expected increase in it, it is usually offset from the cess item. The government has amended the Compensation Act in few months back, on which basis the 50 percent of the unpaid compensation cess item can be transferred to the center at any time till the end of the five-year period.With a significant increase in revenue, the target of 3.4 per cent of fiscal deficit can be achieved. GST collection figures are encouraging. The government has set a target of Rs 6.1 lakh crore CGST collections in the financial year 2019-20, which is 21 per cent more than the revised target of FY 2019. For this, the government will have to adopt the ways to increase tax base and will also have to prevent tax evasion, as the possibility of tax increase is now limited. According to Devendra Kumar, Chief Economist, India Ratings and Research, this goal can be achieved.

It is notable that in the matter of GST collection, April, 2019 has been the second consecutive month when tax collection is more than one lakh crore. Earlier, in the month of March 2019 too, the GST collection was Rs 1.06 lakh crore.

GST revenues were Rs 1,13,865 crore in April, 2019, in which the central GST collection was Rs 21,163 crore, state GST (SGST) was Rs 28,801 crore, unified GST was Rs 54,733 crore and cess collection was Rs 9,168 crore. Apart from this, settlement between the Center and the states was settled at 50:50 ratio of IGST of Rs 12,000 crore. After settling on regular and temporary basis, the Central and State Governments received CGST revenue of Rs 47,533 crore in April, 2019, whereas the SGST revenue was Rs 50,776 crore.

In the financial year 2019-20, the government has estimated to raise 6.10 lakh crore from CGST and Rs 1.01 lakh crore from the compensation cess. IGST is estimated to be worth Rs 50,000 crore. In the financial year 2018-19, the CGST collection was Rs 4.25 lakh crore rupees and the compensation cess of Rs 97,000 crore.

Last month, the average monthly GST collection of goods and services tax collections for fiscal year 2018-19 was 16.05 per cent higher than Rs 98,114 crore. The huge increase in the tax collection was due to many reasons; one of the main reasons was to strengthen the compliance. E-way bills, changes in taxation for the real estate sector, and increasing the tax collection by the government before the general election expenditure has increased tax collection. One reason for this increase is also the adjustment to be done at the end of the year.

It is being said that if this trend goes on in context of tax collection then the target of tax receipts kept for the financial year 2019-20 can be achieved without any extra measures.

About the author: Satish Singh is currently working as Chief Manager in State Bank of India’s Economic Research Department, Corporate Centre, Mumbai, and has been writing mainly on financial and banking topics for the last 10 years.

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GST: B2B invoices will have to be generated on govt portal by Sept

All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, a move aimed at curbing the menace of fake invoices and evasion of GST, officials said.

The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers’ committee has already been set up, they added.

“E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. The entire invoice would have to be generated on a government portal,” an official told PTI.

The move will help in curbing (GST) evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.

“Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill, if needed,” the official added. E-way bill is required for moving goods exceeding Rs 50,000.

Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.

Businesses beyond the specified turnover threshold, to be decided later, would be provided a software which will be linked to the Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice.

The e-invoice generation method will be similar to the one being followed for e-way bill on the ‘’ portal or payment of on the GSTN portal.

A 13-member officers’ committee, comprising central and state tax officials as well as the Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline generation of invoices and easing compliance burden. The committee will finalise its interim report this month.

The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance.

There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme.

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GST, Cos Act bring windfall for CAs 

The move will help in curbing Goods and Services Tax (GST) evasion through issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.

“Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill, if needed,” the official added. E-way bill is required for moving goods exceeding Rs 50,000.

Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.

Businesses beyond the specified turnover threshold, to be decided later, would be provided a software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of invoice.

ALSO READ: April GST collections at new high despite rate rationalisation in December
The e-invoice generation method will be similar to the one being followed for e-way bill on the ‘’ portal or payment of GST on the GSTN portal.

A 13-member officers’ committee, comprising central and state tax officials as well as the GST Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline generation of invoices and easing compliance burden. The committee will finalise its interim report this month.

The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance.

There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme.

The introduction of reforms like GST and the overall increase in economic activity have increased the demand for CAs in the business world from companies. “New reforms in taxation and continuous changes in the Companies Act and rules have prompted enterprises to take a systematic approach to compliance, resulting in increased demand for CAs,” CIEL HR Services director & CEO Aditya Narayan Mishra said.

Out of the 3,180 CAs who accepted job offers, 730 received salary packages of over Rs 9 lakh a year, and 55% landed offers in an annual pay bracket of Rs 7.5-9 lakh. However, average salary packages — at Rs 7.43 lakh — saw a marginal dip on the back of bulk recruitment by few companies.

