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Notification No.76/2017 28-07-2017


SECTION 10(46) OF THE INCOME-TAX ACT, 1961 – EXEMPTIONS – STATUTORY BODY/AUTHORITY/BOARD/COMMISSION – NOTIFIED BODY OR AUTHORITY

NOTIFICATION NO. SO 2384(E) [NO.76/2017 (F.NO.300196/4/2017-ITA-I)]DATED 28-7-2017

In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Himachal Pradesh Electricity Regulatory Commission, a commission established by the Government of Himachal Pradesh, in respect of the following specified income arising to that Commission, namely:—

(a) amount received in the form of Government grants;
(b) amount received as license fee from licensees in electricity;
(c) amount received as Court fee or petition fee; and
(d) interest earned on Government grants and fee received.

2. This notification shall be effective subject to the conditions that Himachal Pradesh Electricity Regulatory Commission,—

(a) shall not engage in any commercial activity;
(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and
(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the said Act.

3. This notification shall apply with respect to the financial years 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022.

Additional tax on cigarette would impact legal sales, says ITC : 28-07-2017


India’s largest cigarette manufacturer ITCBSE 0.28 % today said that higher tax rate under the just introduced GST regime will “exacerbate” the pressure on the entire legal cigarette value chain.

The legal cigarette industry has witnessed a 25 per cent decline in volumes from FY 2012-13, said ITC.

“The additional tax burden caused by the increase in the Compensation Cess rates … will exacerbate the pressure on the entire legal cigarette value chain in the country,” said ITC in its quarterly results.

The high incidence of taxation on cigarettes was further compounded by the steep increase in taxes announced by the GST Council on July 17, 2017, it said.

“The increase in Compensation Cess on cigarettes as announced by the GST Council ranges from Rs 485 to Rs 792 per thousand cigarettes. Under the ‘Others’ segment i.e. cigarettes of length exceeding 75 mm (including the length of filter), a 31 per cent increase in the ad valorem component of the cess has been levied,” said ITC.

The intent of the GST Council behind increasing the Compensation Cess was to correct an apparent anomaly in cigarette taxation under the new tax regime announced earlier, on account of the removal of the cascading effect of Excise Duty which existed in the pre-GST regime.

“However, such increase has resulted in significantly higher tax incidence on cigarettes under the new tax regime compared to the pre-GST scenario which is not in keeping with the fundamental principle of revenue neutrality,” it said.

In fact, the combined impact of increase in Excise Duty announced by the Union Budget 2017 and the recent increase in tax rates effected by the GST Council is estimated to result in an incremental tax burden of over 20 per cent on the company.

“The cumulative growth in tax incidence on cigarettes, after cognising for the latest increase in Cess rates, stands at a staggering 202 per cent since 2011-12, i.e. the last six years,” it added.

However, ITC, which have brands that includes Wills Navy Cut, Gold Flake, Insignia, India Kings and Classic said that despite the extremely challenging operating environment, it sustained its leadership position in the industry through focus on delivering world-class products, continuous innovation and value addition.

In the first quarter of 2017-18, ITC’s revenue from cigarettes increased 6.60 per cent to Rs 8,774.16 crore, from Rs 8,230.60 crore in the year-ago period.

Source : Financial Express

Instagram posts will soon help Modi government sniff out tax evaders : 28-07-2017


A photo of your shiny new car on Instagram or the Facebook post about your chic holiday cottage may lead India’s taxman to your door.

Starting next month, Prime Minister Narendra Modi’s government will begin amassing a warehouse of virtual information collected not just from traditional sources like banks but also from social media sites, as it looks to match residents’ spending patterns with income declarations, said people familiar with the matter. Officials will be able to spot those who pay too little tax without raiding offices and homes as they currently do, the people said, asking not to be identified citing rules  on speaking with the media.

Built over seven years at a cost of about 10 billion rupees ($156 million), ‘Project Insight’ will complement the world’s largest biometric identity database and India’s most ambitious tax overhaul as policy makers try to get more people to pay up. While the economy is among the fastest-growing in the world, revenues aren’t keeping pace, bloating Modi’s budget deficit and triggering anxiety about over-zealous tax sleuths.

“Data analytics is the way forward for tax administrations across the world,” said Amit Maheshwari, managing partner at accountancy firm Ashok Maheshwary and Associates near New Delhi. “This will also put an end to harassment by tax officials as there will be no public interface. Perceived randomness in scrutiny will come to an end.”

Countries including Belgium, Canada and Australia are already using big data to unearth tax evasion that may have gone undetected without technology. India’s efforts resemble the U.K.’s ‘Connect,’ which is estimated to have cost some 100 million pounds. Since its inception in 2010, it has prevented the loss of 4.1 billion pounds ($5.4 billion) in revenue and the number of criminal prosecutions has risen to 1,165 from 165 a year, the London-based Institute of Financial Accountants said in a December 2016 report.

India’s Finance Ministry spokesman D.S. Malik declined to comment on Project Insight. The government said last year it had contracted L&T Infotech Ltd. — an arm of India’s largest engineering conglomerate Larsen & Toubro Ltd. — to help build the network and boost voluntary compliance.

This is a long term project for L&T Infotech, chief executive officer and managing director Sanjay Jalona said, without specifying a time frame. The company has agreed to the build-own-operate-transfer model, which means that while it will be running the project and earning revenues during the contract period, it will ultimately transfer the network to the government once the contract runs out.

Compliance will rise 30 percent to 40 percent during the first phase of the project, the people said. During this time all existing data — including credit card spends, property and stock investments, cash purchases and deposits — will be migrated to the new system and a central team will send postal or email blasts to prod residents to file tax declarations. There will be no physical interaction, they said.

The second phase will be rolled out by December, during which data analytics will mine, clean and process the information. Individual spending profiles will be created and inquiries will be more targeted. In the last phase, which will go live around May 2018, advanced systems will be used to predict future defaults and flag risks.

‘Safeguards are must’
Some analysts recommend that the government use its tools for tax forecasting. Data analytics could show how much business has slumped in a certain town following a flood, for example, which would help authorities better assess aid requirements as well as predict local revenues and plan finances.

The scope of the project has also led to concerns in a country where the government has repeatedly told the Supreme Court it doesn’t consider privacy to be an absolute right. The OECD studied 21 countries that use technology to detect tax fraud and said in a March 31 report that while such methods offer a win-win by making compliance cheaper as well as boosting revenue, they must be accompanied by legislative measures and taxpayer consultation.

“Safeguards are must,” said Rahul Garg, head of direct tax at PwC India. “It has to be seen how effectively data, which has become invaluable, is used for governance.”

Source : Economic Times

GST: Global FMCG heads back reform, talk of short blip : 28-07-2017


MUMBAI|NEW DELHI: India’s goods and services tax (GST) has a found mention in the quarterly earnings calls and statements of global chiefs of nearly half a dozen consumer goods MNCs, as they cited the disruption caused by the transition to the new tax regime in a market whose profile has risen steadily within their global operations.

The country accounts for 2-9% of the global sales of UnileverBSE -2.14 %, ColgateBSE -0.52 %, GlaxoSmithKline, Coca-Cola, NestleBSE -0.14 % and Reckitt Benckiser, and is potentially a highgrowth market for them.

Some of these companies said the impact of the GST rollout weighed down their overall global performance, highlighting India’s importance as a key revenue generator.

At the same time, most of them have welcomed the new unified tax structure, which they believe will prove to be beneficial in the medium term.

“While we believe India has taken the right steps towards modernising its monetary and tax system, new policies have resulted in near-term uncertainty for retailers and consumers that impacted the beverage industry in the first half,” Coca-Cola CEO James Quincey said on Wednesday during a call with investors, becoming the latest in a growing tribe of international chief executives to comment on GST.

Analysts are not surprised by the attention that GST and Indian operations are attracting.

Slowdown Witnessed in Sales
“Indian business will be among the top five or ten markets for most global consumer companies in the long term. The contribution has been steadily increasing and is now contributing significantly to Asia-Pacific sales,” said EdelweissBSE -0.05 % Securities senior vice-president Abneesh Roy.

In the run-up to the new tax regime on July 1, several consumer goods companies witnessed a slowdown in sales as distributors and wholesalers attempted to liquidate existing stock. After July 1, price cuts have been announced in categories where tax rates have been lowered. But, in some rural areas, where wholesalers have not upgraded their systems to be GST compliant, there have been supply disruptions. “In India, the welcome introduction of the new GST prompted distributors and wholesalers to  cut back their stocks during the transition period,” Unilever’s global chief Paul Polman told investors last week. Unilever CFO Graeme Pitkethly said the company expects price growth to moderate as there would be less pressure on commodity costs and tax benefits of GST in India would be passed on to consumers.

Hindustan Unilever, the Indian unit of the company, accounts for nearly 9% of its global sales and India is its second-largest market.

Oral care major Colgate-Palmolive’s Asia Pacific sales declined 3.5% in the April-June quarter, primarily reflecting inventory reductions by wholesalers in India in anticipation of the new tax, increased competitive activity in Australia and consumption decline in Thailand. “We were just digging out of the demonetisation headwind and then boom you get the GST which basically saw the stock list close up sharp the last two weeks in June,” said Colgate’s global CEO Ian Cook. He added that the company was hopeful that there would be a “rebuild across the back half of the year”.

Reckitt Benckiser Plc said GST’s impact on its full-year revenue could be £50 million, or about .`420 crore. “Volatility has been seen in India, particularly in the second quarter as many customers delayed their orders due to the implementation of GST,” Rakesh Kapoor, chief executive at the British consumer goods and healthcare maker, said. The maker of Dettol, however, added that there is no evidence that consumption had reduced and the market saw very strong sales in early July.

