32nd GST Council Meeting took decision with respect to GST turnover limit – Rs 40 lakhs (from Rs. 20 lakhs) and composition scheme limit raised to Rs. 1.5 crore – changes would be effective from 1st April 2019. The Government took steps provide compliance relief to small businesses.
Outcome of 32nd GST Council Meeting -The highlights of the reliefs announced by FM Arun Jaitley are as below:
1. Threshold limit for GST Registration increased to 40 Lakhs
Effective April 1, the GST exemption threshold has been raised from Rs 20 lakh to Rs 40 lakh. For hilly states and those in the North East, the threshold has been doubled to Rs 20 lakh.
Earlier in a press talk AP FM said increased to 50lakhs, but it is increased to 40lakhs only as said by FM
2. Power to states
Now states will be able to choose if they want to keep the GST exemption limit at Rs 20 lakh or Rs 40 lakh, Jaitley said.
3. Composition limit increased to 1.5Cr from the present 1 Cr
The existing Composition Scheme turnover threshold raised to Rs 1.5 crore.
GST turnover limit and composition scheme changes would be effective from 1st April 2019.
4 Quarterly payment and Annual Return
Now Composition tax payers will pay tax quarterly, but file returns annually.
5 NewComposition scheme for Services providers
Those providing services or mixed supplies (goods and services) with a turnover up to Rs 50 lakhs will now be entitled to avail composition scheme.
6 Rate for services under comp scheme @ 6%
Compounding rate for services under composition scheme is fixed at 6 percent.
7 Real Estate
A committee has been set up to consider real estate GST rates, a consensus is yet to be achieved, says FM Arun Jaitley.
8 Consensus for Calamity cess in Kerela @1%
GST Council has given approval to Kerala to levy Disaster / Calamity cess of 1% on all intra-state supplies of goods and services within Kerala, for up to 2 years.
GST Council grants mega relief to taxpayers – ITC for last FY invoices allowed upto March 31, 2019 + New GST Return to be launched on trial basis from April 1, 2019 + amendment in Sec 50 to allow payment of interest on net cash liability
The 31st GST Council meeting concluded today under the guidance of Union Minister Arun Jaitley has taken some important decisions including the due date extension for GST Annual Returns and some other Returns.
As per the recommendation of the Council, the due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 shall be further extended till 30.06.2019.
Further, the due date for furnishing FORM GSTR-8 by e-commerce operators for the months of October, November and December 2018 shall be extended till 31.01.2019.
The due date for submitting FORM GST ITC-04 for the period July 2017 to December 2018 shall be extended till 31.03.2019. ITC in relation to invoices issued by the supplier during FY 2017-18 may be availed by the recipient till the due date for furnishing of FORM GSTR-3B for the month of March 2019, subject to specified conditions.
All the supporting documents/invoices in relation to a claim for refund in FORM GST RFD-01A shall be uploaded electronically on the common portal at the time of filing of the refund application itself, thereby obviating the need for a taxpayer to physically visit a tax office for submission of a refund application.
GSTN will enable this functionality on the common portal shortly. The due date for the taxpayers who did not file the complete FORM GST REG-26 but received only a Provisional ID (PID) till 31.12.2017 for furnishing the requisite details to the jurisdictional nodal officer shall be extended till 31.01.2019.
Also, the due date for furnishing FORM GSTR-3B and FORM GSTR-1 for the period July 2017 to February, 2019/quarters July 2017 to December 2018 by such taxpayers shall be extended till 31.03.2019
Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July, 2017 to September, 2018, are furnished after 22.12.2018 but on or before 31.03.2019.
The Ministry of Corporate Affairs (MCA) has decided to give 21 lakh India Inc directors another 15 days to reactivate their Director Identification Numbers (DINs) by filing Know-Your-Customer (KYC) details upon paying a reduced fee. The decision was taken by Finance and Corporate Affairs minister Arun Jaitley on Wednesday. The notification regarding the extension of deadline is as below.
