Category Archives: SSI, Small & Micro Enterprise, MSME

The Start-up India Initiative

Every individual with a path-breaking idea wishes to turn it into a reality. Unfortunately, they do not possess the knowledge of the pre-requisites to conceptualise it. This is where the Start-up India Initiative comes into picture.


The Startup India Initiative is a flagship initiative of the Government of India, intending to build a strong eco-system for nurturing startups and innovations in the country. This will enable a sustainable economic growth and generation of large scale employment opportunities in India. 


How can a start-up benefit from this initiative?

A start-up can benefit from this initiative in the following ways:

1.       One stop Registration

To commence operations, a start-up would need to get themselves registered with the relevant regulatory authorities. They might face uncertainty regarding the exact procedure to be followed and the list of necessary documentation. To help an organisation with this, a start-up can download the Government of India (GoI) app for android phones here.

The mobile app will help the start-up in the following ways:

  1. Registration:
  • The app will register your start-up with the relevant agencies of the government. It will provide you with a simple form for the same.
  1. Tracking:
  • The start-up will be able to track the status of the registration application and download the registration certificate at any given time. The mobile app will provide a digital version of the final registration certificate which can be easily downloaded.
  1. Compliance:
  • The app will help the start-up file for compliances and obtain information on various clearances, approvals and registrations required.
  1. Networking:
  • The app provides a collaborative platform with a national network of stakeholders (venture funds, incubators, academia and mentors) of the start-up ecosystem.
  1. Schemes:
  • The app will help you apply for various schemes that are being undertaken under the Start-up India Action Plan.

2.       Self-certification for Compliance

In order to make it easier for start-ups to be compliant to all applicable laws and regulation, the government has made a few simplifications. While other agencies certify normal companies for their compliance, start-ups can self-certify themselves.

They can do so through the start-up mobile app with the below mentioned nine labour and environment laws.

The labour laws:

  • The Building and Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996
  • The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labour (Regulation and Abolition) Act, 1970
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948

The environment laws:

  • The Water (Prevention & Control of Pollution) Act, 1974
  • The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003
  • The Air (Prevention & Control of Pollution) Act, 1981

In case of labour laws, the government will not conduct any inspections for a period of 3 years. The start-up will be inspected only on receipt of credible and verifiable complaint of violation (filed by an officer who’s at least one level senior to the inspection officer).

  • If a start-up falls under the “white category” (as defined by the Central Pollution Control Board), they will be able to self-certify compliance and only then random checks would be carried out.

3.       Start-up India Hub

The government understands that many start-ups do not reach their full potential due to limited guidance and access to financial assistance. Therefore, it has set-up a platform called ‘Start-up India Hub’ where start-ups can easily collaborate with key stakeholders, receive financial assistance, and guidance under mentorship programmes.

The Startup India Hub will provide the following support and assistance:

  • The Hub will work in a Hub & Spoke model and help a start-up collaborate with Central and State governments, Indian and foreign venture capitalists (VCs), Angel networks, Banks, Incubators, Legal partners, Consultants, Universities, and R&D institutions.
  • It will assist a start-up in obtaining financing, conducting feasibility testing and providing advisory services for business structuring.
  • The Hub will help you enhance your marketing skills, technology commercialization, and management evaluation.
  • It will organise mentorship programmes in collaboration with government organisations, incubation centres, educational institutions and private organizations who aspire to foster innovation.


The Hub will be operational from 10:00 AM to 5:30 PM on working days and can be reached via the toll free number: 1800115565 or the email ID:

Register to the Hub online by clicking, here

4.       Relaxed norms of public procurement for Start-ups

In order to provide an equal opportunity to start-ups in the manufacturing sector, the government has relaxed the norms for public procurement. The eligibility criteria for a Normal Company to bid for the tenders floated by the government entity or a public sector undertaking (PSU)requires ‘prior experience’ or ‘prior turnover’.

Therefore, in order to help start-ups, the government has exempted them from the criteria of ‘prior experience/turnover’. However, there will be no relaxation in quality standards or technical parameters. A start-up will have to demonstrate the necessary capabilities to execute the project as per requirements and they should have their manufacturing facility in India.

5.       Faster exit for Start-ups

Even though start-ups are highly innovative in nature, they have lower success rates. The government understands that when a start-up fails, it is critical to reallocate capital and resources to more productive avenues.

To tackle this critical situation, the government has proposed a swift and simple process that start-ups can follow to cease their operations. This initiative helps first-time entrepreneurs to experiment with innovative ideas without having to worry about facing a long-drawn exit process where their capital tends to be interminably stuck.

As per the Insolvency and Bankruptcy Bill 2015 (IBB), if a start-up has a simple debt structure or has met all the specified criteria, they can discontinue their operations within a period of 90 days from the time of submitting the application.

