GST rates changed for 30 items, deadline for GSTR 1 filing extended to October

In a significant development, the government today decided to rejig GST rates for as many as 30 items. The decision was made at the GST Council meeting held in Hyderabad.

If GST was making you anxious about your small car buying plan this Diwali, there is some relief for you. Finance minister Arun Jaitley announced no change in tax for small cars.

“There will be no additional burden on small car buyers,” the FM said after the 21st meeting of the GST Council.

Jaitley said there will be a status quo on tax rates on 1200cc petrol and 1500 cc diesel cars. The council decided to increase to raise total tax on midsize cars from 43% to 45%. Tax on large cars was raised to 48% from 43%.

On SUVs, total tax would now be 50% instead of 43%. There was no increase in total tax on 13-seater vehicles.

Here is how it stacks up for now:

► Small cars, 13-seater vehicles & hybrid cars : No change
► Mid-size cars increased by 2%
► Large cars increased by 5%
► SUVs increased by 7%

Progress of implementation was on of the biggest issues before the GST Council, FM Jaitley told the media after the meeting.

The FM said overall GST collection has been quite robust at Rs 95,000 crore for July, with 70% of those registered already filing their returns.

The council reviewed the working of the GST network (GSTN), which had got overloaded on two or three occasions.

The deadline for filing GSTR 1 has been extended to October 10, Jaitley said. The original deadline was tomorrow, i.e. September 10.

The government decided to appoint a committee to ensure smooth transition to the new tax regime, Jaitley said.

The four key issues discussed in the meeting were- imposition of cess on cars, reduction of rate in aam aadmi goods, car leasing issues and new framework for trademark.

GST, the four-tier tax structure of 5, 12, 18 and 28 percent, came into force on July 1.

GST Council is a federal forum with both centre and states in India on board. It is made of the union finance minister (as Chairman), the union minister of state in charge of revenue or finance, the Minister in charge of finance or taxation or any other minister, nominated by each state government.

The GST council has decided that small traders with turnover below 20 lakh selling handicraft outside their state will not have to register.

Source : Economic Times

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Hope anti-profiteering law won’t have to be used: FM Arun Jaitley

Finance minister Arun Jaitley has expressed the hope that the government
will not have to use the anti-profiteering provision of the goods and services tax (GST) and said prices should drop overall under the new regime to be put in place on July 1.
Jaitley said in an interview that there may be some challenges initially, but expects
companies to get accustomed to GST quickly, calling for patience as the reform is rolled
out.
“On an overall basis, the net weighted average of the whole consumption basket is less
than what it was,” he said. “So, in terms of weighted average it should come down.”
India is one of the few countries that has shown it has the ability to carry out structural
reforms, Jaitley said, citing insolvency laws, overseas investment reforms and the Air India disinvestment plan.
On some sections of industry seeking a GST deferral, the minister said the government
has been atypically ahead on this count.
“Normally, in a reform process, the private sector is ahead of the government,” he said.
“This time government seems way ahead of private sector. For an industry association to
say postpone it in face of a constitutional amendment was highly regrettable.”
The minister expects companies to pass on the benefits of GST. “There is already an inbuilt mechanism of anti-profiteering clause,” he said. “I hope we do not have to use it. It should act as a deterrent.” GST is expected to reduce incidence of taxation on goods by
providing full credit for taxes paid on inputs.
The anti-profiteering clause has harsh provisions including cancellation of GST registration of those not sharing gains.
He said GST — which replaces 17 taxes such as central excise duty, service tax, value-added tax, and 23 cesses —was an efficient and simple tax.
“There will be challenges initially,” he said. “There can be hiccups even in the most perfect technology but the beauty of a perfect technology is that it removes those hiccups as soon as possible. This is a reform that is in the interest of the common man, traders,
businesses, industry and the whole country. You need to be patient.”
In response to a question on the possible boycott of the proposed midnight launch ceremony by some political parties, Jaitley said GST is a ‘saanjhi vyavastha’ (joint mechanism) for the whole country that was finalised with the contribution and support of all parties.
“We have had consultation at every stage of the formulation of the new tax. At the time of the constitutional amendment, we incorporated suggestions made by Congress,” he said. “All bills have been approved by them. Their state governments have passed
GST legislations. Finance ministers of the states where their party is in power have participated in the council and agreed to the GST framework.”