As you are aware the last date for filing form DIR-3 KYC without fee has expired on 15th September 2018. The process of deactivating the non-compliant DINs has since been completed and their status has been updated as ‘Deactivated due to non-filing of DIR-3 KYC’. However, the non-compliant DIN holders may file DIR-3 KYC with a fee of Rs.500 (Rupees Five Hundred Only) from 21st September till 5th October 2018(both days inclusive) to get their DINs reactivated. From 6th October 2018 onwards, a fee of Rs.5000 (Rupees Five Thousand Only) becomes payable for reactivation.
DINs, the unique identification numbers, of nearly 21 lakh directors were deactivated by the MCA following non-filing of KYC details.
“The directors will be given another 15-day extension to reactivate their DINs by filing the e-form along with a nominal fee, which is being kept much lower than the current late fee of Rs 5,000,” top government sources said.
Many individuals and professional bodies, including the Institute of Chartered Accountants of India (ICAI) and Institute of Companies Secretaries of India (ICSI), have written to the government seeking extension in the date of submission for KYC without any additional fee. They have citied practical difficulties such as time-consuming process of obtaining digital signatures, video verification, reaching out to foreign directors and Kerala floods among the reasons for the delay.
“It took us an average time of one to one-and-a-half hour to do one KYC filing. It is quite time consuming to get the digital signature and then feed the client details on MCA software. Many a times the site shows glitches,” said Ashok Tyagi, a company secretary, who is looking forward to an extension in the filing time.
After the last date for filing of the e-KYC form, the MCA deactivated DINs of nearly 21 lakh directors, about 63% out of a total of 33 lakh directors registered in the country after they failed to furnish their KYC details. Only 12.15 lakh directors filed their KYC details within the stipulated time.
DIN is the unique number allotted to the directors on the Boards of registered companies without which they can’t sign any compliance document on behalf of the company.
According to some government officials, not more than two lakh directors are likely to come forward to file KYC over next 15 days. “A large number of directors will be dummy directors or the ones having multiple DINs,” said an official.
The MCA launched the e-KYC form under the MCA 21 system on July 14, this year. All the 33 lakh directors were required to provide their personal details such as e-mail address, Permanent Account Number (PAN) and Aadhaar number in an e-filing with the government in a major clean-up drive on ‘fly by night and dummy directors’. The directors also had to upload their short videos introducing themselves. The directors who could not comply with the new rule could, however, get their DINs activated provided they paid a sum of Rs 5,000 as late fee.
MCA extends due date of DIR -3KYC / E-KYC of Directors
The government is considering giving another opportunity to 2.1 million company directors who have failed to comply with the ‘know your customer’ (KYC) norms, according to a senior official.
The government could give another 15 days for meeting the compliance norms or reduce the penalty for late filing, the official said, requesting not to be named. In June, the corporate affairs ministry had decided to seek KYC for all 3.3 million active directors. The last date for complying with the new norms by way of submitting form ‘DIR-3 KYC’ without fee ended on September 15.
Only 1.2 million directors were able to complete KYC. The post of remaining 2.1million can be re-activated only after a fee payment of Rs 5,000 along with requisite form. “We are looking at the option of either providing a window of 15 days or reducing late fee. The situation has been reviewed by corporate affairs minister Arun Jaitley. A lot of these people are genuine directors who could not complete the process,” the official said. “Decision on providing another window could be taken once the corporate affairs secretary, who’s currently traveling, is back.”
The Institute of Chartered Account of India and several other corporate bodies have also made representations to the ministry, requesting them to extend the period by another 15 days.
