Category Archives: SSI, Small & Micro Enterprise, MSME

Govt. likely to take pause on further GST Rate Cuts

The GST regime has been facing many bumps, such as inadequate collections compared to the target set out initially, non-compliance by stakeholders and frequent changes in slabs leading to a revenue shortfall. According to recent reports, the government will take a ‘pause’ in further rate cuts. This has come even when the shortfall each month between the target and actual collection has begun narrowing since the beginning of fiscal 2019.

Since the GST regime was first implemented in July last year, rates on 384 products have been reduced but not a single product has seen any rate hike. Lowering rates obviously reduces overall GST collections, at least in the short term.

Jaitley said the 28% tax slab is being phased out as the bulk of the remaining items in this category are only “luxury items or sin goods.” Other items outside the luxury–sin goods category are cement, air-conditioners, large screen televisions and a handful of others. “Hopefully, with further expansion of revenues, these few items may also witness a change of category,” he said.

Between August 2017 and March this year, the total collections stood at Rs 7,19,078 crore or an average of Rs 89,885 crore. It is obvious that though the shortfall continues, it has been narrowing.

Besides, as Jaitley said, tariff rationalisation depends on the expansion of the revenue base. “In the pre-GST regime, India had a complicated, inefficient, multiple indirect tax system where each assessee could be levied up to 17 different taxes. The GST consolidated them to one tax. Since the passing of GST Constitutional Amendment Bill, there have been twenty-eight meetings of the GST Council which have reviewed the GST tariffs on a continuous basis. Obviously, the tariff rationalisation depends on the expansion of the revenue base. The first one year has witnessed an encouraging trend in this direction.”

Source :  Press Reports

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GST Council clears 20 per cent cashback on digital payments, with Rs 100 cap

Revenue shortfall concerns and issues being faced by micro, small and medium enterprises (MSMEs) dominated the 29th meeting of the GST Council. The Council approved a six-member ministerial panel, headed by Minister of State for Finance Shiv Pratap Shukla, to look into the issues of MSMEs.

The Goods and Services Tax (GST) Council on Saturday cleared a pilot project to offer digital incentives, in the form of cashback of 20 per cent of GST paid on business-to-consumer transactions using RuPay and BHIM platforms, subject to a cap of Rs 100 per transaction.

Revenue shortfall concerns and issues being faced by micro, small and medium enterprises (MSMEs) dominated the 29th meeting of the GST Council. The Council approved a six-member ministerial panel, headed by Minister of State for Finance Shiv Pratap Shukla, to look into the issues of MSMEs.

“We have decided to undertake a pilot project. A broad framework has been worked out so that users of RuPay card, BHIM, Aadhaar, UPI, USSD transactions can be given the incentives because these are mostly used by poor people,” said Finance Minister Piyush Goyal, adding that the pilot programme will be implemented in any state on a voluntary basis.

The revenue department and GST Network (GSTN) will coordinate with the National Payments Corporation of India (NPCI) for the development of software to facilitate the refunds in these digital transactions. “The burden will not be put on the dealers. Software will be developed by NPCI to facilitate the cashback. First, it will be rolled out on pilot basis, and then, after seeing the results, will be considered for a nationwide rollout,” said a senior government official.

Uttar Pradesh, Bihar, Maharashtra, Gujarat, Tamil Nadu and Assam have opted to join the digital incentives pilot project, officials said.

Bihar’s Deputy Chief Minister Sushil Kumar Modi said the revenue impact of the cashback/ refund for these digital transactions is expected to be around Rs 980 crore when it gets rolled out nationwide. “Compliance will increase. In the longer run, it will encourage formalisation of the economy,” he said.

West Bengal’s Finance Minister Amit Mitra pressed the need for a relook at incentives in the wake of revenue considerations. “Already Rs 43,000 crore is the estimated shortfall in the first quarter of this fiscal. If we give incentives and reduce revenues, the shortfall will increase. If we give one incentive today, then tomorrow we will have to give 10 other incentives,” he said.

