Category Archives: Startup Complainces

IMF Advises India To Consider Simpler GST Rate Structure

The GST is an indirect tax levied on the supply of goods and services in India. It came into effect on July 1, 2017

The International Monetary Fund or IMF today described the Goods and Services Tax (GST) as a “milestone reform” in India’s tax policy, but pushed for a simplified structure, saying the multiple rate structure and other features could give rise to high compliance and administrative costs.

In its annual country report, the International Monetary Fund also said that a dual rate structure with a low standard rate and an additional higher rate on select items can be progressive and preserve revenue neutrality.

The GST is an indirect tax levied on the supply of goods and services in India. It came into effect on July 1, 2017.

The IMF said that GST is a milestone reform in India’s tax policy, taking the important step of unifying and harmonising numerous indirect taxes across all states of the federation and the central government.

“Yet, the GST has a complex structure with a relatively high number of rates (and exemptions), which could be simplified without sacrificing progressivity of the current GST and with potentially significant gains from lower compliance and administrative costs,” it said.

A dual rate structure with a low standard rate and an additional higher rate on select items can be progressive and preserve revenue neutrality, while streamlining exemptions would further contribute to progressivity and reduce compliance and administrative costs, the IMF recommended.

The IMF said that with the consumption basket of the rich taxed at higher rates than that of the poor, the GST as presently designed has an effective tax rate rising with household consumption. A revenue-neutral reduction in the number of rates would raise the effective rates for poorer households while reducing those for richer households. This is the key cost of moving to a simpler system, it argued.

In its report the IMF said the implementation of the GST led to the key step of harmonising indirect tax rates on goods and services that previously differed across different states and the centre, and brought services into the state tax net.

However, India belongs in a small group of five countries having four or more GST rates: four non zero rates of five per cent, 12 per cent, 18 per cent, and 28 per cent; special low rates of three per cent on gems and jewelry and 0.25 per cent on rough diamonds; and a GST “cess” levied on demerit goods. In comparison, among 115 countries with VATs, 49 have a single rate, and 28 have two rates, it noted.

“The multiple rate structure and other features of India’s GST environment could give rise to high compliance and administrative costs,” it said.

The goods and services tax created a unified national market for the first time by lowering internal barriers to trade – effectively establishing a free trade agreement for a market of over 1.3 billion people, said Ranil Salgado, IMF mission chief for India.

The tax is also expected to increase the amount of economic activity taking place in the formal sector of the economy – leading to better quality and more reliable jobs, he added.

“As a result, the goods and services tax should improve productivity and boost medium term potential growth, while also creating room for the government to increase much needed social and infrastructure spending,” Mr Salgado added.

Source :  Press Reports

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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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Govt notifies due date for filing GST returns from July 2018 – March 2019

The government has modified the due date for filing of final GST sales returns by businesses with turnover exceeding ₹1.5 crore to the 11th day of the succeeding month

The government has modified the due date for filing of final Goods and Service Tax (GST) sales returns by businesses with turnover exceeding ₹1.5 crore to the 11th day of the succeeding month.

Currently, such businesses are required to file GSTR-1 or final sales return of a particular month by the 10th day of the succeeding month.

In a notification issued today, the Central Board of Indirect Taxes and Customs (CBIC) has stipulated that details of outward supplies for July 2018 to March 2019 has to be filed by the 11th of the succeeding month.

For businesses with turnover up to ₹1.5 crore, and who are required to file quarterly returns, the GSTR-1 giving details of outward supplies has to be filed by the last date of the subsequent month.

In the notification, the CBIC has said that the due date for filing quarterly return for July-September period is 31 October, while for October-December, 2018, period it is 31 January 2019.

GSTR-1 for the period January-March 2019 will have to be filed by 30 April 2019. The due date for filing summary sales return of GSTR-3B and payment of taxes for every month between July 2018 to March 2019 is the 20th day of the succeeding month.

Source : Press Reports

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LS clears amendments to CGST, IGST, GST compensation bills

The lower house has passed The Integrated Goods and Services Tax (Amendment) Bill, 2018, The Union Territory Goods and Services Tax (Amendment) Bill, 2018, The Goods and Services Tax (Compensation to States) Amendment Bill, 2018 and The Central Goods and Services Tax (Amendment) Bill, 2018.

Finance Minister Piyush Goyal today said the capacity to slash the GST rates on more items would go up as Goods and Services Tax (GST) revenues and the compliance rate increases and the economy formalises.

Goyal was speaking in the Lok Sabha after moving four bills seeking to amend the Goods and Services Tax (GST) laws for consideration and passage. The bills were Central GST (Amendment) Bill, Integrated GST (Amendment) Bill, GST (Compensation to States) Amendment Bill and Union Territory GST (Amendment) Bill.

His speech 45-minute speech was interrupted by Congress members who were in the Well raising anti-government slogans on various issues, including demanding setting up of a joint parliamentary committee to probe the Rafale jet fighter deal.