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Govt extends deadline for GST sales return for March until April 23

The government has extended the last date for filing summary sales return, GSTR-3B, for March month by three days until April 23.

“Due date for filing GSTR-3B for the tax period March 2019 has been extended to April 23, 2019,” a ticker on GST portal ‘’ said.

The last date for filing summary sales return and payment of taxes for March is April 20, 2019. AMRG & Associates Partner Rajat Mohan said, “Glitches in GSTN is leading to frequent extensions in the filing of tax returns. Tax filers also need to improve the habit of filing at the last date, leading to burden on the servers resulting in the collapse of the same.”

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E-invoicing may begin under GST 

In what could radically transform the indirect tax administration system and the way business is conducted, India is looking at the possibility of introducing electronic invoicing under goods and services tax.

If the country adopts the system, businesses will likely have to issue invoices, or bills, directly via the GST Network, and the data will be available to the authorities right away.

The GST Council has set up a committee to look into the feasibility of e-invoicing. It will also study the systems in place in other countries, such as South Korea and some from Latin America.

The move comes as the new single tax regime, which took effect on July 1, 2017, has seen a rise in incidents of evasion. The GST Council has taken a number of measures, such as introduction of electronic way bills (e-way), to clamp down on tax evasion.

Tax experts say e-invoicing can be effective in tackling evasion.

“E-invoicing as a concept looks like a good mechanism to check tax evasion and also ease the compliance burden on businesses,” said Pratik Jain, national leader, indirect taxes, PwC.

Since the invoices will be issued via GSTN, there will not be a separate need to update information.

Evasion, however, primarily takes place in the B2C segment and one will need to find ways to incentivize customers to insist on invoices, particularly in case of services where the possibility of tax evasion is more, Jain said.

Technological and infrastructural aspects would become very important, Jain said, adding that the timing and phasing in of this initiative was extremely critical given that GST was now somewhat stabilising.

The panel that will consider this filing includes GSTN chief executive Prakash Kumar, GST officials from state and central governments as members, and GST Council special secretary Rajeev Ranjan as the convenor.

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Discounts planned for consumers who seek bills at shops

The Union government plans to offer cash incentives or discounts to consumers who seek bills for purchases of goods and services from dealers, as part of attempts to expand the Goods and Services Tax (GST) base and increase compliance, according to two officials familiar with the matter.

Better compliance, leading to enhanced collections, is being seen as the way forward for the indirect tax regime that was introduced in July 2017, and the proposed move is in line with that, the officials added.

No major policy announcement is expected immediately due to the ongoing general elections. But the GST-related proposals are being processed in advance so that the new government can take a view expeditiously after the counting of votes on May 23.

One of the officials cited above said that under the proposed move, consumers may be offered discounts amounting to a certain percentage of the total value of the invoice. This will give consumers an incentive to ask for bills. The quantum of incentives is yet to be determined, said the official who asked not to be named.

The second official said that the discounts may also be offered upfront or get credited into the accounts of the consumers if the payments are made through digital modes, including debit and credit cards. This will also encourage digital payments, and have a ripple effect on business units outside the GST net, he added.

The government has been promoting digital payments after banning high-value currency notes in November 2016 as part of efforts to curb black economy.

The Union finance ministry and the Central Board of Indirect Taxes and Customs (CBIC) did not respond to an email with queries about the proposed incentives.

“This will lead to a further formalisation of the unorganised sectors as they will need to report their purchases also in order to make a taxable sale invoice,” said MS Mani, partner at professional services firm Deloitte India.

“In addition to an incentive/discount for invoice documented sales, tax authorities could also explore fixing a low threshold beyond which cash sales cannot be made,” he added.

Pratik Jain, partner and leader, indirect tax, PwC India, said the proposed move is in the right direction. “Cases of tax evasion are rampant, particularly in the B2C [business-to-consumer] segment. Incentives to consumers help in better compliance. The room for increasing taxes on goods and services are limited and enhanced tax targets can be met only through enhanced consumer awareness and incentives to pay tax,” he said.

The GST collection target for 2019-20 is about 20% higher than about ~11.7 lakh crore collected in the last financial year.

The GST collection for March 2019 was a record ~1,06,577 crore. It marked a 15.6% jump over ~92,167 crore collected in March 2018 mainly because of better compliance and widening of tax net even as the government slashed rates on several items.

