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/

One nation, one tax department: I-T takes cue from GST

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The move, which will require a change in the income tax law, would also end the relevance of various geographic divisions in the form of wards and circles.

The one-nation, one-tax principle that underlines the goods and services tax (GST), set to be rolled out on July 1, could be adopted in a much more broader sense by the income tax department through a path-breaking initiative on jurisdiction-free assessment.

This would mean that a taxpayer in Mumbai could be assessed by an income tax officer located in Patna, a significant leap toward eradicating corruption by reducing the need for face-to-face contact between citizens and tax officials to the absolute minimum besides speeding up processing.

The move, which will require a change in the income tax law, would also end the relevance of various geographic divisions in the form of wards and circles with the whole country becoming one jurisdiction. This, it is hoped, will put an end to a system in which bribery is said to be used as a tool to ease processes through human intervention.


A high-level internal report of the Central Board of Direct Taxes (CBDT) recommended the move, which is under active consideration, a senior official told Economic Times.

“We are looking at it,” the CBDT official said.

The government may consider implementing the process in the next financial year.

 

The Catalyst
The key catalyst for such a significant reform is the massive shift toward e-filing of returns, which is already jurisdiction-free with returns going to the Central Processing Centre in Bengaluru.

In the last financial year, over 42.1 million tax returns had been filed online by February. The number of e-returns processed by then was 43 million, which included some backlog from previous years.

Multiple Benefits
In line with this move towards e-processing, the income tax department may even opt for e-scrutiny for all limited scrutiny cases where assesses can explain the transactions in question over email, the official said.

A complete jurisdiction-free environment would make geography redundant and the income tax department completely faceless for taxpayers. Any review or scrutiny of return could happen anywhere in India through an electronic interface, ensuring that the payee is not forced to interact with officials. “A taxpayer would not need to have any physical interface with his assessing officer,” said the official cited above.

CBDT had earlier constituted a seven-member committee to formulate a Standard Assessment Procedure for e-scrutiny to promote greater certainty, transparency and accountability. The board has in recent times taken a number of initiatives to reduce the face-to-face contact between tax officials and assessees and make the system non-adversarial.

These include directing field offices to raise only specific queries in income tax assessment cases picked up for scrutiny. It also directed the expeditious completion of those scrutiny cases where income concealed is up to Rs 5 lakh. “Jurisdiction-free assessment will help the tax department plan and allocate assessment work across the country,” said Jiger Saiya, partner, direct tax, BDO India.

Source: http://economictimes.indiatimes.com/articleshow/59026099.cms

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

GST: Filing returns will no longer be taxing

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
By Prakash Kumar, CEO, GSTN and Upender Gupta, Commissioner (GST Policy), Ministry of Finance

There is an excitement in the country about GST. People want to understand the process of GST. Through this article, we present some points about the process of filing returns.

Every trader will have to file returns once a month and pay tax. The input credits of taxes that have been paid on purchases will be automatic and will be available to every trader. The whole process of filing returns is online. If accounts are kept in the Excel sheet provided by GSTN, then the same account will automatically be converted into returns with the help of an offline tool every month.

If a trader sells all his merchandise only to retail customers, then the returns of such a trader will be very simple – the summary of rate-wise turnover will be shown. If a trader avails of the composition scheme and has a turnover of less than Rs.50 lakh, such a trader will not have to file returns every month, but every three months, showing the total turnover.

Traders selling business-to-business merchandise must give specific details for each sale invoice in their returns. When a trader’s sales details are entered into the form of returns on the GST website by the 10th of the month, the complete details of purchases made by his buyers will be seen in his GSTR-2 (GST Online Account). That means it will auto-populate.

With the purchasing buyer clicking okay, after looking at these details, the merchant’s GSTR-3 return will appear in the computer itself. The GSTN system will auto prepare and show the merchant’s tax liability and the complete details of the input tax credit, along with net tax liability. The trader would be required to deposit the difference between tax liability and input tax credit. Taxes must be deposited online or in the bank.

After this, the trader will have to submit the final return made by computer by clicking on GSTR-3 and submitting it by the 20th of the month. There is an arrangement in business-to-business transactions which we call the input tax credit reversal, which is to return the input tax credit taken. A lot of people have expressed concern about this, but if you understand the whole process, then you would fully support it.

If the trader from whom you buy goods has shown that transaction in his return by the 10th of the month, you will get input tax credit. Suppose the person selling the goods does not put that invoice in his returns, even then you will get an opportunity to show it in your GSTR-2 return by the 15th of the month, and by doing so, you will get full input tax credit.

After that, you have to contact the businessman (the supplier) and explain that he must show that transaction in his return so that there is no reversal of the input tax credit received in the next month. You will get 30 days for this and if even then the merchant who sells the merchandise does not accept this transaction and does not show it in his return, then the input tax credit tax that you got would be reversed in your returns next month.

It is the duty of every businessman to deal with such traders who have deposited the tax with the government after collecting the tax from you.On the basis of the default of each merchant, they will be given a compliance rating, which will be visible to all other traders so that you do not do business with frequent defaulters.

Source: http://blogs.economictimes.indiatimes.com/et-commentary/gst-filing-returns-will-no-longer-be-taxing/