British consumer goods and healthcare maker GSK Plc, too, said destocking on account of GST in India has impacted its global nutrition business in June quarter.

Source : Economic Times

Notification No. SO 2423(E) [F.NO.F.2/250/2006-SEZ], 27-7-2017


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – KAKINADA SEZ PVT. LTD. – AMENDMENT IN NOTIFICATION NO. SO 2177(E), DATED 5-7-2017

NOTIFICATION NO. SO 2423(E) [NO.F.1/17/2011-SEZ]DATED 27-7-2017

The Central Government, in exercise of the powers conferred by sub-section (1) of Section 4 of the Special Economic Zone Act, 2005 (28 of 2005) and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, hereby makes the following amendment in the notification of Ministry of Commerce and Industry, Department of Commerce, number S.O. 2177(E) dated 5th July, 2017 for Multi Product Special Economic Zone at Ponnada, Mulapeta, Ramanakkapeta Villages in Kakinada, East Godavari District, in the State of Andhra Pradesh:

M/s. Kakinada SEZ Private Limited may be read as M/s. Kakinada SEZ Limited.

02 – 27-07-2017


Exim Bank’s Government of India supported Line of Credit of USD 24.54 million to the Government of the Republic of Ghana – Circular – Dated 27-7-2017 – FEMA

RBI/2017-18/28
A.P. (DIR Series) Circular No. 02

July 27, 2017

To

All Category – I Authorised Dealer Banks

Madam / Sir,

Exim Bank’s Government of India supported Line of Credit of USD 24.54 million to the Government of the Republic of Ghana

Export-Import Bank of India (Exim Bank) has entered into an agreement on November 22, 2016 with the Government of the Republic of Ghana for making available to the latter, a Government of India supported Line of Credit (LoC) of USD 24.54 million (USD Twenty four million and five hundred forty thousand only) for the purpose of financing sugarcane development and irrigation project in the Republic of Ghana. The credit is available for financing export of eligible goods and services from India for the purpose of financing sugarcane development and irrigation project in terms of the agreement and those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this agreement. The goods include plant, machinery and equipment and services include consultancy services. Out of the total credit by Exim Bank under this agreement, goods and services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 per cent of goods and services may be procured by the seller for the purpose of the eligible contract from outside India.

2. The Agreement under the LoC is effective from July 07, 2017. Under the LoC, the terminal utilization period is 60 months after the scheduled completion date of the project.

3. Shipments under the LoC will have to be declared on Export Declaration Form as per instructions issued by the Reserve Bank from time to time.

4. No agency commission is payable for export under the above LoC. However, if required, the exporter may use its own resources or utilize balances in its Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- I (AD Category- I) banks may allow such remittance after realization of full eligible value of export subject to compliance with the extant instructions for payment of agency commission.

5. AD Category- I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the LoC from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or from their website www.eximbankindia.in

6. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(J K Pandey)
Chief General Manager

GST impact on states: Governments free to levy certain other taxes : 27-07-2017


The finance ministry on Tuesday said states can levy certain taxes under the new indirect tax regime as the GST Council did not have any authority to direct them against such a move. The ministry was replying to a question in the Rajya Sabha on whether the Goods and Services Tax (GST) Council was empowered to stop states from levying certain taxes. “Under the constitution, certain powers of taxation still remain with the state governments after introduction of GST also and within those powers, the state governments are free to decide their rates of taxation. These taxes include stamp duty and registration charges, VAT on potable alcohol, entertainment tax, electricity duty and taxes on vehicle,” the ministry said.

As FE had reported earlier, in the first week of GST, Maharasthra and Tamil Nadu had raised local taxes leading to fears that more states could follow suit, thus undermining the objective of GST. The GST, which subsumes most major indirect taxes, is designed to reduce cascading of taxes that jacks up costs to businesses. Prevalence of input taxes that cannot be offset by the downstream industries is against the GST’s basic tenet, analysts said.
However, some government official said that the remaining taxation power with states was very limited, and it will prevent distortion of GST unlike the case under the earlier state VAT system. In the past, several states tweaked their laws to restrict flow of input tax credit and impose levies on inter-state transfer of stock under VAT.

For instance, Punjab, in December 2013, introduced a system of levy only on the first point of sale for a large variety of items — from electronic goods and packaged foods to mineral water and medicines — at substantially higher rates of 7-25% (as against the weighted average of about 12% in case of other items). This meant the tax is paid either at the manufacturer’s or first importer’s stage and an absence of tax on the value added downstream, including at wholesale and retail points.

The imposition of local body taxes will continue for sometime before the trend stagnates but it is unlikely to dent the objective of the new regime, a government official said on the condition of anonymity. “The states have enjoyed autonomy over taxation since independence, which has now been stripped off with the implementation of GST. The administrations will take time to adjust to the new reality,” the official said.

Source : Financial Express

GST affect: Cheaper to eat desserts at shop counter than situated at table : 27-07-2017


What is the difference between having a rasmalai standing at the counter of your favourite sweet shop, and ordering it at a table a few steps away? Well, apart from comfort, it’s the GST rate.

If you have the sweet at the counter and walk out after paying the bill, many mithaiwalas will charge 5% GST. But if you decide to enjoy it after asking a waiter to get it, the shop may ask you to pay 18%, if it’s air-conditioned. It is the same for dhokla, the favourite Gujarati snack.

If you order at the counter you pay at a rate of 12% GST, but if you prefer to sit down to enjoy the snack you pay a higher rate of 18%.

There are others who are interpreting it differently. For instance, a leading sweet shop in central Delhi, which does not have seating facility but has tables where you can enjoy a snack or a sweet, is charging 5%.

“The higher levy is applicable if you have a large seating area, which we do not have,” explained the owner, who did not wish to be identified.

But the differential tax rate is something that most consumers are unaware of, resulting in many of them getting a surprise when they are presented the bill.

Tax experts say subtle interpretations of GST need to be effectively communicated to consumers.

The significant difference in GST rates for the same product may prompt a large number of consumers to have their favourite sweet or snack at the counter or outside the shop, rather than enjoy it at leisure sitting at a table.

The levy in many fast-food chains is the same, irrespective of whether you have it there or order a takeaway.

Tax lawyer R S Sharma said that even in case of tea, you may have to pay 18% tax if consumed in a restaurant but if you decide to have it outside, you can get away by paying 12%, which is the levy for beverages containing milk.

“Supply by way of service of food or any other article or drink by a restaurant or eating joint or mess or canteen with air conditioning is subject to 18% GST.

However, supply of food or other article or drink by restaurants or eating joints without AC or central heating is subject to 12% under the food and beverage services category,” he said.

Source : PTI

Demonetisation crackdown round two: Tax sleuths target corporate accounts : 27-07-2017


After targeting individuals who made large cash deposits in banks during or after demonetisation, the income-tax department is now going after businesses that deposited lots of cash in corporate accounts in the second round of demonetisation tax notices.

Since Monday last week, the department has been sending notices to entrepreneurs, including some prominent jewellers, diamond traders, textile merchants and real estate developers, who have deposited money in their corporate bank accounts, a Mumbai-based income-tax official said.

This round of tax notices is focused on “big fish”, the official said. “Anyone who may have deposited unexplained cash in bank accounts after demonetisation has received notices. The tax notices were sent through emails of the taxpayers,” the person said. People in the know said the number of tax notices sent since last week could be in lakhs.

At the time of deposits, most companies had claimed it was cash on hand from their business activities. The main source cited was from sale proceeds. Along with the notices, the tax department has sent bank statements of such transactions and asked these businesses to disclose details of the source of income through a questionnaire consisting four questions.

“Tax department is seeking the information of the customers to whom the cash sales are made,” said senior chartered accountant Dilip Lakhani. “Assessees are asked to give the bifurcation of the customers as to whether they are identified or unidentified and as to whether they hold PAN number or not. The tax department may cross verify the genuineness of the transaction where the customers are identified and having PAN number,” he said.

The first set of demonetization tax notices was sent to individuals around January this year. ET was the first to report on January 28 that about 5,000 tax notices were sent to those who had deposited Rs 1 crore or more in their bank accounts. While the second wave of tax notices has begun, the tax department is continuing with those who were sent notices in January.

Source : Economic Times

Notification No.74/2017 26-07-2017


SECTION 138 OF THE INCOME-TAX ACT, 1961 – DISCLOSURE OF INFORMATION RESPECTING ASSESSEES TO SPECIFIED OFFICER, AUTHORITY OR BODY PERFORMING FUNCTIONS UNDER ANY OTHER LAW – NOTIFIED AUTHORITY UNDER SECTION 138(1)(a)(ii)

NOTIFICATION NO.74/2017 (F.NO.225/252/2017-ITA.II)DATED 26-7-2017

In pursuance of sub-clause (ii) of clause (a) of sub-section (1) of Section 138 of the Income-tax Act, 1961, the Central Government, hereby specifies Joint Secretary, Ministry of Corporate Affairs, Government of India, for purposes of the said clause.

This Notification has to be read with order under section 138(1)(a) of Income-tax Act, 1961 dated 26-7-2017 in file of even number, issued by the Central Board of Direct Taxes, notifying Principal Director General of Income-tax (Systems) as the ‘designated authority’ for furnishing the ‘bulk information’ on certain identified parameters to the above authority, being notified.