The monthly average of GST revenue during 2018-19 is ~98,114 crore — 9.2% higher than 2017-18. “These figures indicate that the revenue growth has been picking up in recent months, despite various rate rationalization measures,” the Union finance ministry said in a statement on April 1.

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Time to soften GST blow on MSMEs

Change is not always easy to adapt to, especially when it is a completely new tax regime like the Goods and Services Tax (GST), which even proponents of reforms acknowledge is very complex. No surprises then, that it drew more flak than applause when the Narendra Modi-led government initiated the move and made it a reality on July 1, 2017.

Why did the Congress, which claimed it to be its baby, term it Gabbar Singh Tax? And, why does Arun Kumar, an eminent economist, call it a Ground Scorching Tax?

Kumar, not known for mincing words, spoke to BusinessLine about the ‘why’, which is the crux of his book Ground Scorching Tax, published by Penguin. he argues that problems with this indirect tax regime are both transitional and structural in India.

To correct these problems there have been a few hundred notifications and orders, which instead of resolving them have added to confusion, he says, adding that there is a need to design a simple alternative.

“Reform of GST as it stands is essential even to get limited gains. It needs to be simplified. It is time that the political leadership (both ruling party and opposition) takes a wider view of the economy, admits its mistakes and gives up the ‘Ground Scorching Tax’ in favour of a ‘Ground Nourishing Tax’. There is still time to retrieve the situation,” he says in his book. But it is slightly less than two years since this tax regime has come into existence; shouldn’t it be given some time? Weren’t the implications, good or bad, well thought through?

“India is not like any other economy; therefore, the argument given that 160 countries have it and why should we not go for it, is not justified. You see, no other economy has such a large unorganised sector. It is the unorganised sector which is facing the problem because of GST. They are the ones who are unable to cope with it even though they are largely exempt from it. The reason is that GST is a very complex tax. It is levied as VAT (Value Added Tax), which in itself is very complex,” he said.

“VAT requires value of inputs and value of outputs. This is possible when everything is computerised. Small businesses are generally not computerised, they don’t have accountants, they work in a very ad hoc manner,” Kumar states.

A difficult tax

From the LK Jha Committee in 1978 and the Long Term Fiscal Policy Report in 1985 to the Kelkar Committee Report in 2002, all have said that it is a very difficult tax. The Jha committee had recommended ‘MANVAT’ (manufacturing VAT) as VAT could not be implemented fully. But even MANVAT couldn’t be executed because in the manufacturing sector there are lots of small players and they couldn’t cope with it, Kumar points out.

The Arvind Subramanian Committee report in 2015 wanted it to be the best internationally, which could be accepted by other countries, but ended up saying that fixing the tax rates is ‘more an art than a science’, thereby admitting it be very difficult.

All the political parties finally agreed after more than a decade of discussion and opposition from some States, because of the pressure of big business. It was projected as a ‘win-win’ for all. The producing States were worried that they would lose revenue to the poorer States, who are the consuming States. Modi, himself was a strong critic of GST, but after the BJP came to power it quickly moved to implement GST and the Congress could not oppose the same as it was their baby to begin with. GST was implemented with all the ruling and opposition parties on board and was presented as an example of cooperative federalism. But, in all this the interest of the unorganised sectors was not taken care of. “This sector, which employs 94 per cent of the workforce and produces 45 per cent of the output now — it produced more earlier — has been adversely hit today. The point is that if you damage such a large sector, then the overall economy will go downhill and so will employment,” says Kumar.

And, if 94 per cent of the workforce is adversely affected, demand for food will go down, as a bulk of the demand comes from here, he argues, adding that “because demand has come down, farmers’ prices have declined leading to a crisis there.” He further states that the surpluses in agriculture are not because everyone is eating well, but due to the fact that people don’t have the purchasing power to buy. “So, the crisis in the Indian economy today is because the unorganised sector is adversely hit by GST,” he states.

Giving the example of the pressure cooker industry, he says that big players such as Prestige are growing because demand has shifted from the unorganised sector units to them. “That is why I called GST, Ground Scorching Tax — it is at the ground level that the economy is getting damaged,” Kumar argues. GST is based on the input tax credit and reverse charge mechanism. These put the small producers at a disadvantage. “Because of all these components the demand is shifting to large-scale players.”

But even the large businesses are suffering due to complexities in the tax, Kumar says, as “there have been more than 500 changes and orders adding to the confusion.” So many returns have to be filed in each of the States in which the company operates — GSTR1, GSTR2 and GSTR3. More than a thousand returns have to be filed by a company operating pan-India. Fortunately, GSTR2 as been suspended for the time being, but then invoice matching is not possible and that was an important goal of GST, he points out. “Many of the critical components of GST had to be postponed or delayed. To add to the complexity there have been changes in the tax rates.”

