Tags Posts tagged with "GST"

GST

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He asked, if raising questions on bullet trains makes one anti-development? Or does questioning the financial policies like GST and demonetisation makes one a tax evader?

After one year of demonetisation, previous Prime Minister Manmohan Singh on Tuesday, 07 November 2017 said that the Demonetisation and Goods and Services Tax (GST) were poorly designed and very hastily implemented over the country.

The Congress had already announced that it would observe November 8, the day demonetisation, as ‘black day’.

He said that during his tenure as PM of the country, his government had originally come up with GST, but Narendra Modi was at the head of the section blocking it and the present GST is a great leap away from their vision. He further said that GST has been converted into a complicated mess because of multiple slabs and additional cess which is a burden. He also accused the government of Gujarat of selling forest lands to industries rather than allowing tribals to farm on the land.

Repeating his speech from Rajya Sabha, he compared demonetisation to legalised plunder. According to him, the day of demonetisation was a black day for Indian economy and democracy. He said that such a coercive step has not been taken in any economy across the world.

He claimed that these economic reforms taken by the NDA government had only helped our rival, China, since exports have rapidly increased this year.

Industries in Vapi, Surat, Morbi and other parts of Gujarat were damaged by demonetisation and GST implementation, he said, adding that these measures had decreased small businesses. He also said that, along with demonetisation, GST has founded a feeling of tax-terrorism in the country.

He criticised the current Prime Minister of India, Narendra Modi on his presonal project, the Mumbai-Ahmedabad bullet train corridor. He said that the project is vane. But he defended himself by asking if raising questions on bullet trains makes one anti-development? Or does questioning the financial policies like GST and demonetisation makes one a tax evader?

 

-Archit

 

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The Congress Party vice president and Nehru Gandhi family scion Rahul Gandhi’s incessant Gujarat visits and his vociferous attacks on Prime minister Narendra Modi and BJP led NDA government at the centre on GST and demonetisation is the only issue that is being emphasised repeatedly with no emphasis on issues like inflation and unemployment. While Rahul Gandhi’s impact in Gujarat is gaining a positive aspect in terms of enhancement in large crowds in his rallies and consolidation of the minority vote bank alongwith the vote of anti incumbency as the BJP is ruling in Gujarat for the protracted period of nineteen years, the Congress party workers and leaders are finding it difficult to explain the people about the demerits of GST as they have not been educated in detail about the intricacies of the complex GST functioning leading to problems to small and medium businessmen and traders. The increasing activity and performance of Rahul Gandhi in social networking sites, particularly the twitter compounded with his furious targetting of BJP leadership in the context of Gujarat election with his fire brand speeches has constrained BJP to adopt a more attacking mode leading the state chief minister Rupani accuse Ahmed Patel, the Congress Rajya Sabha member and Sonia’s political secretary of allegedly in league with anti national elements which finally got badly back fired. Rahul’s highly successful Bharuch rally of Gujarat held on 1st November after successes of other previous rallies during the last few days under his Gujarat mission has definitely send threatening signals to BJP but if we go by the recent opinion polls BJP still seems to be far ahead in Gujarat. The major draw back for the Congress party in Gujarat is that while BJP has no dearth of political leaders right from prime minister Modi to party chief Amit Shah to Gujarat CM Rupani to the entire cabinet in Congress except Rahul Gandhi no other leader carries any special or significant political impact or charisma on the electorates of Gujarat as the Gandhi scion. Moreover, the entire state and central machinery was at work prior to the declaration of the election dates and subsequent code of conduct with announcement of pre election freebies, worth thousand of crores. The former CM Gujarat Shankar Singh Vaghela had also left Congress and few MLA’s as well. While the Gujarat election is a litmus test for prime minister Narendra Modi after spate recent victories in UP, Uttarakhand etc it’s no less significant for Rahul Gandhi, as well, who is likely to be appointed as the Congress Party chief, the party that is 135 years old and ruled India for more than 60 years.

SUNIL NEGI

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According to Mr. Jaitley, the government certainly has no reservations in privatising state-owned firms but it has to wait for the right time before divesting its stake in PSUs.

