GOODS AND SERVICES TAX (GST)

07-08-2018

GST? What GST?

It is almost 11 months since the Goods and Services Tax (GST) came into being. Yet, the necessary consequential changes have not been made in the Spe­cial Economic Zones (SEZ) Act, 2005, or the SEZ Rules, 2006.

There is no mention of GST in either. References to the repealed laws for Service Tax, purchase tax, etc., continue in the SEZ laws. For example, Section 26(e) of the SEZ Act still says every developer and entrepreneur shall be entitled to exemption from Service Tax under Chapter V of the Finance Act, 1994 (32 of 1994) on taxable services provided to a developer or unit to carry on the author­ised operations in a SEZ. Similarly, Section 26(f) and (g) of this Act talk of securi­ty transaction tax and purchase tax. Similarly so with the SEZ Rules, 2006. Some­body needs to tell the Commerce Ministry that read more »

04-08-2018

Sanitary napkin makers face scrutiny on sharing GST gains - No Duty Cuts For MSMEs - Rules Likely To Be Eased Today.

New Delhi: The finance ministry is conducting a cost calculation of sanitary napkin manufacturing to see if the benefits from GST waiver have been fully passed on to consumers or not, even as it appeared satisfied with sharing of gains for other products on which rates have been reduced. “There are instructions to issue notices to companies which are noncompliant,” a finance ministry source told TOI.

The anti-profiteering provisions allow the designated agency to order an inquiry against those who do not pass on entire gains to consumers or raise prices beyond increase in tax. Since GST was launched in July 2017, several FMCG players, such as Hindustan Unilever and P&G have come under scrutiny, along with food chains like Domino’s.

While government officials and some tax consultants believe that waiver of GST on sanitary napkins, instead of levying 12% tax, read more »

02-08-2018

GST collections surge to 3-month high in June.

New Delhi: GST collections were at three month high in June with the total mop-up estimated at Rs 96,483 crore, a shade lower than the monthly target of Rs 1 lakh crore.

The gross mop-up, highest since March, is in line with the target and expected to improve further, Piyush Goyal, who is officiating as finance minister, told reporters after a meeting of the Union Cabinet where amendments to the GST laws were cleared. The move follows an approval to the amendments by the GST Council which will increase the turnover threshold for businesses to avail the less cumbersome composition scheme to Rs 1.5 crore. As many as 46 amendments were cleared by the GST Council at its meeting on July 21.

Data released by the finance ministry showed that in June, Central GST collections were Rs. 15,877 crore, while State read more »

31-07-2018

TAX BENEFITS - Anti-profiteering body seeks Airtel, IndiGo’s inputs on GST.

New Delhi: The GST antiprofiteering authority has sought inputs from Bharti Airtel and budget airline IndiGo on whether GST or credit allowed on inputs in the new regime has created room for reduction in prices.

Taking suo moto cognisance of the impact of GST on prices in telecom and aviation sector, the National Anti-Profiteering Authority (NAA) has asked the market leaders in the sectors to calculate the input tax credit (ITC) benefits that have accrued to them and whether it was enough to pass on to end-consumers, a source said. “The companies have been asked to submit the calculation within a fortnight,” the source said.

With regards to the telecom sector, which saw a rise in tax incidence after GST, the source said, “there may not be enough room for passing on the benefits, but the NAA is seeking calculation from read more »

27-07-2018

Sanitary napkins to be 1.5-2.5% cheaper, not 12%.

Mumbai: With the government not giving in to the demands of the Feminine and Infant Hygiene Association (FIHA) to provide input tax credit (ITC) on sanitary napkins, large organised players are said to be working on reducing product prices in the range of 1.5-2.5%. Contrary to the general expectation that sanitary napkin prices would reduce by 12% following the GST exemption, the price reduction would only be marginal in the absence of ITC.

