GST ushers in new payment system for textile industry

Surat: Textile traders, yarn dealers and power loom weavers may rue the fact that their key demands are yet to be resolved by the Goods and Service Tax (GST) Council and the central government under GST, but majority of them are happy that GST has forced them to introduce a new payment system which is good for a healthy business environment.
Yarn dealers have stopped fresh deliveries of goods to power loom weavers because they are yet to settle outstanding payment. Most of the yarn dealers and fabrics traders have set payment terms where those paying within seven days of goods delivery are given one per cent discount on the total bill amount, whereas there are interest penalties of up to 18 per cent on late payments.

Yarn dealer Rajesh Surana told TOI, “Pre-GST, we would give payment credits for 30 and 60 days. We would not dare ask for payment from weavers, even if they fail to pay on the promised date. Post-GST, weavers pay us cheque against yarn delivery. For those paying in cash, we pay one per cent discount on total bill. For those not paying on time, we impose 18 per cent interest on late payments.”

Surana added, “The new taxation system has definitely impacted the textile business, but it has helped us to introduce new payment norms as well. However, the trade is going to face major difficulties when the national e-way bill is implemented from April 1.”

 

Southern Gujarat Chamber of Commerce and Industry’s (SGCCI) textile committee chairman Devkishan Manghani said, “Post-GST, the fly-by-night operators have literally packed their bags. Because, you can’t do business with those who are not registered under GST. Earlier, anyone was doing business with everyone. Now, the business is restricted to those who are registered players.”

 

Manghani added, “The launch of national e-way bill is going to impact the industry from April 1 onwards. The GST portal is not working properly and the trade is experiencing difficulties even in filing returns, forget about generating e-way bills. Without e-way bills, you won’t be able to send your finished fabrics to other states. Also, trade fears return of inspector raj as GST officials will unnecessarily harass transporters and traders.”

 

Pandesara Weavers Cooperative Society Limited president Ashish Gujarati said, “Only two things work post-GST. Either the trader pays in cash or cheque. There is no space for credit in business now. The payment issues have been resolved, but most of our demands related to GST with the government are still pending.”

 

source:https://timesofindia.indiatimes.com/city/surat/gst-ushers-in-new-payment-system-for-textile-industry/articleshow/63550500.cms

GST e-way bill must for moving goods from one state to another from April 1

The platform has been made more robust and as many as 7.5 million inter-state e-way bills could be generated daily without any glitch

Businesses and transporters moving goods worth over Rs 50,000 from one state to another will have to carry an electronic or e-way bill from April 1.

Touted as an anti-evasion measure that would help boost tax collections by clamping down on trade that currently happens on cash basis, the e-way bill provision of the (GST) was first introduced on February 1.

However, its implementation was put on hold after the system developed glitches in generating permits. With several states also starting to generate intra-state e-way bills on the portal, the system developed a snag.

To ensure a foolproof system, the has activated only that facility on its portal where the e-way bill can be generated when goods are transported from one state to another by either road, railways, airways or vessels.

“We will block any attempt to generate e-way bill for intra-state movement of goods,” an official said.

The Council, earlier this month, decided on a staggered rollout of the e-way bill starting with inter-state from April 1 and intra-state from April 15.

The platform has been made more robust and as many as 7.5 million inter-state e-way bills could be generated daily without any glitch. The system has been designed and developed by (NIC).

“The NIC has assured us that the system should work fine on April 1. NIC has conducted extensive tests so that it doesn’t develop snag at the last moment,” an official said.

He said that Network had advised all transporters and businesses to enrol on the portal for trial on how to generate e-way bills.

Until earlier this week, 1.1 million entities had registered on the e-way bill portal.

This compares to 10.5 million registered businesses under the and about seven million filing monthly returns.

source:http://www.business-standard.com/article/economy-policy/gst-e-way-bill-must-for-moving-goods-from-one-state-to-another-from-april-1-118033000321_1.html

E-way bill mandatory for inter-state movement of goods from Sunday

NEW DELHI: Businesses and transporters moving goods worth over Rs 50,000 from one state to another will have to carry an electronic or e-way bill from April 1.