Finance Minister Arun Jaitley on Thursday, 21 September 2017, promised “appropriate actions to revive the slow economy and said that the government has seized at the problem of private investment not picking up. Though he acknowledged that there is a problem of private investment not picking up as quickly, as was promised.

Two years ago, India had a GDP growth outpacing a slowing China. But since the start of 2016, the growth has fallen, hitting a three-year low of 5.7 per cent in the April-June quarter. It resulted in India losing the fastest growing economy tag to China.

Besides falling GDP growth rate, the exports are also decreasing and the industrial growth is the lowest in five years. The current account deficit i.e. the difference between inflow and outflow of foreign exchange has risen to 2.4 % of GDP in April-June.

For current financial year, the government has raised ₹ 72,500 crore through stake sale in PSUs. According to Mr. Jaitley, the government certainly has no reservations in privatising state-owned firms but it has to wait for the right time before divesting its stake in PSUs.

Goods and Services Tax (GST) was implemented from July 1. Since then it has subsumed over a dozen taxes and efficiently transformed India into a single market with uniform tax rates.

Mr. Jaitley has said that the government has been able to contain the inflationary impact post GST. But as far as black money and benami transactions are concerned, according to him it is no more safe in India to deal in excessive cash.

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Ever-strengthening rupee is also a significant challenge to the domestic industry as cheaper imports flood the country.

It looks as if the growth rate will be below 7% this fiscal year which translates roughly to a loss of ₹1.5 lakh crore of national income. What it signifies is millions of jobs not created.

Ever-strengthening rupee is also a significant challenge to the domestic industry. Since January the rupee is 7% stronger compared to the American dollar. It is stronger than its Asian peer currencies too, including China, the Philippines, Indonesia and Thailand. This directly hurts our export prospects.

The strong rupee also hurts the domestic industry since cheaper imports flood the country. The GST regime has given an extra advantage to importer traders since the countervailing duty that they now pay as GST can be offset against other taxes.

Demonetisation has its adverse effects as well. Investment and consumption spending which were postponed due to cash shortage might recover but jobs that are lost are lost forever.

The agriculture sector GDP shows nominal GDP growth to be lower than real GDP, which will mean depression in farmers’ incomes.

Solution to these problems is a big pick-up in manufacturing and private investment spending. Structural reforms of GST, the new insolvency code, the new monetary framework and Aadhaar linkage might show better results in the medium to long term.

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Modi government has advanced the presentation of the Budget by one month

Modi government has advanced the presentation of the Budget by one month, it has removed the separate Railways Budget and it has merged the two categories of “planned” and “non-planned” spending.

According to the Part I of the Economic Survey presented at the beginning of Budget session, growth for fiscal year 2016-17 was 7.1%. Its deflated value is due to demonetisation. Survey implicitly blames the high interest policy of the RBI for thwarting industrial growth.

According to it, the continuing deflationary trends rise from:

  • Lower investment ratio.
  • Low farm prices.
  • The cutting back on development spending by State governments.
  • The twin balance sheet problem.

The Survey mentions Uttar Pradesh which had to slash its development spending by 13% in order to waive the farm loan.

However, the situation at the Centre is improving. Exports are positive. Four major reforms are taken:

  • GST.
  • A new insolvency and bankruptcy code to deal with NPAs.
  • A new monetary policy framework.
  • Aadhaar linkage.

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GST

GST was meant to create a “single nation and single tax”, however, it has ended up on creating approximately six tax rates apart from the fact that much items are still left with the responsibility of State and Centre. Petroleum and alcohol including all other similar items that have a contribution of approximately 40 percent in the state revenue are out of the concept of GST. The GST has led to a complete change in the financial structure of India with respect to the matters of Tax Collection in our country.

Need to know the difference between the current tax collection framework and the new GST taxation in India? Well, for that there is a need to recognize what precisely GST is about. GST has been introduced with an intention to bring consistency in the market arrangement of our country. This will lead to a reduction in the import and export taxes, thus, lessening the burden of the tax payer.

There is no need for a business incurring an income of fewer than 20 lakhs to register in GST. It is quite transparent and answerable. The tax payer will be facilitated by getting the information on what all taxes he is paying.