Notification No.73/2017 26-07-2017


SECTION 2(19AA) OF THE INCOME-TAX ACT, 1961 – DEMERGER – NOTIFIED CONDITIONS UNDER EXPLANATION 5 – AMENDMENT IN NOTIFICATION NO. SO 3204(E) [NO.93/2016 (F.NO.149/251/2015-TPL)], DATED 14-10-2016

NOTIFICATION NO. SO 2338(E) [NO.73/2017 (F.NO.149/251/2015-TPL)]DATED 26-7-2017

In exercise of the powers conferred by Explanation 5 to clause (19AA) of section 2 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby amends the notification of the Government of India, Ministry of Finance number S.O. 3204(E) published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated the 14th October, 2016, namely:—

2. In the said notification,—

(a) in clause (i), for the words “to transfer”, the words “by way of transfer of” shall be substituted;
(b) in clause (ii) for the words “public sector company”, the words, figures, bracket “public sector company on the appointed date indicated in the scheme approved by the Appellate Tribunal constituted under section 410 of the Companies Act, 2013 (18 of 2013) in this behalf” shall be substituted.

Anti profiteering authority to probe only mass impact cases to be probed, says Hasmukh Adhia : 26-07-2017


The controversial anti-profiteering authority proposed under the new goods and services tax (GST) regime will investigate only those cases that have a mass impact and not small cases of alleged undue profits, revenue secretary Hasmukh Adhiasaid on Tuesday. Once constituted by the GST Council, the national anti-profiteering authority will be responsible for applying anti-profiteering measures in cases where a reduction in tax incidence or the benefit of input tax credit has not been passed on to customers by way of a commensurate reduction in prices. The authority, to be headed by a secretary-level officer and assisted by four technical members, will lapse after two years. “The authority will take up cases of mass importance. It will not look into small cases, but no monetary threshold has been fixed for cases to be picked up for scrutiny by the authority,” Adhia said.

The finance ministry said the GST Council has formed a selection committee under cabinet secretary PK Sinha to identify and recommend eligible persons for appointment as the chairman and members of the national anti-profiteering authority. Complaints related to profiteering will be routed through a three-tier structure consisting of a standing committee at the GST Council level and a screening committee in each state. Any application seeking to revoke anti-profiteering measures will be examined by the central standing committee, but in case the business concerned is located in only one state, it will be taken up by a screening committee in that state. Additionally, the standing committee is empowered to refer cases requiring detailed enquiry to the director general of safeguards in the Central Board of Excise and Customs (CBEC), who will give his recommendation for consideration of the authority.

If the authority confirms the necessity of applying anti-profiteering measures, it has the power to order the business concerned to reduce its prices or return the undue benefit availed along with interest to the recipient of the goods or service. If the undue benefit cannot be passed on to the recipient, it can be ordered to be deposited in the consumer welfare fund within a stipulated time. Separately, in extreme cases the authority can impose a penalty on the defaulting business entity and even order the cancellation of its registration under GST, the government said, and added that the constitution of the authority is expected to bolster consumer confidence.

Source : Financial Express

Sweet makers find GST a tough nut to crack : 26-07-2017


CHENNAI: Would it bother you if halwa were designated ‘jelly’, and dhokla ‘cake’? It is worrying mithai makers, though, as the goods and services tax (GST) has made taxation of sweets and savouries a minefield.

For example, plain barfi, which is a ‘sweet’, is taxed at the lowest rate of 5%, but chocolate barfi with a chocolate-flavoured layer on top risks being bundled with chocolates and taxed at 28%. Even plain barfi garnished with cardamom and dry fruit could be taxed along with nuts at 12%.

More complex dishes like falooda — a combination of ice cream, fruit, jelly, vermicelli pudding, jam, chocolate shavings, etc — and fruit jelly custard trifle are easy targets for the highest tax rate of 28%. Even the diabetic-friendly versions of sweets, gums, etc that contain synthetic sweetening agents like sorbitol come under 18% GST.

Amid confusion over GST rates, mithai makers are playing safe by cutting back on variety. “We are making only plain sandesh, plain badusha, plain barfi and plain peda,” said Mahesh Rajasekhar from sweet chain KC Das that has stopped making mango and chocolate sandesh.

“We are trying to figure out if we need to pay 28% tax on it as many of our chocolate variations have more than 5% cocoa content. Badam milk, basundi and rasmalai are also a concern as we aren’t sure if they are sweets (5% tax) or beverages (12% tax). GST is going to hamper our creativity.”

A sweet like chikki made from equal parts groundnut and jaggery certainly leaves a lot of room for interpretation, said Suresh Nair, partner, indirect tax, Ernst & Young, adding, “Chapter 2008 says nuts such as groundnut and cashew, whether roasted, sweetened, salted or otherwise, are taxable at 18%.”

That sounds like an opportunity to KT Srinivasa Raja, founder, Adyar Anand Bhavan (A2B) and member of Chennai Hotels Association (CHA). “If it is plain roasted cashew, we would have to tax it at 18%. Instead, we would add some more ingredients like aloo bhujia, namkeen, mixture, etc, to make it a snack that can be taxed at 12%. Even better, make it a sweet for taxation at 5%.”

Sellers are getting creative for lower tax rates. As fruit jellies, mousse, pastries and pies come under the 18% GST slab, some are considering renaming and re-packaging them as sweets to pay 5% tax. Shopkeepers said western desserts like macaroons, custards, tarts, cakes and pastries could even be Indianised to avoid the high tax rate of 18%.

Source : PTI

Mistakes in filing income tax returns that may get you a tax notice : 26-07-2017


Some common mistakes that taxpayers often make while filing income tax returns are listed below. These errors could result in problems or a tax notice for the tax payers later on. Consequently, it is best to avoid them.

Here are some of the mistakes that are often made by the taxpayers.

1. Filing ITR using the wrong form
As per tax laws, an individual is required to report all sources of income and file the income tax return using the correct form applicable to him. If he files his tax return, using a wrong ITR form, then his filed return will be treated as ‘defective’ and he will be asked to file a revised ITR using correct form.

“In this case, the taxpayer will get some time to rectify the mistake. A rectified return (in response to notice u/s 139(9)) must be filed within 15 days from the date of receipt of the intimation under section 139(9). This time limit may be extended by the assessing officer on an application by the assessee. If the defect is not rectified within the time limit, then the assessing officer will treat it as an invalid return. In other word, it is same as not filing a return at all. Moreover, the person may face all the penalties related to not filing of ITR in addition to payment of interest u/s 234A for the delay in filing the tax return” says Chetan Chandak, Head of Tax Research, H&R Block, India.

2. Not reporting interest incomes
One should report all the interest incomes received or accrued due to him in the previous financial year (for which the return is being filed) while filing his tax returns. Individuals generally forget to report interest earned from savings bank account, fixed deposits, recurring deposits, etc. under the head ‘Income from other sources’.

While interest received or accrued on fixed and recurring deposits are fully taxable, one can claim tax relief on interest earned from the savings bank account upto a certain limit. Section 80TTA of the Income Tax Act provides that interest upto Rs 10,000 can be deducted from the total interest earned in a year from bank and post office savings account after arriving at the gross total income. “Further if they have a saving account with any Post office then interest from such account is exempt up to Rs. 3500 (in individual account) and Rs. 7000 (in a joint account) under section 10(15)(i). This is in addition to 80TTA deduction” says Chandak.

3. Not filing income tax returns
Many people don’t file their income tax returns because they have long term capital gains which are tax-exempt and without this their gross total income is below the tax-exempt income level.

However, as per recent amendments in section 139 (1) of the Act, if your exempted long term capital gains along with gross total income exceeds the minimum exemption level, you are required to file your income tax return.

For instance, let us assume that in a financial year your gross total income is Rs 1 lakh and long term exempted capital gains is Rs 2 lakh. Earlier you were not required to file income tax return as your total income was below the minimum exemption limit of Rs 2.5 lakh.

Now due to the recent amendment in tax laws, you are required to file ITR as your gross total income plus long term capital gains (Rs 1 lakh + Rs 2 lakh > Rs. 2.5 lakh) exceeds the minimum exemption limit.

4. Not clubbing incomes
As per the rules of clubbing of Income, a taxpayer is required to add income of specified persons (minor children, spouse, son’s spouse, etc.) to his own income and the tax payable by him is calculated on the total of this these two incomes. This is mostly the case when the income of minor child is added to the income of his/her parent. Section 60 to 64 of the Income Tax Act specifies the provision of clubbing of incomes. “In the case where minor’s  child is added to the income of his/her parent. Section 60 to 64 of the Income Tax Act specifies the provision of clubbing of incomes. “In the case where minor’s income gets clubbed with that of any parent, he/she can claim exemption up to Rs. 1,500 under section 10(32). In case if you miss reporting this income (of minor child) you may have to pay the tax due, along with interest and you may even be subjected to a penalty of 50% for under reporting or 200% for mis-reporting of your income (up to A.Y. 2016-17 this penalty was 100-300% of the taxes avoided)”, says Chandak.

5. Not reporting income from the last job
If you have switched jobs in a financial year then income from your previous job must be reported while filing income tax return along with income from the current job. If any income (from previous job) is not reported, then a discrepancy is bound to reflect in your TDS certificates, Form 16 and Form 26AS. This is bound to bring you taxman to your door. “Again the penalties are same as not clubbing of income”, says Chandak.

6. Not reporting tax free incomes
As a taxpayer, you are duty bound to report all your income even if some is tax free. Interest earned from provident fund or/and tax-free bonds in a financial year must be reported in your ITR. However, you can claim exemption on these under various sections of the Income Tax Act. These exempt incomes are to be reported in the ‘Exempt Income’ schedule of the ITR.

