The Government on Friday said as many as 77.5 lakh traders are registered on GSTN and help desks have been set up in every commissionerate to facilitate filing of tax return. “Till July 18, 2017, the total number of GSTIN (Goods and Services Taxpayer Identification Number) registration is 77,55,416,” Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Lok Sabha.
He further said Internet is not required for doing or conducting business, but it would be required only for the purpose of filing of returns under the GST. “The Government has ensured that the return filling process is made convenient for all taxpayers by setting up help desks in every commissionerate and by appointing GST Suvidha Providers,” he said.
Gangwar in another reply said it is difficult to predict whether corruption will be wiped out, but the implementation of GST will definitely bring about transparency in business operations related to taxation. The implementation of GST in itself is expected to have a positive impact on the overall growth of the economy, he said, adding that it is also expected to have a positive impact on the ease of doing business and making India an even more attractive destination for foreign investments.
Various studies, including that from NCAER, have estimated that growth in GDP to be around 1-2 per cent due to the implementation of GST.Replying to another question, Gangwar said, since GST has been implemented only with effect from July 1, it cannot be stated that it helps to bring out black money at this moment.However, he said, the provision in SGST, CGST, UTGST and IGST have a self policing mechanism.
The government today extended the deadline for small businesses to opt for the composition scheme in the GST regime by nearly four weeks to August 16.
The government today extended the deadline for small businesses to opt for the composition scheme in the GST regime by nearly four weeks to August 16.
Small businesses with turnover of up to Rs 75 lakh earlier had time till today to opt for the scheme in the Goods and Services Tax regime. “The Board hereby extends the period for filing an intimation in Form GST CMP-01… up to August 16, 2017,” the Central Board of Excise and Customs (CBEC) said in an office order.
To opt for composition scheme, the taxpayer needs to log into his account at the GST Portal www.gst.gov.in and select ‘Application to opt for the Composition Scheme’ under ‘Services’ menu. They have to fill up the Form GST CMP-01 to opt for the scheme.
Under composition scheme, traders, manufacturers and restaurants can pay tax at 1, 2 and 5 per cent, respectively. Businesses opting for the composition scheme will see a lesser compliance burden as they will have to file returns only once in a quarter as against monthly returns to be filed by other businesses.
There are over 70 lakh excise, VAT and service taxpayers who have migrated to the GSTN portal for filing returns in the GST regime which kicked in from July 1. Besides, there are over 8 lakh new taxpayers who have registered on the portal. These new registered taxpayers can opt for the composition scheme at the time of registration.
The income-tax (I-T) department has asked large corporate entities, including multinational firms, to furnish details of employees off the payroll to check whether they are filing tax returns after deduction at source, or TDS.
According to I-T officials, many lawyers, chartered accountants, consultants, and designers — not on the payroll of companies — have not filed I-T returns (ITR), fearing they would have to disclose their full income.
The move is part of the government’s efforts to increase the tax base and nab potential evaders. The deadline for filing returns for the assessment year (AY) 2017-18, to track income in the fiscal year 2016-17 (FY17), is July 31.
Such professionals who could be potential evaders have been identified through a complete tax profiling, by linking their banks and transaction details.
The tax department, through its non-filer monitoring system, has identified about 13.7 million people with potential tax liabilities who have not filed returns. A preliminary examination of the data has revealed that many third-party vendors in different tax brackets have not been filing returns, while some have been inconsistent in doing so.
“Such measures are part of the second phase of the tax department’s Operation Clean Money, to bring those who have declared unaccounted cash and deposits after demonetisation under the tax net,” said a senior official of the Central Board of Direct Taxes (CBDT). Sources said the CBDT had set the target of adding 10 million taxpayers in the current financial year (FY18).
Under provisions of Section 194 (C) of the I-T Act, a company has to deduct tax at source at the rate of 10 per cent on payments made to professionals or for technical services, if their bill is Rs 30,000 or more.
“The efforts of the tax department to expand the taxpayer base are understandable. Tracking TDS is an important tool to check whether people have filed their taxes,” said Sanjay Sanghvi, partner, Khaitan & Co.
During 2015-16, there were only 55.9 million people in the country who paid income tax. Last year, the tax department had added 9.1 million taxpayers, expanding the base to 65 million.
