Category: News

Towards the end of June, the GST Council chaired its 47th meet under the leadership of finance minister Nirmala Sitharaman, where a slew of decisions were taken regarding the levy of Goods and Service Tax on various items. The council during the meeting agreed to bring multiple items under the ambit of GST, which were previously tax free. This is in turn expected to raise the household budget of the common man, who is already reeling under the pressure of an unprecedented inflation.

The decisions by the GST Council  on exemptions and correction of inversion will come into effect from July 18 this year, revenue secretary Tarun Bajaj had told the media on June 29, after the GST Council meet.

HERE ARE THE ITEMS THAT GET COSTLIER AFTER GST RATE REVISION

– Pre-packaged and pre-labelled retail pack in terms of Legal Metrology Act, including pre-packed, pre-labelled curd, lassi and butter milk will attract a GST at a rate of 5 per cent from July 18. These items were previously exempt from the ambit of GST.

– An 18 per cent GST will be levied on fee charged by banks for the issue of cheques (loose or in book form), the council has informed.

– Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hospital will be taxed to the extent of amount charged for the room at 5 per cent without ITC.

– Maps and charts including atlases will be charged with GST at a rate of 12 percent from July 18.

– The GST Council also decided to bring hotel rooms under Rs 1,000 per day under the 12 per cent GST slab, as opposed to tax exemption category at present.

– The prices of LED Lights, fixtures, and LED Lamps are set to see a price hike as the GST council has recommended a correction in the inverted duty structure from 12 percent to 18 percent.

– Knives with cutting blades, Paper knives, Pencil sharpeners, and blades therefor, Spoons, forks, ladles, skimmers, cake-servers etc have been placed under the 18 percent GST slab, up from the 12 percent slab.

HERE ARE THE ITEMS THAT GET CHEAPER AFTER GST RATE REVISION

– Your ropeway rides at a vacation are set to get cheaper as the GST council has slashed the rates of GST on transport of goods and passengers through ropeways from 18 per cent to 5 per cent with Input Tax Credit services.

– Splints and other fracture appliances; artificial parts of the body; other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; intraocular lens will now attract a GST rate of 5 per cent as opposed to 12 per cent earlier.

– The GST Council has also slashed GST from 18 per cent to 12 per cent on renting of goods carriage with operators where the cost of fuel is included in the consideration.

– IGST on specified defence items imported by private entities/vendors, when end-user is the Defence forces have been exempted from GST.

While the GST Council has deferred the decision on levying a 28 per cent tax on casinos, online gaming, horse racing and lottery, the decisions taken in June will affect the middle class man’s budget from July 18.

SOURCE:https://www.news18.com/news/business/tax/gst-on-curd-lassi-other-items-from-july-18-what-becomes-cheaper-what-becomes-dearer-5521159.html

The state government has assured apple growers of raising the issue of enhanced Goods and Services Tax on cartons at the next meeting of the GST Council. The GST on cartons was raised from 12 percent to 18 percent last year, leading to a considerable increase in the prices of cartons and trays used for fruit packaging.

“The Chief Secretary has assured us that the issue will be taken up at the next meeting of the GST Council. The GST rate needs to be revised considerably, as it is hurting apple growers a lot,” said Deepak Singha, a representative of apple growers who attended the meeting chaired by the Chief Secretary. The meeting was called to examine the overall preparedness of various departments such as Horticulture, PWD, HPMC, Marketing Board, etc., ahead of the apple season.

According to an official, the Chief Secretary also asked the officials concerned to study how the manufacturers fix the prices of the packaging materials. The issue of freight was also discussed at the meeting.

SOURCE:https://www.tribuneindia.com/news/himachal/assurance-to-apple-growers-on-gst-issue-410732

The trend of robust goods and services tax (GST) revenue collection of ₹1.51 trillion a month on average in the June quarter brings states’ GST revenue receipts closer to the level of revenue protection they seek, according to the revenue secretary Tarun Bajaj.