Industry sources said companies are working on the new prices, which would come into effect once the GST notification is issued. When contacted, Procter & Gamble India (P&G) and Johnson & Johnson (J&J) — the two large players in the roughly Rs 4,500-crore feminine hygiene market — declined to comment.

FIHA is represented by companies like J&J, P&G, Dima Products, Kimberly Clark, Soothe Healthcare, Unicharm, Saral Designs, Shekhani read more »

27-07-2018

Has GST filing time been cut to a third? - No, Say Experts.

New Delhi: The government on Thursday said GST has reduced the number of tax filings for businesses, while slashing the preparation, filing and tax payment time to 36 hours, which is almost a third of the 105 hours that were spent earlier, drawing a sharp response from companies and tax practitioners.

The claim made during a presentation to highlight the steps on ease of doing business was questioned, saying the numbers may not be in order. Besides, some company executives said this was more like a statement of intent at the moment as the filing process, which faced severe criticism in the initial months of rollout, is being revamped for simplification.

The department of industrial policy and promotion (DIPP), which is pushing for a further improvement in India’s ranking from the current 100, is highlighting easier tax payment rules, on the read more »

24-07-2018

White goods sales set to surge on 7-8% price cut.

New Delhi: The white goods industry is anticipating a bumper festive season as the latest round of duty cuts in GST is expected to combine with gains from a healthy monsoon to spur demand in rural and urban areas. The industry had a dull festive period last year, ironically on account of GST as teething problems related to its introduction had dampened sentiment.

Kamal Nandi, VP at Godrej Appliances, said prices would come down by 7-8% (after making certain adjustments) as new stocks start rolling in. “It brings in good sentiments and we expect the industry to grow by around 12-15% this festive period against muted or single-digit growth over the past one-and a-half years.”

24-07-2018

GSTN’s IT tools to track evaders.

New Delhi: GST Network (GSTN) is developing IT tools to help the government crackdown on evaders as well as those who have stopped filing returns.

Even as returns are not being matched currently, GSTN is testing a tool for tax officers at the Centre and at the state level to enable them to match their GSTR-1, which is the first return, with GSTR 3B with ease. In addition, a dashboard is planned for tax officers and taxpayers, similar to the one for income tax, where the details of each GST payer is available along with the tax credits and other information.

Separately, an alert is planned to be sent to those who have stopped filing returns, to enable them to comply with the rules. Even in case of income tax, the government is pushing the “stop filers” to file returns to read more »

23-07-2018

No fresh relief for Vaishno Devi, Amarnath trusts.

New Delhi: The government has rejected requests from the Shri Amarnathji Shrine Board and the Shri Mata Vaishno Devi Shrine Board to exempt all services provided by them from GST.

The fitment committee has suggested that several services — such as sale of prasad and renting of rooms up to Rs 1,000 a day — were already exempted as they were covered by the rules meant for charitable bodies. In case of transport by battery cars, an exemption was also available.

Similarly, in case of Amarnath, the government has argued that medical services provided to yatris are already exempted from GST. But it has rejected a plea for exempting GST on the registration fee for the yatra, where the levy is to the tune of 18%, arguing that the tax is “nominal”.

In case of travel, some of read more »

23-07-2018

Hotels breathe easy with tax on actual rate.

New Delhi: The next time you stay in a five-star, the hotel will no longer have to offer you their ‘European Plan’ (EP) — which includes only basic room rate (no breakfast) — in order to have the lowest rack rate of below Rs 7,500 and avoid the highest tax slab of 28%.

With the GST Council now allowing hotels (applicable essentially to five-stars) to levy tax at rates on which rooms are let out — and not their printed/ rack rates — luxury hotels can charge 18% for rooms for less than Rs 7,500 per night.

Travel portal Yatra COO Sharat Dhall said, “Earlier, if a room with a rack rate of Rs 8,000 was let out for Rs 6,000, the tax charged was 28% on Rs 7,500. Now, if the same room is let out for the same price, read more »