He said India had created a federal institution in the GST Council and hoped that the tradition of decision-making by consensus will be followed in future as well.
KEY POLICY CHANGES 
India is one of the only countries making such key policy changes, he said.
“The whole world accepts that if anyone has shown the potential to carry out structural reforms (in the current global situation), it is India only. We carried out FDI reforms, we got largest FDI in the world… The government and prime minister have shown that political-level corruption can be ended,” he said.
Source : Economic Times
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Retailers need to file single GST return every month: Revenue Secy

Days before the rollout of the landmark GST, the government today sought to dispel the notion that the new tax regime will be cumbersome and compliance- heavy, saying taxpayers need to file only one return every month, similar to what they presently do.

In an interview to PTI, Revenue Secretary Hasmukh Adhia said the notion that assessees will have to file three returns every month is unfounded and retailers or B2C dealers need not give invoice wise details every month.

“Eighty per cent of the businesses will have to simply file total turnover detail in return because they are all B2C dealers or retailers. Return filing is very easy, people need not worry about filing process, it is very transparent and is done by machine,” Adhia said.

Explaining filing of returns, he said when a supplier uploads details of sale invoices, a GST Return-1 is generated by 10th of next month.

The details from the suppliers in GSTR-1 automatically gets updated in the GST Return-2 (GSTR 2) of the purchaser. GSTR-2 is to be filed by 15th of next month and is just a few clicks on computer. GSTR-2 doesn’t need full filing of return.

“GSTR 2 is not to be filed by anybody. It will be appearing in the computer on their own account and they can confirm it. If there is any transaction missing in purchase which computer is not showing because the person from whom you bought has forgotten to put it, then you get a right to add it. It is an auto-populated return. Click it and accept it online,” he said.

Adhia said retailer and B2C suppliers need not worry about the return filing procedure as they have to file only turnover wise detail in GSTR-1.

While only B2B dealers have to file both GSTR-1 and GSTR- 2, retailers do not need to file the GSTR-2 as they have to only match with what the dealer has uploaded on the GST Network.

“Ordinary people need not worry…It is not at all complex and people need not worry. 80 per cent of the businesses will have to just file total turnover,” Adhia said.

By 17th of the month, both the supplier and the recipient would have to reconcile the invoice details and file the third return (GSTR-3) by 20th of the month.

GSTR-3 is combination of GSTR-1 and 2 and is computer generated. It gives the summary of the total output tax liability, input tax credit and the difference is the tax liability for the month.

“Out of three returns which are prescribed, only one return has to be filed by the retailer. The remaining two returns are auto-generated by the computer which is only a facility given to them to see so that if there is any mistake they can correct it,” Adhia said.

Adhia said only in case of B2B dealers, invoice wise details are required. “Those number of dealers are very few in the country”.

The GSTN will launch an excel sheet format for B2B dealers so that they can keep the invoice wise details ready and can upload it on the 10th of every month.

In the excel sheet, the businesses would have to give details of transaction, like invoice number, GSTIN of buyer, commodity sold or services given, value of the goods or services sold, the tax incidence and taxes paid.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, has already relaxed return filing rules for businesses for the first two months of the rollout of the new indirect tax regime.

As per the revised return filing timeline decided by the Council, for July, the sale returns will have to be filed by September 5 instead of August 10. Companies will have to file sale invoice for August with the GST Network by September 20 instead of September 10 earlier.

As regards traders, manufacturers or eateries opting having turnover up to Rs 75 lakh and have opted for composition scheme, they will just have to give their total turnover in GSTR-1 and no invoice wise detail is required.

These businesses will have to file just one return every three months, Adhia said.

Such returns are to be filed by 18th of the month in the succeeding quarter.

Source : Times of India

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Details required for GST Registration

  1. Valid E-mail Address :

 

  1. Valid Mobile Number :

 

  1. Bank Account details

Bank name:

Account number:

Account type:

IFSC Code of all the bank accounts maintained:

  1. Details related to business

Registered name as per VAT:

Registered name as per PAN:

PAN number of the Business:

Constitution of Business: Partnership Firm / Private Ltd. Co. / Individual,

Address of Business:

Details of State VAT: Karnataka

Excise Registration No. :

   Note: Since GST Number is pan based, only one registration in a state can be migrated to the GST Portal.

          Details related to promoters/ partners/ directors

Name:

Father’s name:

Date of Birth:

Address:

Email ID:

Cell No. :

PAN number:

Passport (if not a citizen of India)

 

Details related to authorized signatory

Name:

Father’s name:

Date of Birth:

Address:

Email ID:

Cell No. :

PAN number:

Passport (if not a citizen of India)

Note: More than one authorized signatory can also be added.