The existing Taxation System in our country is full of complications. GST is here to remove all these complications and make the Taxation System easier by replacing all the indirect taxes and bringing a common market. Nowadays, a tax on tax is imposed, but with the imposing of GST, this will become much lesser and easier.

On discussing the differences between the condition of taxation WITH NO GST and the condition of the taxation WITH GST, following points can be formulated:

ŸCommon Taxation

Normally, as the system says, VAT tax is levied on goods and Service tax is levied on Services. Here, the GST is playing a vital role by combining both the taxes and forming a COMMON TAXATION SYSTEM making it easier.

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Ÿ No Separation

   Earlier, it happened that you have to pay taxes on goods as well as on the service offered. But the introduction of GST has truly changed the scene. Now you have to pay the taxes collectively without paying separately for the service offered.

Image result for no tax on tax in GST

Image Source: http://www.gstindia.com

Ÿ A sigh of Relief for the importers and exporters

During the time of transportation of goods from state to state, the tax rates reach heights. The taxes are highly rated due to the involvement various VAT and Service taxes adding on the various state taxes, the rates become the highest from the higher. This is a problem for the importers and exporters. With GST coming in the picture, there will be no separate taxes on goods and services and state borders which will be quite feasible for the importers and exporters.

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Image Source: https://www.nrilegalservices.com

GST tax will have a major Impact on the Taxation System of our country-

Ÿ Having a transparent Tax system will lead to decrease the chances of corruption.

ŸIt will act as a support to the smaller organizations which have an income of fewer than 20 lakhs, as it won’t collect taxes from these companies according to the GST Rule.

ŸSMEs will be highly attracted and affected by the GST, thus they are having a wider base in the GST model.

ŸNo need for any poor state to pay any extra tax. They will pay the equal amount of taxes that will help them to develop.

ŸThe three accounts that will be maintained under GST Taxation System are CGST, SGST, and IGST.

Ÿ The new market formed will be free from any complications and easier. This is because, there will be no different separate taxes, a common system of taxpaying will be followed.

 

 

 

 

 

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Now we all know that GST has been implemented in India (including J&K), therefore we must now take care of the below mentioned important points while issuing or receiving any invoices:
1. Under GST, there are only two types of invoices that one can issue. These are
(i) Tax Invoice – To be issued by all Registered Dealers 
(ii) Bill of Supply – To be issued by Composite Dealers and Dealers who sale Exempted Goods only.
2. There is no concept of issuing Retail Invoice or Sales Invoice. Registered Dealers have to issue Tax Invoices only for all of their supplies of Taxable Goods or Services.
3. Registered Dealers are required to show IGST, CGST or SGST rates and amounts separately in their invoice.
4. Dealers issuing Bill of Supply cannot issue an invoice showing IGST, CGST or SGST amounts separately in their invoice. They have to issue the Bill inclusive of Taxes.
5. Invoice numbers may carry characters up to 16 Digits which may include Special Characters like Hash, Slash, Dash, Hiphen etc. apart from Numeric Digits.
6. If invoice type is B2B (Business to Business), then Buyer’s complete Name, Address and GSTIN are required to be mentioned over the invoice.
7. Buyer’s registered address and Place of Delivery may be different and such different addresses should be mentioned separately in the invoice.
8. In case of Unregistered Buyers, Seller need to mention complete name of Buyer with his address and PIN Code including State Name and State Code if issuing invoice over Rs 50,000/-. For below Rs 50,000/- it is not mandatory to mention Buyer’s State Name and Code.
9. It is mandatory to mention whether tax is payable under “Reverse Charge Mechanism” or not.
10. Invoice should be signed manually or digitally by Seller or his authorized representative.
11. HSN Code related requirements are mentioned as under :
Upto turnover of Rs 1.5 Crores -Nil
1.5 Crores to 5 Crores – 2 digits HSN
Above Rs 5 Crores – 4 digits HSN
(Notification no 12/2017 – 28 June 2017)

12. In case of Exports – below mentioned Endorsement is necessary to be mentioned over the invoice
“SUPPLY MEANT FOR EXPORT ON PAYMENT OF INTEGRATED TAX” or “SUPPLY MEANT FOR EXPORT UNDER BOND or LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”.
13. In case of Retail sellers for goods below Rs 200 per buyer, a consolidated invoice may be raised for the whole day collection at day end.
14. For all advances received Advance Voucher need to be issued.
15. Bills to be prepared in triplicate, in case of Supply of Goods. Original will be for Buyer, Duplicate for Transporter and Triplicate for seller’s record. In case of supply of Services, Bills to be prepared in Duplicates.