In such instances, the government appoints an insolvency professional who would be in charge of the start-up in place of the promoters and management. The professional will take care of liquidating the start-up’s assets and pay its creditors within six months of their appointment. This process respects the concept of limited liability.

6.       Credit guarantee fund for start-ups

The major concern for most start-ups is receiving funding support for their business ventures. The government understands that in order to encourage experimentation among budding entrepreneurs, they need to provide a type of credit guarantee comfort.

The Department of Industrial Policy and Promotion (DIPP) are therefore in the process of setting up a corpus of ₹2,000 crore that will provide 80% risk cover and hence enable banks and financial institutions to provide collateral free credit to start-ups. The government has also envisaged a credit mechanism scheme through National Credit Guarantee Trust Company (NCGTC) and SIDBI with a budgetary corpus of ₹500 crore for the next four years.

7.       Providing funding support through a Fund of Funds with a corpus of ₹10,000 crore

In the initial stages of the establishment of a start-up, it is highly difficult for them to gain financial assistance. This is mainly because the start-up might lack collateral or not have any existing cash flow. Also as the probability of a start-up failing is really high which make them an unattractive investment.

Therefore, the government has set up a fund with an initial corpus of ₹2,500 crore and a total corpus of ₹10,000 crore over a period of four years. This fund would be in the nature of ‘Fund of Funds’ which will be managed by SIDBI. The fund will invest in SEBI registered Alternative Investment Funds (AIFs) which, in turn, will invest in start-ups.

This fund would help a start-up attract private capital in the form of equity, quasi-equity, soft loans and other risk capital.

The key highlights of the ‘Fund of Funds’ are as follows:

  • Life Insurance Corporation (LIC) of India will be a co-investor in the ‘Fund of Funds’
  • A wide range of sectors will be covered under this fund. The sectors covered will include manufacturing, agriculture, health care and education
  • A contribution of up to 50% will be made by the ‘Fund of Funds’ to the daughter fund. In order to be eligible for contribution by the ‘Fund of Funds’ the daughter fund should have already raised 50% or more of the stated fund

8.       Tax exemption on capital gains

Investing in a start-up during its initial stages is very risky, hence the government has come up with various incentives in order to attract investors. Investors can now avail exemption on capital gains, if the gains are invested in the ‘Fund of Funds’ recognised by the government.

This will in turn increase the funds available to various VCs/AIFs for investment in start-ups. The government has also extended the existing capital gain tax-exemption for investment in newly formed start-ups.

In order to avail the exemption, the entity needs to purchase new assets with the capital gains received. Investment in computer or computer software will also be considered as purchase of new assets.

9.       Tax exemption to Start-ups for 3 years

The government is aware of start-ups making significant capital investments in order to embrace ever-changing technology, combat rising competition, and overcome the challenges of running a start-up.

In order to facilitate the growth of start-ups and provide them with a competitive edge, they will be exempted from paying income tax for a period of 3 years. Start-ups that are incorporated between April 1, 2016 and March 31, 2019 will be eligible for the exemption.

To avail this benefit, the start-up must also get a Certificate of Eligibility from the Inter-Ministerial Board. Start-ups should not distribute dividends in order to avail the exemption.

10.     Tax exemptions on investments above Fair Market Value

Under the Income Tax Act, 1961, any consideration received for the issue of shares that’s above the ‘Fair Market Value’ (FMV) of such shares, the excess consideration received is taxable under ‘Income from Other Sources’. However, when it comes to start-ups, it becomes difficult to determine the FMV of these shares. The FMV generally tends to be significantly lower than the value at which the capital investment was made.

Under the Start-up India plan, start-ups are exempted from paying this tax. Therefore, investments can be made by venture capital funds and incubators without being taxed.

11.     Organising start-up fest for showcasing innovation and providing a collaboration platform

In order for a start-up to grow, it is necessary to have regular communication and collaboration within the start-up community, i.e., both national as well as international. However, an effective start-up ecosystem is dependent upon the participation of academia, investors, industry and other stakeholders.

In order to strengthen the start-up ecosystem in India, the Government has introduced start-up fests at the national and international level.

These fests will help a start-up showcase their work in front of a larger audience comprising of potential investors, mentors, and fellow start-ups. There will be one fest held at the national level on an annual basis. This will help all the stakeholders of a start-up ecosystem to come together at one platform.

There will also be one fest held at the international level on an annual basis. This will be held in an international city that is known for its start-up ecosystem. The fest will be full of activities and interactive sessions.

It will have exhibitions and product launches, where start-ups can pitch their ideas. It includes:

  • Mentoring sessions
  • Curated start-up walks
  • Talks by disruptive innovators
  • Competitions such as Hackathon, Makerspace, etc.
  • Announcements of rewards and recognitions
  • Panels and conferences with industry leaders, etc.