The Centre gave states GST compensation for five years till 30 June to meet the gap between their actual revenue receipts and their assured revenue in the GST regime—a 14% annual growth in revenue over the base year of FY16. However, this revenue protection scheme has ended, and discussions in the GST Council on states’ demand for an extension remain inconclusive.

“Our average GST collection is ₹1.51 trillion. If somehow we reach ₹1.55-1.6 trillion, then the compound annual growth rate itself becomes close to 12% from the base year. This year, we are going to give a compensation of more than ₹1 trillion. About ₹87,000 crore has already been released this year. We will give around ₹20,000-30,000 crore more,” Bajaj said in an interview.

The average monthly GST collection of ₹1.51 trillion is an improvement of 37% over what was collected at the same time a year ago. GST collections in FY22 of ₹14.8 trillion is an improvement of over 30% from what was collected in FY21, a trend that gives the central government confidence that states will be able to manage without GST compensation.

Bajaj expressed confidence in meeting the revenue collection targets in FY23 in spite of the reduction in excise duty on petrol and diesel.

“We will meet the target. Yes, excise duty has been cut sharply. We are working on GST. This time, first-quarter GST collection has grown by 37%, and the average for the first quarter is ₹1.51 trillion,” Bajaj said, indicating a possible 25-30% annual improvement in GST collections in FY23. The government will also get some revenue from the cess imposed on crude oil and the export of petrol and diesel last week. The Centre’s direct tax receipts are also strong. Net direct tax collections have seen a 49% improvement in FY22 from the year-ago. Up to mid-June this fiscal, net direct tax collection rose 45% to ₹3.39 trillion from a year ago.

For the Centre, an improvement in tax revenue receipts will be a shot in the arm, as it helps compensate for tax cuts on auto fuel and any slippage in meeting disinvestment targets.

There are, however, uncertainties. “We keep our fingers crossed. The world economy should keep doing well, the Russia-Ukraine (conflict) should get sorted out, prices of commodities including petrol and diesel should come down,” Bajaj said.Last month, the Council decided to withdraw several tax exemptions and correct tax anomalies to improve efficiency in the GST system. The revenue secretary said the decision to withdraw the tax exemption on certain pre-packaged and labelled items and place them in the 5% slab was based on feedback from states that they had lost out on revenue collection when they shifted to the GST regime.

The Council’s decision was to prevent the abuse of the arbitrage offered by the tax exemption on unbranded items. Several entities used labels on their pre-packaged products to take advantage of the exemption available to the unbranded products.Bajaj explained that there was feedback that states were getting taxes in the value-added tax (VAT) regime on these items. Because there was an arbitrage between branded items and the rest in the GST regime, a lot of people who would otherwise have used brand names started using this route to avoid taxes. “Some states gave us revenue figures which they were getting under VAT regime. These were very large figures. It is not that these companies never paid taxes,” Bajaj said. The withdrawal of tax exemption will also prevent litigation in addition to simplifying the tax system, Bajaj said.

SOURCE:https://www.livemint.com/economy/centre-robust-gst-will-help-states-give-up-compensation-11656874651628.html

While the GST landscape has matured, there’s room to make the tax system more tech-driven, equitable and simpler

The GST Council, which is scheduled to meet next week in Chandigarh, is likely to discuss changes in tax rates on 14 items recommended by the Fitment Committee, according to a CNBC-TV18 report. The Council was earlier reported to have sought the views of states for increasing rates on 143 items, including handbags, perfumes/deodorants, chocolates, chewing gums, apparel & clothing accessories of leather, and walnuts, among others.

The Fitment Committee, which comprises revenue officials of both Centre and States, rejected rate change on 113 goods, deferred on two goods, and recommended rate change on 22 services, the report said.

The GST Council is likely to waive the requirement for filing refund claims by condoning the two-year period between March 1, 2020, and February 28, 2022, in view of the disruption caused by the COVID-19 pandemic, according to a report by CNBC-TV18 quoting sources. It might also permit tax authorities to file appeals against erroneous refunds by not considering the two-year COVID-19 period.