The ministerial panel for MSMEs, which includes Delhi Deputy Chief Minister Manish Sisodia, Bihar Deputy Chief Minister Sushil Modi, Assam Finance Minister Himanta Biswa Sarma, Kerala Finance Minister Thomas Isaac and Punjab Finance Minister Manpreet Singh Badal, will look into recommendations of fitment and law committees on tax rates and policy. States were of the view that since MSMEs were exempted from excise duty with turnover up to Rs 1.5 crore in the pre-GST era, they should continue to get some relief under GST as well.

Rate cuts, however, will not be considered in the near term as of now in the wake of revenue concerns. “During the meeting, Union Finance Minister was also of the view that the Council should now adopt, in the RBI’s parlance, a pause in rate cuts,” said the official.

Delhi’s Finance Minister Manish Sisodia said MSMEs need to be given importance since they are employment generators. “There are big businesses which give more taxes, but then there are small businesses which are large in number, which give employment. Both have to be given importance. The rule shouldn’t be such that we brainstorm for those who give more tax to government… with this, MSMEs will get the required support,” he said.

Punjab’s Finance Minister Manpreet Singh Badal also echoed the same views. “The small and medium industries may not be paying 50 per cent of tax but they give huge amount of employment of 70-80 per cent… Something has to be done. Small and medium industries cannot fade away,” he said, adding that even if the GoM does not finalise its report within six weeks, it will submit interim reports after consultation with the fitment and law committees.

The proposal to incentivise digital payments was considered at the 27th GST Council meeting in May also, but has now been trimmed considerably to soften the impact on revenue. The earlier proposal of 2 per cent concessional rate for digital payments under GST in B2C transactions (for GST rates 3 per cent and above) was estimated to cost the exchequer around Rs 10,000-25,000 crore.

One in every four items has seen a rate cut in the 13 months of GST rollout. Rate cuts on over 350 items, out of total 1,211 items in the five broad categories of zero, 5 per cent, 12 per cent, 18 per cent and 28 per cent, are estimated to result in a revenue loss of about Rs 70,000 crore a year.

Tax experts said the select rollout of digital incentives would help in limiting the revenue impact and also help in creating a trail of GST transactions. “The incentivising of digital payments would help in maintaining a better database by the government and tracking the footprint of various taxpayers. Also, with the committee for addressing MSME issues in place, further simplification of GST compliance and other issues for this sector should soon be in place,” .

In the Budget for 2018-19, GST collections, including compensation cess, have been pegged at Rs 7.44 lakh crore, out of which the Centre aims to collect Central GST (CGST) of Rs 6.04 lakh crore and Integrated GST (IGST) of Rs 50,000 crore. In theory, IGST is supposed to be equally divided between Centre and the states. Adding State GST (SGST) collections, the government is aiming a monthly target of Rs 1-1.12 lakh crore.

So far, the government has collected Rs 3,89,567 crore from GST — Rs 1,03,458 in April (for March), Rs 94,016 crore in May (for April), Rs 95,610 crore in June (for May) and Rs 96,483 crore in July (for June).

The next GST Council meeting is scheduled to be held in Goa on September 28-29.

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


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Haven’t filed I-T return yet

Not only citizens with income above basic exemption limit, those with income below it are also advised to file ITR on time

In a relief for salaried tax payers, the government recently extended the date for filing income tax returns (ITR) by one month till August 31. Filing ITR is a must for any responsible citizen earning an income. As per government records, around 68 million income tax returns were filed during FY 2017-18, compared to 54 million filed during FY 2016-17. The number is expected to rise further this year. However, many people in India still don’t file return despite getting remuneration.

It is mandatory to file tax return if your taxable income falls above the basic exemption threshold of Rs 250,000. One should file their tax returns on time as failing to do so will attract penalties. Apart from avoiding punishment, filing returns on time has several other advantages too.

