New Delhi Due to the need for digital signature, filing of monthly GST return and delay in tax payment, the government has allowed businesses to verify returns through EVC by 30 June.
In a notification, the Central Board of Indirect Taxes and Customs (CBIC) stated that during the period from April 21, 2020 to June 30, 2020, any registered person was verified Form GSTR-3B through Electronic Verification Code (EVC). Filing of returns will be allowed under Section 39.
Currently, the GSTR-3B form has to be digitally signed while filing monthly returns and paying taxes. However, businesses are not able to digitally sign due to the closure of the office due to the lockdown, causing delays in filing returns.
The government has not released the monthly GST revenue data on 1 May due to low GST collection in April. Apart from this, CBIC has also introduced a new rule in the Central GST Rules.
It is known that businesses with zero or no entry in all tables as GSTR-3B can file returns through SMS using registered mobile number and the said returns are verified by registered mobile number based one time password (OTP) facility. Will go.
New Delhi, Business Desk. The government has provided great relief to the traders. The government has extended the annual GST return filing date for the financial year 2018-19 to 30 September 2020. The Finance Ministry has issued this announcement by issuing a notification. The announcement comes after the nationwide lockdown extended to May 17, implemented to prevent corona virus infection. Significantly, the lockdown has been in force in the country since 25 March. However, Lockdown 3.0 has some leeway in terms of red, orange and green zones.
The GST return filing date has brought a lot of relief to businessmen with annual turnover of over five crore. Earlier, the finance minister had given time till May 5, 2020 to file the GST return for the month of March. The Finance Ministry has provided another relief to the traders. The Ministry has reduced the late fees for late returns. The ministry has reduced it to 9 percent, compared to 12 percent earlier.
According to the Department of Revenue of the Ministry of Finance, people registered under the Companies Act 2013 can submit their GSTR-3B through Electronic Verification Code (EVC). Significantly, businessmen have been demanding exemption from GST for several days in view of the critical time of corona virus epidemic. At the same time, the government believes that waiving the entire tax will cause problems in the credit chain. According to sources, the government is also considering giving GST relief package to the areas most affected by this epidemic. These areas include tourism, aviation and restaurants.
As per the tradition till now, the government releases data related to GST collection on the basis of cash collected in a given month. A source said that under the circumstances arising out of Kovid-19, the government has decided to wait for the extended deadline before releasing the collection figures.
Sources said that it has been decided to postpone the April GST collection figures due to ‘unprecedented circumstances’ arising out of coronavirus. No date has been set for the release of this figure.
According to the source, the government expects more returns to be filed by May 5. He said that a decision has to be taken to extend this deadline. Talking about the financial year 2019-20, in seven months in 12 months, the GST collection figure went up to Rs 1 lakh crore. In March this year, the government earned Rs 97,597 crore from GST.
According to another source, low tax collection in April may also be the reason for postponing the release date.
The Finance Ministry has released Rs 17,287 crore to the states amid Corona crisis. This will help the states to strengthen their financial resources.
Government released Rs 17,287 crore to states
Will help strengthen financial resources
For the past few days, the Indian government has intensified its war against the corona virus. Many such decisions have been taken by the government, including the relief package, which will help the common people a lot. With this, now the government has also released Rs 17,287 crore to the states.
The government has given this help at a time when some states have demanded their GST dues. Actually, recently Punjab Chief Minister Amarinder Singh has written a letter to Prime Minister Narendra Modi. He said in this letter that the amount of GST compensation of 6,752.83 crore has not been received since October last year. In the letter, Amarinder Singh appealed to PM Modi to direct Finance Minister Nirmala Sitharaman to release this amount soon.
Why get GST compensation
Significantly, GST accounts for about 60 percent of the total revenue of states. According to the agreement reached by the Center with the State Governments while implementing GST, the Central Government compensates the loss of revenue from it.
6,195 crores to 14 states
Explain that out of Rs 17,287 crore of the Center, Rs 11,092 crore has been given to the States for the State Disaster Response Relief Fund (SDRMF). At the same time, an amount of Rs 6,195 crore has been released to 14 states as ‘Distribution of Revenue Loss Grant’. These states are Andhra Pradesh, Assam, Himachal Pradesh, Kerala, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Sikkim, Tamil Nadu, Tripura, Uttarakhand and West Bengal.
Which state got what
In a tweet made by Finance Minister Nirmala Sitharaman’s office, it was stated that Andhra Pradesh is worth Rs 491.41 crore, Assam Rs 631.58 crore, Himachal Pradesh Rs 952.58 crore, Punjab Rs 638.25 crore and Uttarakhand Rs 423 crore, Kerala 1276.91 crore has been released.
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Similarly, an amount of Rs 37.33 crore was released to Sikkim. Apart from this, 14 states including Manipur, Meghalaya, Mizoram, Nagaland, Tamil Nadu, Tripura and West Bengal have been given a share. The remaining Rs 11,092 crore has been given to all states in the first installment of SDRMF as advance payment of the Centre’s share.
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Of this, Rs 1,611 crore has been released to Maharashtra, Rs 966 crore to Uttar Pradesh, Rs 910 crore to Madhya Pradesh, Rs 708 crore to Bihar, Rs 802 crore to Odisha, Rs 740.50 crore to Rajasthan and Rs 505.50 crore to West Bengal.
Apple has increased prices of many of its iPhones after the Goods and Services Tax (GST) hike from April 1. After the introduction of new GST rates, the initial price of iPhone 11 Pro Max has now become Rs 1,17,100. At the same time, the initial price of iPhone 11 Pro has gone up to Rs 1,06,600. Let us know how much the prices of all iPhones have become. New apple iphone prices
The price of iPhone 11 Pro Max was earlier Rs 1,11,200 which has now become Rs 1,17,100. This price is of 64 GB storage variant. If seen, the price of this phone has increased by Rs 5,900. At the same time, the initial price of iPhone 11 Pro has increased by Rs 5,400 to Rs 1,06,600. Earlier it was priced at Rs 1,01,200.
iPhone 11 Pro Max 64GB
iPhone 11 Pro 64GB
iPhone 11 64GB
iPhone XR 64GB
iPhone 7 32GB
Let us know that earlier smartphones of companies like Reality, Xiaomi and Oppo have also become expensive by 18 percent. The price of Reality X2 Pro has increased by up to Rs 2,000. This is the first time Realme’s smartphones have become expensive in India.
The numbers are significant because they are among the first available so-called high-frequency indicators of the economic impact of the pandemic.
Goods and Services Tax (GST) collections for March saw an 8% decline over the same month a year ago to the lowest in five months, and auto sales in the month for India’s largest carmaker Maruti Suzuki were down almost by half as the lockdown imposed to combat the spread of the coronavirus disease (Covid-19) took a toll on the economy.