7. Not reporting all bank accounts
From the assessment year 2015-16, a taxpayer is required to report all the bank accounts held by him in previous year in his/her income tax return. Earlier you were only required to mention a single bank account in which you wished to receive credit of the income tax refund if any. However, now only dormant accounts are excluded from requirement of reporting in the ITR.

Chandak here adds, “Further for A.Y. 2017-18 you also need to mention the details of cash deposited in your bank accounts during the demonetisation period of 09/11/16 to 30/12/16 if the aggregate cash deposited in all your accounts exceeds Rs. 2 lakh for that period. Failing to report details of bank account may be considered as furnishing of incorrect particulars and may attract consequent penalties or even prosecution if it is established that certain income has escaped the taxes due to such non-reporting”.

8. Not declaring deemed rent/expected rent
If you own another house apart from a self-occupied house and it is lying vacant, then you should report the expected rent in your gross total income. “This may result in some tax payable as the notional rental gets added to your income and non -reporting may lead to penalties as stated above. But in cases where there is interest payable on the housing loan for the said property it can result in some tax savings. But this benefit  of interest set-off of loss from house property has been capped at Rs. 2 lakh starting 1st April 2017″, says Chandak.

9. Failing to revise your income
If you have discovered any error once tax filing has been completed, then you must rectify your mistake. You must file the revised return to rectify your mistake. Current income tax laws allow you two years to file the revised returns. However, from the financial year 2017-18, a taxpayer will get only one year after the end of the relevant financial year.

“It is always recommended that once the error is detected taxpayer rectify the mistake within time, pay the due taxes with interest to avoid any penalty for under reporting or mis-reporting. Also if you have missed claiming any deduction or exemption you can enhance your tax refunds by filing the revised returns”, says Chandak.

Source : Economic Times

No.24/2017 Dated: 25-07-2017


circular_24_ 2017

Execution of Bond/LUT-services exporters at receiving end – 25-07-2017


UNDER GST, exporters in general and services exporters, in particular, are faced with a rather peculiar predicament… that of the need to execute a bond or a letter of undertaking (‘LUT’).

Section 96A of the CGST Rules, 2017, which requires the exporters to furnish a bond or an LUT, is reproduced below.

96A. Refund of integrated tax paid on export of goods or services under bond or Letter of Undertaking.

“(1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of -

(a) fifteen days after the expiry of three months from the date of issue of the invoice for export, if the goods are not exported out of India; or

(b) fifteen days after the expiry of one year, or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.
(2) The details of the export invoices contained in FORM GSTR-1 furnished on the common portal shall be electronically transmitted to the system designated by Customs and a confirmation that the goods covered by the said invoices have been exported out of India shall be electronically transmitted to the common portal from the said system.

(3) Where the goods are not exported within the time specified in sub-rule (1) and the registered person fails to pay the amount mentioned in the said sub-rule, the export as allowed under bond or Letter of Undertaking shall be withdrawn forthwith and the said amount shall be recovered from the registered person in accordance with the provisions of section 79.

(4) The export as allowed under bond or Letter of Undertaking withdrawn in terms of sub rule (3) shall be restored immediately when the registered person pays the amount due.

(5) The Board, by way of notification, may specify the conditions and safeguards under which a Letter of Undertaking may be furnished in place of a bond.

(6) The provisions of sub rule (1) shall apply, mutatis mutandis, in respect of zero-rated supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit without payment of integrated tax.”
In terms of Notification No. 16/2017-CT read with Circular No. 4/4/2017, both dated 7-7-2017, exporters with a track record of having received his foreign inward remittances amounting to a minimum of 10% of the export turnover, which should not be less than one crore rupees, in the preceding financial year, is allowed to furnish an LUT instead of a bond.

Be that as it may the concept involving providing a bond was well known in the context of goods exporters and importers under the customs and the erstwhile central excise laws. In some cases, depending on the performance of the goods exporters, the furnishing of a bank guarantee was exempted. As a concept, the furnishing of a bond and a bank guarantee was linked to the exporter meeting his export obligation, goods importers covered under DEEC, etc. There was no requirement, as far as my limited knowledge goes, requiring a services exporter to provide a bond or an LUT, in the per-GST era. Of course, services exporters who had imported duty free goods under the STPI scheme, etc., were required to furnish a bond under the Customs Act. But, there was no requirement for services exporters to furnish a bank guarantee under the pre-GST era.

But, under the GST regime, the furnishing of a bond along with a bank guarantee of (not exceeding) 15% of the tax applicable on estimated exports is a must for all exporters including, especially, services exporters who do not have the track record of having received a minimum of 10% of the export turnover, (which should not be less than one crore rupees), in the preceding financial year, i.e. FY2015-16. Thus, all new services exporters including start-ups have the daunting task of having to execute a bond with the Department, along with furnishing a bank guarantee for 15% of the estimated tax liability under GST. The requirement of furnishing the bank guarantee also applies to smaller services exporters who are operating over the years, whose forex realizations are less than the prescribed limit of Rs. 1 crore during FY 2015-16.This need of providing the bank guarantee under GST is sure to hit the smaller services exporters and the start-ups, especially considering the fact that no such requirement existed under the pre-GST era.

It seems that the need to provide a bond is applicable even to SEZ Developers, who render supplies to SEZ Units. Since they do not have forex billings, by and large, the SEZ Developers would also be covered by the need to provide a bond rather than an LUT. Though the SEZ Developers have provided a bond in terms of the SEZ Act, it does seem that they are still required to provide the bond along with the bank guarantee under GST.

Taking this discussion forward…In terms of Rule 96A (reproduced above), the services exporter is required to pay up the IGST applicable on his exports, if he does not receive the payment against his export services within one year or such further period as may be allowed by the Commissioner. The time limit for realization of export proceeds for services exports under the Foreign Exchange Management Act, 1999 read with the master circulars issued by RBI is 9 months, which can be extended by the Authorized Dealer. Now, this power to extend the time limit for export realization is being given to the Commissioner.

Under the erstwhile service tax law, we had Rule 6(8) of the CENVAT Credit Rules, 2004 in terms of which, an export of services was not to be treated as an exempted service if, interalia, the payment has not been received for a period of six months or such extended period as may be allowed by RBI from time to time. The said Rule 6(8) also provided that, if the payment against his exports was received by the exporter after the extended period granted by RBI but within one year from such period, the services exporter was allowed to take back the proportionate CENVAT credit which had been reversed under Rule 6(3) to the extent attributable to such delayed export realisation. Hence, at the most, the services exporter would have been required to reverse the credit proportionate to the delayed export proceeds and nothing more. However, in terms of the provisions contained in Rule 96A, the services exporter who does not realize his export proceeds within the time prescribed would need to pay up the tax of 18% along with interest from the date of the export.

Before concluding…

It does seem that the requirement under GST to provide a bank guarantee and the need to pay up the tax on exports for delayed export realization along with interest, is very draconian for small services exporters and start-ups. One does expect the Government which is seeking to promote the Make-In-India concept to exempt services providers from providing the bank guarantee.

To what extent the provision to empower the Commissioners to grant extension of time for realization of export proceeds vis-à-vis Rule 96A would work, is anybody’s guess. How can the Commissioner get into the shoes of the RBI, which is the statutory authority empowered to grant extension of time for realization of export proceeds? Surely, this provision is bound to face legal challenge.

I am sure that the legal sanctity of Rule 96A which requires services exporters to pay up the tax on their exports that are not realized within the one-year time period or within such extended time granted by the Commissioner, sans any statutory provision, would be tested in the High Courts.

Despite that clear communication from the Government that the LUT can be provided on the exporter’s letterhead, many Commissionerates are insisting that the LUT should be provided on a stamp paper, duly notarized. So much for the willingness of the babus to comply with the circulars issued by the Central Government, under the GST era.

Despite the clear indication that the bank guarantee should not exceed 15% of the tax involved, most Commissionerates (including the city where I live) are not accepting a bank guarantee for a value less than 15% of the tax involved.

If all this is not a return to pre-liberalisation era, what else will one call it?

The Government should, at least now, start trusting the assessees who contribute to the exchequers kitty rather than treating each one as a tax evader and reining him with all sorts of procedural rigmarole.

GST impact on garbage; Yes, waste too affected, check how it will impact you : 25-07-2017


Garbage collectors are now asking people to dump glass bottles in the trash after its resale value dipped on 18 per cent GST being imposed on the commodity. The discarded glass bottles of alcoholic or non-alcoholic beverages will now be taken to the landfills where they would be smashed. According to garbage collectors, a 750 ml bottle of wine would earlier fetch them Re 1 but now a kilo of such bottles is worth the same. The waste pickers have come around a solution to this. They now smash the bottles and sell the pieces as mixed glass for Re 1 per kilo, Indian Express reported. A waste picker, Mohammad Hamid Ali, told IE that his earnings have come down by 40 per cent since the tax reform. He tells his customers to collect the bottles and return them all together in order for him to get a better price. Products like glass bottles, plastic and paper have all faced similar changes.

The GST therefore is not only affecting the environment but the migrant workers who are losing their livelihoods. Swati Singh Sambhyal, programme officer at Centre for Science and Environment told IE that there are around 3-4 lakh workers in the informal waste management sector who might be affected. The scrap market has also been affected. Contractors are witnessing fewer garbage collectors in areas. The police would ask these smaller garbage collectors about an invoice, which they wouldn’t have, when they see huge quantities of kabaad.

Balmukund Kumar of Delhi-based NGO Chintan told IE that some waste pickers might still be accepting glass bottles because contractor would have sufficient funds but with time, this money would not reach the garbage collector.