 

Details related to Principal Place of business

Address:

Email ID:

Phone number:

 

Business Premises: Owned or leased,

Nature of activity carried on:

 

Details related to Additional place of business:

Address

Email ID

Phone number

Owned or leased

Nature of activity carried on

 

Details of goods and services supplied

HSN code for products for products / SAC code for services.

Maximum 5 products can be added in the application.

 

Documents Required for Enrollment  

Proof of Constitution of Business

  • In case of Partnership firm: Partnership Deed of Partnership Firm

(PDF and JPEG format in maximum size of 1 MB)

  • In case of others:

Relevant Proof of Constitution, (In case of Proprietors, Existing VAT Registration certificate / Central Excise Registration Certificate / ST registration certificate be uploaded)

Photograph of Promoters/ Partners/ Karta of HUF JPEG – Size 100 KB

 

Proof of Appointment of Authorized Signatory (Board Resolution in case of Companies / Authorization letter in case of others entities)

In file PDF or JPEG with Size 1 MB

 

Photograph of Authorized Signatory: In JPEG file with Size 100 KB

 

Proof of Principal place of business: Valid Rental Agreement or Sale Deed / Municipal Tax Receipt PDF or JPEG – Size 1 MB

 

Opening page of Bank Passbook/ Statement containing Bank Account Number, Address of Branch, Address of Account holder and few transaction details PDF and JPEG : Size 1 MB

 

Digital Signature Formalities

Please sign across the photo @ specified place with Blue ink only. Kindly do not fill the application; we will take care of this.

 

Provide PAN Copy and for Address Proof*** (Please read : Address Proof document as in Application Form – Kindly provide one of those)  duly attested by your personal bank manager.  Attestation shall be in “Blue Ink Only”.

 

Kindly take note that the Bank Manager has to specify the following below details without fail:

  1. Name
  2. Designation
  3. Office address
  4. Contact no. (Office landline or his cell no.) Along with their
  5. Email id.

 

You will receive a verification call to the given mobile number and DSC passwords will be sent to the provided mail ID ( for Download)

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GST effect: Used car business could impact the new car market in India

Organized players in the used car market normally pitch in with an over 20 percent growth. There has been a rising trend of customers veering away from the traditional middlemen in favour of recognised brands, assurance, warranty, and accountability. In addition, present day buyers of second hand vehicles are well-informed and aware of what competition is offering and hence movement towards organized dealers.

The Goods and Services Tax (GST) that will be enforced from 1 July has the potential to realign the largely unorganized used car market into a more organized frame work say industry leaders.

Interestingly, sale of old and new cars is inextricably linked. It is estimated that about 27-28 percent of new car sales accrue through exchange of old models. So if new car sales are pegged at about 3 million, we could be looking at about 8,40,000 used cars being exchanged for new ones at pre-owned outlets.

The GST will be paid on the value of the exchange. For instance, if the new car costs Rs 6 lakh and exchange value of the old car is Rs 1 lakh, the customer will pay Rs 5 lakh but GST will be paid on Rs 6 lakh.

The GST slabs that are yet to be clarified for the pre-owned vehicle segment could well toe the line of new vehicles, with a lag of a couple of months. Cars will attract a base GST rate of 28 percent excluding cess.

Amit Bhagat Partner -Indirect Taxes, PwC India told ETAuto that the dealer will pay GST under reverse charge and take credit of it while the customer will not pay any GST. The dealer can use this credit to pay GST when he further sells the vehicle. “The major issue would be rate of tax which will be as per the new car – ranging between 28 percent to 53 percent whereas currently only VAT is charged at that leg at 15 percent maximum. To be tax cost efficient, dealers will have to be compliant and optimize on their tax credits.”

Source:  Indian Blue Book
Source: Indian Blue Book

Other applicable taxes and levies such as road tax and lifetime tax for the vehicle do not form part of the GST structure and may continue.

GST effect: Used car business could impact the new car market in IndiaTo understand just how critical used cars are to the new car market, Jagdish Khattar managing director of Carnation Auto and former MD of Maruti Suzuki India points out that when a new car is bought, looking at the resale price is very important. “As a manufacturer we used to fix the resale price. If today the Maruti brand is selling so much then it is because it has fixed the resale price at a particular price at True Value outlets.” This also ensures that brokers don’t sell at a different price and dupe the customer.

In fact, Maruti Udyog was the first to enter the organized pre-owned car market with its True Value outlets in 2001 under Khattar’s tenure.

“That is why the used car market is so critical for selling new cars, as people look at the initial price. Keeping the resale value high and maintaining exchange for the new one is important for a manufacturer,” he adds. He founded Carnation Auto, a multi-brand sales and service outlet for new and used cars after demitting office at the country’s largest carmaker.