“The website wasn’t functioning properly between September 13 and September 15. Also, there were glitches in uploading the digital signatures,” ICAI president Naveen ND Gupta wrote in a recent letter to the ministry. Among those whose director identification number (DIN)—a unique number allotted to individuals eligible to have directorship on boards of registered companies— is being de-activated for non-compliance is a Union minister, a person in the know said. As a part of the KYC drive, company directors had to provide their passport, PAN and contact details, such as phone number and email address. They were required to link their Aadhaar and PAN with the DIN.
The move is aimed at weeding out fake names being listed as genuine directors.
This was a part of the government’s larger strategy to clamp down on shell companies. The government is currently in the process of de-registering 200,000 such companies. These companies have been struck off for not carrying out any business or operation in the last two years.
The GST Council on Friday finally approved single monthly return with an aim to boost collections and compliance. The new system is scheduled to be implemented in next six months.
The Goods and Services Tax (GST) Council on Friday finally approved single monthly return with an aim to boost collections and compliance. The new system is scheduled to be implemented in next six months — but could take more time. “The Council has approved the new system of GST return but the software will take six months to get fully operationalised,” Finance Minister Arun Jaitley said.
However, from the preliminary information provided by the GST Council, the new system will be implemented in three phases. “While the initiative of GST return simplification appears to have crossed another milestone – the 3 Phase implementation plan of the revised returns format or procedures do not bring out the exact comfort that industry has sought so far,” Indirect tax expert Jigar Doshi of SKP Business Consulting told FE Online. He explained how the new single return filing system is planned for implementation.
The new return filing process would be introduced in three phases:
Phase 1: First six months
The current process of filing GSTR-3B and GSTR-1 will continue for the first six months.
Software for the new system will be developed during this phase.
Phase 2: Next six months
A single-monthly system of filing returns will be introduced for all taxpayers, except persons with nil liability and composition dealers. They will be filing quarterly returns.
A uni-directional system of uploading details of invoices by the supplier will be implemented. Recipients will get credit on the basis of these invoices.
For the first six months of the new system, a facility to avail provisional credit by the recipient will be available.
Suppliers will be uploading details of invoices and recipients will follow up with the supplier in case of any gap in the uploaded details.
Recipients will try and reduce mismatch through follow up only. No mechanism will be in place for the recipients to upload any invoice.
Phase 3: After 1 year
The new system of return filing will be fully implemented with no facility of provisional credit. Credit will be available on the basis of details of invoices uploaded by the supplier only.
If tax liability on uploaded invoices is not discharged by the supplier but the credit is availed by the recipient, the government would first recover the same from the supplier. However, the government would retain the power to recover the tax from the recipient also.
Tax liability on long term capital gains (LTCG) at the rate of 10% will accrue only when the shares or mutual funds are sold after April 1, 2018.
In the Budget 2018, Union Finance Minister Arun Jaitley had introduced long term capital gains (LTCG) on sale of equity and mutual funds, which will be taxed from April 1 onwards. One must remember that any capital gains arising out of sale of shares in this financial year (2017-18), which means prior to March 31 this year, will not attract any long term capital gains tax.
Seven Things To Know About Tax On LTCG Arising On Equity/ Mutual Funds Sale
1. Tax liability on long term capital gains (LTCG) at the rate of 10% will be charged only when the shares or mutual funds are sold after April 1, 2018.
2. The tax liability will not arise if the shares or mutual funds are sold, at whatever premium, before the beginning of April since the new legislation will come in force with effect from the next financial year, which is April 1.
3. For the tax on LTCG to get liable, there must be a difference of at least Rs. 1,00,000 between the cost of acquisition and the amount of sale.
4. The time period of one year will be calculated from the date of acquisition even if the time period falls in the previous financial year, which is 2017-18.
5. Any gains prior to January 31 are grandfathered. This means the capital gains will be zero if the sale price is more than the cost of acquisition but less than the value on March 31.
For instance, an equity share is acquired on January 1, 2017 at Rs. 100, its fair market value is Rs. 200 on January 31, 2018 and it is sold on April 1, 2018 at Rs. 150.
In this case, the actual cost of acquisition is less than the fair market value as on January 31, 2018. However, the sale value is also less than the fair market value as on 31st of January, 2018. Accordingly, the sale value of Rs. 150 will be taken as the cost of acquisition and the long-term capital gain will be NIL (Rs. 150 – Rs. 150).
6. The tax payer will stand to gain when the shares market price on January 31 was lower against the acquisition cost. Since the higher of two values is chosen (between the cost of acquisition and the price on January 31), the investor stands to gain. Sample this. An equity share is acquired on 1st of January, 2017 at Rs. 100, its fair market value is Rs. 50 on 31st of January, 2018 and it is sold on 1st of April, 2018 at Rs. 150.
In this case, the fair market value as on 31st of January, 2018 is less than the actual cost of acquisition, and therefore, the actual cost of Rs. 100 will be taken as actual cost of acquisition and the long-term capital gain will be Rs. 50 (Rs. 150 – Rs. 100).
7. When the selling price is lower than both cost of acquisition and price on January 31, then instead of the higher of the two values, one has to take the lower of two values for computing the capital gains. Sample this. An equity share is acquired on 1st of January, 2017 at Rs. 100, its fair market value is Rs. 200 on 31st of January, 2018 and it is sold on 1st of April, 2018 at Rs. 50. In this case, the actual cost of acquisition is less than the fair market value as on 31st January, 2018. The sale value is less than the fair market value as on 31st of January, 2018 and also the actual cost of acquisition. Therefore, the actual cost of Rs. 100 will be taken as the cost of acquisition in this case. Hence, the long-term capital loss will be Rs. 50 (Rs. 50 – Rs. 100) in this case.
The last date for filing initial GSTR-3B returns for a month is the 20th of the subsequent month.
The GST Council in its meeting on Saturday is likely to extend the deadline for filing of simplified sales return GSTR-3B by three months till June.
The Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, is also expected to finalise a simplified return filing procedure for businesses registered under Goods and Services Tax (GST) regime.
“The new return filing system, if agreed upon by the Council, would take about 3 months to be implemented. Till then GSTR-3B could continue,” an official told PTI.
The 26th GST Council meet is slated on March 10.
Simplified sales return GSTR-3B was introduced in July, the month of GST roll out, to help businesses to file returns easily in the initial months of GST roll out. This was to be followed with filing of final returns — GSTR – 1, 2 and 3.
With businesses complaining of difficulty in invoice matching while filing final returns as well as complications in GSTN systems, the GST Council in November last year extended GSTR-3B filing requirement till end of March, 2018, and did away with filing of purchase return GSTR-2 and final return 3.
“GSTR-3B filing system has stabilised and businesses are comfortable. So, businesses can continue to pay taxes by filing 3B till the time new return filing system is put in place,” the official added.
The last date for filing initial GSTR-3B returns for a month is the 20th of the subsequent month.
The GST Council had in January entrusted Bihar Deputy Chief Minister Sushil Kumar Modi led GoM to work out a simplified return filing process so that businesses can fill up only a single form to file returns under GST.
The group of ministers met last month to work out a simplified return form, but the meeting remained inconclusive.
In the GoM meet, the Centre and state officials presented their model for return simplification, while Nandan Nilekani also made his presentation. The idea is GST return form should be simplified, it should ideally be one return every month, Modi had said.
About 8 crore GST returns have been filed so far on GST Network portal since implementation of GST on July 1.
In absence of anti-evasion measures and invoice matching, the GST collections have declined since July.
As per official data available, in January 57.78 lakh GSTR-3B returns were filed, which fetched Rs 86,318 crore revenue to the exchequer.
For December 56.30 lakh GSTR-3B were filed which fetched Rs 86,703 crore revenue to the exchequer, while in November 53.06 lakh returns were filed with total revenue of Rs 80,808 crore.
Collections topped Rs 95,000 crore in the initial month of July.