Source : Financial Express

Notification No.72/2017 25-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION New Delhi,

the 25th July, 2017

(INCOME TAX)

 S.O. 2321(E).— In exercise of the powers conferred by sub-section (1) and (2) of section 120 of the Incometax Act,1961 (43 of 1961), read with section 6 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) the Central Board of Direct Taxes hereby makes the following amendment in the notification of the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, number S.O. 1590(E), dated the 16th May, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 16th May, 2017, namely:-

In the said Notification, in the Schedule, —

(i) against serial number 11, in column (6) —

(a) the following entries occurring from serial numbers

(xx) to (xxv) shall be omitted, namely:- “(xx) Pithoragarh

(xxi) Udham Singh Nagar

(xxii) Bageshwar

(xxiii) Nainital

(xxiv) Almora

(xxv) Champawat” (b) after the serial number “

(xxxvii)” the following serial numbers shall be inserted, namely:- “

(xxxviii) Pithoragarh

(xxxix) Udham Singh Nagar

(xl) Bageshwar

(xli) Nainital

(xlii) Almora

(xliii) Champawat”;

(ii) against serial number 14, in column (6), after the words “Principal Chief Commissioner of Income-tax, Pune”, the words “; Chief Commissioner of Income-tax, Pune” shall be inserted.

                                                                            [Notification No. 72/2017/ F. No. 187/13/2015-(ITA.I)] DEEPSHIKHA SHARMA, Director

Notification No.71/2017 25-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 25th July 2017

(Income-tax)

 S.O. 2320 (E).—In exercise of the powers conferred under sub-section (2) of section 28 read with section 59 of the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) the Central Government hereby makes the following amendment in the notification of the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, number S.O.1621(E), dated the 18th May, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 18th May, 2017, namely :— In the said Notification, in the Schedule, —

(i) against serial number 18, in column (5), the brackets, letters, and words “(xx) Pithoragarh (xxi) Udham Singh Nagar (xxii) Bageshwar (xxiii) Nainital (xxiv) Almora (xxv) Champawat” shall be omitted;

(ii) against serial number 19, in column (5), after the word “Shamli”, the brackets, letters and words “(xxxviii) Pithoragarh (xxxix) Udham Singh Nagar (xl) Bageshwar (xli) Nainital (xlii) Almora (xliii) Champawat” shall be inserted;

(iii) against serial number 23, in column (5), after the words “Principal Chief Commissioner of Income-tax, Pune”, the words “; Chief Commissioner of Income-tax, Pune” shall be inserted.

 

                                                                                       [Notification No. 71/2017/F.No. 187/13/2015(ITA.I)] DEEPSHIKHA SHARMA, Director

Good, bad and ugly of India’s new national sales tax journey : 25-07-2017


If there’s one word that sums up the response of India’s businesses and consumers to the country’s new national sales tax, it’s ‘confused.’

Will premium economy seats be taxed as economy class or business? Is a chocolate-coated biscuit a biscuit or chocolate? These are the questions now troubling businesses large and small across India’s $2.3 trillion economy.

The roll out of the goods and services tax came less than a year after the government’s shock withdrawal of 86 percent of the nation’s currency, which helped knock India’s GDP growth down to 6.1 percent from 7.1 percent in the January-March quarter and eliminated as many as 1.5 million jobs.

Tax Milestone

After more than a decade-long journey, the biggest tax reform since independence in 1947 became a reality on July 1, combining more than a dozen levies into one tax.

Many Indians responded by sharing their first GST bill on WhatsApp, Facebook and Twitter. The novelty soon wore off. Small traders and businesses struggled to issue invoices and battled with the new software, with some forced to provide handwritten invoices to customers.

In an attempt to cut through the confusion, the government held tax ‘master classes’ and published advertisements in the newspapers showing the revised prices alongside the old prices of goods.

Checkpoints Abolished

About two dozen states of 29 have abolished check points at their borders, where tax compliance and goods inspections used to delay deliveries — often by days.

Yet while travel time has been reduced as tax inspectors disappear from the roads, transport department officials are still actively checking vehicles. Transportation of illegal goods has reduced because those businesses cannot provide GST-compliant bills.

“People are finding it tough to understand the GST,” said Pradeep Singal, national president of the All India Transporters Welfare Association. “This has meant that companies had ordered in advance and are still using old stocks,” pushing down transport business by 30 percent.”

Confusion Reigns

Traders, particularly in small towns, are struggling with their lack of knowledge of the new tax regime — compliance obligations, raising invoices and accessing input credits, said Praveen Khandelwal, secretary general of the Confederation of All India Traders.

Small merchants and e-commerce companies are tripping over a dizzying array of documents and the complicated classification system that determines what percentage of tax will be charged. Thousands of small merchants have stopped selling on e-commerce sites because they can’t meet these new requirements.

Add to that, there’s multiple rates for various products. Footwear below 500 rupees ($7.70) attracts one rate and above that price attracts a higher tax rate, leaving suppliers confused over which rate they should apply.

“Any new law would have interpretation issues,” said Pratik Jain, national leader indirect tax at PWC India. “Like what rates would be charged for an economy-plus ticket issued by some airlines? It should be charged at economy rates.”

September Test
Whether the GST network can seamlessly match billions of credits, facilitate tax collections, provide refunds and check evasions will be tested when most of the traders and companies file returns in September.

Businesses have not yet uploaded their sales and purchases invoices generated post-July 1 on the network, as that part of the system has not been functioning and companies have been allowed to file late returns for first two months.

“The biggest problem being faced right now is that the GSTN has still not formalized their format for firms to pay taxes,” said Sachin Menon, national head of indirect tax at KPMG India. “We have some multiple revisions in format in the last couple of weeks alone. Companies providing GST software are having a tough time.”

Small business owners, as well as traders and shopkeepers who have never turned on a computer, are scrambling to acquire the skills to navigate these technological challenges.

No Single Market
Prices of some products are varying according to location as traders have not fully implemented the new structure and profiteers have stepped in, hindering the creation of a single Indian market.

For instance, Maruti Suzuki India Ltd.’s Baleno Sigma gasoline model cost 635,000 rupees near Navi Mumbai in Maharashtra while the same model is priced at 664,952 in Bengaluru in Karnataka.

“A quick comparison of price of motorcycles and cars across the country reveals a convergence in price post-GST,” equity analysts of Jefferies India Private Ltd., the unit of the global investment banking firm said in a July 13 note.

Movie tickets in Tamil Nadu and Maharashtra became costlier as the states imposed additional taxes, defeating the purpose of a unified tax. The federal government, however, has set up a panel of officials to monitor any price rise, shortage of commodities and implementation of GST.

Exemption Demands
Textile traders have been protesting to demand that fabrics be exempted from the tax. The government is reluctant to agree, saying it will break down the input tax credit chain.

The industry won’t be able to sustain the rise in costs, given that 60 percent of the trade is in the informal sector, said S. Sunanda, secretary general of the Confederation of Indian Textile Industry, which represents more than 3,000 units.

“Individuals form about 65 percent of units involved in our trade,” Sunanda said. “The trade will be hit by cheaper imports from China, Bangladesh and Indonesia.”

There’s a 5 percent GST on cotton, however the government raised tax rates on man-made fiber to 18 percent from 12 percent.

“While the medium-to-long run benefits of GST cannot be disputed, the short-run impact on growth is expected to be negative as compliance, confusion and inventory effects take a toll,” said Abhishek Gupta, India economist at Bloomberg Intelligence. “However, recorded GDP growth is still likely to show an increase as part of the shadow economy shifts to the formal sector.”

Source : PTI

Getting help for GST: 5 things to keep in mind before choosing a partner or solution : 25-07-2017


Goods and Services tax or as our Prime Minister likes to call it ‘Good and Simple tax’ regime has been the center point of conversations and discussions across all business, political and media circles for over half a year now.

From a phase of pre-emption to discussions around actual roll-out, to analyses of possible impact across sectors etc., enough and more aspects have been deliberated upon by experts from different spheres. But, now the needle is shifting towards discovery of possible ways of implementing the regime and considerations around most effective tools for easy compliance with the changed law are on the rise.

While most businesses have surface level understanding of the changes, only few large corporates have the knowledge and wherewithal to evaluate multiple solutions being offered in the market to adapt the best suited technology for effective compliance. The smaller players are facing multiple challenges not only in understanding various facets and nuances of GST regime, but they are also clueless on how to go about choosing the right partner who may hand hold them through the process for seamless transition.

Different businesses have different requirements and all GST Suvidha Providers (GSPs) and Application Service Providers (ASPs) are working towards developing customized solutions which are best suited to a specific player’s needs. From offering invoice volume based adaptation models to coming up with duration specific packages, there is no dearth of variety in market today. Yet, due to technology intensive nature of solutions, most players are not in a place to evaluate which partner or solution to go for.

1. Maintaining annual records: There are various solutions in the market currently which are offering duration based solutions for limited months like a quarter or six months, but we cannot afford to forget that all businesses will need to file annual returns. If a business operates on a solution which is for six months and switches to some other solution later, it should have the assurance of seamless records transfer. Similarly, there are players who are charging clients  on the basis of duration of association, for such associations, cost of further extension of record keeping should be budgeted in when planning to partner with a solution provider .