The numbers are significant because they are among the first available so-called high-frequency indicators of the economic impact of the pandemic and the hard lockdown that India has imposed for three weeks till April 14 to slow its progress. Over the next few days, more indicators, including Purchasing Managers Index, a measure of economic health, will become available.
GST collections in March fell to Rs 97,597 crore. Apart from Maruti, which has a close-to-50% share of the Indian car market, Tata Motors, the leading maker of trucks and buses, said sales of these commercial vehicles were down 87% in the month. Demand for commercial vehicles is considered an indicator of economic activity. India imposed a lockdown starting March 25. The lockdown has exacerbated an existing slowdown in vehicle sales. Sales at Hyundai Motor were down 47% in the month and at SUV-maker Mahindra & Mahindra by 88%.
Analysts and economists say India is unlikely to meet its target of 5% growth in 2019-20 and have revised downward their estimates for 2020-21 too. SBI Research said in a report that India could grow by 4.5% in 2019-20 and 2.6% in 2020-21. Nomura has said in a report that it expects India’s GDP to fall by 0.5% in 2020 (calendar year), revising its earlier estimate of 4.5% growth.
Total GST for the financial year 2019-20 has increased by 3.8% to Rs 12,22,131 crore compared to Rs 11,77,369 crore collected in 2018-19.
Experts said things could get worse. Abhishek Jain, tax partner at consulting firm EY, said, “With most businesses being non-operational for a considerable period in March and the relaxation of delayed payments being allowed, the collections in the coming quarter would see quite a fall.”
The fall in March breaks the trend of four months of robust GST collections since November that saw monthly revenue figures crossing the Rs 1 lakh crore benchmark.
Out of the gross GST revenue for March, the share of central GST is Rs 19,183 crore, state GST is Rs 25,601 crore, integrated GST is Rs 44,508 crore (including Rs 18,056 crore collected on imports) and cess is Rs 8,306 crore, a finance ministry statement said.
Pratik Jain, partner and leader of Indirect Tax practice at PwC India said although the March collection has seen some impact of the Covid-19 lockdown, the real impact would be reflected in April. “There is around 7% reduction in filing of GSTR 3B (returns) over last month. It seems that many businesses may not have been able to pay GST because of liquidity issues.”
Vishal Raheja, deputy general manager (DGM), Taxmann said: “It is noteworthy that the import of goods has also shown a negative growth of 23% as compared to March 2019. It has also played a crucial role to push back the GST collections.”
Experts said the impact of coronavirus and consequent lockdown of major economies will continue to be a drag for global growth and India will also be impacted. International Monetary Fund (IMF) managing director Kristalina Georgieva said last week that the outlook for global growth in 2020 is negative and remarked it a recession “at least as bad as during the global financial crisis (2008) or worse”. Moody’s Investors Service on Friday slashed India’s economic growth projection for calendar 2020 from 5.3% to 2.5% and ICRA Ltd estimated India’s growth at 2% for FY-21.
The government has allowed taxpayers to invest in PPF, NSC, ELSS or any other tax saving scheme by June 30, 2020, and yet claim tax benefit for the FY 2019-20.
Even while the country is in a complete lockdown to control the spread of Coronavirus in the country, the new financial year (FY) 2020-21 has sneaked in from April 1. For income tax purpose, while the FY 2020-21 has begun on April 1 and will end on March 31, 2021, the relevant assessment year (AY) will be AY 2021-22. All income earned during the FY is assessed in the AY and income tax return for FY 2020-21 is accordingly filed in the AY 2021-22.
As a taxpayer and even if one is not a taxpayer, there have been several important changes that one needs to be aware of. Here are a few of those key income tax changes effective April 1, 2020.
1. Financial Year not extended
Firstly, it is important to note that contrary to the concern raised about a change in the financial year, the government had clarified on March 30, 2020, that the financial year has not been extended and the status quo on the same is being maintained. The government had extended the date related to the Indian Stamp Act for certain amendments to be effective from April 1, 2020, which has now been extended to July 1, 2020.
2. Last date for I-T savings extended
If you were not able to make income tax saving for FY 2019-20 because of the lockdown, there’s a piece of good news. The government has allowed taxpayers to invest in PPF, NSC, ELSS or any other tax saving scheme by June 30, 2020, and yet claim tax benefit for the FY 2019-20. The tax benefit under Section 80C, for FY 2019-20 may, therefore, be availed even if the investment is done between April 1, 2020, and June 30, 2020. However, for those who have already made tax-saving investments, can invest till June 30 or anytime later in the FY and avail tax benefit for FY 2020-21.
3. New Tax Regime in-force
Starting FY 2020-21, the income taxpayers will have an option to pay lower income tax rates by foregoing income tax exemptions and deductions or continue paying the same tax rates by availing the deductions. For those availing lower rates will be assessed under the New Tax Regime else the assessee will continue to pay taxes as per Old Tax Regime.
Under the new tax regime, the following will be the new income slabs and tax rates:
Up to Rs 2.5 lakh – Nil
From 2,50,001 to Rs 5 lakh – 5 per cent.
From 5,00,001 to Rs 7.5 lakh – 10 per cent.
From 7,50,001 to Rs 10 lakh -15 per cent.
From 10,00,001 to Rs 12.5 lakh – 20 per cent.
From 12,50,001 to Rs 15 lakh – 25 per cent.
Above Rs 15 lakh – 30 per cent.
Some important exemptions, deductions available under Income-tax Act that the taxpayer will have to forgo will include – Investments in PPF, ELSS, Life insurance etc, and expense such as home loan repayments, tuition fees etc.
4. Belated return last date extended
The last date to file ITR without late filing fee for AY 2020-21(FY 18-19) was August 31, 2020. The late filers could file their belated return by March 31, 2020, which now has been extended by the government to June 30, 2020. The penalty of Rs 10,000 as a late filing fee for those with income above Rs 5 lakh will, however, needs to be paid.
5. Interest on due tax
If as a taxpayer you have delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS made between 20th March 2020 and 30th June 2020, the government has reduced interest rate at 9 per cent instead of 12 per cent per annum ( i.e. 0.75 per cent per month instead of 1 per cent per month.
6. Dividend taxable
From this FY, the dividend received by equity shareholders and equity mutual fund investors will become taxable as per one’s income tax slab. Till now, the company declaring the dividend was levying Dividend Distribution Tax (DDT) before the distribution of dividends to the investor but now that will stop. The tax on dividend will be paid by investor now. For equity MF investors, the DDT of 11.64 per cent was deducted before receiving the dividend amount. Those investors in higher tax slab will be impacted more because of this new rule.