12.     Building innovation centres at National Institutes

The government understands there’s a need to increase the incubation and R&D efforts in the country. It

Under this initiative, the following benefits will be provided:

  • The government shall set-up 13 start-up centres
  • An annual funding support of ₹50 lakh will be provided for 3 years in order to encourage student driven start-ups from the host institute. The funds will be provided by the Department of Science (50%) and the Ministry of Human Resource Development (50%)
  • The government shall set-up or scale-up 18 Technology Business Incubators (TBI) at NITs/IITs/IIMs etc

The start-up centres and TBIs will be set-up at the following locations –

Start-up Centres Technology Business Incubators
RGIIM Shillong NIT Goa MANIT Bhopal IISER Bhopal NIT Warangal
NIT Delhi NIT Agartala NIT Rourkela IIM Rohtak MNIT Jaipur
MNIT Allahabad NIT Silchar NIT Jalandhar IIT Mandi NIT Tiruchirappalli
VNIT Nagpur IIT Bhubaneswar IIM Udaipur IISER Mohali IIT Patna
IITDM Kancheepuram NIT Patna NIT Calicut IIT Roorkee
PDPM – IITDM Jabalpur NIT Arunachal Pradesh IIT Ropar IIM Kozhikode
ABVIIITM Gwalior IISER Thiruvananthapuram IIM Raipur

13.     Setting up of seven new research parks modelled at IIT Madras

In order to promote innovation through incubation and joint R&D efforts between academia and industry, the government will set up seven new Research Parks. These will be modelled based on the existing Research Park at IIT Madras. Each Research Park will require an initial investment of ₹100 crore.

The government plans to set-up Research Parks at the following locations –

  • IIT Guwahati
  • Hyderabad IIT
  • IIT Kanpur
  • IISc Bengaluru
  • IIT Kharagpur
  • Gandhinagar IIT
  • IIT Delhi

IIT Madras Research Park tries to enable companies who want to focus on research to set up a base in the Park. These companies can make use of the expertise provided at IIT Madras. The Research Park breaks down the traditional, artificial barriers of innovation through its connectivity and collaborative interaction.

This will help the industry to create, integrate and apply advancements in knowledge. It leverages the best practices from successful Research Parks such as those at Stanford, MIT, and Cambridge.

The guiding principles behind the park assist start-ups:

  • To create a collaborative environment between the industry and academia through joint research, projects, and consulting assignments
  • Create a self-sustaining and technologically fertile environment
  • To encourage and enable R&D activities and start-ups which are aligned to potential needs of the industry
  • Provide world class infrastructure for R&D activities and incubation
  • To enable development of high quality personnel and motivating professional growth for researchers in companies through part time Masters and PhD Programs

14.     Harnessing private sector expertise for incubator setup

The government is aware about the lack of incubation facilities across India.

The incubation facilities include physical infrastructure, provision of mentorship support, access to networks, and access to markets. The government can provide the capital required for setting up the physical infrastructure. However, the technical skills required for operating on an incubator are also pivotal. For this, expertise from the private sector can be sought.

Thus considering all of this, the government proposes to:

  • Set up 35 new incubators in existing institutions. The Central Government shall provide 40% of funding support (up to ₹10 crore), the state government shall also provide 40% and the remaining 20% will be funded and managed by the private sector for the establishment of new incubators.
  • Set up 35 new private sector incubators. The Central Government shall provide a grant of 50% (up to ₹10 crore) for the establishment of new incubators. The incubator shall be managed and operated by the private sector.

NITI Aayog will provide the funding for setting up of incubators as a part of the Atal Innovation Mission.

The following departments and agencies will be the participants for setting up of new incubators –

  • Department of Science and Technology
  • Department of Electronics and Information Technology
  • Ministry of Micro, Small, and Medium Enterprises
  • Department of Higher Education
  • Department of Industrial Policy and Promotion
  • NITI Aayog
  • Department of Biotechnology

The above mentioned departments/agencies would enter into a standard MoU with identified private sector players for creation of academia-industry tie-ups in order to nurture innovations in academic institutions.

15.     Launching of innovation focused programs for students

The government understands the importance of promoting research and innovation among young students. It has therefore implemented the following measures:

  • Innovation core:

This programme will target school kids and plans to reach out to 10 lakh innovations from five lakh schools. Out of these 10 lakh innovations, one lakh innovations will be targeted and the top 10,000 innovations will be provided with prototyping support. Out of these 10,000 innovations, 100 will be shortlisted and showcased at the Annual Festival of Innovations in the Rashtrapati Bhavan.

  • National Initiative for Developing and Harnessing Innovations (NIDHI):

This programme will help start-ups with initial funding. It aims to support 20 student-driven start-ups each year. The start-ups would be selected through a national-level competition.