The Council is also likely to extend the timeline for filing GSTR 4 for FY22 without late fees by composition dealers to July 28 from the earlier deadline of June 30, 2022. It may also extend the due date of filing of FORM GST CMP-08 for composition taxpayers for the first quarter of FY23 from July 18 to July 30, 2022.

A group of ministers (GoM) reviewing goods and services tax (GST) rates has proposed removal of exemptions on a host of services, including for stay in relatively cheaper hotel rooms, hospital rooms above a tariff threshold and services provided by financial sector and food safety regulators.

In line with a mandate to raise the revenue neutral rate (RNR) from a little above 11% now, the group headed by Karnataka chief minister Basavaraj Bommai also proposed raising the GST rate on electronics waste steeply from 5% to 18%. Also, a rate hike is proposed for goods and services related to exploration of petroleum and coal-bed methane. These activities are now taxed at the lowest GST slab of 5%.

The GoM also proposed removal of exemptions for reinsurance of exempted insurance schemes such as weather-based crop insurance schemes and the GST Network services to the government. A few proposals aimed at correcting residual cases of inverted duty structures have also been made.

The implementation of the goods and services tax (GST) in 2017 led to uniform tax rates across country but issues including the need for lower tax rates and easing compliance norms for tax filings need to be tackled to further strengthen the framework, small and medium (SME) business owners told Moneycontrol.

“Compliance framework for service providers is very complex requiring two returns to be filed every month in every state where they have operations despite all operations being under the same legal entity,” MS Mani, partner at Deloitte India, told Moneycontrol.

“Input tax credit depends on the vendor’s payment of GST over which the buyer has little control. Also, matching data on the GST portal with financial records is quite complex, especially for smaller businesses,” he added.

What owners say

Business owners say the rolling out of GST has enabled them to broaden their network of services.

Manoj Munot, owner of Shilpa Furniture, which has three outlets in Jalgaon, Maharashtra, says the tax problems he faced before the GST regime have reduced.

“GST is good for businesses, but the tax percentage charged for various items as per the HSN (Harmonized System of Nomenclature Code), that should be practical. It should not be intolerable, and rates should be reduced by 50 percent,” Munot said.

“I have been doing business for over 40 years. Earlier, my limitation was that I used to sell only in my district, but now I have no barrier as I can sell my goods online. I can do business anywhere due to uniform taxation, it provides more chances,” he added.

“If the tax rate is 18 percent, then throughout country it is 18 percent. If it is out of my state, then I have to mention 18 percent on my tax invoice. If it is within Maharashtra, I have to mention 9 percent tax to the state and central governments each. It is never like if I want to do business in Tamil Nadu, then I will be charged an extra 1 percent or 2 percent tax.”

However, goods classified as furniture attract a tax of 18 percent (the second highest GST slab), Munot said, adding that furniture must be considered an essential item.

Shailesh, a Mumbai-based small electrical parts wholesaler who goes by one name, says the GST system has computerised the processes, making it easier to file taxes.

“The process to file taxes is computerised so there is no challenge. The cost of items has not increased due to GST but due to inflation. As a business owner I have no problem with implementation of GST,” he said.

Anshu Tiwari Shukla, a Mumbai-based senior corporate law professional and GST consultant, says that the GST compliance systems have developed over time. “Earlier, applicability of GST was not easy for the government as well as for users. As a professional, I went through with so many difficulties at the initial stages of implementation like lengthy registration procedures and other problems in filing different tax returns,” Shukla said.

“Overall, GST has reduced the burden to file many other taxes, we just have to be up to date with filing. Yes, it will add up in monthly operational expenses but if you check annually, the cost for compliance will be less,” she added.