7. Home loan for first-time buyers
For the first time buyer of a home, the government has extended the tax benefit available on interest payment of the home loan. Under Section 80EEA, the borrower can avail a deduction of up to Rs 1.5 lakh on home loan interest payment subject to certain conditions. One such condition is that the home loan needs to be sanctioned by the lending institution during the period from 1st April 2019 to 31st March 2020 which has now been extended to March 31, 2021. Importantly, the value of the home as per the stamp duty needs to be within Rs 45 lakh.
The GST on mobile phones has now increased from 12 to 18 per cent. This move is expected to see all major phone makers announce price hikes on their phones in the coming days.
Xiaomi has increased the price of its phones owing to the hike in GST
GST on phones was recently increased from 12 to 18 per cent
The new prices have come in to effect already and will be gradually updated on the company’s website
Chinese phone maker, Xiaomi, appears to have buckled under the pressure and announced a price hike on it Mi and Redmi branded phones in the country. The new prices have come into effect already with the company promising them to start updating them on Mi.com soon.
The company explained that the step has been taken after factoring in the 50% jump in GST recently announced by the government. The increase in GST on mobile phones now sees the rate being increased from 12 per cent last financial year to 18 per cent from April 1, 2020.
The company further informed that the move to increase the price of their phones was being taken after much deliberation and to maintain the company’s policy of more than 5 per cent margin on their phones and other hardware products.
The move comes after the GST Council, headed by Finance Minister Nirmala Sitharaman, hade earlier, increased GST on smartphones from 12 per cent to 18 per cent. The India Cellular and Electronics Association (ICEA) had previously warned that the move is bound to see many phone makers increase the prices of their products in the country.
While it is not clear how much the prices will increase for now, when combined with the weakening rupee against the dollar, the price hike could be between 5 to 10 per cent. Pankaj Mohindroo, ICEA chairman had also told IANS last week that the 6 per cent GST increase will be detrimental to the vision of digital India. Consumption will be stymied and our domestic consumption target of $80 billion (Rs 6,00,000 crores) by 2025 will not be achieved as India will fall short by at least Rs 2,00,000 crores.
ICEA, in a letter to the Finance Minister, wrote that the mobile handsets sector was already in deep stress due to supply-chain disruption happened after coronavirus outbreak in China. The GST rate increase will affect the market adversely. The industry body said that it was the most inappropriate time to increase the GST.
Goods and services tax (GST) collections of February are hardly signalling a revival in gross domestic product
About 8.35 million returns were filed in February against 8.1 million last December
India’s low exposure to China has saved the day for manufacturers for now, but it is still early days to rejoice. The official manufacturing Purchasing Managers’ Index (PMI) held up at 54.5 in February, just slightly lower than the 55.3 recorded in January. The numbers suggest that manufacturing operations are improving, which is quite heartening in a weak global economy.
But much of this is because New Delhi remains insulated from Beijing as India’s exports to China constitute about 5% of its total exports. So while a few Asian countries managed to buck the trend, March may still twist the narrative if the global economic conditions worsen.
“The impact of Covid-19 (coronavirus) remains uncertain and could hit us hardest in March. The sharp drop in China’s manufacturing PMI in February and likely production outage in India’s auto industry indicates an impact is pending,” economists at Axis Capital Ltd said in a note to clients.
Besides, goods and services tax (GST) collections of February are hardly signalling a revival in gross domestic product. In fact, GST collections slipped to ₹1.05 trillion in February against the government’s target of ₹1.15 trillion. Month-on-month collections were lower by about ₹6,000 crore.
However, GST return filers have increased. About 8.35 million returns were filed in February against 8.1 million last December. Besides, this suggests that while compliance is improving with a rise in returns filed, actual business activity for companies may have contracted.
Two lakh youth to be benefited by Government’s GST training programme
Government pushed a GST preparing program under the Pradhan Mantri Kaushal Vikas Yojna. Through this program around two lakh people will be readied, and those readied people will then further help in associations especially in domains, for instance, selection and calculation of cost hazard under the new obligation organization. Skill development minister Rajiv Pratap Rudy said at an event, the second recognition of Skill India Mission, that this readiness program will be completed in 14 states.
Rudy alongside Water Resources Minister Uma Bharti, Oil Minister Dharmendra Pradhan, Health Minister J P Nadda, Textiles Minister Smriti Irani and Rural Development Minister Narendra Singh Tomar carefully initiated the training course at 100 focuses in the nation.
The service likewise propelled a national entrance for assessors and mentors other than 51 new PMKVY focuses. With this, the aggregate number of PMKVY focuses has expanded to 200.
Just a few days back government similarly launched an app ‘GST Rate Finder’, through which one can without much of a stretch check what is the GST rate on a specific thing. All these efforts can be viewed as government’s activity to encourage the business and everyday action in new GST administration.
e-way bill: Movement of goods set to be easy from February 1
As confirmed by GST Network , from 1st of February transporters will not need separate transit passes for transporting goods from one state to another as the e-way bill issued to them will be valid pan India.
Under the Goods and Services Tax made effective from July last year, inter-state transportation of goods beyond 10 kms of range, with a value of Rs 50,000 and above, will mandatorily require e-way bill from February 1 2018.
GSTN CEO Prakash Kumar said: “Taxpayers and transporters need not visit any check post or tax office as the e-way Bill can be generated electronically in a self-service mode.
“The new system makes generation of e-Way bill very easy on the portal, via mobile App, SMS and for large number of users using offline tool.” The e-way bill system has already been launched in four states — Rajasthan, Karnataka, Uttarakhand and Kerala. These states together generate approximately 1.4 lakh e-way bills per day.
“The remaining states will join during in next two weeks. The trial period will run till January 31 for all stakeholders,” GSTN said in a statement.
It said transporters who want to generate e-way bill can visit the ‘ewaybill.nic.in’ portal and would need to register themselves by giving the GSTIN. Those who are not registered under GST can get themselves enrolled under e-way bill system by providing their Aadhaar or PAN to generate the eWay Bill.
Alert messages are also issued to the users through online and SMS facility.
“Vehicle number can be entered by those who generate E- way Bill or transporter and they can also update the vehicle number in case of vehicle breakdown or transshipment,” said GSTN, the company handling the technology project for GST roll out.
There is also a provision for cancellation of e-way Bill within 24 hours of time. “No E-way Bill is required for transportation of goods in non- motorised conveyance and also for certain class of goods like fruits, vegetables, fish and water,” the report added.
The e-way bill rules provide for random verification which can be done by a any tax officer on duty. However, he has to upload and provide the requisite report within the specified time frame.
