GST interim returns: Over 30 lakh paid tax in August, matching July trend

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While the number of businesses registered for the goods and services tax (GST) has crossed 90 lakh, much higher than tax base in the previous regime, filing of even the interim (summarised) returns and tax payments are not keeping pace.

While the number of businesses registered for the goods and services tax (GST) has crossed 90 lakh, much higher than tax base in the previous regime, filing of even the interim (summarised) returns and tax payments are not keeping pace. Just over 30 lakh taxpayers have filed the interim return (GSTR-3B) for August, before the stipulated September 20 deadline, GST Network (GSTN) chairman Ajay Bhushan Pandey told FE. The glitches plaguing GSTN, the inability of a sizeable section of SMEs to comply and a general lackadaisical tendency among taxpayers are said to be reasons for the slack in the return-filing process. But the filing pace for August was not much slower than it for July GST — by August 20, the initial deadline for GST payment for July, only 32 lakh taxpayers filed the interim return and made tax payments; the figure rose to 39 lakh by August 29, the extended deadline without penal interest, and then to 49 lakh till date.

While about Rs 92,300 crore was collected as GST for July till August 20, a similar amount has been paid by the taxpayers till Wednesday for August GST, sources said. To make things easier for the business, the GST Council had extended the last dates for filing detailed returns — GSTR1, GSTR2 and GSTR3 — but businesses need to pay the tax with GSTR-3B filing. However, the slow pace at which even the interim returns are being filed is vexing the government — a TV channel reported that finance minister Arun Jaitley has asked the Central Board of Excise and Customs to submit daily reports of GST filings. With the GSTR1 for outward supplies for the month of July can now be filed until October 10 and GSTR2 for inward supplies by October 31, the government is now putting in place an interim arrangement for refund of taxes to exporters, as waiting for these funds for longer periods could hit the liquidity of thousands of exporters. Pandey said that some assessees were still filing return for July along with August. For July, there were nearly 60 lakh eligible taxpayers and this number must have moved up for August and new registrants are being added.

Pandey said the GSTN portal could handle the sudden rush in filings in the last two to three days, which displayed its robustness. He said GSTN accepted up to 85,000 returns per hour on Wednesday, as nearly 14 lakh assessees filed the interim summarised return on that day. While the government is keeping its fingers crossed on the GST revenue, analysts expect it to cut rates — at least for the goods that fall under 28% slab — given the robustness of collections. The government is closely examining the huge transitional credit claims of Rs 65,000 crore by the industry — these can be availed of by the industry against its supplies in the next six months. Sanjay Garg, partner, indirect tax, KPMG in India, said: “Expansion in the tax base at the outset due to the applicability of GST on transactions not taxed before would likely shrink after the industry avails the credit generated by payment of tax on such newly-taxable transactions. The GST collections might decline. It is apparent that fingers would remain crossed at least for next two quarters of (FY18).” Earlier this month, the GST Council had constituted a group of ministers (GoM) under Bihar deputy chief minister Sushil Modi, to resolve issues faced by businesses while filing returns and paying taxes on GSTN portal. The GoM met earlier this week, and assured taxpayers that most technical glitches in GSTN would be resolved by October-end.

Source: Financial Express

July GST collections of Rs 92,000 crore exceeded target: Finance Minister Arun Jaitley

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July GST receipts touch Rs 92,200 cr: Jaitley

Goods and services tax (GST) collections have exceeded estimates in the first month of the landmark levy’s rollout despite a significant number of assessees not having filed returns yet.

“We seem to be comfortable… The redline has been crossed in the first month itself,” finance minister Arun Jaitley said at his briefing on the first set of data on tax collections on Tuesday.

“Not many had thought that the redline would be crossed in the first month itself.” GST, which replaced multiple state and central levies, took effect on July 1.

The total collection under GST for July is pegged at Rs 92,283 crore. Extrapolating Budget targets, the central government’s July tax revenue should be Rs 48,000 crore and that of states Rs 43,000 crore, adding up to Rs 91,000 crore, Jaitley said.“We have exceeded the target,” he said, adding that even after the compensation cess is excluded, the target will still be surpassed when all taxpayers file returns. The last date for payment of tax for the month of July was August 25 and for those seeking transitional credit for taxes paid in the pre-GST era, the deadline was August 28.