The selected start-ups would receive a grant/award of up to ₹10 lakh.

The eligibility criteria to receive this funding is as follows:

  • The programme would only support student-driven start-ups. A student cannot be a part of more than one start-up
  • The start-up should be a registered company/LLP
  • It should be a project supported by the Innovation and Entrepreneurship Development Centre (IEDC)/New-Gen IEDC in the previous 5 years
  • The projects should be nominated by IEDC/New-Gen IDEC
  • The start-up should be the sole owner of the IP, the host institution should be transferred or forgone their rights on the IP

The funds would be disbursed to the start-up as per the following milestone: 70% on selection and 30% on achievement of milestone/pre-defined deliverables.

Uchhattar Avishkar Yojana

This scheme was set-up by the Ministry of Human Resource Development (MHRD) and the Department of Science and Technology (DST). IT provides financial assistance to IIT students for undertaking high quality research.

They’ve earmarked Rs.250.00 crore per annum for this scheme.

The funding towards this research will be 50.00 per cent contribution from MHRD, 25.00 per cent from DST and remaining 25.00 per cent from the industry.

Eligibility Criteria

What is the eligible criteria to be a start-up?

The eligibility criteria to be a start-up is as follows:

  1. Firm is no older than five years
  2. Annual turnover should not exceed ₹25 Cr
  3. Work is related to innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property
  4. Entity should not have been formed by splitting up, or reconstruction of a business that was already in existence


How can an aspiring company apply to be recognised as a start-up?

An aspiring company can apply to be recognised as a start-up by clicking here.

Source : SME First Post

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

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Scheme for Fast Track Exit Mode

Organisations sometimes show no business activity or operation for a year or more of their establishment. At such times they choose to strike their name off from the official records of the Ministry of Corporate Affairs (MCA). If you’re an MSME who wishes to do the same, the Fast Track Exit Mode scheme introduced by the MCA can benefit you.


The Fast Track Exit Mode Scheme by the MCA enables an MSME to close down their non-operational business at a cheaper cost with fewer formalities under Section 560.


How does an institution benefit from this scheme?

An institution can:

  • Avail loans to close down its non-operational business at an affordable price
  • Gain assistance from the government to:

– Build intermediary institutions

– Manufacture new products

– Identify target markets

– Meet its training needs

  • Gain assistance from the government in the fields of:




What are the features of this scheme?

  1. Arranging fixed deposits for MFIs/NGOs

The Government of India provides funds to SIDBI. These funds are used for the security deposit requirement of loan for MFIs/NGOs. SIDBI takes 10% as security deposit, out of which MFIs/NGOs get 2.5% (25% security deposit). The institutions can avail further loans on the basis of security deposit.

  1. Training and Studies on Micro-Finance Program

The Government of India would help SIDBI in meeting the training needs of NGOs, Self Help Groups, intermediaries and entrepreneurs and also in enhancing awareness about the program. This would be performed with the help of various developmental institutes.

  1. Assistance in building conciliatory institutions

The government of India will help in building intermediary institutions for MFIs that will help them with building new products, identifying target markets, and providing technical and marketing assistance.

Eligibility Criteria:

What is the eligibility criteria for this scheme?

An MSME is eligible for this scheme if it falls under the following categories:

  • The company is not operating or is not carrying any business since the last one year from the date of application
  • Company is not operating or not carrying out any business since its incorporation
  • The company has no assets and liabilities
  • The company’s status should be ‘active’ or ‘dormant’ on the MCA portal

What makes an MSME ineligible for this scheme?

An MSME is ineligible for this scheme if it falls under the following categories:

  • Listed companies
  • De-listed companies due to non-compliance of Listing Agreement or any other statutory laws
  • Companies under Section 25
  • Vanishing companies
  • The companies against which an investigation or inspection has been ordered and yet to be taken up or pending
  • Companies where order u/s 234 has been issued by ROC and reply is pending
  • The companies where prosecution for a non-compoundable offence is pending in court
  • Companies which have accepted deposits which are outstanding or have defaulted in repayment
  • The companies having secured loan
  • Companies having management dispute
  • The companies for which filing of docs have been stayed by court or CLB or CG or any other competent authority
  • Companies having dues of income tax / sales tax / central excise / banks / financial institutions / CG / SG / other local authorities
  • The companies not having active / dormant status on MCA portal


How can an MSME apply for this scheme?

If your company is eligible to apply for this scheme, you will need to file the Form FTE with the Registrar of Companies (ROC).

The form must be filed online for a fee of ₹5,000, here.