Today Maruti Suzuki has around 700 outlets of second hand cars. When a customer sells an old Maruti Swift at a True Value outlet for say Rs 3.5 lakh, he can buy a new car in exchange by paying another Rs 5 lakh and upgrading to a new Ciaz sedan under the same roof.
Following up on it, in 2003-04, Maruti Suzuki started the across the counter exchange bonus scheme that offered a Rs 15000 discount for exchanging a new Maruti for an old Maruti model boosting old car sales.

Meanwhile, clarity from the GST Council pre-owned vehicle slabs is expected within the next two weeks.

“If new car prices start falling post GST, expect the same for a second hand vehicle after a couple of months,” says Dr Nagendra Palle, managing director of multi-brand used car business of Mahindra First Choice Wheels (MFCWL).

As dealers earn around a 10 percent margin on second hand vehicle sales, a high tax structure could dent their margins. Palle feels that new car sales would see a marginal dip in prices while SUVs and luxury cars would see a larger drop post GST.

Transiting towards organized structure

Palle is bullish of a positive spin-off of the new tax regime in that it will see the formal shift of the predominantly unorganized second hand vehicle market towards a more consolidated and organized framework.
“Going forward, GST will be very positive for the industry as at present there are about 30 cars per 1000 people in India so it is pretty low on the upside. I think the demand for passenger vehicles will rise and the second hand car market will get a boost becoming more organized,” he adds.

Bhagat feels that GST may stipulate that businesses with a threshold limit of around Rs 20 lakh may be drawn into the tax fold. This will move them towards an organized status. “Tax compliance will become non-evasive after the promulgation of GST, that will consolidate the unorganized sellers,” he adds.

At present, the second hand car market in India is largely unorganized and fragmented. The report on the pre-owned car market by the Indian Blue Book of MFCWL, compares dealers across USA, China and India. Compared to the US, most new car dealers in India and China are not involved in used car retail. The volume of pre-owned vehicles sold per dealer per year in India is pegged at 71, in China 75 and in the US 533.

Source:  Indian Blue Book
Source: Indian Blue Book

In India, organized dealers account for 19 percent of the total used car market, with the semi-organised segment contributing 52 percent and unorganized dealers 29 percent. In comparison, in China, the unorganized dealers are pegged at 73 percent and franchisee dealers at 27 percent.

In the US, franchisee dealers chip in with 54 percent of the market share and independent dealers 46 percent. In India, metros contribute a large 45 percent chunk of the sales with the balance coming from the non-metros.

Normally the pre-owned car market grows at a higher pace to the new car segment with the organized players contributing a major chunk to this growth. For instance, if new car sales report a 10-12 percent growth, a 13-16 percent uptick for the old car segment is expected.

Organized players in the used car market normally pitch in with an over 20 percent growth. There has been a rising trend of customers veering away from the traditional middlemen in favour of recognised brands, assurance, warranty, and accountability. In addition, present day buyers of second hand vehicles are well-informed and aware of what competition is offering and hence movement towards organized dealers.

On growth path

According to a report by Frost and Sullivan, the used car market is pitted to grow at a CAGR of 12.5 percent from 3.94 million units in 2016 to 7.1 million in 2021. While hatchbacks dominate the below Rs 5 lakh price range, SUVs and MUVs hold sway in the above Rs 8 lakh bracket.

In addition, only a fifth of the used luxury car segment is organized that is led by Mercedes Benz with a 50 percent market share followed by BMW with a 32 percent share of the total pie.

In terms of prices, while the average used car price in the US ranges between Rs 11 lakh and Rs 12.5 lakh, in India it hovers around Rs 2.85 lakh to Rs 3.15 lakh. About 90 percent of the used car sales come from the below Rs 10 lakh price bracket, maintains the Frost and Sullivan report.

Changes in the field of safety, emissions as well as connectivity trends are expected to further reduce the holding period of the used car going forward with only 1 in 3 used car customers considering a new car for purchase.

Moreover, the general sentiment prevailing in the second hand car market reveals that sales of diesel cars have tripped with the petrol bouquet comprising 65 percent with diesel contributing the balance 35 percent. A few years earlier, diesel accounted for 45 percent of the share in new cars and the same ratio was seen in the pre-owned car market.

At Berkeley Hyundai, Hyundai Motor India’s pre-owned outlets an executive speaks about the used car market looking up post GST. The outlet sells multi brand cars of which 70 percent are petrol and the balance diesel.