While the government argues it has brought in more transparency in the system and facilitated ease of doing business, Kumar writes: “The promised ‘ease of doing business’ is not yet in evidence.” According to him, fiscal federalism is being dented by the idea of “one nation one tax”. The autonomy of the States is being dented and the local bodies are not provided any tax source.

The way ahead

What is the alternative then? Can GST be reversed and can one go back to the earlier system of indirect tax? Clearly not! But there is still time to correct the course and turn it into a ‘Ground Nourishing Tax’, he says.

“First part of the alternative is to collect more direct taxes by curtailing black income generation, for which ideas have been mentioned. This will enable reduction of indirect taxes,” he says.

The second part, according to Kumar, is to simplify the GST regime. GST is a destination tax, paid by the final consumer and also collected by the State where the final consumption takes place. So, GST should be levied only on the final consumption leaving out the intermediate stages of production and distribution like transportation, accountancy and raw materials. “It can be further simplified if it is levied as ad valorem rather than VAT, since at the last point, the two amount to the same,” Kumar says.

Yes, GST gave the economy a shock as it followed demonetisation. “Political will is needed to curtail the black economy. It is a political choice whether to tackle the black economy and reduce indirect taxes or continue as it is with its negative consequences,” summarises Kumar.

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INDIATIMES.COM : 9 April 2019

Roll-out of new, simplified GST return forms deferred

New Delhi, Mar 31 () The pilot project envisaged for rolling out simplified monthly GST return forms from April 1 has been deferred and the new forms would be made available once they the notified and the software is ready.
The GST Council had in July last year decided that the simplified GST return forms — Sahaj and Sugam — would be rolled out on a pilot basis from April 1, 2019, while mandatory filing across the country would kick in from July.

In July last year, the Central Board of Indirect Taxes and Customs (CBIC) had come out with the draft GST returns forms and sought comments from stakeholders.

Under the new return filing format, taxpayers who have no purchases, no output tax liability and no input tax credit in any quarter of the financial year would have to file one ‘Nil’ return for the entire quarter. Facility for filing quarterly return shall also be available by an SMS.

The new return filing format would replace the current requirement of filing final sales return GSTR-1; but as per the plan, summary sales return GSTR-3B would continue for some time.

“The pilot project of new return filing has been deferred. New date would be decided. The forms would be notified first; following which, the pilot would be launched. Systems are being developed for the new forms,” an official said.

Small taxpayers, with turnover of up to Rs 5 crore in the last financial year, can file quarterly return with monthly payment of taxes on self-declaration basis.

The return form ‘Sahaj’ is for businesses which make supplies to only consumers (B2C). It includes details of outward supplies and inward supplies attracting reverse charge as well as summary of inward supplies for claiming input tax credit (ITC).

Also, such B2C businesses will have to show harmonised system nomenclature (HSN)-wise summary of supplies and interest and late fee liability details along with payment of tax and verification. HSN is a code number to specify a particular product.

Besides, businesses making supplies to both businesses (B2B) and consumers (B2C) have to file returns form ‘Sugam’. It includes summary of supplies made and tax liability, summary of inward supplies for claiming ITC, along with details of interest due and tax payment.

When goods and services tax (GST) was rolled out from July 1, 2017, a three-stage monthly return filing system was set up — GSTR-1 (sales return), GSTR-2 (purchase return) and GSTR-3 (final returns based on GSTR-1 and 2 matching).

However, with businesses facing trouble, the GST Council decided in November 2017 to keep filing of GSTR-2 and 3 in abeyance. It also introduced a simpler GSTR-3B to facilitate easier return filing and tax payment. JD ANS
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INDIATIMES.COM : 9 April 2019

GST collection hits record high in March 

NEW DELHI: GST collection in March crossed the Rs 1-lakh cro mark the heighest since the tax reform measure was rolled out in july 2017 bringing relief for the government relief for the government battling sluggish receipts. Total.gross GST collected in March was Rs 1,06,577 crore, of which .. CGST was Rs 20,353 crore, SGST Rs 27,520 crore, IGST Rs.50,418 crore (including Rs 23,521 crore collected on imports) and cess was Rs 8,286 crore (including Rs 891 crore collected on imports), according to finance ministry data.

