Tag Archives: GST

43rd GST Council meeting: Amnesty Scheme for tax payers

Newsroom24x7 Network

  • COVID-19 related medical goods including Amphotericin B for free distribution given full exemption from IGST upto 31 August 2021
  • Custom duty exemption also given to Amphotericin B
  • Amnesty Scheme to provide relief to taxpayers regarding late fee for pending returns ; Late fee also rationalised for future tax periods
  • Simplification of Annual Return for Financial Year 2020-21

New Delhi: The 43rd GST Council met under the Chairmanship of Union Finance & Corporate Affairs Minister Nirmala Sitharaman through video conferencing here on Friday 28 May.

The meeting was also attended by Union Minister of State for Finance & Corporate Affairs Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance & States/ UTs.

The GST Council has made the following recommendations relating to changes in GST rates on supply of goods and services and changes related to GST law and procedure:

COVID-19 Relief

  • As a COVID-19 relief measure, a number of specified COVID-19 related goods such as medical oxygen, oxygen concentrators and other oxygen storage and transportation equipment, certain diagnostic markers test kits and COVID-19 vaccines, etc., have been recommended for full exemption from IGST, even if imported on payment basis, for donating to the government or on recommendation of state authority to any relief agency. This exemption shall be valid upto 31.08.2021. Hitherto, IGST exemption was applicable only when these goods were imported “free of cost” for free distribution. The same will also be extended till 31.8.2021. It may be mentioned that these goods are already exempted from Basic Customs duty. Further in view of rising Black Fungus cases, the above exemption from IGST has been extended to Amphotericin B.

Further relief in individual item of COVID-19 after Group of Ministers (GoM) submits report on 8th June 2021

  • As regards individual items, it was decided to constitute a Group of Ministers (GoM) to go into the need for further relief to COVID-19 related individual items immediately. The GOM shall give its report by 08.06.2021.

OTHER RELIEFS ON GOODS

  • To support the LympahticFilarisis (an endemic) elimination programme being conducted in collaboration with WHO, the GST rate on Diethylcarbamazine (DEC) tablets has been recommended for reduction to 5% (from 12%).
  • Certain clarifications/clarificatory amendments have been recommended in relation to GST rates. Major ones are, –
    • Leviability of IGST on repair value of goods re-imported after repairs
    • GST rate of 12% to apply on parts of sprinklers/ drip irrigation systems falling under tariff heading 8424 (nozzle/laterals) to apply even if these goods are sold separately.

SERVICES

  • To clarify those services supplied to an educational institution including anganwadi(which provide pre-school education also), by way of serving of food including mid- day meals under any midday meals scheme, sponsored by Government is exempt from levy of GST irrespective of funding of such supplies from government grants or corporate donations.
  • To clarify these services provided by way of examination including entrance examination, where fee is charged for such examinations, by National Board of Examination (NBE), or similar Central or StateEducational Boards, and input services relating thereto are exempt from GST.
  • To make appropriate changes in the relevant notification for an explicit provision to make it clear that land owner promoters could utilize credit of GST charged to them by developer promoters in respect of suchapartments that are subsequently sold by the land promotor and on which GST is paid. The developer promotor shall be allowed to pay GST relating to such apartments any time before or at the time of issuance of completion certificate.
  • To extend the same dispensation as provided to MRO units of aviation sector to MRO units of ships/vessels so as to provide level playing field to domestic shipping MROs vis a vis foreign MROs and accordingly, –
  • GST on MRO services in respect of ships/vessels shall be reduced to 5% (from 18%).
  • PoS of B2B supply of MRO Services in respect of ships/ vessels would be location of recipient of service
  • To clarify that supply of service by way of milling of wheat/paddy  into flour (fortified with minerals etc. by millers or otherwise )/rice to Government/ local authority etc.for distribution of such flour or rice under PDS is exempt from GST if the value of goods in such composite supply does not exceed 25%. Otherwise, such services would attract GST at the rate of 5% if supplied to any person registered in GST, including a person registered for payment of TDS.
  • To clarify that GST is payable on annuity payments received as deferred payment for construction of road. Benefit of the exemption is for such annuities which are paid for the service by way of access to a road or a bridge.
  • To clarify those services supplied to a Government Entity by way of construction of a rope-way attract GST at the rate of 18%.
  • To clarify that services supplied by Govt. to its undertaking/PSU by way of guaranteeing loans taken by such entity from banks and financial institutions is exempt from GST.