Also, the new rule also says that if a transporter faces detention of more than 30 minutes, he can go online and upload a report on the portal.
Rules, User Manual, Notification, FAQs and Computer based tutorials (CBTs) are available online.
GSTN has invited suggestions from stakeholders on the e-way bill system.
Government all set to include petrol, diesel under GST, says FM Arun Jaitley
As a result of the consistent demand for the inclusion of petroleum products like petrol, diesel under GST, the government may soon include these products under the uniform tax regime. The first clear hint on this came from Union Finance Minister in Parliament a couple of days back when Mr. Arun Jaitley said the government was willing to include petrol, diesel under GST, and that before the GST Council took a decision, the government was awaiting confirmation response from different states of the country. A couple of days ago, Bihar Finance Minister and GST Council member Sushil Modi had stated that the government should include petroleum under the GST domain. Also, the Petroleum Ministry has been suggesting for a uniformity of taxes on petroleum products due to price difference in states after imposing of Value Added Tax (VAT).
On December 15, Sushil Modi Finance Minister of Bihar and GST Council member had said real estate, electricity, stamp duty and petroleum products should become a part of the GST regime. He also added that the GST council could merge tax slabs of 18% and 12% into one and reduce the highest tax slab from 28% to 25% once the tax collection is stabilised. Sushil Modi had also assured the states that their revenues would remain unaffected as they would be free to levy addition cess to the petroleum products.
During the Rajya Sabha sessions, P Chidambaram the former finance minister also asked Jaitley to tell the House when the final decision would be taken this new inclusion. Jaitley replied saying the previous Congress regime knew that the petroleum inclusion in the GST could be a “deal breaker”, and so it was kept out of the GST draft. He said he was hopeful that the centre government and states would soon reach a consensus on the issue.
In its biggest GST tax rate change, the GST Council on November 10 had slashed tax rates on over 200 items but kept the petroleum products out of the GST domain. Close to 178 items of daily use were shifted to low tax bracket, bringing them down from 28% to 18%, while a uniform 5% tax was prescribed for all type of restaurants.
Besides, several reports said the government had not paid attention to several warnings from private companies that the complex technology required for a nationwide goods and services tax GST) to work smoothly was not ready for launch. Weeks before the launch of GST, the government did not listen to industry experts who said more time was required to prepare for the changes, reports said. More than IT and tax consultant professionals who worked on the GST project said that the government was deliberately ignoring warnings for more testing of the complex system even as it was pushing through late changes.
While the sources mentioned Infosys, a leading technology company which built the GST technological network, made “basic errors”, they said government officials did not accept any responsibility for the glitches in the GST roll out. Till date the government is making changes to filing deadlines, tax rates and other features, making it hard to bring stability in the system, they said. The finance ministry and GSTN, the government authority managing the GST network, refused to comment on specific problems about the GST rollout or specific warnings by industry related to testing. The GST law was debated for decades, industry had enough time to prepare, and glitches are being fixed, a finance ministry spokesman said.
Government reduces GST rate on 27 items, announces several relief measures for traders and exporters
The GST Council, headed by Finance Minister Arun Jaitley yesterday made a series of announcements on the new tax regime to provide relief to thousands of small business owners and exporters.
This meeting was the result of the discussion which happened between Jaitley, Prime Minister Narendra Modi and BJP President Amit Shah about the economy.
Confirming to reporters, Jaitley said, “GST doesn’t have exemptions, and hence there will be an e-wallet for each exporter with a notional advance refund amount. E-wallet for exporters are expected to be implemented by 1st April 2018, till then they can file GST on the rate of nominal 0.1%.” Later he also added that ‘starting from October 10, tax refunds of July and August for exporters will be processed’. GST rates of 27 items reviewed by the GST Council, including sliced dry mangoes, khakhra, unbranded namkeen, chapati have been cut to a considerable low rate. E-way bill to be implemented from April 1, said the finance minister – Arun Jaitley.
GST rate on some diesel engine parts, stationery items have been reduced to as low as 18% from a raging 28%.
He also added that a group of Ministers are going to study taxation regime for restaurants. The decision will be taken while keeping the bifurcation on basis of AC and non-AC restaurants in mind.
Jaitley said reverse charge mechanism for transactions between registered and unregistered businesses has been postponed till March 31, 2018.
Limit for composition scheme in GST has been increased from Rs. 75 lakh to Rs. 1 crore so as to reduce compliance burden on medium and small taxpayers, as confirmed by Jaitley.
However, responses of business owners are yet to come on this news and let’s see how the general public reacts to this change.
Stay tuned for more updates from Discountwalas about latest news related to GST.
All eyes are on GST as Centre plans higher social pension
A draft proposal is readied by the government to proliferate the quantum of the three key “social pensions”.
It will however, depend largely on whether there are resources with the Centre to fund the revision.
In the first quarter after GST, revenue collections far exceeded the Centre’s expectations.
NEW DELHI: A draft proposal is readied by the government so as to increase the three key social pensions’ quantum but everything relies on the revenues of the Centre post-GST, with the reconstruction being dependent on whether there are resources with the Centre to fund the revision.
The estimates say that restructuring of NSAP (National Social Assistance Programme) — disability pension, widow pension and old-age pension— will invite an extra expenditure of approx. Rs 10,000 crore over and above the present annual budget of Rs 9,500 crore.
While the proposal has been worked out by the rural development ministry, but it will be put forward to the Expenditure Finance Committee when there is a clearer picture on the availability of funds.
As per a source, “The fate of the proposal will be decided majorly by GST. We are ready, if there is availability of funds”.
Observers mentioned that in the first quarter, revenue collections were above the Centre’s expectations, which raises hope that in such revisions, funds will not be a hurdle. Recommendations of the Sumit Bose committee mentions that the government should link the pensions given to BPL households, under NSAP, to the CPI (consumer price index) and should reduce the age eligibility from 40 years to 18 years for widow pension.
At the time of accepting the recommendations, the ministry should also try to absorb the rising outgo on pensions, which can be done by restructuring the pattern of funding.
The Centre may ask states to share 40 % of the bill in contrast to the existing arrangement of total cost being borne by the Centre alone. The extent of coverage needs to be finalized crucially, probably viewing the uncertainty over resources.
As per the expert panel, pensions should be extended to all households except for those “automatically excluded” under the ‘socio-economic caste census’ — the measure of deprivation levels — the rural development ministry has kept it open whether to limit its schemes to families with “one deprivation” or “two deprivations”.
As a pilot proposal, the ministry may increase the old-age pension to Rs 500 from Rs 200, of which the states will pay Rs 300 and Centre Rs 200.