The rebound in GST revenues comes against the backdrop of robust receipts on the direct tax front, with tax official expressing confidence about meeting the 2018-19 target. They said receipts will keep flowing in till middle of the month and a final picture would be available by then. In an interview to TOI, finance minister Arun Jaitley had expressed confidence of meeting the fiscal deficit target for 2018-2019 and had said GST revenue would be good. He had also said that the tax department would be “fairly close” to the direct tax target.
The GST revenue in March 2019 showed a growth rate of 15.6%.over the receipts in the same month last year, official data showed.

The revenue for the last quarter of 2018-19 was 14.3% higher.than that collected during the same period of the previous financial year. The monthly average of GST revenue during 2018-19 was Rs 98,114 crore, 9.2% higher than 2017-18.”These figures indicate that revenue growth has been picking.up in recent months, despite various rate rationalisation ministry said.

Tax experts said the increase showed rising compliance as the tax reform measure has nearly settled down. “A sharp increase of Rs 9,000 crore compared to the previous month would lead to an expectation that the collections would now surpass Rs 1 lakh crore on a monthly basis regularly. This indicates that stability in policies and rates always lead to increased compliance and collection.said Deloitte India partner MS Mani.

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View: A fair assessment of Good and Services Tax

After long deliberation, the goods and services tax (GST) was implemented in July 2017. Nearly two years have passed since, and there’s a widespread perception that GST revenue growth has not lived up to expectations. This is not a fair assessment. GST’s revenue performance must be measured against not the target set, but against the growth of nominal GDP.
An assessment was made by Kapil Patidar & Arvind Subramanian in June 2018. This showed that in the first year of implementation of GST, revenues grew by 11.9% and the buoyancy was 1.20. A buoyancy ratio over 1shows progressiveness in the revenue growth and opens up the prospect of a rising tax-to-GDP ratio.

This is a significant improvement over the pre-GST period when the buoyancy ratios for state value added tax (VAT) and central indirect taxes like central excise and service tax were less than 1. The revenue performance is especially creditable given the transitional difficulties during implementation and teething technical problems with the GST Network (GSTN).

Some other analyses show that the tax-to-final consumption expenditure also grew from 10.3% in the year before GST (2015-16) to 11.9% (including adjustments for transitional credits) in 2017-18.

However, the state-wise picture shows that some states did better than the others. The states that had a high percentage of origin-based taxes in subsumed revenues — Bihar, Chhattisgarh, Himachal Pradesh, Punjab and Odisha — were found to lag behind in subsequent revenue performance.
The relative buoyancy of GST revenue compared to the pre-GST period is not surprising. This is a result of two factors. One, the design of GST that integrated the entire value chain from raw material to retail for the purpose of indirect taxation. This design reduced non-compliance in downstream trading, as these entities chose to register to avail of the input tax credit generated upstream.

The Economic Survey 2016-17 also points out that small units even falling within the threshold exemption limit opted for GST registration to avail of the input tax credit as they buy largely from bigger units.

Two, GST buoyancy was also aided by the tax incidence on services increasing from 14% pre-GST to 18% post-GST. The buoyancy in GST revenues is also reflected in the bump in the personal tax revenues on the direct tax side. Personal income-tax collections include the revenues of unincorporated enterprises that have tended to pay more direct tax revenues induced by their formalisation in the GST scheme.

A further surge in GST revenue will happen once land and real estate is brought under the GST net. This will clean up the land market and the revenue gains will be more on the direct tax side as more transactions are reported under GST.

Asalutary impact of GST is the greater coordination between the Central Board of Indirect Taxes and Customs (CBIC) and the Central Board of Direct Taxes (CBDT). This reduces non-compliance and enhance revenues, a win-win for both departments. The I-T departments have incorporated information on GST registration and turnover in their return format.

This modification would require companies to indicate the HSN (Harmonised System of Nomenclature) code in eight digits in respect of goods supplied by them and accounting codes of each of the services provided.

Duty payment in cash should be indicated code-wise for each of the goods and services. At the time of evolution of GST, it was visualised that the monthly and quarterly returns would be kept simple and that the annual return would capture detailed information for compliance verification and data analysis. It would be a real pity if analysis is hampered by insufficient data. Besides greater revenues, the great success has been the emergence of the GST Council as a credible institution of cooperative federalism.

Its success has opened up the prospects of replicating this institutional arrangement in other sectors like power, agriculture and transportation. The GST impact goes beyond revenues and rates of duty. It has fundamentally transformed our federal polity for the good.



Already bought a house? New GST rates may not apply to you

  • Developers can choose between the old and new GST rates for existing under-construction projects.
  • Any new under-construction project that is launched after 1 April will have to adhere to new GST rates.