2. Offline and online capabilities: The new GST regime is completely digital in nature and adapting to internet enabled technology solution is a pre-requisite. But, it would not be prudent for solution providers to overlook limited or no internet connectivity in majority small towns and villages of India which are a hub of SMEs and MSMEs and therefore we cannot do away with offline capabilities completely. It is equally important for your partner to have offline capabilities  to store invoice records which may be updated on regular intervals. This would ensure that tax professionals have the flexibility of updating and editing data anytime at their convenience. Additionally, as GST regime is like a chain linked through the entire business transaction cycle, many a times there would be requirements to go back and forth to check, update and manage records and entries and offline capabilities would ensure that working in this domain is possible without pushing the data  out.

3. Plug and play model: The solution which a business opts for should offer the flexibility of usage in terms of data entry like – possibility of importing data in multiple formats ranging from manual entry to excel based imports etc. Additionally, it should offer the choice between entering data on the cloud and keeping it there to make further edits or saving it directly on GSTN. Essentially, the solution should offer flexibility of operation which would enable plug and play and reduce adaptation time.

4. 24X7 support and real time infrastructure upgrade: despite opting for the easiest to implement technology solution, tax practitioner, businesses or any other user when operating a new system, may have queries or require hand holding. Therefore, an infrastructure to handle such queries in form of a multi-linguistic call center or real-time support by trainer professionals in form of free demonstrations, regular counselling and personal visits, or in-built assisted return filling model etc would be much required. These solutions would essentially be needed for tier II and III towns which are a hub for SMEs and MSMEs.

5. Possibility of pre and post filing reconciliation: While GST regime makes the entire taxation model fairly effective but for many players who are used to the traditional format of functioning, this technology enabled advancement is limiting. Data once filed with GSTN cannot be edited, for many players who have a complicated supply chain or who work with multiple vendors, there is a huge chance of invoice mismatches or other gaps in overall transactions which would only be r .. only be reconciled after returns are filled. But, there are many players which are offering enhanced features in their tax filing solutions and pre-filing reconciliation is one of those critical feature which would ensure faster follow ups and closures for reduced mismatches.

There are multiple models of operating with the GSTN and GSPs are mainly offering 3 to 4 kinds of solutions so far. These include API based billing model, MB consumption based fee structure, GSTIN based fee and per CA / tax practitioner. While most businesses can predict their invoicing nature and work-load to opt for the best suited solution, but it is best to select a solution provider who offers flexibility of switching from one model to the other so that a business may function on one model  and choose to move to the other in case required, with no additional charge or formality.

Apart from the above mentioned points, there are various other aspects which should be analyzed and evaluated before selecting a GST implementation partner. Going by the cheapest available solutions or being lured by free trials and monthly subscriptions or even sticking to well-known old and renowned players just for their brand equity, may not be the best way to forge partnerships in this domain. Technology capabilities with experience and expertise in on-ground implementation, complimented with  direct presence across key cities throughout the nation are some pre-requisites which would help you identify the right partner for your business .

Source : Economic Times

Demonetisation, GST to widen tax base, make cash dealing difficult, says Arun Jaitley at Delhi Economics Conclave : 24-07-2017


Finance Minister Arun Jaitley today said demonetisation and GST will make cash transactions a lot more difficult and lead to greater compliance as well as expansion of tax base. Jaitley said the government has come out with laws to contain overseas black money as well as those dealing with domestic black money and cracking down on shell companies. The minister said the country had reconciled to a Indian normal — a very large number of tax non-compliance and very large amount of transaction which took place outside the system. “There was almost a helplessness in trying to deal with the situation. Every year through the Finance Bill we would announce some changes which at best had a marginal impact. I think the lasting impact of those marginal changes was not very significant. “And therefore, steps had to be taken in order to make a very significant impact,” he said, adding that seen in totality, the steps taken by the government will have a “great long term impact” and a “substantial ethical rationale” behind it. “Net impact of the demonetisation exercise coupled with the GST exercise, which is going to make generation of cash a lot more difficult, will certainly lead to greater compliance, greater digitisation. And the first signs of greater digitisation, expansion of the tax base of direct and indirect taxes is already visible,” Jaitley said.

Speaking at the Delhi Economics Conclave organised by the Finance Ministry, he said the first significant step taken by the government, which shook the system, was penal action against those who stashed money abroad. He said one easy format of subversion has always been the shell companies, which are created by multi-layering of companies. “This had almost become standard operating procedure and this was not only used by businesses but was used to round trip corruption money by politicians, by civil servants,” the minister added. Jaitley said not only the detection of this but the decision to invoke the benami property law in acquiring these assets by the state is going to be a big deterrent and already revenue department has started doing that. “The sooner this business of routing this money through the shell companies does collapse, I think the better it is going to be for the formal economy for this country,” he said.

The amended benami property law, Jaitley said is “sending shiver down the spine” of those who conventionally used this methodology of round tripping of tax avoided money or corruption money and bringing it back into the system. Goods and Services Tax (GST), rolled out on July 1, is the biggest taxation reform since Independence and is expected to boost GDP growth and help tax evasion as every transaction in the value chain gets recorded digitally.

The demonetisation of 500 and 1000 rupee announced on November 8, 2016, has suck out over Rs 15 lakh crore worth old currencies from the system and move was aimed at cracking down on black money holders. Post-demonetisation, the government has taken many steps to encourage digital transaction.

Source : Financial Express

Goods and Services Tax will accelerate growth, says Nitin Gadkari : 24-07-2017


The Goods and Services Tax (GST) will accelerate the growth and ease of doing business and help in nation building, Union minister Nitin Gadkari said today.

“GST will remove the red-tapism and corruption and will bring in transparency in the system,” the Shipping minister said at the inaugural ‘Gopal Krishna Gokhale Memorial’ lecture organised by newspaper ‘The Hitvada’.

“Till a few days ago 75 lakh (traders/businessmen) have registered for the GST and it is the biggest economic reform that the the country has witnessed wherein, 17 taxes and 22 cesses have been cancelled,” he said.

“India has a logistic cost of 18 per cent, while China has a logistic cost of 8 to 10 per cent and that is a reason, why we are not that competitive in the export market,” he said.

“Export and manufacturing will get a big boost by GST. Maharashtra’s revenue will increase by 25 per cent and illegal trading will come to a standstill,” he added.

Source : PTI

 

GST: When does a service provider need to register across multiple states? : 24-07-2017


If you are a service provider with operations in only one state, GST is going to be excellent because without too much of compliance burden, you tend to get more input-tax credits. But, if you are a service provider in more than one state, and I believe, the majority would have operations in multiple states; in that case it would be hugely different under GST.

Service providers now have to grapple with a completely new set of facts. Many of them are going to be assessed in several states, several of them would have to obtain registration in new states, which they are not familiar with.

However, there has been much confusion when it comes to registration in different states and when does a service provider need to look at a multi-state registration. To make things very clear, merely because you provide services in a particular state, you are not required to register in that state. That is not required at all. It is only when you have operations in a particular state, which is a place of business or office that you have to register in that state.

Service provision is typically of a nature where in order to succeed in your business in a state, you will have to set up an office in that state. So if you are a Bangalore-based company and if you are selling your solutions in Mumbai and Delhi, at some stage in your evolutionary process you will set up your office in that city. For you it makes sense to have an office in that city and have a person manning that office instead of you going there frequently.

When you have that kind of setup with more than one state of operation, you are required to obtain multiple registrations, you have to do the compliance of each of those registrations, the invoicing has to be organized according to that state and therefore the input tax credit also becomes state-centric. This is the reason that for multiple state service providers, it is a mixed bag.

In the past, even if you are operating in 20 states, you could have obtained just one registration, which is for the place where you are headquartered. The theory was that as long as you are paying the right amount of tax, how does it matter? Now you have to break down that tax into relevant states and pay that to the relevant state.

For a very long time, many companies and many industry bodies, including the ones representing the technology industry tried to get centralized registration for several categories of companies under the GST. In fact at the forefront of such representations was the banking, financial services and technology companies. For a very long point of time industry bodies tried to persuade the government to continue having a centralized registration for these two to three sectors.

However, the states did not agree because in terms of the bargain that the Centre had with states, they had agreed with the states that they will be able to tax services and if you provide the states the power to tax services but take away technology and financial services, there is hardly anything left for the states to tax. That is why if you are a service provider having operations in more than one state, at least for the initial one-two years, it is going to be a mixed bag. It is also going  to entail significantly high compliances and chances are you will have to deal with problems that you have never dealt with before.

Source : Economic Times

Realty players – confusion continues ‘unabated’ in GST – 21-07-2017


By S Sivakumar,LL.B., FCA, FCS, ACSI, MBA, Advocate

IT seems that the confusion created under the GST law, in respect of the tax rates applicable to the Realty Developers especially, in major cities like Mumbai where the land prices are significantly high, continues to haunt the sector.

As we know, realty developers in Maharashtra (as well in many other states) were allowed the benefit under a composition scheme under the then prevailing MVAT Act, in terms of which, they were allowed to pay VAT @ 1% on the total value of the apartment including the value of the undivided portion of the land. Most of these developers had also opted to pay service tax under the then prevailing Notification No. 26/2012-STdated 20-6-2012, in terms of which, service tax was paid on 30% of the total value inclusive of the land value. In effect, the total of VAT and service tax worked out to 5.5%on the total value including land, in the pre-GST era.

Under the GST law, we find the following two entries in terms of the notifications viz.

Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly (the value of land is deemed to be one-third of the total amount charged for such supplies) [Sl No. 9954(i)] 12% with no refund of accumulated ITC
Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act (Sl.No. 9954(ii)] 18%

One would recall that, in terms of the recommendations of the GST Council, prior to the issuance of the notifications, the following two entries were found, viz.