Currently 3.5 crore households are included by the pension. Extending it to people with “one deprivation” will increase the net to 8.72 crore households and extending it to those with “two deprivations” will spread it to 5.5 crore households. The ministry favors instituting widow pension for those aged 18-39 years while agreeing to pay a one-time grant in case of remarriage. On disability, the ministry has agreed to change the eligibility criteria from 18 years to the person’s date of birth, and from 80% disability to 40% disability. The pension too is to be raised from Rs.300 to Rs.500. There are estimations, that the Centre will need around Rs.22,000 crore to fund the revamped pensions. Introduction of state’s share of 40% will bring in Rs.10,000 crore and considerably ease the Centre’s burden.
The rumour mills have gone on an overdrive mode since the launch of GST.
Here’s a reality check by ET Wealth for both GST supporters and its detractors.
1. Now it’s one nation one tax
Myth : Since GST will replace all other taxes on all goods and services, we are in a single tax regime.
Reality : Though this was the original idea, petroleum products—petrol, diesel—are still outside GST’s ambit and, therefore, their tax rates vary significantly across states.
For example, petrol is still sold in Mumbai at Rs 74.30 per litre (as on 5 July) compared to Rs 63.12 in New Delhi. Similarly, some other items, such as liquor, have also been kept out of GST for now.
2. Small businesses will suffer
Myth : The life of small businessmen will become difficult under GST because of computerised billing, need for Internet connectivity.
Reality : Shops can do manual billing under GST and Net connectivity is needed only at the time of filing monthly return and can be managed from a cyber cafe.
3. Prices will shoot up
Myth : Personal expenses will go up on account of GST making it inflationary because tax rates have been fixed at higher levels—18%, 28%.
Reality : Though the GST rates seem high, it is only because the entire tax is now visible to the consumer. Earlier most taxes—central and state excise, additional excise, purchase tax, etc.—did not reflect on your bill. If one adds up all the taxes, it would have been more for most items (ie effective tax rates will be lower for most products).
For example, the price of chicken dish in Kerala should fall because there was a 14.5% tax on live chicken earlier, which has come down to zero now under GST.
4. Corporates may try to profiteer but govt won’t
Myth : Business will try to rob you of the GST benefits, but the government won’t make money at your expense.
Reality : Some state governments are also acting greedy and not passing on the GST benefits to consumers. For example, the Maharashtra government has increased the vehicle registration tax by 2% after auto firms passed on the GST benefit by cutting prices by 2-3%.
5. No tax other than GST is now a reality
Myth : For every good or service that has been brought under GST, there won’t be any additional tax.
Reality : GST only subsumes central and state taxes and the levies charged by local bodies are still outside its ambit. Using this loophole, the Tamil Nadu government has allowed its local bodies to charge 30% tax on movie tickets over and above GST. GST is 18% for movie tickets up to Rs 100 and 28% for tickets that cost more than Rs 100.
But because of local body levies, tax in Tamil Nadu will be 48% for tickets up to Rs 100 and 58% for tickets that cost more. Not surprisingly, the cinema hall owners in the state went on strike. “Action of the Tamil Nadu government is against the spirit of the GST and the GST council should take action against it,” says Amit Sarkar, Partner and Head, Indirect Taxes, BDO India.
6. Economic growth will rise
Myth : GST will push up the economic growth.
Reality : Real economic growth comes from both organised and unorganised sectors. Tax evasion becomes difficult in GST, so cost advantage of unorganised sector goes and this will result in some businesses shifting to the organised sector. So, what happens will not be an in increase in ‘real’ economic growth but an increase in ‘recorded’ economic growth. However, there will be a small uptick in ‘real’ economic growth due to the improvement in the ease of doing business.
7. Pay GST twice for card payments
Myth : GST will be charged twice, if you make payments via credit card.
Reality : There is no additional GST for credit card payments and the confusion arose only because there is GST on additional fees—convenience charges—levied by companies. For example, you make a Rs 10,000 payment and a company charges Rs 50 as convenience fee for helping you make the payment via the credit card, you have to pay 18% GST on that fee too—earlier you paid a 15% tax on it. So the 3% increase is very small—just Rs 1.5 on Rs 50.
The tax system in India has seen an overhaul with the launch of Goods and Services Tax (GST) from July 1. The GST, in its making, was met with both inhibitions and excitement. While the country is still debating the impact of the four-structure tax system, some of its benefits have already started to trickle down to the masses.
India now has four tax slabs – 5%, 12%, 18% and 28% and an exempt and additional cesses category. Though GST will impact the budget of everyone differently, depending on their lifestyle patterns, the change in household expense is set to be more or less the same for everyone.
Some household articles have seen a price increase, while the prices of many others have come down. Food products have seen a GST imposition of 0-5%, while toiletries have seen an imposition of 18%. Let us take a look at the overall impact of GST on your basic household expenditure:
Groceries –While some grocery items like milk, bread, pulses, flour, fruits and vegetables, tea, coffee and basmati rice have been left outside the ambit of GST, other items like packaged curd, paneer, cheese, biscuits, corn flakes, shampoos, face creams, hair oils, medicines, etc. have become cheaper. Things which have become expensive include packaged chicken, butter, bhujia, etc.
Lifestyle expenses – Entertainment expenses have come down as the tax has been reduced to 28% from 30% earlier.
Airfares – The economy class airfare too has come down as the new tax regime levies 5% tax on airfare against the old rate of 9%.
Cab rides – Your monthly expense on travel is sure to come down if you take cabs for regular commute as the service tax has now been reduced to 5% from 6%.
Telecommunication services – DTH and cable TV charges have become dearer as these services will charge 18 per cent GST instead of 15% service tax.
Education – Pre-schools and school education will remain tax free under GST. Services offered by colleges and higher universities will attract 18% GST levy as compared to 15 % earlier.
Luxury spending – Stay in 5-star hotels, restaurant bills etc have gone up with the implementation of GST. Luxury expenses are now taxed at 28%.
Car prices – Many companies have revised the prices of their car models after the GST roll out. Now car purchases are taxed at 28 per cent GST with an additional cess between 1% and 15%. Cars with diesel engines less than 1,500 cc will attract 3 per cent cess, while small cars with petrol engines less than 1200 cc will be imposed with 1% cess. Big cars with engines over 1,500 cc and SUVs with length over 4 metres will be imposed with 15% cess in addition to 28% GST. Electric vehicles have been kept at 12%.
GST has certainly brought in changes in prices of various items, but what you need to do is plan your household budget smartly to avoid getting into any financial mess.