Ashok Kumar, 36, assistant manager with a Gurgaon-based multinational company, was among the happy lot of homebuyers, when the Goods and Service Tax (GST) Council announced the reduction in GST rates last month on under-construction houses. About six months ago, Kumar bought an under-construction apartment in Gurgaon that came under the Haryana government’s affordable housing scheme for 21 lakh. He has paid about 10 lakh so far, along with GST at the rate of 8%. After the GST Council slashed the rate on affordable housing projects to 1% from the earlier 8%, Kumar was hoping to save 77,000 on the remaining 11 lakh that he has to pay to the developer.

His happiness, however, could be short-lived as the GST Council, which met on 19 March, decided to give developers a choice in how to levy GST on properties already under construction, and that could mean no savings for Kumar.

In the case of regular housing, the developers can either opt for the existing GST rate of 12% with input tax credit (ITC) or the new rate of 5% without ITC that was announced on 24 February. For affordable housing projects, developers can either go for the existing GST rate of 8% with ITC or the new rate of 1% without ITC. The new lower GST rates and the choice for the developers come into effect from 1 April 2019.

Keep in mind that developers can choose between the old and new rates for existing under-construction projects only. Any new under-construction project that is launched after 1 April will have to adhere to new GST rates.

Here is why the GST Council gave a choice to developers on levying GST on existing under-construction properties and how it will impact homebuyers.

The rationale

GST is applicable only on under-construction projects. According to the 24 February announcement by the GST Council, lower rates came without ITC. ITC helps a business reduce the GST amount it has paid on inputs or raw material from the amount of GST it has to deposit on the output. This reduction in GST expense is passed on to the homebuyers.

Since developers would have already passed on the benefits of ITC to buyers of existing under-construction properties, the new GST rate would impact their cost and profitability. Developers are, therefore, happy with the latest announcement that offers them choice. “It is beneficial for developers who had already worked out the sale price after factoring in the input credits of the project and had already passed on the benefits to the customers. The confusion is now clear,” said Ashok Gupta, chief managing director, Ajnara India Ltd, a real estate developer based in National Capital Region or NCR.

This means that most developers will stick to existing GST rates for under-construction projects to avoid any loss. “For older projects, developer will go for older rates and hence the fear of losses is gone,” said Vikas Bhasin, managing director, Saya Homes.

However, for new projects that get launched after April, there is no choice and the developers will have to levy the new rate. For buyers, this will mean a change in pricing of real estate projects.

According to a report by Kotak Institutional Equities, “The revision in headline GST rates will likely help lower real estate prices in high-realization markets such as Mumbai and Delhi, while being less beneficial for players in Bangalore.”

Developers will now have to hurry to communicate the reduction in the price to the buyers. “Now, the developers have to work towards undertaking the changes in the system (IT, documentation and processes) to meet the deadline of 1 April. They have to take the decision at the earliest regarding the new projects as customers would be expecting a reduction in prices. Also, the basis of revised pricing has to be communicated to them,” said Pradeep Aggrawal, co-founder and chairman, Signature Global, a real estate developer, and chairman of National Council on Affordable Housing, Assocham.

Existing homebuyers

While giving choice to builders has brought relief to them, it is a setback for existing buyers in under-construction projects who were cheering the reduction in GST rate. Had it been made mandatory for developers to charge the lower GST rate even in existing under-construction projects, homebuyers would have paid GST at the rate of 5% instead of 12% on remaining instalments amount in case of normal housing projects and 1% instead of 8% in case of affordable housing projects.

It is unlikely that developers will charge the lower GST rate on remaining instalments. “The choice of selecting the GST regime would depend on the respective project dynamics. The ones with healthy sales traction are likely to continue with the earlier regime to maintain their profitability,” said Shishir Baijal, chairman and managing director, Knight Frank India, a real estate consultant firm.

However, developers who want to clear off their existing inventory may take the bait and levy a lower GST to attract buyers. “For projects with slower sales velocity, the developers may change course as the stimulation of demand will far outweigh the adverse impact of ITC withdrawal on developer margins,” said Shishir.

Many experts believe that the choice to choose the tax rate may lead to confusion and tax evasion. “The option to choose between 12% with ITC versus reduced rates without ITC will confuse customers. Customers will prefer reduced rates whereas developers might prefer higher rates with ITC. We can expect many more disputes and cases coming to the anti-profiteering authority in the coming days,” said Ankur Dhawan, chief investment officer, PropTiger, a Gurgaon-based real estate consultant firm.