The government had recently amended the provisions in the I-T rules dealing with the filing of returns. Those not filing on time will have to pay a fine.
For instance, for people earning below Rs 5 lakh annually, missing the deadline will make them liable to a fine of Rs 1,000; those with earnings above Rs 5 lakh annually will have to cough up Rs 5,000 as penalty.
At present, there is no fine if the returns are filed with a delay within the AY. Official data suggest that about 5 million companies registered in the country, of which only 690,000 filed I-T returns last year.
In the past week, the government has reached out to tax commissioners on the audit process, highlighting the risk areas.
The Centre has created a detailed road map for goods and services tax (GST) audits barely 20 days after the levy’s rollout, listing risks, target industries and even potential auditees for officials examining corporate India’s transition to the new regime.
In the past week, the government has reached out to tax commissioners on the audit process, highlighting the risk areas. Beginning next week, therefore, officials could visit companies to assess whether the transition from the multiple to the single producer levy from July 1 stuck to the rule book.
Their mode of inspection will also be very different from the traditional script. “They would focus on credit transfer or transition from the old tax regime to GST. The government already has the requisite sets of data in place for this,” a tax official told ET on the condition of anonymity.
The government has shared sector-wise “risk factors” companies might exploit to avoid paying GST. According to the tax official quoted above, categorisation or risk evaluation for these audits has been created by using Big Data analytics.
The government has used statistics of the last two financial years to create the audit checklist.
In the internal government note shared with middle-rung tax officials, they have also been told to cause the “least inconvenience” to auditees and to even educate the taxpayers, especially small and medium enterprises (SMEs).
Industry experts, however, pointed out that a granular scrutiny could mean additional tax-related effort at many companies, as the GST audits would also take earlier taxes into account while evaluating the transition.
‘Extra book-keeping effort’
“The decision to focus on risk-based parameters in determining the audit plan is good. However, since the audits to be undertaken now would focus on earlier legislation such as excise and service tax, taxpayers will grapple with both the earlier legislation and the new legislation (GST) simultaneously,” said MS Mani, partner, GST, Deloitte India. “It would significantly increase the focus and time taken to attend to tax matters.”
A list of auditees, made up of large, medium, and small-scale companies across the country, was also shared with the tax commissioners. “Most of the companies have manipulated the system while transitioning credits from excise and service tax to GST. This is what would be the focus of the tax audits initially,” a senior tax official told ET.
Tax officials have been asked to first examine a specific list of companies. This was disclosed in an official communication by the director general of audit, central taxes, on July 12, with several mid-level tax officials being informed this week.
Big Data analytics are being used by the tax departments since 2016. The tool is deployed to find outliers in any industry, and the gap from industry based average taxes is used to determine targets for further scrutiny.
“The government would have comparables. Say, if 10 consumer goods companies of a particular size pay Rs 50 crore in taxes, it is unlikely that one company, of the same revenue size, would pay Rs 1 crore. Data analytics could easily point out such anomalies, and the lens would then be on such companies,” a person in the know said.
The micro-finance industry is rebounding, real rural incomes are rising and unemployment is falling, according to brokerage Motilal Oswal Securities and an Indian unit of HSBC Holdings in analysis that contrasts to the distress that’s swept the farming sector
India’s vast rural hinterland, which makes up 70% of the country’s population, is showing signs of recovery from last year’s cash crunch, boosting optimism that increased spending will help the broader economy regain its vigour.
The micro-finance industry is rebounding, real rural incomes are rising and unemployment is falling, according to brokerage Motilal Oswal Securities Ltd and an Indian unit of HSBC Holdings Plc in analysis that contrasts to the distress that’s swept the farming sector.
“We believe repayments and improved collection trends have increased the confidence of companies to start disbursing loans at a healthy pace again,” Mumbai-based Alpesh Mehta and colleagues wrote in a report from Motilal Oswal.
India’s micro-finance industry, which provides small loans to entrepreneurs and business owners who have little collateral, was slammed when the government withdrew high-denomination bank notes from circulation late last year in a bid to stamp out corruption. And while farmers have taken to the streets across India to protest plunging food prices, labourers who get paid a wage to work the land have actually seen their incomes rise after last year’s good monsoon, the HSBC economists wrote.