Touted as an anti-evasion measure that would help boost tax collections by clamping down on trade that currently happens on cash basis, the e-way bill provision of the goods and services tax (GST) was first introduced on February 1.

However, its implementation was put on hold after the system developed glitches in generating permits. With several states also starting to generate intra-state e-way bills on the portal, the system developed a snag.

To ensure a fool proof system, the GSTN has activated only that facility on its portal where e-way bill can be generated when goods are transported from one state to another by either road, railways, airways or vessels.

“We will block any attempt to generate e-way bill for intra-state movement of goods,” an official said.

The GST Council, earlier this month, decided on a staggered rollout of the e-way bill starting with inter-state from April 1 and intra-state from April 15.

The platform has been made more robust and as many as 75 lakh inter-state e-way bills could be generated daily without any glitch. The system has been designed and developed by National Informatics Centre (NIC).

“The NIC has assured us that the system should work fine on April 1. NIC has conducted extensive tests so that it doesn’t develop snag at the last moment,” an official said.

He said that GST Network had advised all transporters and businesses to enrol on the portal for trial on how to generate e-way bills.

Till earlier this week, 11 lakh entities had registered on e-way bill portal.

This compares to 1.05 crore registered businesses under the GST and about 70 lakh filing monthly returns.

source:https://economictimes.indiatimes.com/small-biz/policy-trends/e-way-bill-mandatory-for-inter-state-movement-of-goods-from-sunday/articleshow/63543953.cms

GST Council decides to exempt 24 insurance schemes for reinsurance

The proposal to exempt reinsurance schemes was recommended by the Fitment Committee and was approved by the GST Council on January 18

The Insurance Regulatory and Development Authority of India (IRDAI) in a circular on Wednesday has informed all insurers that the Goods and Services Tax (GST) Council in its 25th meeting, has chosen to exempt schemes from the purview of the tax network.

The proposal to exempt schemes was recommended by the Fitment Committee and was approved by the Council on January 18. The Council has prescribed that any benefit from the reduction in premium on such insurance schemes, must be passed on to the beneficiaries, as well as State and Central exchequers.

Hasmukh Adhia, Finance Secretary at the Ministry of Finance, states that the “the fact that no is payable on the insurance premium in such schemes” but that a was applied on the for such schemes led the council to accept the proposal to exempt the re-insurance, for specific 

The charged on re-insurance would be included in the premium charged by the companies, which is paid not only by regular customers but also by the Central and State Governments.

There are 24 difference (general) which are exempted under GST, including Pradhan Mantri Jeevan Jyoti Bima Yojana, Cattle Insurance, Jan Arogya Bima Policy, Pradhan Mantri Fasal Bima Yojana, and Aam Aadhmi Bima Yojana, amongst others.

Suitable action will be taken against the insurer, if the reduction in premium is not passed onto the insured or Government, with the National Anti-Profiteering Authority under Section 171 of the Central Goods and Services Tax, Act, Adhia’s letter states.

source:http://www.business-standard.com/article/economy-policy/gst-council-decides-to-exempt-24-insurance-schemes-for-reinsurance-118032900788_1.html

COMMENT-Happy with a handwritten bill and a discount? You’re undermining GST

While the total collection under GST is stagnating to trending down, the total filing has also not shown any significant improvement

It’s become almost commonplace for vendors across the country to offer an “exemption” from GST for small cash transactions. In other words, as long as he is content with a hand-written “kachcha” receipt, the buyer gets a neat discount to one who insists on a proper bill. (In the case of a good valued at Rs 100, the discount is 15%, because he pays Rs 100 instead of the Rs 118 that includes Rs 18 of GST). As long as such an opt-out exists, bringing the informal sector fully into the tax net will remain a pipe-dream.

Such anomalies and other problems may be the reason the GST collection picture is more subdued than what economic indicators would have led one to expect. Over a period, the GST back end issues along with other technical glitches have been addressed, and the rate structure rationalised. Overall compliance should have improved, but the data suggests otherwise.

While the total collection under GST is stagnating to trending down, the total filing has also not shown any significant improvement.