Of the total, central GST accounted for Rs 14,894 crore, state GST for Rs 22,722 crore and integrated GST for Rs 47,469 crore, which includes Rs 20,964 crore on imports. IGST is levied on inter-state movement of goods and imports and is equal to CGST and SGST.

The compensation cess amounts to Rs 7,198 crore, of which Rs 599 crore is that on imports.

Jaitley said the total number of taxpayers having to file returns for July stood at 5.96 million if those that registered in August and those opting for the composition scheme were excluded. Of these, the minister said, 3.84 million returns have been filed — 64.42% of the total. This suggests that by the time all returns are filed, the tax kitty could swell further.

IGST will be allocated between CGST and SGST to the extent it has been used for payment of either of them. This allocation will be based on the cross-utilisation report to be received from the GST Network (GSTN), the technological backbone of the system.

STATE COMPENSATION
Exact revenue figures of the Centre and individual states would be known after this exercise, which will be conducted before the end of month. Jaitley said it will have to be seen if any specific state needs to be compensated. The tax collection number would “somewhat increase” with greater compliance, he added.Of the total 7.23 million taxpayers, 5.85 million have fully migrated to GSTN, while 1.38 million are yet to complete procedural formalities. The number of new taxpayers that registered with GSTN up to August 29 was 1.883 million.

“On the face of it, collection of over Rs 92,000 crore in the first month looks quite encouraging, given the fact that GST is still stabilising,” said Pratik Jain, partner and leader, indirect tax, PwC.“It is also to be noted that only 64% of registered dealers have actually done the compliances and therefore the actual collection could go up in next few days. Also, a large component of IGST collected on imports might be used as an offset in coming months and some amount of GST collected would also be given as a refund to exporters. Therefore, while initial trend shows healthy collection, the real picture would emerge over next couple of months.” MS Mani, senior director, Deloitte Haskins & Sells LLP, echoed this sentiment.

“The 65% compliance achieved in the first month of GST accompanied with the collection of Rs 92,000 crore is a very good beginning and both the compliance and collections are expected to show a significant upsurge in the coming months,” he said.

GST Council meet clears 5 set of rules, defers e-way bill rule, relaxes deadline for filing returns

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The GST Council on Sunday made the dreaded anti-profiteering clause more palatable specifying a sunset clause of two years even as it relaxed the deadline for filing returns under the goods and services tax (GST) till September

The GST Council on Sunday made the dreaded anti-profiteering clause more palatable specifying a sunset clause of two years even as it relaxed the deadline for filing returns under the goods and services tax (GST) till September. The Council also approved five sets of rules but deferred a decision on the E-Way Bill rule. The GST — a uniform levy across the country — will be rolled out at midnight on June 30, ahead of which the council will meet again. Jammu and Kashmir and Kerala are yet to approve the State GST law.

The GST Council tweaked rates for luxury hotels giving relief to states relying on tourism. State-run lottery tickets will attract a levy of 12% while those run by private players will attract a higher GST of 28%. Rates for hybrid vehicles were not discussed at the meeting, the 17th Council meeting.

The anti-profiteering clause seeks to penalise businesses that do not pass on the benefit of a reduced incidence to customers. Any firm found to be profiteering, will pay a penalty equivalent to the amount of benefits gained under GST but not passed on to customers.

At a press conference, finance minister Arun Jaitley said he hoped the anti-profiteering rule would not be used.

Explaining how the anti-profiteering clause would work, revenue secretary Hasmukh Adhia said the GST implementation committee, a body comprising officers from states and central government, would pass on any complaints that it receives to the Director General of Safegaurd. “The DG of Safeguard will then take about three months to investigate the complaint and send its findings to the anti-profiteering authority,” Adhia explained.

“We may be able to refund the penalty to consumers in the case of commodities that can be tracked. However, for other commodities, the penalty amount will be deposited in the consumer welfare fund as provided under the GST Act,” Adhia added.