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With launch of Goods and Services Tax (GST), the Indian sports industry feels the heat from a heavier tax burden in the near future. Tickets for sports events such as the Indian Premier League (IPL) will include a tax charge of 28% approx., which will boost their prices. The impact of GST will be clearly visible with the rise in the prices of sports goods and equipments as well price hikes of tickets for premier sports events.

Sports goods set to be costly

The manufacturers in the industry had been paying a 2% excise duty on goods, after the charge was imposed in 2011. Now, under GST, these goods will be taxed under the 12-28% slab, a steep rise from the previous charge. While most of the manufacturers had called for sporting equipment to be placed under the 5% slab, debating the industry still falls under cottage industry category; the GST Council decided to set with a much higher rate.

The council doesn’t consider a number of products such as sports helmets, sports kit bags, training bags, boxing headgear, etc., as sports goods. These have been placed under categories from 12-28% slabs. While the sports gloves will be charged at 12%, the athletics, gymnastics and table tennis equipment will be taxed at 28%. Essential fitness items such as sports shoes, skipping ropes, etc, will also feel the heat of GST reform, as the category has been placed in the 28% slab.

“To make high quality equipment, we need support from the government. The current move might have a negative impact on the growth of the industry. There are more than 1000 registered units and another 1500 cottage units in villages,” Rakesh Mahajan, chairman of All India Sports Goods Manufacturers’ Federation.

Pay more for IPL tickets, events by NSFs in 18% slab

Tickets for the events organized by National Sports Federations (NSFs) and of course BCCI-organized cricket matches will be taxed at 18%. Tickets for Indian Premier League (IPL) as well as Pro Kabaddi League (PKL), will even go higher as they will be taxed at 28% under the new GST regime.Tickets priced below Rs.250 will be exempt from GST.

 

(A compiled report)

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Goods and Services Tax (GST) is ON, replacing almost 20 state and federal taxes. Now, it is going to change the fate of all businesses and lives of every Indian in many ways and some of them in a disruptive way.

1) A transparent tax reform

For the first time, through the form of a single GST rate consumers will have the knowledge of the actual amount of taxes they are paying for goods and services.  The GST rate will be split between central and state governments. Earlier, an invoice included the state-level value added tax (VAT) and in certain cases, the service tax levied by the central government, which excluded taxes on raw materials and services used by various intermediaries.  These taxes were added to the final price of the goods purchased but were not mentioned in the invoice. The efficiency of GST is expected to minimize the tax burden and encourage the transparency.

2) Transition in tax burden

The effort is for keeping the GST rates as close as possible to the existing tax burden on goods and services and to make the transition revenue neutral. Therefore, the effective tax on individual products or goods is expected to move up or down. Tax on services like telecom is expected to go up. However, actual changes will depend on the pricing strategies adopted by the businesses.

3) Unorganized sector at a turning point

Small enterprises with annual sales less than Rs 20 lakh are exempt from the rigors of registering for GST and filing returns. But this exemption poses a risk of larger enterprises turning away from the unorganized sector for sourcing materials and services to larger suppliers that are within the GST system so that taxes paid by their suppliers are available as credit. Small enterprises have to voluntarily sign up for GST to not lose their customers. Larger procurers looking forward to keep ties with the unorganized sector, however, have the choice of paying taxes on their behalf under a system called ‘reverse charge’. Small businesses being a part of the GST system is expected to enhance tax compliance not only of indirect taxes, but also of income tax.

4) Impact on Small and medium enterprises (SMEs)

The tax burden for SMEs is set to go up. With the threshold for GST registration for businesses being much lower at Rs20 lakh annual sales, SMEs will come under GST and have to pay taxes at the federal level too—the central GST. This is expected to double the tax rate for them, although the actual increase in tax burden may not be equally high because of the tax credits passed on to them from their material and service suppliers. GST is devised to broaden the taxpayer base with a vision of minimizing the overall tax rate.