FY19 fiscal math rides on GST

As is common knowledge, if the collection doesn’t pick up, it could have repercussions on the fiscal deficit, government borrowing, and interest rates.

The data shows that in FY18, the monthly run rate of GST collection under CGST, at Rs 23,474 crore, is lower than the asking rate of Rs 27,675 crore which is budgeted for FY18. However, the total collection under CGST (central GST) and IGST (Integrated GST) put together is only 4% lower than the FY18 target. The collection under compensation cess is on expected lines indicating that they since this tax is mostly levied on goods manufactured by the organised sector, the predictability of collection is high.

The estimated GST collection for FY19 under CGST and IGST together is budgeted at Rs 6,53,900 crore – translating to a monthly asking rate of Rs 54,492 crore, as against the current monthly run rate of Rs 46,116 crore. Unless this data point shows visible signs of improvement in the coming months, the credibility of the projected fiscal numbers of FY19 will be put to test.

What has gone wrong?

The moot question remains: What has gone wrong, and what can reverse this disturbing trend? It is compliance. While, theoretically speaking, the introduction of E Way Bills, simplification of the filing process etc. can go a long way in improving compliance, these are at best partial solutions.

India has a large cash-based economy and a large part of this only-cash economy has no direct relation with big businesses or the so-called formal sector. It is therefore not uncommon these days to find smaller service provides (like an entity providing catering service) accepting only a part of the billed amount in cheque (on which GST is paid) and the remaining getting settled by cash. The cash component doesn’t get reported and perhaps is paid to vendors who are not registered under GST (because of their size) and are still comfortable with pure cash dealings.

It wouldn’t be too wrong to conclude that as against the initial apprehension of GST being inflationary (due to a large unorganised sector coming under the tax net), the impact has been quite benign.

Along with rationalisation of the rates (that has already happened in several goods), a gradual migration to a more cash-less economy (not a knee jerk experiment like demonetisation) where digital transactions dominate could help in realising the dream of greater compliance under GST. Or else, like with direct tax counterpart where only large businesses and tax payers bear the lion’s share of the burden, GST too, will depend on the big boys turning up to play.

source:https://www.moneycontrol.com/news/business/moneycontrol-research/comment-happy-with-a-handwritten-bill-and-a-discount-youre-undermining-gst-2539521.html

Economy disrupted by lingering impact of demonetisation, GST roll-out

Businesses are still taking time to adjust in the new tax regime, which would weigh on growth rates

Call it disruption or structural reform, (or note ban) did have dampening effects on the  However, even as its negative impact was fading by the time 2017-18 began, the announcement of another reforms or “disruption” — the (GST), which was to be implemented by July 1, 2017, shock the and businesses.

The result of these two reforms was evident as the gross domestic product (GDP) came crashing down to a three-year low of 5.7 per cent in the first quarter of 2017-18. It was largely because of pre-jitters and lingering effects of 

The did recover thereafter to 6.5 per cent in the second quarter and to 7.2 per cent in the third quarter. Overall, the is now projected to grow 6.6 per cent in 2017-18 by the second advance estimates, a bit higher than 6.5 per cent, pegged by the first advance estimates.

Both the World Bank and the International Monetary Fund had projected India’s to grow a tad higher at 6.7 per cent for 2017-18. So, the for 2017-18 should to be around the figure projected by second advance estimates, depending on the fourth quarter numbers.

However, the moot point is that economic saw disruptions due to and implementation of the  While the impact of has faded, experts believe that some of the effects are still lingering such as on exporters who have been struggling to get refunds. Merchandise exports did not contract in any month of 2017-18, except for October. However, the has been coming down since its strong surge of 30.55 per cent in November 2017 and stood at just 4.4 per cent in February, due to the issue of refunds.

“In many ways, 2017-18 was a defining year for the Indian  India completely reset its indirect tax system to a comprehensive while still experiencing the impact of the shock of November 2016,” says Anis Chakravarty, partner and lead economist, Deloitte India.

He says that the rise in from the second quarter of 2017-18 suggests that the initial negative impact of the and may be waning.