Loan collection rates in Uttar Pradesh, India’s largest and most populous state, are largely back at about 98% levels, up from less than 50% after demonetisation, Mehta, Piran Engineer, and Subham Banka said in their 3 July note. Other major states such as Karnataka are displaying “much improved collection trends,” they said.
Micro-finance disbursements, which grew 13% last year compared with 80% the prior year, are expected to return to pre-ban levels in three to six months, according to Motilal Oswal.
Gold loan company Manappuram Finance Ltd has risen 68% from its low after demonetisation in November and Bharat Financial Inclusion Ltd, India’s largest listed micro-finance firm, has rebounded 64% over the same time frame.
However, the state of Maharashtra, home to India’s financial capital, Mumbai, is lagging other states and continues to face delinquency pressures, with about 20% of loans unpaid 90 days past due, according to Motilal Oswal.
Interactions with micro-finance companies reveal no expectation of disruption from the rise of farm loan waivers in Indian states but instead a focus on the effects of demonetisation, the report said. Microfinance Institutions Network—India’s largest group of microfinance firms—reported that “demonetization severely impacted the micro-finance business in multiple ways including slowing down of growth due to non-availability of cash for a few months.”
Motilal intends to observe delinquency trends for a few more quarters before reaching conclusions over the impact of waivers on micro-finance. Maharashtra, Punjab, Uttar Pradesh have all announced, waiver programs.
The rise in credit growth at the micro-finance level is complemented by a rise in rural incomes and purchasing power, according to HSBC Securities and Capital Markets (India) Pvt. Ltd.
“Macro indicators have improved” in rural India, HSBC economists Pranjul Bhandari, Aayushi Chaudhury, and Dhiraj Nim said in their 10 July note. The plunge in inflation has helped boost annual real income growth to just under 4% from contracting levels a year ago while rural unemployment has sunk from about 9% last September to around 4%, according to HSBC.
Normal rains so far in 2017 and a bumper crop in 2016 after a two-year drought have generated more jobs for rural Indians who work the land—some 70% of rural households who are “landless, according to HSBC.
That’s help pushed up two-wheeler sales and the production of consumer non-durables in this segment, according to the HSBC report. Shares of companies with substantial rural customer bases are experiencing steady growth.
While falling farm prices have hit many rural Indians hard, they have also boosted purchasing power and consumption among the population which could help a broader recovery in the Indian economy that’s suffering from a slowdown in growth, soured loans and weaker manufacturing sector.
Gujarat is followed by Delhi, Andhra Pradesh, Haryana, Telangana, Tamil Nadu, Kerala, Maharashtra, Karnataka and Madhya Pradesh.
Gujarat has retained the top position in the list of 21 states and UTs with most investment potential, according to a report by economic think-tank NCAER.
Gujarat is followed by Delhi, Andhra Pradesh, Haryana, Telangana, Tamil Nadu, Kerala, Maharashtra, Karnataka and Madhya Pradesh.
The ranking of 20 states and one Union Territory of Delhi was based on six pillars — labour, infrastructure, economic climate, governance and political stability, perceptions and land — and 51 sub-indicators.
While Gujarat topped in economic climate and perceptions, Delhi ranked one in infrastructure. While Tamil Nadu topped the chart in labour issues, Madhya Pradesh ranked one in land pillar.
The National Council of Applied Economic Research (NCAER) State Investment Potential Index (N-SIPI 2017) report ranks states on their competitiveness in business and their investment climate.
Compared to 2016, Gujarat and Delhi again top the list of states, while Haryana and Telangana have moved rapidly up the ranks to finish among the top five, it said.
NCAER Director-General Shekhar Shah said: “Investment opportunities are expanding in India in all sectors. The GST will weave India’s states together in ways that has not been possible before”.
Further the report said that although Bihar, Uttar Pradesh and West Bengal are ranked among the least favourable states for investment, they rank higher under individual pillars.
Indira Iyer, the team leader for the 2017 N-SIPI, stated that as per the report, “corruption” continues to be the number one constraint faced by businesses.
However, she said, the 2017 N-SIPI reports a decline in the percentage of respondents citing corruption as a constraint to conducting business from 79 per cent in 2016 to 57 per cent in 2017.