5) No more tax breaks

There is no more excise duty exemption for setting up production units in the north east or hill states. Enterprises will have to make investment decisions based on scale of economy rather than tax arbitrage. This indicates that enterprises will have to set up new production units closer to their market rather than expanding existing facilities in places to leverage on region specific exemption. Units that have already come up with excise exemption for a specified period will have to pay tax first and claim refunds for the remaining period. Mostly the drug makers, automobile producers and cement companies will be affected more as they prefer to set units in hill states earlier.

6) Revamping supply chain

GST will also affect the businesses in terms of its location of warehouses and movement of goods from state to state. As GST is applicable on transfer of stock within a group company’s warehouses in different states, it is expected that businesses may try to optimize their supply chain.

7) Keeping on Right Side of Law

Businesses and traders have to work hard on their pricing strategy during the transition period to avoid getting caught for not passing on any reduction in effective tax burden to the consumer. An anti-profiteering body being set up will keep an eye on how businesses restructure the tax inclusive price charged from consumers.

8) Training vendors, workforce

People in the entire business ecosystem of a company need to be trained. Companies have to not only update their business, accounting and tax payment software, but also train their personnel. Training vendors and business partners is also important as the invoices they file are relevant for the taxes to be paid by a business.

9) Return filing

While suppliers have to upload details of transactions and invoices, the tax return of buyers of goods and services will be auto-generated based on suppliers’ data, minimizing human discretion. Buyers can either accept auto-generated return or modify it.

10) Alcohol and fuel

Alcohol and five fuels including crude oil, petrol, diesel, jet fuel and natural gas are expected to see an increase in tax burden as they continue to remain in the existing tax system, while the GST paid on all equipment and services used in their production become an added cost.

 

 

(A compiled report)

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Goods and Services Tax (GST) has been rolled out. From 1st July 2017, as the prices of goods and services are going to change, it will impact every Indian. The GST Council has fixed the tax rates for 1,211 items, keeping a majority of these in the 18% slab.

Below is the list of the goods and services that will become cheaper from 1st July, as GST goes LIVE:

Eatables

Milk powder, Curd, Butter milk , Unbranded natural honey, Dairy spreads, Cheese, Spices, Tea, Wheat, Rice, Flour, Groundnut oil, Palm oil, Sunflower oil, Coconut oil, Mustard oil, Sugar, Jaggery, Sugar confectionery, Pasta, Spaghetti, Macaroni, Noodles, Fruit and vegetables, Pickle, Murabba, Chutney, Sweetmeats, Ketchup, Sauces, Toppings and spreads, Instant food mixes, Mineral water, ice, Sugar, Khandsari, Biscuits, Raisins and gum, Baking powder, Margarine, Cashew nuts.

Items of daily use

Bathing soap, Hair oil, Detergent powder, Soap, Tissue papers, Napkins, Matchsticks, Candles, Coal, Kerosene, LG domestic, Spoons, Forks, Ladles, Skimmers, Cake servers, Fish knives, Tongs, Agarbatti, Toothpaste, Tooth powder, Hair oil, Kajal, LPG stove, Plastic tarpaulin.

Stationery

Notebook , Pens, All types of paper, Graph paper, School bag, Exercise books, Picture, Drawing and coloring books, Parchment Paper, Carbon paper, Printers

Healthcare

Insulin, X-ray films for medical use, Diagnostic kits, Glasses for corrective spectacles, Medicines for diabetes and cancer.

Apparels

Silk , Woollen fabrics, Khadi yarn, Gandhi topi, Footwear below Rs 500, Apparel up to Rs 1,000

Others

Diesel engines of power not exceeding 15HP, Tractor rear tyres and tubes, Weighing machinery, Static converters (UPS), Electric transformers, Winding wires, Helmet , Crackers and explosives, Lubricants, Bikes, Movie tickets less than Rs100, Kites, Luxury cars, Motorcycles, Scooters, Economy-class air tickets, Hotels with tariff below Rs7,500, Cement, Fly ash bricks and blocks