Here’s a look at top 10 advantages of filing ITR on time:

1. Being a responsible citizen: It is mandatory for every individual who earns a specific income and pays income tax on it, to file income tax return before July 31. In addition to this, those who are not eligible to file taxes can still file voluntary returns. When you file returns, you are fulfiling sort of a national duty which brings you into the mainstream as your income gets recorded with the I-T department with applicable tax (if there is any) having been paid. In other words, it’s a sign of being a responsible citizen.

2. Helpful during loan applications: Individuals who are planning to apply for home loans or vehicle loans, filing ITR can prove to be very helpful. Almost all major banks ask for a copy of returns, thus keeping a steady record of filing ITRs may make life easier for you in such a situation. ITR can have further significance as an income proof and an individual might be able to use it to get a loan in line with his/her income.

3. Loss adjustment: Losses incurred by an individual both short-term and long-term, speculative as well as non-speculative, capital or any other type of losses, which are not recorded in the tax return, cannot be carried forward or adjusted against the capital gains made in the subsequent years. So, if you do not file a return then you may not be eligible for any exemption against your tax liability in subsequent years.

4. To claim a refund: There are cases when after TDS deductions or advance tax filings an individual ends up paying more than his/her actual tax liability. In that case, that person can claim a refund from the I-T department through an ITR. So, if a person doesn’t file an ITR he may not get his/her refund.

5. Travelling Overseas: During visa processing, foreign consultants may ask you for your ITR records/receipts of previous years in interviews. The reason is to ensure that the person applying for the visa has an income source in India and does not actually intends to leave the country forever. Many major countries in Europe, US and Canada strictly follow this process and thus filing ITR gains further importance.

6. Buying life insurance: These days, ITR receipts are required when one opts to buy a term policy with sum insured of Rs 5 million or more. Life insurance companies like LIC use ITR documents to verify your annual income.

7. Filing of govt tender: ITR documents also come handy when one need to fill a government tender. Government demands tax return receipts of the previous five years to ensure that the person filing the tender will be able to support the payment obligation.

8. Proof of income and tax payment for the self-employed: Unlike the salaried class, businessmen do not get Form 16. Hence, ITR receipts become an extemely important document for them.

9. Avoid penalties: Filing income tax return is mandatory for individuals whose income falls in the tax bracket. Such individuals might be penalised up to Rs 10,000, besides interest, for not filing ITR on time.

10. An important financial document: Not only while applying for a loan or visa, ITR receipts can be useful in many other ways as it is an important financial document. It is even more detailed than Form 16 as it entails your income and taxation along with revenue from other sources.

Citizens with income below the taxable bracket should also file ITR as most of the above given advantages are also applicable for them.

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

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GST Returns Filing Made Easy

VidyaSunil & Associates provides GST Customised Solutions which will help our Clients to deliver GST compliance related services to taxpayers by processing data, Efficient reconciliation, Timely credits & Tax Management.

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This service will allow the customer to download/view cash and credit ledgers from GST Portal.

Offline File Preparation Utility

This offline utility will validate, convert invoices into GSTN format and also directly upload invoices to NSDLgst ASP.

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Matching invoices as per dealer & as per GSTN.

Utilization of ITC & Cash Balances

This service will allow the customer to submit cash/ credit utilization towards GST payable.

GSTR-1 Upload & Filing

This service will allow the customer to upload sales invoices as well as file GSTR 1 return.

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This service will allow the customer to upload final GSTR-2 return after matching of purchases with those downloaded from GST portal.

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GST Rate Cuts

Apart from tax on sanitary pads being brought down from 12 per cent to zero, the GST council has recommended rate cut on an array of products which will be effective from this Friday.

The GST Council in its 28th meeting on Saturday pruned rates on a number of goods including several daily use appliances such as washing machines, vacuum cleaners, small TV sets and refrigerators.