Most of the goods and services have been listed under the four broad tax slabs – 5 per cent, 12 per cent, 18 per cent and 28 per cent. Some items like gold and rough diamonds have exclusive tax rates while some have been exempted from taxation.
As India wakes up to a new tax regime, here is a quick guide to all the goods and services and their respective tax slabs:
Tax exempted Goods A number of food items have been exempted from any of the tax slabs. Fresh meat, fish, chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, all kinds of salt, jaggery and hulled cereal grains have been kept out of the taxation system.
Bindi, sindoor, kajal, palmyra, human hair and bangles also do not attract any tax under GST.
Drawin .. or colouring books alongside stamps, judicial papers, printed books, newspapers also fall under this category. Other items in the exempted list include jute and handloom, Bones and horn cores, hoof meal, horn meal, bone grist, bone meal, etc.
Services Grandfathering service has been exempted under GST.
A low budget holiday may get cheaper as hotels and lodges with tariff below Rs 1,000 are in this category.
Rough precious and semi-precious stones will attract GST rate of 0.25 per cent.
Goods An array of food items such as fish fillet, packaged food items, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, cashew nut, cashew nut in shell, raisin, ice and snow will be priced at 5 per cent tax. Apparel below Rs 1000 and footwear below Rs 500 are also in this category.
Some items in the fuel category like bio gas, kerosene and coal are in this slab.
Items from the health industry in this category include medicine, insulin and stent.
Other items in this slab are agarbatti (incense sticks), kites, postage or revenue stamps, stamp-post marks, fertilizers, first-day covers and lifeboats.
Services Transport services like railways and air travel fall under this category.
Small restaurants will also be under the 5% category
Gold has been taxed under a separate slab of 3 per cent.
Yet another category of edibles like frozen meat products, butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, namkeen and ketchup & sauces will attract 12 per cent tax. Cellphones will also be priced in this category.
Cutlery items like Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs fall in this slab.
Ayurvedic medicines and all diagnostic kits and reagents are taxed at 12 per cent. Utility items like tooth powder, umbrella, sewing machine and spectacles and indoor game items like playing cards, chess board, carom board and other board games like ludo are in this slab.
Apparel above Rs 1000 will attract 12 per cent tax. Services
Non-AC hotels, business class air ticket, state-run lottery, work contracts will fall under 12 per cent GST tax slab
Another set of consumables are listed under the 18 per cent category- biscuits, flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, curry paste, mayonnaise and salad dressings, mixed condiments and mixed seasonings and mineral water.
Footwear costing more than Rs 500 are in this category.
Items like Printed circuits, camera, speakers and monitors, printers (other than multi function printers), electrical transformer, CCTV, optical fiber are priced at 18 per cent tax under GST. Other items in this slab include bidi leaves, tissues, envelopes, sanitary napkins, note books, steel products, kajal pencil sticks, headgear and its parts, aluminium foil, weighing machinery (other than electric or electronic weighing machinery), bamboo furniture, swimming pools and padding pools. Services AC hotels that serve liquor, telecom services, IT services, branded garments and financial services will attract 18 per cent tax under GST.
Goods The residuary set of edibles which include chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, pan masala and aerated water fall in this category.
Bidi attracts 28 per cent tax. n array of personal care items like deodorants, shaving creams, after shave, hair shampoo, dye and sunscreen are in the highest tax slab as well.
Paint, wallpaper and ceramic tiles are priced at 28 per cent.
Water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers and hair clippers have been clubbed together in this slab. Automobiles, motorcycles and aircraft for personal use will attract 28 % tax – the highest under GST system.
Services 5-star hotels, race club betting, private lottery and movie tickets above Rs 100 are under the 28 per cent category.
The GST on restaurants in five-star and luxury hotels has been reduced to 18 per cent from 28 per cent, bringing it at par with standalone air-conditioned (AC) restaurants. Even at some air-conditioned restaurants, the bills may come down, as GST will subsume service tax and value-added tax (VAT) that is currently charged.
What is GST? Goods & Services Tax Law Explained for Beginners
The Goods and Services Tax or GST is scheduled to be launched on the 1st of July, and it is set to revolutionize the way we do our taxes. But what is GST and how will it reform the current tax structure? And most importantly, why does the country need such a huge overhaul in its taxation policies? We answer these pressing questions in this in-depth article.
What is GST?
Why is Goods and Services Tax so Important?
How does GST work?
How will GST help India and common man?
GST Law in India – A Detailed History
What is GST?
Goods & Services Tax is a comprehensive, multi-stage, destination-based tax that will be levied on every value addition.
To understand this, we need to understand the concepts under this definition. Let us start with the term ‘Multi-stage’. Now, there are multiple steps an item goes through from manufacture or production to the final sale. Buying of raw materials is the first stage. The second stage is production or manufacture. Then, there is the warehousing of materials. Next, comes the sale of the product to the retailer. And in the final stage, the retailer sells you – the end consumer – the product, completing its life cycle.
So, if we had to look at a pictorial description of the various stages, it would look like:
Goods and Services Tax will be levied on each of these stages, which makes it a multi-stage tax. How? We will see that shortly, but before that, let us talk about ‘Value Addition’.
Let us assume that a manufacturer wants to make a shirt. For this he must buy yarn. This gets turned into a shirt after manufacture. So, the value of the yarn is increased when it gets woven into a shirt. Then, the manufacturer sells it to the warehousing agent who attaches labels and tags to each shirt. That is another addition of value after which the warehouse sells it to the retailer who packages each shirt separately and invests in marketing of the shirt thus increasing its value.
GST will be levied on these value additions – the monetary worth added at each stage to achieve the final sale to the end customer.
There is one more term we need to talk about in the definition – Destination-Based. Goods and Services Tax will be levied on all transactions happening during the entire manufacturing chain. Earlier, when a product was manufactured, the centre would levy an Excise Duty on the manufacture, and then the state will add a VAT tax when the item is sold to the next stage in the cycle. Then there would be a VAT at the next point of sale.
So, earlier the pattern of tax levy was like this:
Now, Goods and Services Tax will be levied at every point of sale. Assume that the entire manufacture process is happening in Rajasthan and the final point of sale is in Karnataka. Since Goods & Services Tax is levied at the point of consumption, so the state of Rajasthan will get revenue in the manufacturing and warehousing stages, but lose out on the revenue when the product moves out Rajasthan and reaches the end consumer in Karnataka. This means that Karnataka will earn that revenue on the final sale, because it is a destination-based tax and this revenue will be collected at the final point of sale/destination which is Karnataka.
Why is Goods and Services Tax so Important?
So, now that we have defined GST, let us talk about why it will play such a significant role in transforming the current tax structure, and therefore, the economy.