Though buyers in existing projects may not get the benefit of lower GST rates, potential buyers who are looking to buy an apartment may get the benefit if they book an apartment in a project that is launched after 1 April.

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Explained: Why GST still vexes India’s real estate developers and buyers

The press release after the 34th GST Council meeting has attempted to address many of ambiguities and apprehensions.

Sudipta Bhattacharjee, partner (tax controversy management & contract documentation), Advaita Legal, explains why the tax still vexes the real estate sector: Several clarifications on real estate emerged from the 34th GST Council meeting.

Why is there confusion over its applicability? Several representations were filed following the radical recommendations of the 33rd meeting of GST Council, once the real estate players realised that there is not much to be cheerful about those recommendations and that various points need further clarity. The press release after the 34th GST

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Logo Infosoft joins hands with APRA & Associates LLP

Logo Infosoft, a technology leader in providing GST compliant business solutions to MSMEs in India, has announced the launch of its easy-to-use mobile ERP application ‘Vyapari’ for SMEs, MSMEs and trader community, that facilitates recording and processing of all kinds of accounting transactions.

Like all products of Logo Infosoft, ‘Vyapari’ is GST compliant. This user-friendly application, delivers seamless processing of business data, providing accuracy for chartered accountants (CAs) to file taxes in a timely manner. Vyapari’s state-of-the-art accounting and GST Compliant Mobile ERP solution will make life easier for 100K MSMEs.

After free download of this app on their existing Android or Apple based mobile phone, the users simply have to register using their respective GST number and start selling/purchasing. Once active, ‘Vyapari’, takes care of all inward and outward processes including purchase order, sales invoices, material dispatches and accounting entries that get performed under strict compliance. The app allows to generate statutory reports recommended by GSTN to file GSTR. This app also has a built-in barcode scanning system which takes care of managing inventory accurately.

‘Vyapari’ data is 100 per cent secured where only the authorized users and their approved CAs selected by you can access the information, taking care of access rights and required security protocol. You can easily change list of authorized users.

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GST Council to meet in March to usher in single monthly return

Moving away from the complicated system of filing three returns every month, the GST Council is likely to approve a single monthly return with annexure on sales and purchases.

The new return filing form will reduce the compliance burden for taxpayers as they would have to file only one monthly return and invoices have to be uploaded only by sellers. It will be put in place within six months and the transition will be done in a phased manner.

Finance secretary Hasmukh Adhia said the monthly return filing system will come into force in six months and the present system of filing of return through GSTR 3B and GSTR 1 forms would continue for not more than six months. Photo: Indranil Bhoumik/Mint

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GST: No Decision Yet On Simplification Of Returns Filing Process

The Group of Ministers tasked with simplifying return framework under Goods and Services Tax regime could not finalise the new design in its meeting today.

The GoM has invited suggestions from industry and tax experts within a week, which will be incorporated in a report and tabled before the GST Council, GST Network head Sushil Modi told reporters. The Council will then finalise the new return filing framework.

In a meeting with industry representatives and tax experts the GoM headed by Modi discussed whether input credit paid on tax can be provided on a provisional basis or linked to tax payments. The committee headed by GSTN Chairman Ajay Bhushan Pandey suggested several options, including having the seller upload all invoices and giving the buyer credit for the bills he acknowledges. As per this suggestion, no credit will be made available if the buyer claims there are missing invoices, an official involved in the deliberations told BloombergQuint on the condition of anonymity.

The other suggestion was to provide provisional credit to buyers if the seller fails to upload an invoice, the official said. If seller disputes that transaction, the credit given to the buyer would be reversed.

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GST Council to meet in March to usher in single monthly return

Moving away from the complicated system of filing three returns every month, the GST Council is likely to approve a single monthly return with annexure on sales and purchases.


AB Pandey, Chairman, GSTN

Bringing relief to taxpayers, the Goods and Services Tax Council is likely to meet early next month to finalise a new and simplified monthly return filing format.

To this end, GST Network Chairman AB Pandey met with stakeholders including industry chambers and traders on Thursday to get their views on a simplified return filing process.

“All participants are keen for a single and simplified return format,” said a person familiar with the development.

The expert panel under Bihar Deputy Chief Minister Sushil Modi is now expected to meet later this month to finalise its recommendations.

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E-way Bill: Why the nation needs a successful rollout at the earliest

The GST Council in its 22nd meeting held in October last year, had decided that the e-way bill under GST will shall be rolled out nationwide from the April 1, 2018. This was surely good news for businesses across the nation, as they got more time to get acclimatized to the various changes brought in by the GST era.