Among other products whose rates were brought down to zero, the Council meeting chaired by Finance Minister Piyush Goyal also cut GST tax on sanitary pads from 12 per cent to nil.

Other than this, GST has been brought down on an array of handicraft items from 18 per cent to 12 per cent such as handbags, wooden frames, handcrafted lamps, etc. Also, handicraft items which used to attract 12 per cent of GST such as handmade carpets, lace, hand-woven tapestries and toran have been brought under the 5 per cent GST bracket.

The new rates will come into effect from Friday, said Piyush Goyal.

Here are all the changes in GST rates on goods and what will get cheaper after the new rates come into effect:

1. Reduced from 28 per cent to 18 per cent

  • Washing machines
  • Vacuum cleaners
  • Domestic electrical appliances such as food grinders and mixers & food or vegetable juice extractor, shaver, hair clippers etc
  • Televisions up to the size of 68 cm
  • Refrigerators, freezers and other refrigerating or freezing equipment including water coolers, milk coolers, refrigerating equipment for leather industry, ice cream freezer etc.
  • Storage water heaters and immersion heaters, hair dryers, hand dryers, electric smoothing irons etc
  • Lithium-ion batteries
  • Paints and varnishes (including enamels and lacquers)
  • Glaziers’ putty, grafting putty, resin cements
  • Special purpose motor vehicles. For instance, crane lorries, fire fighting vehicle, concrete mixer lorries, spraying lorries
  • Works trucks (self-propelled, not fitted with lifting or handling equipment) of the type used in factories, warehouses, dock areas or airports for short transport of goods.
  • Trailers and semi-trailers
  • Miscellaneous articles such as scent sprays and similar toilet sprays, powder-puffs and pads for the application of cosmetics or toilet preparations

2.

From 28 per cent 12 per cent

  • Fuel Cell Vehicle(compensation cess will also be exempted)

3. From 18/12/5 per cent to zero

  • Sanitary Napkins
  • Stone/Marble/Wood Deities
  • Rakhi (other than that of precious or semi-precious material)
  • Coir pith compost
  • Sal Leaves, siali leaves and their products and Sabai Rope
  • PhoolBhari Jhadoo (Raw material for Jhadoo)
  • Khali dona
  • Circulation and commemorative coins, sold by Security Printing and Minting Corporation of India Ltd (SPMCIL) to Ministry of Finance.

4. From 12 per cent to 5 per cent

  • Chenille fabrics and other fabrics under heading 5801
  • Handloom dari
  • Phosphoric acid (fertilizer grade only)
  • Knitted cap/topi having retail sale value not exceeding Rs 1000

5. From 18 per cent to 12 per cent

  • Bamboo flooring
  • Brass Kerosene Pressure Stove.
  • Hand Operated Rubber Roller
  • Zip and Slide Fasteners

6. From 18 per cent to 5 per cent

  • Ethanol for sale to oil marketing companies for blending with fuel
  • Solid biofuel pellets

Source :  Press Reports

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GST Council: 17 amendments under GST Acts to be place before Parliament

These amendments will now be placed before the parliament and the legislature of the state and union territories with legislatures for carrying out the amendments in the respective GST Acts.

The GST Council held their 28th meeting at New Delhi, which was chaired by Union Minister of Railways, Coal, Finance and Corporate Affairs Piyush Goyal. Under the meeting, the council has recommended somewhat 17 amendments under the CGST, IGST, UTGST Act and GST (Compensation to States) Act. These amendments will now be placed before the parliament and the legislature of the state and union territories with legislatures for carrying out the amendments in the respective GST Acts.

Here’s the list of the amendments.

1 – Upper limit of turnover for opting for composition scheme to be raised from Rs 1 crore to Rs 1.5 crore. Present limit of the turnover can now be raised on the recommendation of the council.

2 – Composition dealers to be allowed to supply services (other than restaurant services), for upto a value not exceeding 10% of turnover in the preceding financial year or Rs 5 lakhs whichever is higher.