Documents Required:

The documents required to apply for this scheme are:

  • Statement of accounts (duly signed by one MD / director / secretary and certified by auditor of the company or any other chartered accountant)
  • Copy of board resolution authorizing directors to file application
  • Indemnity bond duly notarized and signed by all directors
  • Affidavit duly notarized and signed by all directors (separately)
  • Physical Copy of e-form FTE duly signed by director / MD / manager / secretary if no DSC is available
  • Attested copy of PAN / passport (in case DIN is not available)
  • NOC from government (if applicable)
  • Any other optional attachment
  • Source : SME First Post


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GSTN Chairman Urges with experts to simplify GST Returns filing

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 VAT commissioners of Karnataka, Gujarat, Telangana, and senior officials from the Department of Revenue and the CBEC.

As many as 40 per cent of the businesses filing returns on GST Network (GSTN) portal has nil tax liability.

The Goods and Services Tax (GST) Council had set up this committee on November 10 to suggest ways for simplification of the returns filing process. It has also decided to keep in abeyance till March 31 the filing of GSTR-2 (purchase returns) and GSTR-3 (the matching of sales and purchase returns).

Now, businesses will have to file simplified initial GSTR-3B forms till March, along with sales returns GSTR-1.

“The committee would look into simplification exercise because all (GST returns) are intricately connected,” Pandey said, when asked if the committee would focus on only GSTR-2 and GSTR-3 or all the returns under GST.

The committee will collect feedback from people, the trade and industry and study the whole system in detail and then come out with an appropriate plan.

“If people have very minimal transactions, they should be able to file both the returns in a manner without going through full complications. Therefore, the display of the forms will be based on certain questions and the questions posed to the dealer,” Pandey said.

He added that the panel will also look into what information on returns should be taken and at what frequency.

Pandey said the ultimate goal will be to provide convenience to people so that those who are filing the returns can do so without any difficulty.

According to the data, 55.87 lakh GSTR-3B returns were filed for July, 51.37 lakh for August and over 42 lakh for September. Preliminary returns GSTR-3B form for a month is filed on the 20th day of the next month after paying due taxes.

According to the GSTN data, a huge chunk of businesses files their returns after the expiry of the due date.

While only 33.98 lakh July returns were filed by the due date, the number has now gone up to 55.87 lakh. Similarly, for August, 28.46 lakh returns were filed until the last date, but the figure went up to 51.37 lakh later.

Also, for September, while 39.4 lakh returns were filed by the due date, the number is rising and was over 42 lakh until October 24.

Also, the Council earlier this month substantially lowered late return filing fees for businesses from the Rs 200 at present. Businesses with nil tax liability will now have to pay only Rs 20 as late fee for the delayed filing of return while for the rest, the fee is Rs 50.

Source : Press Reports

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GST Rate Cut: Cabinet clears Setting up of Anti-Profiteering Authority

The anti-profiteering measures enshrined in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers.

The Union Cabinet on Thursday gave its approval for the creation of the posts of chairman and technical members of the National Anti-profiteering Authority (NAA) under GST, following up immediately on yesterday’s sharp reduction in the GST rates of a large number of items of mass consumption.

This paves the way for the immediate establishment of this apex body, which is mandated to ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices.

The establishment of the NAA, to be headed by a senior officer of the level of secretary to the government with four technical members from the Centre and/or the States, is one more measure aimed at reassuring consumers that government is fully committed to take all possible steps to ensure the benefits of implementation of GST in terms of lower prices of the goods and services reach them.

It may be recalled that effective from midnight of 14th November, the GST rate has been slashed from 28% to 18% on goods falling under 178 headings. There are now only 50 items which attract the GST rate of 28%. Likewise, a large number of items have witnessed a reduction in GST rates from 18% to 12% and so on and some goods have been completely exempt from GST.

The ‘anti-profiteering’ measures enshrined in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers.

Affected consumers who feel the benefit of commensurate reduction in prices is not being passed on when they purchase any goods or services may apply for relief to the Screening Committee in the particular State.

However, in case the incident of profiteering relates to an item of mass impact with ‘All India’ ramification, the application may be directly made to the Standing Committee. After forming a prima facie view that there is an element of profiteering, the Standing Committee shall refer the matter for detailed investigation to the Director General of Safeguards, CBEC, which shall report its findings to the NAA.

The authority is to ensure benefits of the GST rate cut are being passed on to the consumers

The Union Cabinet on Thursday approved setting up of a National Anti-profiteering Authority under the GST, seeking to ensure consumers get the benefit of reduced prices under the new indirect tax regime.

Union Minister Ravi Shankar Prasad said currently there were only 50 items that attracted the highest tax of 28% under the Goods and Services Tax (GST) regime and rates on many items have been cut to 5% as well.

“The National Anti-Profiteering Authority is an assurance to consumers of India. If any consumer feels that the benefit of tax rate cut is not being passed on, then he can complaint to the authority,” Mr. Prasad told reporters after the Cabinet meeting.

