Category Archives: Startup

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

Advise for contacting VidyaSunil & Associates;

Website :  http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

Advertisements

GST Council meeting: Here are all the changes Announced

The GST Council relaxed the tax exemption limit to Rs 40 lakh from the earlier cap of Rs 20 lakh during its 32nd meeting on Thursday. The all-powerful panel also decided to extend the composition scheme to traders from informal sector rendering services or mixed supplies with a turnover up to Rs 50 lakh.

Briefing the media after the meeting, Finance Minister Arun Jaitley said that the threshold limit has been doubled to Rs 40 lakh from Rs 20 lakh. The exemption limit for small states has also been increased to Rs 20 lakh from Rs 10 lakh.

“The states will have the discretion to opt up or opt down the exemption limit. They will have to inform the Secretariat within a week if they wish changes in their exemption limit,” Jaitley said.

The exemption limit is the threshold of annual turnover above which companies have to mandatorily register under the GST regime. Regarding exemption limit, a dual threshold system is maintained, a lower cap for North-eastern and hilly states flagged as special category states and a higher one for the rest of India.

The GST Council also decided that service providers and those who render mixed supplies of goods and services with a turnover up to Rs 50 lakh in the informal sector will be entitled to the composition scheme under the GST regime. The composition rate for service providers in the informal sector has been pegged at 6 per cent.

“This 6 per cent is lower than the service tax paid by service providers with turnover up to Rs 50 lakh,” Jaitley said during the media briefing.

In the meeting today, the GST Council also decided to allow Kerala to levy a cess to cope up with the natural calamities it faced last year. The southern state was ravaged by the worst floods it had seen in years, leaving a property worth crores in shambles.

Kerala will now be able to impose a cess of 1 per cent on intra-state sale of goods and services for a maximum of two years. There is a provision in the GST Act which allows the Council to permit cess for coping up with natural calamities, Jaitley said.

The two items which did not see a decision today were GST on real estate and uniformity of taxation on lottery or other issues arising out of lottery, due to “diverse opinions” on these matters. Two ministerial panels have been formed to take a closer look at these items before they can be taken up again by the GST Council.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. However, GST is not levied on buyers of real estate properties for which completion certificate has been issued at the time of sale.

“A seven-member GoM has been formed to look into the GST on real estate. Another GoM with representation from lottery developing and selling states will be formed for uniformity of taxation on lottery or other issues arising out of lottery. These ministerial panels will give their recommendations in the next meeting,” the Finance Minister said.

In its previous meeting, the GST Council had slashed tax rates on seven items previously placed in the highest tax slab. Rationalising the 28 per cent tax slab, the council had pruned the GST rates on six items to 18 per cent slab and one item to five per cent slab. In total, the panel had reduced rates on 23 goods and services.

Also read: How unscrupulous businesses are gaming the GST system

LIVE Updates

03:10pm: Service providers and those who render mixed supplies of goods and services with a turnover up to Rs 50 lakh in the informal sector will be entitled to the composition scheme under the GST regime. The composition rate for services has been put at 6 per cent, Finance Minister Arun Jaitley said.

03:15 pm: This 6 per cent is lower than the service tax paid by service providers with turnover up to Rs 50 lakh, Jaitley added.

03:18 pm: The GST Council has extended the exemption limit under the GST regime to Rs 40 lakh from Rs 20 lakh. For hilly and small states, the exemption limit has been extended to Rs 20 lakh from Rs 10 lakh.

03:20 pm: If small states wish to increase their exemption limit from the revised 20 lakh to Rs 40 lakh, they have been given the discretion to opt up, Jaitley said. They will have to inform the Secretariat within a week.

03:20 pm: Kerala is now entitled to impose a maximum cess of 1 per cent for two years on intra-state sales, the Finance Minister said. This has been done to help the state cope up with natural disasters, as per the provision of the GST Act.

03:22 pm: There were diverse opinions on items related to real estate and uniformity of taxation on lottery or other issues arising out of lottery, Jaitley said.

03:22 pm: A seven-member GoM has been formed to look into the GST on real estate. Another GoM with representation from lottery developing and selling states will be formed for uniformity of taxation on lottery or other issues arising out of lottery. These ministerial panels will give their recommendations in the next meeting, the Finance Minister said.

03:25 pm: Each one of these decisions today are meant to help the SMEs, Jaitley said.

03:26 pm: The issue of real estate was sent to GoM because it needed deeper examination, Jaitley said.

The 32nd Goods and Services Tax Council meeting, chaired by Union Finance Minister Arun Jaitley on Thursday, announced various changes with significant relief to small businesses and enterprises. Here is a list of announcements made by the government:

Higher exemption threshold limit for goods suppliers

The council approved doubling of the exemption threshold under Goods and Services Tax (GST) regime to Rs 40 lakh along with raising the turnover limit under composition scheme to Rs 1.5 crore from current Rs 1 crore with effect from April 1. States, however, will have the option to choose between the two exemption thresholds of Rs 20 lakh and Rs 40 lakh and will have to intimate their decision within a week.

Turnover Limit increased for existing Composition Scheme

The limit for annual turnover for availing composition scheme for goods will be increased to Rs. 1.5 crores. The special category states comprising of northeastern states, Jammu and Kashmir, Himachal Pradesh and Uttarakhand are given one week time to decide upon the composition limit in their respective states.

Composition scheme

Under the composition scheme, traders and manufacturers can pay taxes at a concessional rate of 1 per cent, while restaurants pay 5 per cent GST. There are over 1.17 crore businesses which have registered under the GST, which was rolled out from July 1, 2017. Of these over 18 lakh have opted for composition scheme. While a regular taxpayer has to pay taxes on a monthly basis, a composition supplier is required to pay taxes on a quarterly basis and is not required to keep detailed records compares with a normal taxpayer under GST.

Accounting and Billing Software

Free of cost accounting and billing software shall be made available to small taxpayers by Goods and Services Tax Network (GSTN).

Real Estate

It is decided that a seven-member group of ministers will be constituted to examine the proposal of giving a composition scheme to boost the residential segment of the real estate sector.

Revenue mobilisation for Natural Calamities

The Council also allowed Kerala to levy a 1 per cent disaster cess on intra-state sale of goods and services for a period of up to two years to mobilise revenues to meet the cost of rehabilitating parts of states that were ravaged by floods last year.

Source : Press Reports

Advise for contact :

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

Advise for contacting VidyaSunil & Associates;

Website :  http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

 

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

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

Advise for contacting VidyaSunil & Associates;

Website  :  http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

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

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

Advise for contacting VidyaSunil & Associates;

Website :  http://www.vidyasunilassociates.com

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

Small businesses likely to be off GST radar; council to decide on Thursday

The GoM also recommended a composition scheme for service providers with an annual turnover up to Rs 50 lakhs

The Goods and Services Tax (GST) Council will take a decision on increasing the turnover threshold for mandatory registration under the ambit of GST on Thursday, the group of ministers (GoM) said on Sunday. The threshold, currently at Rs 20 lakh, is likely to be increased to about Rs 50 lakh, which will benefit small businesses and micro-small and medium enterprises (MSMEs) with turnover Rs 20-50 lakh.

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

 

Source : Press Reports

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

Advise for contacting VidyaSunil & Associates;

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

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

 

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

 

Advise for contacting VidyaSunil & Associates;

 

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819

 

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

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

Advise for contacting VidyaSunil & Associates;

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819