At a Maruti True Value showroom in NCR, optimism prevails about GST as well. The showroom offers warranty on Maruti used cars though it houses other brands as well that come through exchange. The showroom sells about 200-250 cars in a month while a Berkeley Hyundai outlet in Chandigarh markets about 50-60 cars monthly.

Source:  Indian Blue Book
Source: Indian Blue Book

However a common constraint facing this market especially in large metros pertains to the sourcing of vehicles for the second hand car market. Currently many online portals give leads and operate as classified search engines on where to shop for automobiles but sales take place on ground zero.

To ease the issue, Carnation Auto has tied up with half a dozen corporates and leasing companies to maintain a steady supply of vehicles after they complete their service with the respective companies. A benefit is that such vehicles maintain proper records and are of good quality, with limited wear and tear.

With most of the authorised dealerships conducting about 120-140 checks on each second hand vehicle before purchase, besides providing certification and warranty post sales, the future augurs bright for the growing pre-owned car market. GST is expected to further oil the wheels it runs on.

Source : Economic Times

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Karnataka assembly unanimously passes state GST bill

With less than a month left for the rollout of the GST, the ‘Karnataka Goods
and Services Tax Bill, 2017’ was unanimously passed by the state assembly here today.
Before Karnataka, as many as 24 states and Union Territories had passed the State
Goods and Services Tax (SGST) bill in their respective legislative assemblies.

As per the GST Constitutional amendment, all states have to pass SGST bills by
September 15, 2017, failing which they will lose their taxation powers.

Piloting the bill, Karnataka Chief Minister Siddaramaiah said the state has always been at
the forefront of issues like implementing tax reforms, including VAT.

“Even the World Bank has acknowledged Karnataka as the most progressive states in
implementing tax reforms,” he added.

Countering this, Vishweshwara Hegade Kageri (BJP) said the image of the state took a hit
for not being the first state to pass the SGST bill, especially after being the first state to implement VAT.

“Karnataka should have been first to have agreed to implement GST, especially after the state was first to implement VAT in the country… But this did not happen… This is one of the examples where it hurt the image of Karnataka being a progressive state,” the BJP
leader said.

Kageri also slammed Siddaramaiah for not agreeing to implement GST on earlier occasions despite 50 per cent of the states agreeing to do so.

“Everybody knows the hurdles created by your party (Congress) in parliament to stall the bill, which was your own baby,” he argued.

Taking an indirect dig at BJPruled states, Siddaramaiah said as many as 24 states and one union territory have agreed to implement GST, but initially Gujarat, Madhya Pradesh and Rajasthan were against it.

Siddaramaiah also said since parliament has already passed GST Bill, the state assembly did not have much scope to debate over it because decisionmaking powers are vested with the GST Council.

However, suggestions submitted by members will be presented during GST Council meetings, he added.

The Chief Minister said he did not attend the GST Council meetings because he did not get time and had deputed Agriculture Minister Krishna Byre Gowda.

Source : Economic Times

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GSTN Registrations Set to Open Doors for E-Commerce Vendors

Small businesses won’t face the risk of their products being taken off online marketplaces

E-commerce com panies such as Amazon, Flip kart and Swiggy concerne about losing business after th rollout of the goods and services tax (GST) on July 1 shouldn’ have to worry about being for ced to exclude pro ducts sold by unregistered vendors.

The GST Network, which provides the new tax regime’s technological backbone, plans to start registra tion of new taxpayers soon to ensure there is no disruption in online commerce.“Registration for first-time taxpayers will open soon in about a week’s time,“ said a GSTN official.

All vendors on ecommerce platforms have to be registered on the GST Network.That’s because online market platforms have to mandatorily collect tax on any payment they make to a supplier.

The market places have been grappling with the matter as a d substantial number of vendors e fall below the tax threshold and hence aren’t registered with the  tax authorities of either the states or the Centre.

Many of these are small businesses, some even operating from home. Another set of sellers were only offering taxexempt items on these platforms and hence were not required to pay tax or register with the tax department.

Industry representatives who recently met finance ministry officials to lobby them on the issue were told that registration would be opened up soon, an e-commerce executive told ET.

GSTN had only opened enrol ment for existing taxpayers who were migrating to GST from either value-added tax, service tax or central excise duty and not for fresh registrants.Thursday was last day for enrolment in the second round.

The third round will open on June 25. It is expected that registration of the first-time vendors will begin before that. While early registration will be good, the government can consider providing some relief to vendors, experts said.

“Alternatively, the government may want to consider giving a relaxation to vendors to obtain the registration after GST is implemented till say the first GST return is filed.“The first GST returns have to be filed on August 10.

Source : The Economic Times New Delhi, 16th June 2017

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