Sl.No.19 Construction of a complex, building, civil structure or a part thereof, intended for sale to a buyer, wholly or partly. [The value of land is included in the amount charged from the service recipient] 12% With Full ITC but no refund of overflow of ITC
Sl.No. 27 Composite supply of Works contract as defined in clause 119 of section 2 of CGST Act 18% With Full ITC

The TIOL readers would note that there the reference to ‘full ITC’ is conspicuously absent in the notifications issued under the GST law, indicating that the provisions contained in Section 17(5)(c) of the GST Act could result in denial of credit of the tax paid by the Developers who are classifying their output activities under Sl No. 9954(i), as these players cannot be construed as executing works contracts within the meaning of Section 2(119) of the GST Act.

Be that as it may……. one huge dilemma that Realty Developers operating in major metros like Mumbai could face, would be the very high level of land prices. I am given to understand the land prices in these metros could work out to as high as, 50% to 70% of the total apartment value. Taking a conservative example of land cost being 50% of the total value of the apartment, the tax rate that the Developer operating in a major metro would need to charge to his flat buyer, if he classifies his outward supply under Sl No. 9954(i) would work out to 12.06% of the total value of the apartment inclusive of land, as he would be entitled to a standard deduction of 33% of the total value towards land (irrespective of the actual value of the land). On the other hand, if the Developer classifies his outward supply as one of works contract under Sl No. 9954(ii), he would be allowed to apply an effective GST rate of only 9% in our example (18% tax rate applicable on the construction value being 50% of the total value of the apartment inclusive of land).Thus, the effective GST rate calculated as a percentage on the total value of the apartment inclusive of land, would work out to 12.06% if the Developer classifies his outward supply under Sl No. 9954(i) or 9% if the Developer classifies his outward supply under Sl No. 9954(ii). Of course, the tax differential would be much higher, if the land value is to be higher, say 60% or 70% of the total value of the apartment.

Given the huge difference in the overall GST rates, the question that would arise iswhether, the Developer is allowed the option of classifying his outward supply under either of the two chapter headings, viz. 9954(i) or 9954(ii). In my humble view, if the Developer is directly engaged in the construction activity even to a very small extent and is therefore to be treated as a works contractor within the meaning of Section 2(119), he would have to necessarily classify his outward supply under Sl No. 9954(ii), while the activity covered by Sl No. 9954(i) is restricted to pure Developers who have entirely contracted out the construction activity (and are consequently not treated as works contractors under the GST law). The very fact that the Developer was paying tax under the then prevailing state VAT law would go to indicate that he is to be treated as a works contractor under the GST law, irrespective of the fact that such Developer might have been paying tax @ 1% of the total value of the apartment inclusive of the land value under the composition scheme.

In my view, even the manner in which the agreements are entered into by the Developer would not be a reason to determine the head under which the Developer is required to classify his outward supply. I understand that, in places like Mumbai, the Developer typically enters into a single contract wherein, a single consideration is agreed to for construction and sale of the apartment without the land value being shown separately. Even in these cases, there is nothing in the law to prevent the Developer to enter into an addendum/codicil agreement with his prospective flat buyer wherein, the value for the undivided portion of the land can be specifically agreed to, consequent to which, the Developer (being a works contractor) cannot be denied the benefit of charging the lower overall tax rate under Sl No. 9954(ii).

Even as a matter of planning, there is nothing in law to prevent for a pure Developer (who has contracted out the entire construction activity to a contractor) to convert himself into a works contractor by directly handling a very small portion of the construction activity and deriving the benefit of the lower overall tax rate under Sl No. 9954(ii), given the benefit of significantly lower tax rates (especially in major metros like Mumbai).

Before concluding…..

Very unfortunately, the confusion regarding the classification of the outward supplies/services by the Realty players and the consequent changes in the tax rates, which has been existing right from 2005, is continuing well into the GST regime.

Can the benefit of classification under Sl No. 9954(ii) be denied to Developers (who are to be treated as works contractors) who have entered into single agreements (specifying a single price for the sale of the apartment without specifying the break up between the land value and the construction value) in places like Mumbai? My view is a clear NO. It is always open to these Developers to either amend their existing agreements or enter into addendum agreements to provide for the bifurcation between the value of undivided portion of land and that for construction and take the benefit of the lower tax rate that is available to works contractors under Sl No. 9954(ii).

GST impact on economy: ADB says medium term growth in India set to get boost : 21-07-2017


The Asian Development Bank (ADB) has retained its earlier growth forecast for India at 7.4% for the current fiscal and 7.6% for 2018-19, and said the goods and services tax (GST) regime is expected to improve the ease of doing business and facilitate growth in the medium term.

In its supplement to the Asian Development Outlook 2017, ADB also said India’s economic growth slowed to 7.1% in 2016-17, mainly due to demonetization, sluggish private sector investment and weak bank lending. However, in the first quarter of the current fiscal, manufacturing inched up, as indicated by the improvement in purchasing managers’ index from 51.2 in the fourth quarter of 2016-17 to 51.7. “Consumption is likely to continue to be the main driver of growth. Higher crop sowing, helped by a healthy monsoon, and an uptick in rural wage growth will bolster rural consumption, while urban consumption will get a boost from pay hikes for central and state government employees,” it said.

The goods and services tax is expected to boost growth in the medium term, though there may be some teething pains as firms adjust to the new system, ADB said.

“Front-loading central government capital expenditure should further propel the pickup in growth in the current fiscal,” it said. Inflation in India is expected to average 4% in 2017-18 before rising to 4.6% in 2018-19, it said.

Retail inflation hit a fresh low of 1.54% in June on a broad-based moderation.

ADB upgraded its growth outlook for developing Asia to 5.9% for 2017 from 5.7% projected in its April outlook. It also revised up the growth forecast for the region to 5.8% for 2018 from 5.7% announced earlier.

Source : Financial Express

Goods and Services Tax Network will help in keeping strategic control: Prakash Kumar : 21-07-2017


As is expected with any radical reform or transformation, the unrolling of the GST has also created quite a significant stir in India. There is palpable concern among taxpayers and businesses over how the new system will work out. Despite the anxiousness, taxpayers across the country have responded very positively to the new interface, with a majority of them having already completed their migration to the new portal.

THE IT BACKBONE OF GST
The GST System Project is a unique and complex IT initiative. It is unique as it seeks, for the first time, to establish a uniform interface for the taxpayer and a common and shared IT infrastructure between the Centre and states. Integrating 36 disparate systems, which were at different levels of maturity would have been too complex. Besides GST being a destination-based tax, interstate trade of goods and services (IGST) would need a robust  settlement mechanism amongst the states and the Centre. This is possible only when there is a strong IT infrastructure and service backbone which enables capture, processing and exchange of information amongst the stakeholders (including taxpayers, states and central government, accounting offices, banks and RBI). In view of the sensitivity of the information that would be available with the agency which will put in place the IT infra, the government must have strategic control over the agency.  which will put in place the IT infra, the government must have strategic control over the agency. Keeping these requirements in view, Government of India and state governments created goods and services tax network (GSTN), a special purpose vehicle as non-government, not-for-profit company where Centre holds 24.5% shares and all states collectively hold 24.5%. The remaining shares are held by five private financial institutions. This structure brings flexibility of private sector with strategic  control of the government.

THE PROCESS
GSTN rolled out the registration module on November 8, 2016 to on board taxpayers registeredunderVAT, service tax, central excise and other taxes to be subsumed in GST. Payment of taxes has started taking place using one challan for all types of taxes which is prepared on the GST portal. Once challan is created with GSTIN, name of taxpayer, amount under various tax heads and sub-heads etc., the taxpayer has following two options to pay the tax.  He can use Net-banking facility out of 25 authorised banks or print the challan and take it to an authorised bank for payment over the counter (OTC). The OTC payment can be up to `10,000 in a month. The taxpayer can also use NEFT/RTGS from any bank operating in India. The money gets deducted from the account of the taxpayer and gets transferred to RBI though the bank. No tax money ever comes to GSTN in any manner.

REDUCING COMPLIANCE BURDEN
Tax compliance is the duty of every citizen. However, making the process of compliance simple and convenient is the responsibility of the government. At GSTN, we have crafted a series of services and technological tools to ensure that paying taxes and filing returns becomes convenient for the last common denominator. Checking of claim of input tax credit (ITC) is one of the fundamental pillars of GST, for which data of business-to -business  (B2B) invoices have to be uploaded and matched. The invoice level data can be directly entered on the portal by the taxpayer. In case the number of B2B invoices is higher, he can use free offline tool developed by GSTN which imports data from Excel sheet and converts it into a json file which is then uploaded on the GST portal. GSTN has already released template of Excel sheet in which taxpayers can keep the business data at invoice level. The tool can pull 19,000 line items from Excel sheet to generate a 5 Mb file. The tool can be used multiple times to upload data for creating GSTR-1. For those taxpayers who have lakhs of invoices and they want one-stop shop for end-to-end functionality, GSTN has empaneled GST Suvidha Providers (GSPs). The GSPs are going to provide accounting services, inventory and reconciliation services and facility of direct upload into GST system.

The common GST portal created and managed by GSTN will do this matching on the basis of invoice level data filed as part of return by all taxpayers. Similar exercise will be done for interstate supplies where goods or services will move from the state of origin to the state of consumption and so will the taxes. The claim of IGST and its utilisation will be settled based on returns filed at the common GST portal. GSTN will create and maintain the information on IGST based on returns of taxpayers. This data will be used for settlement of funds between Centre and states.