The simplified rules for filing returns require a taxpayer to file only a simple, self-certified return —by August 20 for July and September 20 for August. This would summarise inward and outward supplies rather than specify invoice-wise detailed returns as per GST rules. However, assesses must file the return with invoice details in September for both months. These will be matched with the simpler returns filed earlier, and any discrepancy would be liable to a fine, Adhia said.

The FM observed the IT platform—GSTN– was ready. “So far, 65.6 lakh of the 80.91 lakh existing assessees have migrated to the GSTN. This is a reasonably good number given many current taxpayers would be out of GST ambit due to the annual turnover ceiling of Rs 20 lakh,” Jaitley said. The FM added that there was a window of more than 30 days for new businesses to register.

The GST council approved five sets of rules including those relating to advance ruling, appeal and revision, assessment, anti-profiteering and fund settlement.

The anti-profiteering authority will be a five-member body; the chairman will be a secretary- level officer with four joint secretary level officers as members.

With the GST Council divided on the E-way rule—the manner in which consignments moving across states will be tracked–Jaitley said the transient rule would prevail pending a final decision.

Meanwhile, the Council raised the ceiling for hotel rooms attracting the highest tax rate of 28%– rooms costing more than Rs 7,500 per night will now be taxed at 28% compared to Rs 5,000 and above earlier. Similarly, services provided by restaurants in five-star hotels will now also charge 18%, down from 28% earlier. This has brought these restaurants at par with other air-conditioned restaurants.

The Council lowered the annual turnover limit for the composition scheme to Rs 50 lakh for the north-eastern and some other hilly states, at their request. Earlier, the composition limit for all states was increased from Rs 50 lakh to Rs 75 lakh. The composition scheme is applicable only to traders, manufacturers and restaurants.

Source: http://www.financialexpress.com/india-news/gst-council-meet-clears-5-set-of-rules-defers-e-way-bill-rule-relaxes-deadline-for-filing-returns/725238/

Bad loan crisis: Arun Jaitley says visible action on NPA’s soon

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The resolution of the vexed issue of massive non-performing assets (NPAs) in the banking system is a work in progress and some “visible action” will be initiated over the next few days under the NPA ordinance promulgated recently, finance and defence minister Arun Jaitley said.

The resolution of the vexed issue of massive non-performing assets (NPAs) in the banking system is a work in progress and some “visible action” will be initiated over the next few days under the NPA ordinance promulgated recently, finance and defence minister Arun Jaitley said on Thursday.

 

“The RBI was taking measures under the existing mechanism. We have now taken other steps and there would be visible action taken under the new mechanism in the next few days,” Jaitley said, addressing media on achievements of the ministries under him over the past three years. The Centre won’t provide any special package to any state to waive farm loans but the states are free to spend from their own budgets should they take any such decision, the minister said.

 

Here are few excerpts from FM’s media briefing:

 

On NPAs and other things constraining private investments

Massive toxic assets impact the ability of banks to support growth, although record levels of foreign direct investments (gross FDI inflows touched $60 billion in 2016-17) and higher government spending have offset inadequate private investments to a certain extent. Linked to it (NPAs) is the challenge of wanting to increase private sector investment, even though our FDI and public investments have significantly increased. And of course there is a significant (adverse) impact of the global situation also (on private investments).

 

“Note ban not sole reason for Q4 GDP slowdown”

Demonetisation could be one of the several factors, and not the sole reason, that contributed to the slowdown of GDP growth to an 8 quarter-low of 6.1% in Q42016-17. What you think is very clear (that note ban dragged down Q4 growth) isn’t very clear. There are several factors which can contribute to GDP in a particular quarter. There was some slowdown visible, given the global and domestic situations, even prior to demonetisation in the last year. Financial services, which used to have 9-10% growth, has come down (to 2.2% in Q42016-17). Under the current global situation, 7-8% growth, which is at the moment the Indian normal, is fairly reasonable by our own standard and very good by global standards.

 

And I am sure as the impact of all these policies (taken by the government) holds out, growth will gather momentum. There won’t be any adverse impact of GST on GDP growth. The GST by itself should normally add to growth.