MEASURES FOR TRADE FACILITATION:

  1. Amnesty Scheme to provide relief to taxpayers regarding late fee for pending returns:

To provide relief to the taxpayers, late fee for non-furnishing FORM GSTR-3B for the tax periods from July, 2017 to April, 2021 has been reduced / waived as under: –

  1. late fee capped to a maximum of Rs 500/- (Rs. 250/- each for CGST & SGST) per return for taxpayers, who did not have any tax liability for the said tax periods;
  2. late fee capped to a maximum of Rs 1000/- (Rs. 500/- each for CGST & SGST) per return for other taxpayers;

The reduced rate of late fee would apply if GSTR-3B returns for these tax periods are furnished between 01.06.2021 to 31.08.2021.

  1. Rationalization of late fee imposed under section 47 of the CGST Act:

To reduce burden of late fee on smaller taxpayers, the upper cap of late fee is being rationalized to align late fee with tax liability/ turnover of the taxpayers, as follows:

A. The late fee for delay in furnishing of FORM GSTR-3B and FORM GSTR-1 to be capped, per return, as below:

(i)   For taxpayers having nil tax liability in GSTR-3B or nil outward supplies in GSTR-1, the late fee to be capped at Rs 500 (Rs 250 CGST + Rs 250 SGST)

(ii)  For other taxpayers:

      1. For taxpayers having Annual Aggregate Turnover (AATO) in preceding year upto Rs 1.5 crore, late fee to be capped to a maximum of Rs 2000 (1000 CGST+1000 SGST);
      2. For taxpayers having AATO in preceding year between Rs 1.5 crore to Rs 5 crore, late fee to be capped to a maximum of Rs 5000 (2500 CGST+2500 SGST);
      3. For taxpayers having AATO in preceding year above Rs 5 crores, late fee to be capped to a maximum of Rs 10000 (5000 CGST+5000 SGST).

B. The late fee for delay in furnishing of FORM GSTR-4 by composition taxpayers to be capped to Rs 500 (Rs 250 CGST + Rs 250 SGST) per return, if tax liability is nil in the return, and Rs 2000 (Rs 1000 CGST + Rs 1000 SGST) per return for others.

C. Late fee payable for delayed furnishing of FORM GSTR-7 to be reduced to Rs.50/- per day (Rs. 25 CGST + Rs 25 SGST) and to be capped to a maximum of Rs 2000/- (Rs. 1,000 CGST + Rs 1,000 SGST) per return.

All the above proposals to be made applicable for prospective tax periods.

3. COVID-19 related relief measures for taxpayers:

In addition to the relief measures already provided to the taxpayers vide the notifications issued on 01.05.2021, the following further relaxations are being provided to the taxpayers:

  1. For small taxpayers (aggregate turnover upto Rs. 5 crore)
  1. March & April 2021 tax periods:
  1. For May 2021 tax period:
  2. For large taxpayers (aggregate turnover more than Rs. 5 crore)
  1. A lower rate of interest @ 9% for first 15 days after the due date of filing return in FORM GSTR-3B for the tax period May, 2021.
  2. Waiver of late fee for delay in furnishing returns in FORM GSTR-3B for the tax period May, 2021 for 15 days from the due date of furnishing FORM GSTR-3B.

C.  Certain other COVID-19 related relaxations to be provided, such as

    1. Extension of due date of filing GSTR-1/ IFF for the month of May 2021 by 15 days.
    2. Extension of due date of filing GSTR-4 for FY 2020-21 to 31.07.2021.
    3. Extension of due date of filing ITC-04 for QE March 2021 to 30.06.2021.
    4. Cumulative application of rule 36(4) for availing ITC for tax periods April, May and June, 2021 in the return for the period June, 2021.
    5. Allowing filing of returns by companies using Electronic Verification Code (EVC), instead of Digital Signature Certificate (DSC) till 31.08.2021.

D.  Relaxations under section 168A of the CGST Act: Time limit for completion of various actions, by any authority or by any person, under the GST Act, which falls during the period from 15th April, 2021 to 29th June, 2021, to be extended upto 30th June, 2021, subject to some exceptions.