This reflects government’s full commitment to take all possible steps to ensure benefits of implementation of GST to the common man, the minister added.

The approval by the Cabinet paves the way for immediate establishment of the apex body, which is mandated to ensure that the benefits of GST rate reduction is passed on to consumers.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, had last week decided to slash tax rates of over 200 items in the GST regime as well as lowered tax rates on AC and non-AC restaurants to 5 per cent.

The Council had earlier approved setting up of a five-member National Anti-Profiteering Authority to enable consumers to file complaint in case price reduction was not passed on.

A five-member committee, headed by Cabinet Secretary P.K. Sinha, comprising Revenue Secretary Hasmukh Adhia, CBEC Chairman Vanaja Sarna and chief secretaries from two states, has been entrusted to finalise the chairman and members of the authority.

The authority will have a sunset date of two years from the date on which the chairman assumes charge. The chairman and the four members of the authority have to be less than 62 years.

As per the structure of the anti-profiteering mechanism in the GST regime, complaints of local nature will be first sent to the state-level ‘screening committee’, while those of national level will be marked for the ‘Standing Committee’

If the complaints have merit, the respective committees would refer the cases for further investigation to the Directorate General of Safeguards (DGS). The DG Safeguards would generally take about three months to complete the investigation and send the report to the anti-profiteering authority.

If the authority finds that a company has not passed on GST benefits, it will direct the entity to pass on the benefits to consumers. If the beneficiary cannot be identified, it will ask the company to transfer the amount to the ’consumer welfare fund’ within a specified timeline.

The authority will have the power to cancel registration of any entity or business if it fails to pass on to consumers the benefit of lower taxes under the GST regime, but that might be the final step.

According to the anti-profiteering rules, the authority will suggest return of the undue profit earned from not passing on the reduction in incidence of tax to consumers along with an 18% interest, as also impose penalty.

Source : PTI

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GSTR Filing Due Dates – Press Release

Press Release
10th November, 2017
Recommendations made by the GST Council in the 23rd meeting at Guwahati on 10th November, 2017

The GST Council, in its 23rd meeting held at Guwahati on 10th November 2017, has
recommended the following facilitative measures for taxpayers:

Return Filing
a) The return filing process is to be further simplified in the following manner :

i. All taxpayers would file return in FORM GSTR-3B along with payment of tax by 20th
of the succeeding month till March, 2018.

ii. For filing of details in FORM GSTR-1 till March 2018, taxpayers would be divided into two categories. Details of these two categories along with the last date of filing GSTR 1 are as follows:

(a)Taxpayers with annual aggregate turnover up to Rs. 1.5 crore need to file GSTR-1 on
quarterly basis as per following frequency:

Period                            Dates
Jul- Sep             :          31st Dec 2017
Oct- Dec            :          15th Feb 2018
Jan- Mar           :          30th April 2018

(b) Taxpayers with annual aggregate turnover more than Rs. 1.5 crore need to file
GSTR-1 on monthly basis as per following frequency:

Period              Dates

Jul- Oct :      31st Dec 2017
Nov  :          10th Jan 2018
Dec :            10th Feb 2018
Jan :             10th Mar 2018
Feb  :           10th Apr 2018
Mar :           10th May 2018

iii. The time period for filing GSTR-2 and GSTR-3 for the months of July, 2017 to March
2018 would be worked out by a Committee of Officers. However, filing of GSTR-1
will continue for the entire period without requiring filing of GSTR-2 & GSTR-3 for
the previous month / period.

b) A large number of taxpayers were unable to file their return in FORM GSTR-3B within due date for the months of July, August and September, 2017. Late fee was waived in all such cases. It has been decided that where such late fee was paid, it will be re-credited to their Electronic Cash Ledger under “Tax” head instead of “Fee” head so as to enable them to use that amount for discharge of their future tax liabilities. The software changes for this would be made and thereafter this decision will be implemented.

c) For subsequent months, i.e. October 2017 onwards, the amount of late fee payable by a
taxpayer whose tax liability for that month was ‘NIL’will be Rs. 20/- per day (Rs. 10/- per day each under CGST & SGST Acts) instead of Rs. 200/- per day (Rs. 100/- per day each under CGST & SGST Acts).