UPA v/s NDA: Qualitative difference

However, if one goes into comparison between where UPA had left the economic and the NDA’s performance, it does seem that expansion in 2017-18 is officially estimated to be just 0.2 percentage point higher than 6.4 per cent handed down by the Manmohan Singh government in 2013-14, a period ridiculed for its so-called “policy paralysis”.

In between, the NDA did push the upwards to 7.4 per cent in 2014-15 and then to 8.2 per cent in 2015-16.

Bibek Debroy, chairman of the economic advisory council to the Prime Minister, however, feels that achieved by the UPA was due to fiscal profligacy.

“The question is not what rate has been delivered, but about fiscal consequences of that  The question about the UPA was not about the figure, but about the way that happened,” says Debroy.

Bibek Debroy

So far, as fiscal deficit is concerned, the NDA paused on fiscal deficit target thrice. The Budget Estimates of reining in fiscal deficit at 3.2 per cent of was revised upwards to 3.5 per cent for 2017-18. Even the revised target seems difficult to achieve unless expenditure was squeezed. The fiscal deficit figure for the April to February period 2017-18 (11 months) was 20.3 per cent higher than revised estimate for the entire fiscal year.

The parameter on which the NDA government succeeded remarkably is inflation. This may also be due to Monetary Policy Committee, which has been given the mandate to contain consumer price index-based inflation between 2 per cent and 6 per cent. If the average inflation breaches this range in any three consecutive quarters, the Reserve Bank of India (RBI) will have to explain the reasons to the government.

Inflation never breached this range in 2017-18, except for the month of June. That time, inflation was outside the lower range and stood at 1.46 per cent, initially leading to worries over low inflation.

Exact contrast to this, inflation exceeded 4 per cent for the fourth month in a row till February. However, inflation has been coming down from the high of 5.21 per cent in November and stood at 4.44 per cent in February.

Risks aplenty

Major risks to the may come from oil prices and growing tendency of protectionism around the world, triggered by US’s so-called reciprocal taxes. However, domestic factors, including from adjustments to the GST, would play a greater role. “Major external risks include oil price shocks, tax rate competitiveness, and growing barriers to trade. However, the Indian remains predominantly a domestically-driven one, so the major downside risks will be domestic in nature, such as continuing disruptions from the implementation of the GST,” Chakravarty says.

 

source:http://www.business-standard.com/article/economy-policy/economy-disrupted-by-lingering-impact-of-demonetisation-gst-roll-out-118032901121_1.html

GST Refund Fortnight for exporters extended by 3 days; customs desks to stay open on 29, 30, 31 March

The Central Board of Excise and Customs (CBEC) has extended the GST ‘Refund Fortnight’ by three days to facilitate the sanction of refunds to exporters.

 

The Central Board of Excise and Customs (CBEC) has extended the GST ‘Refund Fortnight’ by three days to facilitate the sanction of refunds to exporters. The CBEC will also keep open all Customs field formations on March 29, 30 and 31 even as they are public holidays.

“The government is keen to ensure that all the exporters get their refunds sanctioned at the earliest and, therefore, requests the exporters to avail this opportunity to settle their refund claims if not done as yet,” CBEC said in a statement.

The CBEC had launched Refund Sanction Fortnight from March 15 to March 29 pan-India to expedite the process of refunds to exporters who were facing liquidity issues due to the delay. The Refund Fortnight was launched to ensure that “maximum number of pending refund claims are settled”. Exporters have been facing a lot of issues due to the delay in GST refunds and it could have had an impact on India’s exports as well.

In the last GST Council meeting on March 10, the date for the tax exemption to exporters was extended by six months. CBEC Chairperson Vanaja Sarna had said that the government is aiming to clear the refunds to exporters by March 31.

Last week, CBEC had held a meeting with leading industry and export bodies to discuss on how to clear the pending dues. The Centre and states have sanctioned more than Rs 10,000 crore as GST refunds to exporters.

 

source:http://www.financialexpress.com/economy/gst-refund-fortnight-for-exporters-extended-by-3-days-customs-desks-to-stay-open-on-2930-31-march/1115113/

GST, demo done, India can clock higher growth: CEA

New Delhi, Mar 29 () Having overcome the short term consequences of GST and demonetisation, India can now propel itself into a higher growth trajectory, Chief Economic Adviser Arvind Subramanian said today.