The Minister said the “GST Council has reduced rates on many items and services in the last round. We want the consumer to be burdened less by indirect tax.”

Elaborating, Goyal said that in the last one year, the GST Council has reduced rates on 384 items and 68 services. “186 items and 99 services were exempted from GST. Also sanitary pads were exempted from the GST,” he said.

He also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.

Highlights Of Proposed Return Filing Process

  • Taxpayers with a turnover threshold of up to Rs 5 crores can file a quarterly return but the taxes will have to be paid monthly. Forms sugam — for B2B and B2C supplies — and sahaj — for B2B supplies — have been proposed for this category.
  • Taxpayers above this threshold will have to file a monthly return. The due date for the same will be the 20th of the next month.
  • Suppliers can upload invoices anytime during the month and this would be visible to the buyers.
  • Based on the uploaded invoices, buyers will be able to claim input tax credit.
  • Buyers will be able to claim input tax credit for those invoices that are uploaded till the 10th of that month.
  • Taxpayers will be able to file an amendment return twice for any tax period.

The Minister said the “GST Council has reduced rates on many items and services in the last round. We want the consumer to be burdened less by indirect tax.” Elaborating, Goyal said that in the last one year, the GST Council has reduced rates on 384 items and 68 services.

“186 items and 99 services were exempted from GST. Also sanitary pads were exempted from the GST,” he said.

He also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.

Referring to the recent growth forecast about India by the IMF, he said “I think India’s economic growth will be better than this forecast.”

India is projected to clock an economic growth of 7.5 per cent in the 2019-2020 fiscal year on strengthening of investment and robust private consumption, the IMF had said in its latest report.

Source :  Press Reports

 

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

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Income Tax efiling: Haven’t filed your ITR yet? Now use updated forms to file tax return

With the extension of due date for filing tax returns, some simultaneous changes have also been made in the online as well offline ITR forms, among others. Here’s all you need to know.

All of you must be aware that for filing income tax returns for the Financial Year 2017-18, CBDT has extended the due date by one month, i.e. from 31st July 2018 to 31st August 2018. However, are you also aware about the changes made in the ITR forms?

In fact, with the extension of due date for ITR filing, some simultaneous changes have also been made in the online as well offline ITR forms. So, if you haven’t filed your tax return yet, then it becomes very important for you to know about these changes for a hassle-free filing experience. Here they go:

1. Invalidation of Offline ITR utilities & Removal of Saved Online ITR-1 & 4 Computations

If you are willing to file tax return using offline excel/ java utility & have also saved it, but haven’t filed it before 31st July, then such excel/ java file will no longer remain valid. As some changes have been made in the ITR forms, like Sec 234F, Sec 234A etc, you’ll have to download the new forms from the income tax e-filing website.

Similarly, “in case of online ITR-1 Form Sahaj, if you have saved a draft & did not file it before 31st July, 2018, then such draft will no longer be available for you. You will have to fill a new ITR-1 & 4 Form from the beginning”.

2. Changes in Verification Box

While filing tax return online/ offline, a verification is required to be made by the taxpayer under the head “Taxes Paid & Verification.” After the extension of due date for ITR filing, a new option of selecting the capacity of filing return has been provided. One can either file the return in the capacity of “Self” or in the capacity of “Representative”. This option wasn’t provided before. Further, in case of ITR -4, you will find 4 options, i.e. “Self or Representative or Karta or Partner.”

3. Due Date Extension for Late Filing Fee

The new Section 234F has been the most-discussed topic of this ITR filing season. And why not? This is for the first time that a late filing fee up to a maximum of Rs 10,000 will now be levied even for a single day delay in filing tax return. “This fee was supposed to be imposed if the taxpayer failed to file ITR till the due date, i.e. 31st July, 2018, which has now been extended to 31st August, 2018 for FY2017-18. As ITR filing due date has been extended, so has been the due date of Sec 234F penalty. Late filing fee will now be applicable when the tax return is filed after 31st August, 2018.”

4. Extension of Due Date for calculation of interest under Sec 234A

As per Section 234A of the Income Tax Act, interest is levied for delay in filing tax return. If you do not file tax return on or before the due date (i.e. 31st July, 2018, now extended till 31st August, 2018) and there is any tax liability, then interest @1% per month will be levied on the tax payable. The period of interest will be taken from the due date till the date when the return is actually filed. For this purpose, interest will be levied from 31st August, 2018.

“The extension of income tax return filing due date, thus, is a welcome move as it has provided much-needed relief to the taxpayers who have not filed their return yet. However, if you haven’t filed your ITR yet, it is time to act now. Plan your taxes, claim tax benefits and file tax return on time keeping in view all the changes made in the ITR forms as well as the return filing process. This will also help you avoid any penalty for late filing of return,” .