GST in numbers

Total GST revenue in May stood at Rs 1.40 lakh crore, up 44 percent on a year-on-year (y-o-y) basis, as per latest Union Finance Ministry data. Collections were Rs 1.40 lakh crore or more for the third consecutive month, reflecting increased tax coverage, it said.

Further, as per a Deloitte survey including feedback from 234 CXOs and CXO-1 level individuals, 90 percent of industry leaders view the transition to GST as largely positive.

A total of 59 percent business leaders said they were happy with the present GST regime while 31 percent had neutral views and 10 percent had a negative GST experience.

“As we complete half a decade since the implementation of GST, measures to unlock working capital blockage seems to be on top of the list of asks of leaders… GST continues to carry vestiges of the erstwhile regime in terms of credit restrictions… A majority of the leaders feel that removing restrictions of input tax credit will contribute to their sectors’ growth,” the survey said.

SOURCE:https://www.moneycontrol.com/news/business/banks/rbi-approves-reappointment-of-p-n-vasudevan-as-md-ceo-of-equitas-small-finance-bank-8692241.html

Goods and services tax (GST): Today (June 20) is the last day to file the monthly GSTR-3B return for May for taxpayers who are not under the QRMP (quarterly return filing and monthly payment) scheme, according to the Central Board of Indirect Taxes & Customs (CBIC). For non-resident GST taxpayers, June 20 is the last day for filing monthly GSTR-5 Return for the month of May.

“Attention GST Taxpayers who are not under QRMP Scheme! Today is the last day to File your monthly GSTR-3B Return for the month of May 2022,” the CBIC said in a tweet on Monday.

GSTR-3B is filed in a staggered manner between the 20th-24th day of the succeeding month.

” Attention Non-Resident GST Taxpayers! Today is the last day for filing the monthly GSTR-5 Return for the month of May 2022. Attention OIDAR Services Suppliers! Today is the last day for filing monthly GSTR-5A Return for the month of May 2022,” the CBIC said in other tweets.

GSTR-5 contains all business details for non-residents, (NR) including the details of sales & purchases. Information from GSTR-5 will flow into GSTR-2 for buyers. GSTR-5A is a return form to be filed by non-resident Online Information and Database Access or Retrieval (OIDAR) services provider for the services provided from a place outside India to a person in India to an unregistered person or non-taxable customers.

GST Collections in May hit an amount of Rs 1,40,885 crore, which was a 44 percent year-on-year jump. However, it was a drop of 16 percent as compared to the GST collections in April. The gross GST revenue collected in May 2022 was Rs 1,40,885 crore, of which CGST is Rs 25,036 crore, SGST is Rs 32,001 crore, IGST is Rs 73,345 crore (including Rs 37469 crore collected on import of goods) and cess is Rs 10,502 crore (including Rs 931 crore collected on import of goods).

The GST Council is scheduled to conduct its 47th meeting during June 28-29 in Chandigarh. The Council-appointed group on ministers (GoM), headed by Karnataka Chief Minister Basavaraj Bommai, has already conducted its meeting to discuss various, including changes to tax slabs and rates. The GoM will submit its report before the GST Council meeting.

During the 47th meeting, the GST Council, headed by Finance Minister Nirmala Sitharaman, is likely to discuss pruning the list of exempted items, plan to shift rate slabs, and proposal to correct inverted duty structure in textiles. It might discuss a proposal to shift rate slabs from the current five percent to seven or eight percent; and from 18 percent to 20 percent. The Council may also discuss the proposal to correct the inverted duty structure in textiles.

Currently, there are four GST slabs — 5 percent, 12 percent, 18 percent, and 28 percent. The 18 percent slab has 480 items, from which about 70 percent of the GST collections come. Apart from this, there is an exempt list of items like unbranded and unpacked food items that do not attract the levy.

SOURCE:https://www.news18.com/news/business/gst-deadline-to-file-returns-under-these-categories-ending-today-5404573.html

A complaint was received alleging that CGST officer had threatened to register a case against a person and demanded a bribe of ₹ 10 lakh.