[Wherever the timelines for actions have been extended by the Hon’ble Supreme Court, the same would apply]

  1. Simplification of Annual Return for Financial Year 2020-21:
  1. Amendments in section 35 and 44 of CGST Act made through Finance Act, 2021 to be notified. This would ease the compliance requirement in furnishing reconciliation statement in FORM GSTR-9C, as taxpayers would be able to self-certify the reconciliation statement, instead of getting it certified by chartered accountants. This change will apply for Annual Return for FY 2020-21.
  2. The filing of annual return in FORM GSTR-9 / 9A for FY 2020-21 to be optional for taxpayers having aggregate annual turnover upto Rs 2 Crore;
  3. The reconciliation statement in FORM GSTR-9C for the FY 2020-21 will be required to be filed by taxpayers with annual aggregate turnover above Rs 5 Crore.
  1. Retrospective amendment in section 50 of the CGST Act with effect from 01.07.2017, providing for payment of interest on net cash basis, to be notified at the earliest.

OTHER MEASURES     

  1. GST Council recommended amendments in certain provisions of the Act so as to make the present system of GSTR-1/3B return filing as the default return filing system in GST.

Maybe they are competent economists but poor in comprehending political and structural transformations

Newsroom24x7 Network

Photo by Burak K on Pexels.com

Arun Kumar, an eminent economist and leading authority on black money, who has taught at the Jawaharlal Nehru University till 2015 has continuously underscored “demonetisation opened the floodgates for earning “black incomes” and affected the unorganised sector so adversely that the overall Indian economy has stagnated and is not growing any more.

The economy has been growing at 1% in the last 3 years, Kumar pointed out in an interview in mid-2019 and said since it’s an unorganised sector that got hit first by demonetisation, followed by GST and the NBFC crisis, it has left an impact on the economy.

Newsroom24x7 is sharing here with our followers an ongoing dialogue on social media. We are only using the initials for those engaged in this dialogue on Arun Kumar’s view point that GST and demonetisation were grand disasters that have brought about the downslide in India’s economy.

RS:
The deadly post-demonetisation, the new GST regime and direct policy impact of select corporates have led to this debacle. Its just not Modi the previous and the present FM and the policy makers within the BJP are responsible for this mess

RL:
There are two different things here. One is that GST, demonetisation, are not measures which will make the economy grow immediately. Rather, they are measures without which the economy will never grow any more than what it had already done. The second is the downturn in the economy. That downturn was bound to happen as India adjusted to more formal, more systematic, ways of working. That will happen because Narendra Modi has effectively liberated the people of India from the clutches of politicians and civil servants.

The GST and demonetisation were both steps in the direction of such liberation. The liberation of banks from the clutches of politicians and bureaucrats too needs to be counted here. These measures will empower those who wish to grow to grow. Earlier only those with contacts could.

The Indian economy which had been liberated in the 1990s, had reached the limits of its growth. The five decades of independence had shown us that no growth was possible for anyone without the active help of politicians and civil servants. Two and a half decades of indifferent growth since the 1990s, at least showed the people that there was a possibility of them growing without kowtowing to politicians and civil servants.

RS:
Demonetisation was a colossal failure. The timing of the GST post-demonetisation was a blunder in the waiting. In politics, the decisions should not be arbitrary even if they claim to be for public good. The rationale for both the decisions had brought India to its knees even before corona. This bet of bringing the unorganised sector or restructuring it by the fiats has brought economic hardship to millions, destroyed small enterprises and has pushed the nation into a poverty trap from which it was barely trying to get out. Unless policies are not nuanced and fine tuned, this reckless arrogance with an authoritarian streak so visible in the present regime will not improve anything whatever might have been their intentions. Unlike you, I don’t credit them with wisdom that you find in them and their half baked ill-conceived schemes(unless you being closer to power centres have more access to the brilliant effort that has gone into this planning and its execution).

RL:
There is this belief in India that such changes that empower the poor, the commoner, come through social consensus. They don’t. The only way to bring changes such as the GST is through fiat. Even the zamindari abolition bills of the 1950s, came about in the face of stiff opposition from many academics, analysts, journalists and of course zamindars. Similarly with the nationalisation of banks and the coal mines and LIC.

The manifestation of consensus is not merely that all political parties, all journalists and all academics support such a measure. If they do, it makes life easier for those bringing in the change. The manifestation of consensus in such issues is also about taking a chance of annoying a lot of people. The Narendra Modi government took that chance.

Also, I know that every government has sought to bring in these changes but has been scared that those in power and authority would find the transformation upsetting. If the Modi government went ahead to still go in for the transformation, it deserves accolades rather than criticism.