Source : Press Reports

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

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GST gets standing ovation from IMF: ‘Milestone reform’ in India’s tax policy; could be even better

The IMF today described the Goods and Services Tax (GST) as a “milestone reform” in India’s tax policy, but pushed for a simplified structure, saying the multiple rate structure and other features could give rise to high compliance and administrative costs.

In its annual country report, the International Monetary Fund also said that a dual rate structure with a low standard rate and an additional higher rate on select items can be progressive and preserve revenue neutrality.

The GST is an indirect tax levied on the supply of goods and services in India. It came into effect on July 1, 2017.

 

The IMF said that GST is a milestone reform in India’s tax policy, taking the important step of unifying and harmonising numerous indirect taxes across all states of the federation and the central government.

“Yet, the GST has a complex structure with a relatively high number of rates (and exemptions), which could be simplified without sacrificing progressivity of the current GST and with potentially significant gains from lower compliance and administrative costs,” it said.

A dual rate structure with a low standard rate and an additional higher rate on select items can be progressive and preserve revenue neutrality, while streamlining exemptions would further contribute to progressivity and reduce compliance and administrative costs, the IMF recommended.

The IMF said that with the consumption basket of the rich taxed at higher rates than that of the poor, the GST as presently designed has an effective tax rate rising with household consumption. A revenue-neutral reduction in the number of rates would raise the effective rates for poorer households while reducing those for richer households. This is the key cost of moving to a simpler system, it argued.

In its report the IMF said the implementation of the GST led to the key step of harmonising indirect tax rates on goods and services that previously differed across different states and the centre, and brought services into the state tax net.

However, India belongs in a small group of five countries having four or more GST rates: four non zero rates of five per cent, 12 per cent, 18 per cent, and 28 per cent; special low rates of three per cent on gems and jewelry and 0.25 per cent on rough diamonds; and a GST “cess” levied on demerit goods. In comparison, among 115 countries with VATs, 49 have a single rate, and 28 have two rates, it noted.

“The multiple rate structure and other features of India’s GST environment could give rise to high compliance and administrative costs,” it said.

The goods and services tax created a unified national market for the first time by lowering internal barriers to trade – effectively establishing a free trade agreement for a market of over 1.3 billion people, said Ranil Salgado, IMF mission chief for India.

The tax is also expected to increase the amount of economic activity taking place in the formal sector of the economy – leading to better quality and more reliable jobs, he added.

“As a result, the goods and services tax should improve productivity and boost medium term potential growth, while also creating room for the government to increase much needed social and infrastructure spending,” Salgado added.

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

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GST Council to consider merging of two GST Rates

The chairman of GST implementation committee Sushil Modi informed on Thursday that the GST Council is deliberating over merging the rates of 12 percent and 18 percent into a single slab of 14-15 percent, based on the stabilization of revenues.

For a country like India, he said, it was not possible to have a single GST rate. “The number of items under the 28 percent category may also be reduced but the states would be able to impose cess or surcharge on sin and luxury goods,” he said.

“It is surprising to see the manufacturing states like Maharashtra, Tamil Nadu, Gujarat and few others were experiencing a lesser shortfall in GST (goods and services tax) revenue collection despite being manufacturing states,” he told.

For Maharashtra, the shortfall was 2 percent, while for Tamil Nadu it was 3 percent, he said.

For consuming states like West Bengal, the shortfall was 10 percent while for Uttar Pradesh it was 8 percent and Bihar at 30 percent, he said on the sidelines of an Institute of Chartered Accountants of India (ICAI) event here.

The manufacturing states were apprehending that they would lose revenue as GST was a consumption-based tax.

“It is due to the huge base of the services sector in the manufacturing states and the shortfall they face now will be wiped out very shortly,” Modi, who is also Bihar’s deputy chief minister, said.

He said the priority of the GST Council for 2018 was to simplify GST returns.

Regarding e-way bill, he said that the council had taken a decision to attach RFID (radio frequency identification) tags on all vehicles travelling between states and also install GPS, which would help in integrating various databases and detect whether anyone was evading tax. He also urged the composite dealers to pay taxes as evasion was taking place.

The GST implementation committee chairman said that revenue collection might fall in the next 3-4 months due to rate cuts on a number of items totaling to Rs 70,000 crore.

The GST Council in its last meeting reduced rates of 450 items, Modi said, adding that all the states were taking compensation for the shortfall in revenue as the Centre had promised to them.

On bringing petroleum products under the GST, he said it would depend on when revenues stabilize.

“If petroleum products are brought under GST, there is no guarantee there will be an impact since they are linked to international prices and no state will like to lose revenue as they can levy the cess on them,” he said. Modi said, “I do not think it will come soon. It may take a long time.”

The GST Council would meet on Saturday to discuss the problems faced by the micro, small and medium enterprises (MSME) sector, he said.

Source :  Press Reports

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

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