Manual Filing

d) A facility for manual filing of application for advance ruling is being introduced for the time being. Further benefits for service providers

e) Exports of services to Nepal and Bhutan have already been exempted from GST. It has now been decided that such exporters will also be eligible for claiming Input Tax Credit in respect of goods or services used for effecting such exempt supply of services to Nepal and Bhutan.
f) In an earlier meeting of the GST Council, it was decided to exempt those service providers whose annual aggregate turnover is less than Rs. 20 lakhs (Rs. 10 lakhs in special category states except J & K) from obtaining registration even if they are making inter-State taxable supplies of services. As a further measure towards taxpayer facilitation, it has been decided to exempt such suppliers providing services through an e-commerce platform from obtaining compulsory registration provided their aggregate turnover does not exceed twenty lakh rupees.
As a result, all service providers, whether supplying Intra-State, inter-State or through e-commerce operator, will be exempt from obtaining GST registration, provided their aggregate turnover does not exceed Rs. 20 lakhs (Rs. 10 lakhs in special category States except J & K).
Extension of dates
g) Taking cognizance of the late availability or unavailability of some forms on the common portal, it has been decided that the due dates for furnishing the following forms shall be extended as under:
S. No. FORM and Details                                     Original Due Date           Revised Due Date
1 GST ITC-04 – Quarter July-September, 2017             25.10.2017                           31.12.2017

2 GSTR-4  – Quarter July September, 2017                  18.10.2017                             24.12.2017

3 GSTR-5 for July, 2017                                                    20.08.2017 or

7 days from the

last date of registration

whichever is earlier                11.12.2017

4 GSTR-5A for July, 2017                                                      20.08.2017                         15.12.2017

5 GSTR-6 for July, 2017                                                         13.08.2017                         31.12.2017

6 TRAN-1                                                                                 30.09.2017                         31.12.2017                                                                                                                                       (Onetime option

of revision also

to be given till this date)

Revised due dates for subsequent tax periods will be announced in Due Course.

Benefits for Diplomatic Missions/UN organizations

h) In order to lessen the compliance burden on Foreign Diplomatic Missions / UN Organizations, a centralized UIN will be issued to every Foreign Diplomatic Mission / UN Organization by the Central Government and all compliance for such agencies will be done by the Central Government in coordination with the Ministry of External Affairs.

2. Relevant notifications for all of the above decisions will be issued shorty, so as to be
effective from 15.11.2017.

Source : Press Release

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GST Council Slashes Tax Rates on 177 items

The GST Council decided to cut the tax rate on 177 items from 28% to 18%, leaving only 50 items in the highest tax slab and offering major relief to consumers and businesses.

Since businesses with Rs20 lakh annual sales come under the GST, these small units were beset with a higher tax burden, which the GST Council has tried to correct. Photo: PTI

The Goods and Services Tax (GST)) Council on Friday slashed rates across the board, including for a range of daily items of consumption, relaxed penalties and tweaked rules to make it easier for businesses, especially small and medium enterprises, to comply.

The feel-good package from the council, which comes into effect from 15 November, is likely to boost consumer demand, reduce disquiet over compliance costs and also lend fresh momentum to the tax reform initiative.

The GST Council at its 23rd meeting in Guwahati has slashed tax rates on 177 items in the top 28 per cent slab. (Photo: ANI)

The Goods and Services Tax (GST) Council on Friday decided to slash rates on more than 175 items, reducing taxes on these from the existing 28 percent in one of the biggest tax reductions since the new system kicked-in from July 1.

The council, which is currently meeting in Guwahati, has decided to cut keep only 50 luxury and `sin’ goods like tobacco in the highest slab, paving the way for price cuts in a raft of commonly used goods from furniture to sanitary ware.

Daily use products such as shampoo, chocolates, beauty products and construction items such as marble and granite will cease to be in the 28 percent slab, Bihar Deputy Chief Minister Sushil Modi said today at the sidelines of the 23rd GST Council meeting in Guwahati.

The tax cuts will have a revenue implication of about Rs 20,000 crore.

 The council is set to approve sweeping changes including simpler procedures, a single return filing form for small firms and several changes to make composition scheme more attractive.


The GST Council—the apex body for decision making headed by finance minister Arun Jaitley— today in its 23rd meeting in Guwahati will also discuss the proposal to do away with the distinction between air-conditioned (AC) and non-air conditioned restaurants (not under composition scheme) and tax them at 12 percent.

The reduction in rates will be a significant step towards simplification of the GST to support the trader community ahead of the election in Gujarat that will be held in two phases—December 4 and 11. Small and Medium-Sized Enterprises (MSMEs) have been hit by the implementation of the new indirect tax system and crucial steps will be taken to mitigate their challenges.

GST, billed as the country’s biggest indirect tax overhaul, has consolidated a dozen of state and central duties into one single levy. All goods and services have been fitted into four broad slab structure –5, 12, 18 and 28 percent—along with a cess on luxury and demerit goods such as tobacco, pan masala and aerated drinks.

In the next few hours, the Council is expected to take crucial decisions to make composition scheme more attractive,improve compliance burden and may explore the possibility of including real estate under GST.

Prime Minister Narendra Modi took to Twitter and said, “All our decisions are people-inspired, people-friendly and people-centric. We are working tirelessly for India’s economic integration through GST.”