3 – Levy GST on reverse charge mechanism on receipt of supplies from unregistered suppliers, to be applicable to only specified goods in case of certain notified    classes of registered persons, on the recommendations of the GST council.

4 – The threshold exemption limit for registration in the states of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalay, Sikkim and Uttrakhand to be increased to Rs 20 lakhs from Rs 10 lakhs.

5 – Taxpayers may opt for multiple registrations within a state/union territory in respect of multiple places of business located within the same state/union territory.

6 – Mandatory registration is required for only those e-commerce operators who are required to collect tax at source.

7 – Registration to remain temporarily suspended while cancellation of registration is under process, so that taxpayer is relieved of continued compliance under the law.

8 – The following transactions to be treated as no supply (no tax payable):

  • Supply of goods from a place in the non-taxable territory to another place in the non taxable territory without such goods entering in India
  • Supply of warehood goods to any person before clearance for home consumption and
  • Supple of goods in case of high sea sales

9 – Scope of input tax credit is being widened and it would now be made available in respect of the following:

  • Most of the activities or transactions specified in Schedule 3
  • Motor vehicles for transportation of person having seating capacity of more than 13 (including driver), vessels and aircraft
  • Motor vehicles for transportation of money for or by a banking company or financial institution
  • Services of general insurance, repair and maintenance in respect of motor vehicles, vessels and aircrafts which credit is available
  • Goods or services which are obligatory for an employer to provide to its employees under any law for the time being in force

10 – In case the receipient fails to pay the due amount to supplier with 180 days from the date of issue of invoice, the ITC availed by the receipient will be reversed but liability to pay interrest is being done away with.

11 – Registered perspm may issue consolidated credit/debit notes in respect to multiple invoices issued in a financial year.

12 – Amount of pre-deposit payable for filing of appeal before the Appellate authority and the tribunal to be capped at Rs 25 crores and Rs 50 crores respectively.

13 – Commissioner to be empowered to extend the time limit for return of inputs and capital sent on job work up to period of one and two years respectively.

14 – Supply of services to quality as exports, even if payment is received in Indian Rupees where permitted by RBI.

15 – Place of supply in case of job work of any treatment or process done on goods temporarily imported into India and then exported without putting them to any other use in India, to be outside India.

16 – Recovery can be made from distinct persons, even if present in different state/union territories.

17 – The order of cross-utilisatiion of ITC is being rationalised.

Source : Press Reports

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GST Products to get Cheaper

The GST Council on Saturday cut tax rates on 88 items, including footwear, refrigerator, washing machine and small screen TV, while the widely demanded sanitary napkins have been exempted from the levy.

The highest tax bracket of 28 per cent has been rationalised further with rates on daily-use items like perfumes, cosmetics, toiletries, hair dryers, shavers, mixer grinder, vacuum cleaners, lithium ion batteries, being lowered to 18 per cent. The revised tax rates will come into effect from July 27.

A look at the items that got cheaper.

GST on commodities slashed to 0%:

Sanitary Napkins

Supply of services by old-age homes

GST on commodities slashed from 28% to 18%:

Refrigerators

Water Heaters

Washing Machines

Televisions (up to 68 cm)

Vacuum Cleaners

Paints

Hair Shavers

Hair Curlers

Hair Dryers

Scent Sprays

Lithium-ion batteries used in mobile phones and electric vehicles

GST on commodities slashed from 18% to 12%:

Handbags including pouches and purses; Jewellery box

Wooden frames for painting, photographs, mirrors etc

Ornamental framed mirrors

Brass Kerosene Pressure Stove

Art ware of iron

GST on commodities at 5%:

Ethanol

Solid biofuel pellets

Handmade carpets and other handmade textile floor coverings (including namda/gabba)

Hand-made braids and ornamental trimming in the piece

Source : Press Reports

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

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