Currently, the Indian tax structure is divided into two – Direct and Indirect Taxes. Direct Taxes are levies where the liability cannot be passed on to someone else. An example of this is Income Tax where you earn the income and you alone are liable to pay the tax on it.
In the case of Indirect Taxes, the liability of the tax can be passed on to someone else. This means that when the shopkeeper must pay VAT on his sale, he can pass on the liability to the customer. So, in effect, the customer pays the price of the item as well as the VAT on it so the shopkeeper can deposit the VAT to the government. This means that the customer must pay not just the price of the product, but he also pays the tax liability, and therefore, he has a higher outlay when he buys an item.
This happens because the shopkeeper has paid a tax when he bought the item from the wholesaler. To recover that amount, as well as to make up for the VAT he must pay to the government, he passes the liability to the customer who has to pay the additional amount. There is currently no other way for the shopkeeper to recover whatever he pays from his own pocket during transactions and therefore, he has no choice but to pass on the liability to the customer.
Goods and Services Tax will address this issue after it is implemented. It has a system of Input Tax Credit which will allow sellers to claim the tax already paid, so that the final liability on the end consumer is decreased.
How does GST work?
A nationwide tax reform cannot function without strict guidelines and provisions. The GST Council has devised a fool proof method of implementing this new tax regime by dividing it into three categories. Wondering how they work? Let our experts explain this to you in detail.
When Goods and Services Tax is implemented, there will be 3 kinds of applicable Goods and Services Taxes:
CGST: where the revenue will be collected by the central government
SGST: where the revenue will be collected by the state governments for intra-state sales
IGST: where the revenue will be collected by the central government for inter-state sales
In most cases, the tax structure under the new regime will be as follows:
Sale within the state
CGST + SGST
VAT + Central Excise/Service tax
Revenue will now be shared between the Centre and the State
Sale to another State
Central Sales Tax + Excise/Service Tax
There will only be one type of tax (central) now in case of inter-state sales.
A dealer in Maharashtra sold goods to a consumer in Maharashtra worth Rs. 10,000. The Goods and Services Tax rate is 18% comprising CGST rate of 9% and SGST rate of 9%. In such cases the dealer collects Rs. 1800 and of this amount, Rs. 900 will go to the central government and Rs. 900 will go to the Maharashtra government.
Now, let us assume the dealer in Maharashtra had sold goods to a dealer in Gujarat worth Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. In such case the dealer has to charge Rs. 1800 as IGST. This IGST will go to the Centre. There will no longer be any need to pay CGST and SGST.
How will GST help India and common man?
The basis of Goods and Services Tax is the seamless flow of Input Tax Credit (ITC) along the entire value addition chain. At every step of the manufacturing process, businesses will have the option to claim the tax already paid in the previous transaction. Understanding this process is crucial for businesses. A detailed explanation here.
To understand this, let us first understand what is Input Tax Credit. It is the credit an individual receives for the tax paid on the inputs used in manufacturing the product. So, if there is a 10% tax that the individual must submit to the government, he can subtract the amount he has paid in taxes at the time of purchase and submit the balance amount to the government.
Let us understand this with a hypothetical numerical example.
Say a shirt manufacturer pays Rs. 100 to buy raw materials. If the rate of taxes is set at 10%, and there is no profit or loss involved, then he has to pay Rs. 10 as tax. So, the final cost of the shirt now becomes Rs (100+10=) 110.
At the next stage, the wholesaler buys the shirt from the manufacturer at Rs. 110, and adds labels to it. When he is adding labels, he is adding value. Therefore, his cost increases by say Rs. 40. On top of this, he has to pay a 10% tax, and the final cost therefore becomes Rs. (110+40=) 150 + 10% tax = Rs. 165.
Now, the retailer pays Rs. 165 to buy the shirt from the wholesaler because the tax liability had passed on to him. He has to package the shirt, and when he does that, he is adding value again. This time, let’s say his value add is Rs. 30. Now when he sells the shirt, he adds this value (plus the VAT he has to pay the government) to the final cost. So, the cost of the shirt becomes Rs. 214.5 Let us see a breakup for this:
So, the customer pays Rs. 214.5 for a shirt the cost price of which was basically only Rs. 170 (Rs 110 + Rs. 40 + Rs. 30). Along the way the tax liability was passed on at every stage of transaction and the final liability comes to rest with the customer. This is called the Cascading Effect of Taxes where a tax is paid on tax and the value of the item keeps increasing every time this happens.
Buys Raw Material @ 100
Manufactures @ 40
Adds value @ 30
In the case of Goods and Services Tax, there is a way to claim credit for tax paid in acquiring input. What happens in this case is, the individual who has paid a tax already can claim credit for this tax when he submits his taxes.
In our example, when the wholesaler buys from the manufacturer, he pays a 10% tax on his cost price because the liability has been passed on to him. Then he adds value of Rs. 40 on his cost price of Rs. 100 and this brings up his cost to Rs. 140. Now he has to pay 10% of this price to the government as tax. But he has already paid one tax to the manufacturer. So, this time what he does is, instead of paying Rs (10% of 140=) 14 to the government as tax, he subtracts the amount he has paid already. So, he deducts the Rs. 10 he paid on his purchase from his new liability of Rs. 14, and pays only Rs. 4 to the government. So, the Rs. 10 becomes his input credit.
When he pays Rs. 4 to the government, he can pass on its liability to the retailer. So, the retailer pays Rs. (140+14=) 154 to him to buy the shirt. At the next stage, the retailer adds value of Rs. 30 to his cost price and has to pay a 10% tax on it to the government. When he adds value, his price becomes Rs. 170. Now, if he had to pay 10% tax on it, he would pass on the liability to the customer. But he already has input credit because he has paid Rs.14 to the wholesaler as the latter’s tax. So, now he reduces Rs. 14 from his tax liability of Rs. (10% of 170=) 17 and has to pay only Rs. 3 to the government. And therefore, he can now sell the shirt for Rs. (140+30+17) 187 to the customer.
Buys Raw Material
Manufactures @ 40
Adds Value @ 30
In the end, every time an individual was able to claim input tax credit, the sale price for him reduced and the cost price for the person buying his product reduced because of a lower tax liability. The final value of the shirt also therefore reduced from Rs. 214.5 to Rs. 187, thus reducing the tax burden on the final customer.
So essentially, Goods & Services Tax is going to have a two-pronged benefit. One, it will reduce the cascading effect of taxes, and second, by allowing input tax credit, it will reduce the burden of taxes and, hopefully, prices.