The accusation that the present slow-down in the economy is a consequence of introducing GST and demonetisation is merely an unfair accusation.

Even the common public who is claimed by critics to be hurt by these changes does not support these accusations when it comes for them to make a choice: Modi or Congress– and the public has consistently, with ever increasing strength, opted for Modi while rejecting the Congress eco-system.

I have said this earlier and will continue to say that academics like Arun Kumar, Prabhat Patnaik, are simply out of their depth when they indulge in criticism of the structural transformations that Modi is bringing in. Maybe they are competent economists, maybe they are not; but they are certainly extremely poor when it comes to comprehending political and structural transformations. And they definitely don’t have the good of India or the people of India in their hearts. Their criticism is mindless. They have no roots on the ground.

GST: Government of India grappling with the issue of “Revenue Leakage”

Lalit Shastri

There is no end to problems linked with GST – initiallty leading to county-wide anger over a multi-tier tax structure of 5, 12, 18 and 28 percent.

The Government of India, after the new tax regime was overhauled and the 28 percent tax levied on 178 items was reduced to 18 percent or less earlier this month, is now grappling with the issue of revenue leakage.

The Union Finance Secretary Hasmukh Adhia has called a meeting of all State Commercial Tax Commissioners and other senior officers responsible for GST implementation in the States on 9 December 2017 in New Delhi to review the revenue trend under GST and discuss what can be done to prevent leakages and augment the revenues.

The Chairman CBEC, GST Commissioners and Chief Commissioners of Central and Starte Government will be attending the meeting in new Delhi.

The Meeting has been convened mainly to dicuss the reason for low level of revenue as compared to what was being geneated uinder the VAT/Excise/Service Tax regime.

The concerned officers, both at the Centre and in States, have been asked to compare teh revenues of top 100 companies of the State with their past performance and the status of eway bill system in teh States.

Although not related directly with the agenda for the 9th December meeting, those in knowledgable circles questioning the logic behind the anti-profiteering authority. It is being pointed out that prices should be determined by the market and the authority should not be given the power to control prices of goods and services.

The idea of forming a private limited company with private players to implement the GST goes against the whole concept of sovereign responsibility of administering tax administration. It is to be underscored that India is a Union of States and the Union should not become weak by giving the States excessive leverage when it comes to implementing GST. It was weak institutional framework and tax administration that was responsible for the fiscal developments that eventually flared up the Greek crisis.

Newsroom24x7.com (September 15, 2016) Click here to read more

Cabinet approves creation of National Anti-profiteering Authority under GST

Newsroom24x7 Network

New Delhi: Close on the heels of the reduction in the GST rates of a large number of items of mass consumption, the Union Cabinet chaired by Prime Minister Narendra Modi today approved the creation of the posts of Chairman and Technical Members of the National Anti-profiteering Authority (NAA) under GST.

The National Anti-profiteering Authority is mandated to ensure that the benefits of the reduction in GST rates on goods or services are passed on to the ultimate consumers by way of a reduction in prices.

The NAA, will be headed by a senior Government of India Secretary-level officer with four Technical Members from the Centre and/or the States.

Effective from midnight of 14 November, 2017, the GST rate has been slashed from 28% to 18% on goods falling under 178 headings. There are now 50 items which attract the GST rate of 28%. Similarly, GST rates of a large number of items have been reduced from 18% to 12% and some goods have been completely exempted from GST.

The “anti-profiteering” measures inbuilt in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers. This institutional framework comprises the NAA, a Standing Committee, Screening Committees in every State and the Directorate General of Safeguards in the Central Board of Excise & Customs (CBEC).

Affected consumers, who feel the benefit of commensurate reduction in prices is not being passed on when they purchase any goods or services, may apply for relief to the Screening Committee in the particular State. However, in case the incident of profiteering relates to an item of mass impact with ‘All India’ ramification, the application may be directly made to the Standing Committee. After forming a prima facie view that there is an element of profiteering, the Standing Committee shall refer the matter for detailed investigation to the Director General of Safeguards, CBEC, which shall report its findings to the NAA.

If the NAA confirms there is a necessity to apply anti-profiteering measures, it has the authority to order the supplier/business concerned to reduce its prices or return the undue benefit availed by it along with interest to the recipient of the goods or services. If the undue benefit cannot be passed on to the recipient, it can be ordered to be deposited in the Consumer Welfare Fund. In extreme cases, the NAA can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST.