Category Archives: SSI, Small & Micro Enterprise, MSME

Breather for Small Businesses: GST exemption cap up to Rs 40 lakh

On the rate cut on pending items such as cement, which is in the peak slab of 28 per cent, Jaitley said any further reductions would be considered only when revenues move up.

In a bid to provide relief to small taxpayers, especially micro, small and medium enterprises (MSMEs), the Goods and Services Tax (GST) Council Thursday decided to double the exemption threshold to Rs 40 lakh and hike the limit for composition scheme to Rs 1.5 crore from Rs 1 crore with effect from April 1. The threshold will be Rs 20 lakh for “some hilly/northeastern states”.

In its 32nd meeting, the Council also provided relaxation to composition scheme registrants to pay taxes quarterly and file a single annual return, along with extending the scheme to service providers and suppliers of goods and services up to a turnover of Rs 50 lakh with tax rate of six per cent.

States will have the option to choose between the two exemption thresholds — Rs 20 lakh and Rs 40 lakh — within a week’s time. With the hike in exemption threshold to Rs 40 lakh, about 20.64 lakh taxpayers, including composition scheme registrants, will have the option to move out of GST regime.

The annual revenue impact of the decision is estimated to be Rs 5,225 crore, assuming that 50 per cent of registered taxpayers will move out of GST, official sources said. The other 50 per cent is still expected to stay within the ambit of the indirect tax regime for supply chain benefits, sources said.

The Council also allowed Kerala to levy disaster cess on intra-state supply of goods and services within the state at a rate not exceeding 1 per cent for a maximum period of two years for revenue mobilisation in the aftermath of floods in the region last year.

Other proposals pertaining to rate cut on under-construction residential properties to 5 per cent and uniform tax rate for state-run and state-authorised lotteries were referred to two separate Group of Ministers (GoMs) after divergent views emerged in the Council meeting.

It is learnt that Opposition-ruled states, such as Punjab, raised concerns over lowering the rate on under-construction residential properties citing potential leakages and no assurance of benefits reaching the end-buyers.

Finance Minister Arun Jaitley said each one of the decisions taken by the Council is “intended to help the SMEs”. “For those who utilise the composition scheme, from April 1 onwards, it will be quarterly tax payment but only one annual return. So this takes off a lot of compliance burden on them,” Jaitley said.

Free accounting and billing software shall also be provided to small taxpayers by GSTN, the Finance Ministry said in a statement.

On the rate cut on pending items such as cement, which is in the peak slab of 28 per cent, Jaitley said any further reductions would be considered only when revenues move up.

The Finance Minister also said that there will be a facility to “opt up or opt down” with the two thresholds, Rs 40 lakh and Rs 20 lakh, depending on revenue. For service providers, the threshold will continue to be the current Rs 20 lakh.

“A few states had a view that if the turnover threshold is hiked to Rs 40 lakh, their assessee base gets eroded. So if they inform the Secretariat within a week then they would be given the option to opt down. Puducherry has kept this option…this is a one time exception and does not affect businesses with inter-state supplies,” he said.

Official data shows that if the GST Council would have approved a higher exemption threshold of Rs 75 lakh, it would have resulted in a revenue loss of Rs 9,200 crore per year.

The option to choose between the two exemption thresholds was given as some states insisted on the current threshold of Rs 20 lakh. “Threshold limit increased from 20 to 40 lakh in GST. Kerala & Chattisgarh insisted on 20 lakh. So states given option either remain in 20 or 40 lakh,” Bihar’s Deputy Chief Minister Sushil KumarModi posted on Twitter.

Revenue Secretary Ajay Bhushan Pandey said that even though the exemption limit currently is Rs 20 lakh, there are about 10.93 lakh taxpayers who are below Rs 20 lakh but are paying taxes under GST. “The increased (exemption) limit (of Rs 40 lakh) is applicable for those businesses who deal in goods and also do intra-state trade and not for those who do inter-state transactions,” Pandey said.

When GST was rolled out on July 1, 2017, the exemption threshold was fixed at Rs 10 lakh for hilly and northeastern states and at Rs 20 lakh for other states. Many hilly/N-E states, such as J&K and Assam, later opted for a higher exemption threshold of Rs 20 lakh.

 Source : Press Reports

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GST Rules: No e-way bill if returns not filed for two months

In a bid to force non-compliant businesses to file returns regularly, the finance ministry has barred e-way bill generation while transporting consignment if the supplier or recipient of the cargo has not furnished returns for two consecutive tax periods under Goods and Services Tax.

In a bid to force non-compliant businesses to file returns regularly, the finance ministry has barred e-way bill generation while transporting consignment if the supplier or recipient of the cargo has not furnished returns for two consecutive tax periods under Goods and Services Tax (GST).

The e-way bill is required to be generated from a common portal by a business for movement of consignment worth more than `50,000. For this, the supplier/recipient furnishes part A of the form with details of GST identification number, value of goods and invoice number among others. Further, part B of the e-way bill form is furnished by the transporter with details of vehicle used.

“This effectively means that businesses who fail to file returns cannot transport goods at all,” Rajat Mohan, partner at AMRG & Associates, said.

The tax department has not been able to improve compliance in a significant manner since GST was launched in July, 2017. Nearly 30% of eligible taxpayers continue to fail to file summary return GSTR-3B by the deadline, which is set on the 20th of every month.

For instance, nearly 29% of the eligible 98.4 lakh taxpayers had not filed returns for November by the end of December. Similarly, for composition scheme taxpayers who are required to file quarterly returns, over 25% of nearly 18 lakh eligible taxpayers had not filed returns for July-September quarter till December 27.

Combined with low compliance and truncated return-filing system, the tax department has found it difficult to rein in tax evasion as the flow of intelligence data is fragmented. The GST Council has announced that the new simplified return system would become operational from July this year. The cases of evasion has increased in the second year of GST.

Source :  Press Reports

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Govt Will Find Solution To Angel Tax Problems: Suresh Prabhu

Suresh Prabhu said that he has taken the issue to the Ministry of Finance

This announcement comes after startups and investors demanded exemption from angel tax with immediate effect

The protestors have demanded that the angel tax law be done away with

Minister of commerce and industry and civil aviation Suresh Prabhu said that the Centre will soon find a solution to the problems that startups are facing due to angel tax as he has taken the issue to the Ministry of Finance.

While speaking at the third edition of the National Entrepreneurship Awards, held on January 4 in Delhi, he also added that the government is completely supportive of new entrepreneurs and that efforts are being made to solve regulatory and financing issues for enterprises.

The angel tax issue has become a bane for the Indian startup ecosystem and there was quite an uproar after recent income tax notices and demand orders were issued to startups and angel investors.

Although the angel tax issue has been brewing for a long time, the recent trouble erupted when in November 2018, the Ministry of Corporate Affairs (MCA) sent notices to over 2,000 startups that have raised money since 2013.

Startup founders and angel investors took their anger to a Twitter campaign which saw participation from ecosystem enablers such as TV Mohandas Pai. Pai said that the “draconian” angel tax will hamper startup innovation in the country.

Some other well-known industrialists such as Mahindra Group chairman Anand Mahindra, Biocon CEO Kiran Mazumdar Shaw, entrepreneur-investors Snapdeal founder Kunal Bahl and Innerchef cofounder Rajesh Sawhney and others also tweeted in support of angel tax exemption.

Representatives from iSPIRT foundation, Swarajya Jagran Manch, and LocalCircles also met Prabhu as well as the joint secretary, Department of Revenue, and filed their submission asking for exemption of angel tax with immediate effect.

The protesters demanded that the government do away with the angel tax law as it would hamper the growth of startups in the country. In response to the protests, Prabhu had earlier tweeted that the government was considering the issue.

Also, in December 2018, the Central Board of Direct Taxes had issued a notice directing that no coercive step would be taken to recover the outstanding amount from the startups until any further development.

However, according to reports, the I-T department currently has no plans to take back the notices it has issued to the startups.

Source : Press Reports

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GST Rates Slashed – 28 Items remaining only in 28%

Computer Monitors, TV screens, video games, lithium-ion power banks, retreaded tyres, wheelchairs and cinema tickets are among products and services set to get cheaper, as they have been removed from the highest 28% bracket under the Goods and Services Tax (GST) regime, Finance Minister Arun Jaitley announced on Saturday.

Among the items consumed by the common man, only cement continues to remain, along with luxury and ‘sin’ goods, in the 28% bracket as the GST Council brought down the rates of all other categories of goods in a further rationalisation of rates that left only 28 items in the highest tax slab.

A total of 17 items and six services have been reduced, which will result in a revenue impact of Rs 5,500 crore for the full fiscal, Jaitley said, briefing reporters here after the 31st meeting of the Council.

“There are 28 items left in the 28% bracket if we include ‘luxury and sin items’, and items used by economically well-off sections of the society, only one item of common man’s usage – cement – remains in the bracket,” Jaitley said.

Second-hand tyres, video games, monitors and television screens up to 32 inches, and lithium battery power banks will now attract 18 per cent GST.

The GST on wheelchair accessories has been brought down to 5 per cent from the existing 28, which will also allow the payment of input tax credit that is not possible with zero tax,” Jaitley said.

Air-conditioners and dishwashers have been left untouched at the highest rate because these are not items of common use in India, he said.

Nearly 1,250 goods and services have been categorised under the four tax slabs of 5, 12, 18 and 28% under the GST regime.

Cutting the rates on cement and automobile parts would mean a combined revenue loss of Rs 33,000 crore, which the Council felt is “too steep” to be considered at this juncture, Jaitley said.

While the GST on third party motor vehicle insurance has been cut from 18% to 12%, cinema tickets up to Rs 100 have also been granted a similar reduction. Movie tickets costing more that Rs 100 have been brought down from 28% to 18%.

“It’s a mass entertainment medium and its revenue impact is about Rs 900 crore,” the Finance Minister said on the reduced tax on movie tickets.

GST on solar power generating plants and renewable energy items have also been reduced, he added.

This major tax rationalisation ahead of the 2019 general elections comes after Prime Minister Narendra Modi recently promised to bring 99% the goods under the 18% or lower GST slab.

Goods and Services Tax (GST), which subsumes 17 local taxes, was rolled out on July 1, 2017.

 

Source : Press Reports

 

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Gradual Reduction In GST Rates To Strengthen Tax Regime, Says Industry Body

With the latest rate cut announcement, only 28 items including cement, luxury and ‘sin’ goods remain in the highest tax bracket of 28 per cent.

Lauding the GST Council’s decision to reduce the tax rates on several items and services, Ficci’s President Sandip Somany on Sunday said a gradual reduction in GST rates would further stabilise and strengthen the tax regime.

The Goods and Services Tax (GST) Council in its 31st meeting on Saturday reduced the tax rates of 17 items and certain services, including computer monitors, TV screens, video games, lithium-ion power banks, retreaded tyres, wheelchairs and cinema tickets.

“The GST council has followed a pragmatic policy by bringing down the rates gradually, taking into consideration the revenue realisation and affordability, and this will stabilise and strengthen GST further,” a Ficci statement quoted Somany as saying.

“The government has been pro-actively engaging with various sectors and I am confident that going forward the council would continue to address issues,” he added.

The newly elected President also appreciated the council’s decision to extend the due date for filing the GST annual return and GST audit to June 30, 2019.

The industry body observed in the statement that with likely rate cuts on more items in the council’s next meeting and the indication that the remaining issues pertaining to GST application and administration would be resolved speedily, the tax regime is set to yield larger gains for the economy.

COMMENT

With the latest rate cut announcement, only 28 items including cement, luxury and ‘sin’ goods remain in the highest tax bracket of 28 per cent.

Goods and Services Tax (GST), which subsumes 17 local taxes, was rolled out on July 1, 2017.

 

Source : Press Reports

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GST rates slashed: All things that will get Cheaper

GST Council Meet: The Goods and Services Tax Council on Saturday reduced the rates on many items, including television, computers, power banks. Here’s a list of the revised tax rates

In a Christmas bonanza to the common man, the GST Council Saturday reduced tax rates on 23 goods and services, including movie tickets, TV and monitor screens and power banks, and exempted frozen and preserved vegetables from the levy. The reduced rates are likely to come into effect from January 1, 2019, Finance Minister Arun Jaitley told reporters after the 31st meeting of Goods and Services Tax (GST) Council here.

Of the 23 goods and services on which rates have been slashed, tax rate on seven items in the 28 per cent slab has been brought down. With this, only 28 goods are left in the highest 28 per cent tax bracket.

The goods on which GST has been lowered to 18 per cent from 28 per cent at present include pulleys, transmission shafts and cranks, gear boxes, retreaded or used tyres, power banks of lithium ion batteries, digital cameras, video camera recorders and video game consoles.

The 28 per cent slab is now restricted to only luxury and sin goods apart from auto-parts and cement – the tax rate on which could not be cut due to high revenue implication.

The Goods and Services Tax (GST) Council meet on Saturday ended with tax rates being cut for 33 items, including some consumer goods such as televisions, tyres, monitors and movie tickets.

In a bid to fulfill what Prime Minister Narendra Modi hinted at a few days ago that almost 99 per cent items will be brought under the 18 per GST slab, Finance Minister Arun Jaitley on Saturday announced that the 28 per cent slab will now be applicable only on 34 items, which are mainly luxury goods and sin items.

Jaitley said, “There are 28 items left in the 28 per cent bracket if we include luxury and sin items. 13 items are from automobile parts and one is cement. Cement’s revenue is Rs 13,000 crore and automobile parts revenue is Rs 20,000 crore. If they are brought down from 28 per cent to 18 per cent implications are of Rs 33,000 crore.”

Thus, there will be no tax cuts on cement and automobile parts.

The new tax rates will be effective starting January 1, 2019.

HERE’S A LIST OF ALL ITEMS THAT WILL GET CHEAPER WITH THIS REVISION

Monitors
32-inch television screens
Tyres
Power banks of lithium-ion batteries
Movie tickets
Air travel of pilgrims
Pulleys, transmission shafts
Gear boxes
Video game consoles and other games and sports requisites
Digital cameras, video recorders
Parts and accessories for carriages meant for disabled persons
Walking stick
Vegetables, frozen vegetables (branded and put in a unit container)
Flyash blocks
Music books
Solar power generating plant
Renewable energy devices
Insurance premium on goods-carrying vehicles
Services supplied by banks to Basic Saving Bank Deposit (BSBD) account holders

Goods and Services Tax (GST), which subsumes 17 local taxes, was rolled out on July 1, 2017.

Source : Press Reports

 

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India wants a simpler, easier GST complaint form for consumers

India wants to make it easier for consumers to complain against companies that may not be passing on the benefits of lower goods and services tax (GST) after having slashed rates on a number of items of daily use and Union finance minister Arun Jaitley pledging a single standard slab.

The anti-profiteering format will be simplified so that complaints can be made on a single page, said officials with knowledge of the matter.

The current format requires consumers to fill in details such as the Harmonised System of Nomenclature (HSN) code of an item, maximum retail price, tax rate, pre and post-reduction price, all of which requires the guidance of an expert.

“You need a professional to fill the form,” said Bihar deputy chief minister Sushil Modi and a member of the GST Council.”Lot of unwanted information is sought from consumer, making it difficult for him to fill it.”

The law committee has been asked to work on a new format to make it easier for consumers to approach the authorities following demands from some states to this effect. “It is being further simplified,” said one of the officials cited above.

A form that’s easier to fill will allow more consumers to bring instances where benefits have not been passed on to the attention of the National Anti-profiteering Authority (NAA), which can also receive complaints by email, on its website and via a helpline.

The GST Council has cut rates on several consumer items since the landmark indirect tax was rolled out on July 1, 2017. The latest round of reductions, announced on December 22, applied to 23 items including movie tickets, cameras, TV screens and monitors.

Further, the council is likely to cut the GST on under-construction flats to 5% without input tax credit from 12% at its next meeting on January 10.

India had introduced the anti-profiteering framework, on the lines of Malaysia and Australia, under the GST regime to protect consumers from undue price increases by companies and to ensure they benefit from price reduction thanks to slab reductions and input tax credit.

The anti-profiteering framework is enshrined in the GST law. It comprises the NAA, a standing committee at the central level, screening committees in every state and the Directorate General of Safeguards for investigation. The state-level screening committees and the standing committee at the national level form the first level of examination of complaints. A case is referred to DSG for detailed investigation if a prima facie case is established. The NAA takes a final decision on whether profiteering took place after examining the investigation report.

Goods and Services Tax (GST), which subsumes 17 local taxes, was rolled out on July 1, 2017.

 

Source : Press Reports

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