However, a couple of months later, at the 24th GST Council meeting held in December 2017, the powers that be, sprung a surprise at the business and transporter communi ..

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THE HINDU : 19 JAN 2018

GST e-way Bill System rolled out on trial basis

The Finance Ministry has rolled out the nationwide e-way Bill System for inter-state movement of goods on trial basis from Tuesday. The GST provision requiring transporters to carry an electronic waybill will be implemented from February 1 for inter-state movements.

The e-way bill system eliminates the need for transit passes for inter-State movements of goods and works on the self-declaration model, according to a commercial taxes department release.

The e-way bills can be generated through the portal by giving details such as invoice related to the consignment, vehicle details, tax value, GST rates, among others. A copy of the bill will be sent as an SMS to the registered mobile number.


GSTN chairman-led panel to consult experts to make return filing easier

The committee tasked with simplification of GST returns filing will consult tax experts and trade bodies to make the process convenient for businesses that have minimal transactions, its chairman said today.

GSTN Chairman Ajay Bhushan Pandey-headed panel comprises tax commissioners of Karnataka, Gujarat, Andhra Pradesh and Punjab and senior officials from the Department of Revenue and the CBEC.

“We are also discussing with experts and taking opinion from various o ..


GST tax returns filed increase as compliance rises, tax mop-up jumps

Thanks to the proactive steps taken by the Goods and Services Tax (GST) Council to remove the sundry glitches that used to trouble taxpayers in the initial months after the GST launch and also the progressive lowering of tax rates by the council over its last few meetings, compliance and tax collections have picked up of late. This has not only reduced the states’ revenue shortfall considerably over the period but boosted the government’s confidence that GST would eventually expand the tax base and yield revenue higher than the taxes that collapsed into it did in the previous regime.

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GST Council eases filing norms till March 2018:

In a major relief for the industry, the GST Council has eased the compliance burden on the industry till March 2018. It has extended the simplified form GSTR3B till March 2018, introduced simplified GSTR3B with indicative filing facility and form for those businesses which have nil tax liability or have no transactions to file in invoice.

About 40% of the businesses filing returns on GST Network portal have nil tax. The GST Council also set up a committee under GSTN Chairman Ajay Bhushan Pandey to look into making GSTR-2 and GSTR-3 business friendly.

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ET NOW : 27 SEP 2017

EY-ET Now Poll:
India Inc Feeling The GST Pinch

Three months into India’s new tax order and GST collections are not very encouraging. With tax compliance at just about 55 per cent, it is not surprising that India Inc is feeling the pinch. ET Now has joined hands with Ernst & Young to get you a comprehensive poll and Ahswin Mohan gives you an overview on what this poll points out to. Tune-in to ET Now at 9 pm today for detailed insights.EY-ET Now poll: India Inc feeling the GST pinch?


Hard times for small business in India

Informal manufacturers are reeling under the twin shocks of last year’s cash ban and the new sales tax. Amy Kazmin reports from an industrial hub in Delhi.

EY-CNBC TV 18: 31 AUG 2017

EYE ON INDIA -Episode 5
‘ GST implementation: The story so far’

As the new GST era continues to unfold, EYE ON INDIA – Insights on doing business has been providing keen insights into the experiences and challenges faced by the India Inc. In this episode our panellists shared their insights into policy developments and practical issues in filing of returns faced by businesses.

EY - CNBC TV 18: 31 AUG 2017

EYE ON INDIA -Episode 4
‘ GST: The Compliance Factor’

Watch EY – CNBC-TV18 episode on GST: The Compliance Factor. Navin Kumar, Chairman, Goods and Services Tax Network (GSTN), Mahender Singh, Member – Central Board of Excise & Customs (CBEC), Harishanker Subramaniam, National Leader and Partner, Indirect Tax, EY India share insightful view into compliance issues businesses are facing

EY - CNBC TV 18: 01 AUG 2017

EYE ON INDIA -Episode 3
‘GST Experiences and Compliance Challenges’

Watch the third episode of EY – CNBC-TV18 show. In this episode, a panel of industry leaders, EY specialist discuss practical issues businesses are facing related to compliance, role of technology and impact on operations in the first three weeks of GST (Goods and Services Tax) – the new tax regime. The panellists include P.B. Balaji, Chief Financial Officer, Hindustan Unilever Ltd., Dr. T.M. Thomas Issac, Minister for Finance and Harishanker Subramaniam, National Leader and Partner, Indirect Tax, EY India

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