He further said the policymakers have to reevaluate whether more has to be done to deal with banking sector woes.

“After we put behind some of the major structural reform, growth has started to revive… In some way there are two or three big reform actions that don’t necessarily involve new stuff that we have to do,” he said while referring to the Goods and Services Tax (GST) implementation and Air India privatisation.

Banks are saddled with Rs 10 lakh crore of bad loans which the policymakers are trying to resolve through insolvency and bankruptcy code and other steps.

“If we can solve this twin balance sheet challenge given the new developments and if we put the short term consequences of GST and demonetisation behind us, I think that could itself propel us to higher rates of growth than we have seen recently,” Subramanian said at the India Economic Conclave.

Indian economy is estimated to grow at 6.6 per cent in the current fiscal, lower than 7.1 per cent recorded in 2016-17.

For 2018-19 fiscal beginning April 1, the growth has been projected to be between 7 to 7.5 per cent. JD CS ABM ABM

source:https://timesofindia.indiatimes.com/business/india-business/gst-demo-done-india-can-clock-higher-growth-cea/articleshow/63532722.cms

GST Council okays exempting 24 insurance schemes for reinsurance

sector regulator Irdai today said as many as 24 schemes will be exempt from (GST) for and asked firms to pass on the benefits to customers.

The proposal to exempt schemes in respect of specified plans has been approved by the in its 25th meeting held on January 18, 2018 on the condition that the benefit of reduction in the premium on such schemes must be passed on to the beneficiaries and the state and central exchequers, Irdai said in a circular directed to all insurers.

The Regulatory and Development Authority of (Irdai) has further directed all the firms to avoid any undue enrichment arising out of this exemption.

“Insurers may note that if necessary benefit on account of reduction in premium is not passed on to the insured/ government, suitable action against the companies may be initiated with under Section 171 of the CGST Act,” Irdai said.

As many as 24 schemes have been exempted from being taxed under GST including Janashree Bima Yojana, Aam Aadmi Bina Yojana, Varishtha Pension Bima Yojana, Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Vaya Vandan Yojana, Hut Scheme, Pradham Mantri Fasal Bima Yojana, Universal Health Scheme, Rashtriya Swasthya Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Niramaya Health Insurnace Scheme, among others.

The exemption was sought for ease of living of senior citizens as well as for schemes relating to other schemes of the government.

“Considering the fact that no GST is payable on premium of such schemes and the GST paid on the re-is included in the cost of premium charged by the companies from the beneficiaries and also shared between the centre and the state governments, the proposal to exempt schemes in respect of specified schemes has been approved by the ..,” the ministry said in a communication.

source:http://www.business-standard.com/article/pti-stories/gst-council-okays-exempting-24-insurance-schemes-for-reinsurance-118032801377_1.html

Govt notifies series of changes in GST compliance requirements

Under the new GST compliance requirements traders get more time to file the tax return form to claim transitional credit

New Delhi: The government on Wednesday notified a series of changes in the timelines of the compliance requirements under the goods and services tax (GST).

It gave traders more time to file the tax return form to claim transitional credit known as Tran-2. The new deadline for filing the return disclosing the transitional credits claimed by traders to 30 June from 31 March.

Abhishek Jain, partner, EY said that this extension is expected to bring substantial relief to traders who were struggling with system issues for filing the form

The deadline for filing the input service distributor has also been extended to 31 May from 31 March.

However, the government has reduced the time for filing of GSTR-1 forms that provides details of outward supplies.

The due dates for filing of GSTR-1 for the months of April, May and June have been significantly curtailed from the previous 40 days.

Taxpayers will get 31 days to file tax returns for April and 10 days for May and June.

“The businesses now would need to be quite proactive in collation of data and filing of returns within the curtailed timelines,” Jain said.

source:https://www.livemint.com/Companies/BAHl1udSkjQ94LL4Js6uHM/Govt-notifies-series-of-changes-in-GST-compliance-requiremen.html