Getting approvals for starting a business is still the second-most pressing constraint faced by businesses in 2017 as was the case in 2016, she added.
Talking about this index, Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said these reports are aiding states in improving the business climate and attracting investors.
Over two weeks into the goods and services tax (GST) regime, Navin Kumar, chairman of GSTN — the IT backbone of the system — speaks to Sumit Jha on how taxpayers have adopted the new system.
Over two weeks into the goods and services tax (GST) regime, Navin Kumar, chairman of GSTN — the IT backbone of the system — speaks to Sumit Jha on how taxpayers have adopted the new system.
What are the latest numbers on migration and new registrations on GSTN platform?
Till June 16, over 70 lakh have migrated to the portal while 7.4 lakh new taxpayers have registered so far. The number of migration has dwindled from 30,000 daily to about 12,000 since we reopened the window on June 25. However, the rate of new registration is still going as strong as it was on June 25 with nearly 35,000 taxpayers registering every day. Our system will remain open for migration till September 25 (3 months).
What explains the large number of new registrations?
A better analysis of why so many new taxpayers have registered can be provided by the tax department, but we are thinking on the lines that businesses realise that it would be harder to do business if they remain outside GST. According to our study, we were expecting a 4-5% growth in new taxpayers yearly. On an 80-lakh existing taxpayer base, this translates into around 4 lakh new registrations. Since June 25, we have had 7.40 lakh new registrations, which is nearly double our expectations. It shows businesses have welcomed GST.
What has been the response for composition scheme?
Till June 16, only 90,000 businesses had opted for composition scheme. I believe many more would want to but the problem is, if you don’t opt for it now, the next opportunity will arise only next year. Though we had collected information on composition scheme from VAT we can’t say off-hand how the registration under GST so far compares with the the figures in the VAT. One of the possible explanation for a subdued number could be that any inter-state supply made by a business makes it ineligible for the scheme.
Has the GSTN been able to deliver the application programming interfaces (APIs) on time?
There are two kinds of APIs: One is government-to-government meant for connecting the tax department with the GSTN, which is already functional. As far as APIs for GST suvidha providers (GSPs) are concerned, we had a meeting with them in June, where we shared a time schedule for releasing APIs. So far, we have stuck to that schedule.
Is there any pilot testing for uploading invoices being carried by GSTN?
The next big thing happening is we are opening the facility for uploading invoices for a closed group of businesses from June 24. Business-to-business people are required to record transactions at the invoice level for filing return. If you are generating 50,000 invoices every day, don’t wait until the last moment. If you have 5,000 invoices in a month, you can upload weekly but it must be done regularly.
A month ago you had questioned the GSPs’ preparedness. What is the status now?
We have asked all GSPs to be prepared, and they have assured us that they are working towards that. The invoice uploading pilot will tell us where they stand.
What is the expected format of filing interim return in August?
This is to be filed in the GSTR3B form where the taxpayer has to indicate his tax liability and input tax credit. So, it would be on self-declaration basis. When they submit the first full return in September for July, we will match their input tax credit submitted through GSTR3B as a form of cross-verification. The final position will be told to them then.
When is the e-way bill likely to come for approval?
The National Informatics Centre (NIC) is working on the e-way bill, and they are supposed to bring it for consideration by October 1. Currently, the removal of check posts at state borders is due to the nature of GST. Earlier you had tax arbitrage between VAT and CST which is gone now. However, state governments are concerned about movement of goods without paying taxes, which would be resolved once e-way bill is introduced.
Can businesses make amends in their information now?
We started the facility to amend registration data from June 18. Many people are coming and saying they need to change some data, including bank account number or phone number. Registration of non-residents and casual taxpayers will also open on June 18. This is for the people who come over in the country for a fair or exhibition for a few days or a month.
The Government on Friday said as many as 77.5 lakh traders are registered on GSTN and help desks have been set up in every commissionerate to facilitate filing of tax return. “Till July 18, 2017, the total number of GSTIN (Goods and Services Taxpayer Identification Number) registration is 77,55,416,” Minister of State for Finance Santosh Kumar Gangwar said in a written reply to the Lok Sabha.
The government has shared sector-wise “risk factors” companies might exploit to avoid paying GST. According to the tax official quoted above, categorisation or risk evaluation for these audits has been created by using Big Data analytics.