 

(Chief economic adviser Arvind Subramanian pointed out that under the GST, the incidence of tax is going to come down. While there could be some teething problem in implementation, at the most, initially, the tax cut would be positive to both reduce inflation and stimulate consumption).

 

On Pradhan Mantri Garib Kalyan Yojana

PMGKY wasn’t an isolated scheme in last financial year. First we introduced the Income Disclosure Scheme; after the IDS, there was a (post-demonetisation) phase of people depositing cash in the banking system. And the PMGKY was over and above these. To assess the total amount of (black money) disclosures made, you have to look at all the three collectively.

 

Revenue secretary Hasmukh Adhia said the response to PMGKY hasn’t been very good; only Rs 5,000 crore has been declared under the scheme. There are mainly two reasons for it. First, even before the scheme was announced, people had tried to deposit their cash in different accounts and tried to “adjust their money”. Secondly, many people found the (PMGKY) rate – 50% tax plus 25% as interest-free for four years – too high).

 

No central funds for farm loan waiver by states

The Centre won’t provide any special package to any state to waive farm loans but states are free to spend from their own budgets should they take any such decision. The Centre will continue to provide the states funds in accordance with the latest Finance Commission suggestions, and not more to waive farm loans (clarified that states are free to take decision on farm loan waivers from their own budgets but they have to stick to the 3% fiscal deficit target, as stipulated under the fiscal responsibility legislation).

 

On Air India

As far as AI is concerned, Niti Aayog has given its suggestion to the civil aviation ministry and the ministry will have to explore all the options for divestment or privatisation of the airline. The civil aviation minister will now devise the methodology ( for disinvestment / privatisation). As far the merger of oil PSUs are concerned, the petroleum ministry will have to take a call.

 

On “jobless growth”

Jobs aren’t created outside the economic structure. If the economy grows then it’s only natural that the formal sector would create jobs and in this country job creation is even faster in the informal sector. Since there is no firm statistics available on job growth in the informal sector, the term ‘jobless growth’ is being bandied about.

 

On the amount of demonetised currency

On the total currency given to the banks, the RBI used to give the figures frequently during the process of demonetisation, but now that the exercise is complete, as a responsible institution it can’t give an approximation. Today, every currency note is to be counted and if there are counterfeits these also need to be counted before arriving at the real count. The exercise is enormous and large but the RBI will give the accurate figure when it is complete.

Source: http://www.financialexpress.com/economy/bad-loan-crisis-arun-jaitley-says-visible-action-on-npas-soon/697527/

Income Tax department warns against cash dealings of Rs 2 lakh, seeks tip-off

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Income Tax department warns against cash dealings of Rs 2 lakh.

Income Tax department today warned people against indulging in cash transaction of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty.

It also advised people having knowledge of such dealings to tip-off the tax department by sending an email to ‘ blackmoneyinfo@incometax.gov.in ‘.

The government has banned cash transactions of Rs 2 lakh or more from April 1, 2017, through the Finance Act 2017.

The newly inserted section 269ST in the Income Tax Act bans such cash dealings on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.

“Contravention of Section 269ST would entail levy of 100 per cent penalty on receiver of the amount,” the tax department said in a public advertisement in leading dailies.

In the 2017-18 Budget, Finance Minister Arun Jaitley had proposed to ban cash transaction of over Rs 3 lakh. This limit was lowered to Rs 2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha in March.

The restriction is not applicable to any receipt by government, banking company, post office savings bank or co- operative bank, the tax department said.

The move to ban cash transaction above a threshold was aimed at curbing black money by discouraging cash transaction and promoting digital economy.

The tax department had started the email address ‘ blackmoneyinfo@incometax.gov.in ‘ in December last year post the demonetisation of 500 and 1000 rupee notes.

It had then asked people having knowledge about conversion of black money into black/white to inform the government through this mail id.

Post the demonetisation of 500 and 1,000 rupee notes, people with unaccounted wealth had illegally converted their black money held in old notes to new 500 and 2,000 rupee notes.

The government had come out with a tax amnesty scheme PMGKY (Pradhan Mantri Garib Kalyan Yojana) under which people holding unaccounted cash could come clean by declaring their wealth and pay 50 per cent as tax and penalty. Also, a mandatory deposit of 25 per cent of the black money was to be made in a zero-interest bearing account for four years.

 

Source:  http://economictimes.indiatimes.com/articleshow/58959395.cms

RBI makes it easier for banks to implement joint lenders forum

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RBI gives more powers to tackle NPAs: Arun Jaitley

The Reserve Bank of India sprang into action as soon as the government notified the ordinance on bad loans, with the regulator offering more teeth to groups of lenders to deal with recovery proceedings and telling banks to stick to majority-agreed plans or face a penalty.

 

Any resolution plan agreed to by 60% of members in a joint lenders’ forum is binding on everyone in the group and no bank board will have the power to overrule the decision, the central bank said. Banks will have to implement the plan agreed upon without any additional conditions and there would be a monetary penalty on those who veer away from the decision.

 

“Delays have been observed in finalising and implementation of the CAP (corrective action plan), leading to delays in resolution of stressed assets in the banking system,” RBI said in a notification.

“It is reiterated that lenders must scrupulously adhere to the timelines prescribed in the framework for finalising and implementing the CAP.”

RBI’s strong measures come on a day when the regulator was empowered by law to direct banks to take action against bad loans which have been plaguing the sector for the better part of the last decade. Banks, because of differences between them over the recovery procedures, had often failed to resolve the problem.

In new timelines released on Friday, the RBI said henceforth decisions agreed to by a minimum of 60% creditors by value and 50% by number in the forum would be enough to approve a restructuring plan for the loans. The earlier rule required approval of 75% creditors by value and 60% by number.

The new corrective action plan covers restructuring of project loans, change in ownership under strategic debt restructuring and the scheme for sustainable structuring of stressed assets.

Source: http://economictimes.indiatimes.com/articleshow/58538315.cms

 

 

 

FIPB approves 9 FDI proposals worth Rs 659 crore

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Inter-ministerial body FIPB has approved nine investment proposals, including those of Netmagic Solutions and Vodafone, totaling a foreign investment of Rs 659 crore.

Inter-ministerial body FIPB has approved nine investment proposals, including those of Netmagic Solutions and Vodafone, totaling a foreign investment of Rs 659 crore. “Based on the recommendations of the Foreign Investment Promotion Board (FIPB) at its meeting held on February 21, the government has approved nine proposals involving FDI of Rs 659 crore and recommended three proposals for the Cabinet Committee on Economic Affairs (CCEA),” an official statement said. The FIPB, headed by Economic Affairs Secretary Shaktikanta Das, cleared proposals of Netmagic Solutions entailing an investment of Rs 534 crore and Vodafone India Rs 55 crore. It recommended proposals of Rs 750 crore of Apollo Hospitals Enterprise, Rs 900 crore of Star Technologies and Rs 789 crore of Flag Telecom Singapore Pte to the CCEA, it said.

The panel has deferred six proposals, including those of Gland Pharma, Crown Cement Manufacturing India Private and Powervision Export and Import India Private. It also said proposals of Hindustan Aeronautics, Spectrumlabs India Private and PMI Engineering Exports Private did not come to the FIPB as these were on the automatic route. The government has already announced winding up of the FIPB by putting in place a new mechanism, a move which will further improve ease of doing business.

Finance Minister Arun Jaitley, in his Budget 2017-18, announced the decision to abolish the FIPB, saying 90 per cent of foreign investment approvals are via the automatic route and only 10 per cent go to the board. The FIPB offers single-window clearance for applications on FDI in India that are under the approval route. The sectors under the automatic route do not require any prior approval and are subject to only sectoral laws.

India allows FDI in most sectors through the automatic channel, but in certain segments that are considered sensitive for the economy and security, the proposals have to be first cleared by the FIPB. With growth in FDI in important sectors like services and manufacturing, overall foreign inflows in the country rose by 30 per cent to USD 21.62 billion during the first half of 2016-17. FDI in the country rose 29 per cent to USD 40 billion in 2015-16 as against USD 30.94 billion in the previous financial year.

Source: http://www.financialexpress.com/economy/fipb-approves-9-fdi-proposals-worth-rs-659-crore/601389/