GST Law in India – A Detailed History
GST is not a new phenomenon. It was first implemented in France in 1954, and since then many countries have implemented this unified taxation system to become part of a global whole. Now that India is adopting this new tax regime, let us look back at the how and when of the Goods and Services Tax and its history in the nation.
France was the world’s first country to implement GST Law in the year 1954. Since then, 159 other countries have adopted the GST Law in some form or other. In many countries, VAT is the substitute for GST, but unlike the Indian VAT system, these countries have a single VAT tax which fulfills the same purpose as GST.
In India, the discussion on GST Law was flagged off in the year 2000, when the then Prime Minister Atal Bihari Vajpayee brought the issue to the table.
History of GST in India – Year by Year Events
The idea behind having one consolidated indirect tax to subsume multiple currently existing indirect taxes is to benefit the Indian economy in a number of ways:
It will help the country’s businesses gain a level playing field
It will put us on par with foreign nations who have a more structured tax system
It will also translate into gains for the end consumer who not have to pay cascading taxes any more
There will now be a single tax on goods and services
In addition to the above,
The Goods and Services Tax Law aims at streamlining the indirect taxation regime. As mentioned above, GST will subsume all indirect taxes levied on goods and service, including State and Central level taxes. The GST mechanism is an advancement on the VAT system, the idea being that a unified GST Law will create a seamless nationwide market.
It is also expected that Goods and Services Tax will improve the collection of taxes as well as boost the development of Indian economy by removing the indirect tax barriers between states and integrating the country through a uniform tax rate.
The Goods and Services Tax (GST) has been one of the key things that has caught the attention of the market given its implications on earnings of companies. The government has kept a large number of items under 18% tax slab. The government categorised 1211 items under various tax slabs. Here is a low-down on the tax slab these items would attract:
Here is the complete updated list:….
Gold and rough diamonds do not fall under the current rate slab ambit and will be taxed at 3% and 0.25% respectively.
Goods No tax will be imposed on items like Jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom, Bones and horn cores, bone grist, bone meal, etc.; hoof meal, horn meal, Cereal grains hulled, Palmyra jaggery, Salt – all types, Kajal, Children’s’ picture, drawing or colouring books, Human hair.Services Hotels and lodges with tariff below Rs 1,000, Grandfathering service has been exempted under GST. Rough precious and semi-precious stones will attract GST rate of 0.25 per cent.
Goods Items such as fish fillet, Apparel below Rs 1000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats, Cashew nut, Cashew nut in shell, Raisin, Ice and snow, Bio gas, Insulin, Agarbatti, Kites, Postage or revenue stamps, stamp-post marks, first-day covers.
Services Transport services (Railways, air transport), small restraurants will be under the 5% category because their main input is petroleum, which is outside GST ambit.
Goods Apparel above Rs 1000, frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, cellphones, Ketchup & Sauces, All diagnostic kits and reagents, Exercise books and note books, Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs, Spectacles, corrective, Playing cards, chess board, carom board and other board games, like ludo,
Services State-run lotteries, Non-AC hotels, business class air ticket, fertilisers, Work Contracts will fall under 12 per cent GST tax slab.
Goods Most items are under this tax slab which include footwear costing more than Rs 500, Trademarks, goodwill, software, Bidi Patta, Biscuits (All catogories), flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers and monitors,Kajal pencil sticks, Headgear and parts thereof, Aluminium foil, Weighing Machinery [other than electric or electronic weighing machinery], Printers [other than multifunction printers], Electrical Transformer, CCTV, Optical Fiber, Bamboo furniture, Swimming pools and padding pools, Curry paste; mayonnaise and salad dressings; mixed condiments and mixed seasonings.
Services AC hotels that serve liquor, telecom services, IT services, branded garments and financial services will attract 18 per cent tax under GST, Room tariffs between Rs 2,500 and Rs 7,500, Restaurants inside five-star hotels.
Goods Bidis, chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use, will attract 28 % tax – the highest under GST system.
Services Private-run lotteries authorised by the states, hotels with room tariffs above Rs 7,500, 5-star hotels, race club betting, cinema will attract tax 28 per cent tax slab under GST.
First fill the Part- A of Form GST REG-01. Give your PAN, Mobile Number Email ID, and Submit the form.
Then the PAN is verified on the GST portal. The mobile number and E-mail ID are verified with OTP(one time password)
Then you will receive an application reference number on your mobile and Email.
Then fill Part-B of Form GST REG 01 and specify the application reference number received. You should attach all these necessary documents as listed below.
Submit the photographs of the proprietor, partners, managing trustee, committee etc and authorized signatory.
Constitution of the taxpayer as to the partnership deed, registration certificate or other proof of constitution.
You have to give proof of principal and additional place of business i.e if business is in own premises then you have to give any document in support of ownership of that property e.g latest property tax receipt, copy of electricity bill etc. As for Rented Lease you have to give rent/lease agreement along with owner’s documents like latest property tax receipt etc.
Bank account related proof is to given by scanned copy of the First page of bank pass book or bank statement.
Authorisation forms for each authorized signatory, upload authorization copy or a copy of resolution of managing committee or board of directors in the prescribed format
People who have to register in GST
Person making for inter-state taxable supply
Casual Taxable Person
Persons who are required to pay tax under reverse damage
Non-resident taxable persons
Persons who are required to deduct tax under section 37
Persons who supply goods or services on behalf of other registered taxable persons whether as a agent or otherwise
Input service distributor
Persons who sells other goods and services other than branded services, through electronic commence operator.
Every electronic commence operator
An aggregator who supplies services under his brand name or his trade name
Such other person or class of persons as may be notified by central government or State government on the recommendation of the counsel.
Penalties under GST
An offender has to pay a penalty amount of tax evaded, i.e 100%, subject to minimum of Rs.10,000/-. The person who is helping the person to evade this is also liable for punishment. the amount extending to Rs.25,000/-
If a person is convicted under section 73(1) then he shall be punished with penalties as follows. If the tax evaded is between 25 lakhs and 500 lakhs then 1 year imprisonment and fine, if the tax evaded is between 50 lakhs to 250 lakhs then 3 years imprisonment and fine, if the tax evaded is more than 250 lakhs then 5 years imprisonment and fine.
Advantages and Disadvantages of GST
GST is a transparent tax and reduces indirect taxes
In GST there will be no hidden taxes and the cost of doing business will be lower.
As the prices will come down which will help the companies as consumption will be increased by people.
Separate taxes for goods and services, which is the present taxation system,
in GST when all the taxes are integrated, then taxation burden will be split equally between manufacturing and services.
GST will be levied on the final destination of consumption of VAT and not on various points.
It will help build a transparent and corruption free tax administration.
GST id backed by the GSTN, which is a fully integrated tax platform to deal with GST.