It is one of the biggest packages concessions announced after the new indirect tax system took effect on 1 July.

The tax reductions will, however, result in a revenue loss of about Rs20,000 crore a year, four people who attended the council meeting said.

A state finance minister explained that buoyancy in GST revenue had given the council the fiscal cushion to undertake the cuts. “The revenue loss of states has come down from 28% to 17% in August. This has emboldened the council to cut rates and take the hit,” the person said.

The biggest rationalization was the decision to cut the tax rate on 178 items from 28% to 18%, leaving only 50 items in the highest tax slab and offering major relief to consumers and businesses.

“There was unanimity that in the 28% slab, there should only be the so called sin and demerit goods (the consumption of which is discouraged through high tax rates). So, today the council took a historic decision to retain only 50 items in the highest slab and to bring down the rate on the rest to 18%,” said Bihar deputy chief minister Sushil Kumar Modi..

The tax rate was reduced on a range of goods, from granite and marble to chewing gum and chocolates, deodorants and detergents.St

Vivek Gambhir, managing director and CEO of Godrej Consumer Products Ltd, said in an email statement, “We remain committed to making our products more affordable and accessible for the mass population, thereby driving consumer demand. In many of our categories, penetrating rates are low and so, the headroom for growth is significant.”

Jammu and Kashmir finance minister Haseeb Ahmed Drabu said that tax rate rationalization was a continuous process and that, eventually, further rate cuts may be possible. West Bengal finance minister Amit Mitra said his government had pitched for retaining only tobacco and big luxury items in the highest tax slab.

In other relief measures, the council also decided to bring more units within the scope of a special tax payment window for small and medium enterprises (SMEs) called the composition scheme and halved the tax rate allowed under it to 1%. The eligibility threshold for the scheme too has been raised to Rs1.5 crore from Rs1 crore now.

The council sought to tackle two major factors that gave GST a bad name—the practice of restaurants not passing on to consumers the benefit of tax rebates that they got in the new system and the rigours of compliance that big and small businesses faced.

Accordingly, the GST rate on restaurants has been slashed to 5% for all restaurants except those in the category of five-star hotels where the tax rate remains 18%. However, benefit of tax rebates is restricted to the 18% category.

The response to this move was, however, mixed. “Effectively the consumer pocket will get a marginal benefit and not as it seems. This move is also retrograde to bringing in players in the organized segment. In fact, restaurants are like the ‘gatekeepers’ which have worked with suppliers to bring them into the formal economy,” said Rahul Singh, vice-president, National Restaurant Association of India. Singh is also founder and CEO, The Beer Cafe.

Source : Press Information

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GST filing may be tweaked to simplify it: GSTN Chairman

The government is considering a proposal to tweak the way people file their goods and services tax (GST) returns. The move, to customise the form as per the varying requirements of the taxpayer, is expected to significantly simplify the filing process which has been criticised for being complex and mired with glitches.

In an interview to ET, Ajay Bhushan Pandey, the newly-appointed chairman of the GST Network (GSTN), said instead of having a standard form for everyone, users can be asked a few questions upon signing in and then the best suited form can be displayed as per their transactions and nature of business. “We are looking at these options so that the forms can be simpler,” he said.

The form in the system can be dynamically generated and only the relevant portions which are applicable to a particular dealer will be displayed so that he won’t have any difficulty in filing the returns, he said. “The ultimate aim is that the small tax payers should be able to file the returns without much assistance from outside,” added Pandey , who is also the CEO of the Unique Identification Authority of India (UIDAI), which administers the Aadhaar project.
So far, 45 lakh people have filed GSTR 3B for the month of September, while 56 lakh and 52 lakh have filed their returns for July and August, respectively .

Despite the initial teething troubles, 56 lakh dealers have filed returns on the GSTN portal, Pandey said. “It means that 56 lakh people somehow know how to file the returns on a new system. So progressively more and more people will be able to come on the platform.” The government has also started an exercise to collect feedback and proactively reach out to people who have filed the returns to understand the nature of their concerns so that they can be rectified. Pandey said as a first step, forms have to be simplified.

The initial hiccups in the system happened because people were not used to the new system, he said. Since the GST launch on July 1, the government has taken several measures to alter the tax structure as well as the filing process in order to make it less tedious for business entities to file their returns. “There are 35 states and union territories apart from service tax and excise tax departments; so almost 37 systems had to migrate to one platform. With 90 lakh dealers and thousands of tax officials along with so many tax practitioners – naturally if you bring any change like this, people might face certain difficulties initially,” Pandey said. Most of the people who are required to pay the taxes have already filed the returns, he said. The government is also discussing ways to reduce the periodicity of filings of returns.

Source : Press Reports / Economic Times
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