USHERING IN A COMMON MARKET
The common GST portal will be the single interface for all taxpayers from any part of the country. Only in case where a taxpayer is picked up for scrutiny or audit, he will interface with the respective tax authority. For all other cases, which is expected to be around 95%, the common GST portal will be the only interface taxpayer. The way it has been conceived and devised, GST portal truly promises to make India one single, albeit large, market, that promises to bring multiple benefits for the economy.

Source : Business Standard

What you must check in your TDS certificates, Form26AS & why they should match : 21-07-2017


1. TDS certificates should be downloaded only from TRACES
You should ensure that TDS certificates (Form 16/16A) issued to you are downloaded only from TRACES (TDS Reconciliation Analysis and Correction Enabling System of the Income tax department). Certificates downloaded from TRACES are in a specific format. A form downloaded from TRACES would bear a 7 character alphabet unique certificate number and it will also have a TDS- CPS logo on the left side and a national emblem on the right side at the top. This certificate would provide the details of the income paid to you and also the tax deducted from that income by the payer and whether the same has been deposited by him with the government. See below for a sample of how a valid TDS certificate in Form 16 or Form 16A should look.

2. Digital signature should be verified.
In case of digitally signed certificates check that the signature is verified i.e. has a check mark across it. An unverified signature will bear a question mark over the signature instead of the check mark.

3. Must check details on the TDS certificate
Your name, PAN, Deductor’s TAN, amount paid to you, TDS amount should be correctly reflected on the TDS certificate.

4. What is Form26AS and how to get it 
An annual tax credit statement is generated by the income tax department for a person subjected to TDS (deductee) in Form 26AS. The statement provides details such as name of the deductee, PAN of deductee, details of deductor, the TDS amount, the amount of TDS deposited with the Government by the deductor etc.

The user can download the statement from the income tax e-filing website. The downloaded statement is password protected and the password to open the file is the Date of birth of the user which he would have entered when registering with the income tax e-filing site.

This statement is linked to your PAN and contains details of all your TDS -by employers as well as others (e.g. banks etc).

The link to download Form 26AS from TRACES can be found after logging into your account on the income tax e-filing site.
https://incometaxindiaefiling.gov.in/e-Filing/UserLogin/LoginHome.html?nextPage=taxCred 

It can also be downloaded via your net banking account provided that your bank provides the e-filing login facility. The list of banks providing this facility is available at: http://contents.tdscpc.gov.in/en/netbanking.html 

5. Cross check the TDS certificate figures with Form 26AS
You can verify whether your TDS -as shown in the TDS certificate received from the deductor –has actually been received by the government or not by comparing with the Form 26AS. It is the duty of a taxpayer to verify whether the deductor has deducted tax on each transaction on which it was supposed to be deducted. He must also check that the TDS mentioned in form 16/16A is reflecting in Form 26AS. In case the TDS shown in your TDS certificate is not reflecting in your Form 26AS it would imply that although the deductor has deducted the tax on your behalf but the TDS has not been deposited / has not reached the income tax department. In case of any discrepancy between the TDS certificates and Form 26AS inform your deductor and ask for the reasons for this discrepancy and get it corrected. A possible reason behind the mismatch can be because your PAN has been incorrectly  entered in the records of the deductor. In case the deductor has not deducted the tax on your behalf, then it is your responsibility to remind the deductor to deduct tax on your behalf and deposit the same with government.

Source : PTI

Notification No.70/2017 20-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION New Delhi, the 20th July, 2017

S.O. 2281(E).— In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Noida Special Economic Zone Authority, Noida’, an authority constituted under the Special Economic Zone Act, 2005 of the Government of India, in respect of the following specified income arising to that authority, namely:-

a) lease rent (charged as per Government prescribed rate);

b) interest from banks on FDRs;

c) receipts from I-Card and Permit fees;

d) allotment Fee in respect of Standard Design Factories(SDF);

e) auction/Bid amount in respect of Plots/Buildings which fall vacant;

f) transfer charges in respect of Plot/Building;

g) fee for issue of Form-I for exemption of Building Plans;

h) processing fee for approval of Building Plans;

i) site usage charges from Service providers; and

j) license fee for allotment of Staff Quarters to the staff.

2. This notification shall be effective subject to the conditions that Noida Special Economic Zone Authority, Noida

(a) shall not engage in any commercial activity

(b) its activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) it files return of income in accordance with the provision of clause (g) of sub-section (4C) section 139 of the Income-tax Act, 1961. 3. This notification shall be deemed to have been applied for the Financial Year 2013-2014, 2014-2015, 2015-2016, 2016-2017 and shall apply with respect to the Financial Year 2017-2018.

                                                                              [Notification No. 70 /2017, F.No.196/30/2013-ITA-I] DEEPSHIKHA SHARMA, Director

Explanatory Memorandum :- It is certified that no person is being adversely affected by giving retrospective effect to this notification.

Notification No.69/2017 20-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION New Delhi, the 20th July, 2017

S.O. 2280(E).—In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, the Assam State Biodiversity Board, a board established by the Government of Assam, in respect of the following specified income arising to that board, namely:—

(a) Grants received by the Board from Assam State Government and from National Biodiversity Authority;

(b) fee received by the Board for granting access to biological resources by applicants;

(c) fee/ Consultancy charges received from organizations for carrying out field studies/research works;

(d) interest earned on the Grants in aid provided to the Board by National Biodiversity Authority and Government of Assam; and

(e) interest earned from Term deposits with bank.

2. This notification shall be effective subject to the conditions that Assam State Biodiversity Board,—

(a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

3. This notification shall be deemed to have been applied for the financial Years 2015-16, 2016-17 and shall apply with respect to financial years 2017-18, 2018-19 and 2019-20.

                                                                   [Notification No. 69/2017/F. No. 300196/1/2016-ITA-I] DEEPSHIKHA SHARMA, Director Explanatory

Memorandum : It is certified that no person is being adversely affected by giving retrospective effect to this notification.

Notification No.68/2017 20-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION New Delhi, the 20th July, 2017

S.O. 2279(E).—In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘National Biodiversity Authority’, Chennai, an authority established under the Biological Diversity Act, 2002 (18 of 2003), in respect of the following specified income arising to that Authority, namely:—

(a) amount received in the form of Grant-in-aid from Government of India;

(b) benefit sharing fee and royalty received;

(c) amount received in form of Application fee;

(d) amount received in form of Interest; and

(e) amount received in form of Penalty.

2. This notification shall be effective subject to the conditions that National Biodiversity Authority, Chennai,— (

a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

3. This notification shall be deemed to have been applied for the financial year 2016-2017 and shall apply with respect to the financial years 2017-2018, 2018-2019, 2019-2020 and 2020-2021.

                                                                      [Notification No. 68 /2017/F. No. 300196/01/2017-ITA-I]

DEEPSHIKHA SHARMA, Director

Explanatory Memorandum : It is certified that no person is being adversely affected by giving retrospective effect to this notification.

Notification No.67/2017 20-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 20th July, 2017

S.O. 2278(E).—In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘National Council of Science Museums’, Kolkata, an autonomous body established under the Ministry of Culture, Government of India, in respect of the following specified income arising to the Council, namely:—

a) Amount received in the form of grants-in-aid and subsidies from Government of India;

b) Fees or subscription by sale of tickets;

c) Charges for maintenance recovered for use of auditorium and other public facilities for scientific and educational purposes; and

d) Income arising or derived by way of interest received from investment.

2. This notification shall be effective subject to the conditions that National Council of Science Museums, Kolkata,—

(a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the Income-tax Act, 1961.

3. This notification shall apply with respect to the financial years 2017-2018, 2018-2019, 2019-2020 and 2020- 2021.

[Notification No. 67 /2017/F. No. 300196/7/2017-ITA-I]

DEEPSHIKHA SHARMA, Director

Notification No.66/2017 20-07-2017


MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 20th July, 2017

 S.O. 2277(E).—In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies for the purposes of the said clause, ‘Haryana Electricity Regulatory Commission’, a commission constituted under the Haryana Electricity Reform Act, 1997 (Haryana Act No. 10 of 1998), in respect of the following specified income arising to that body, namely:-

(a) grants and loans made by the Government of Haryana;

(b) fees received under the Electricity Act, 2003 (36 of 2003); and

(c) interest earned on government grants and loans and fees received under the Electricity Act, 2003 (36 of 2003).

2. This notification shall be effective subject to the conditions that Haryana Electricity Regulatory Commission:-

(a) shall not engage in any commercial activity;

(b) activities and the nature of the specified income shall remain unchanged throughout the financial years; and

(c) shall file return of income in accordance with the provision of clause (g) of sub-section (4C) of section 139 of the said Act.

3. This notification shall apply with respect to the financial years 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-22.

                                                                                  [Notification No. 66 /2017, F.No.300196/9/2017-ITA-I]

DEEPSHIKHA SHARMA, Director

CBEC to be renamed CBIC, restructured in current Parliament session : 20-07-2017


The Central Board of Excise and Customs (CBEC) which started functioning with the new reorganised structure ahead of the Goods and Services Tax (GST) roll-out, will get its new name – Central Board of Indirect Taxes and Customs (CBIC) – in the current Parliament session, a top government official has said.

“CBEC is renamed, and CBIC is going to be the name. But it needs to be done as a legislative change, because it was part of the Central Board of Revenues Act, 1963. So it’s still in the process. It will happen in this Parliament Session,” CBEC Chairperson Vanaja Sarna told IANS in an interview.

The Parliament’s Monsoon Session commenced on July 17 and will come to an end on August 11.

National Academy of Customs, Excise and Narcotics (NACEN), the training establishment, has been renamed as National Academy of Customs, Indirect Taxes and Narcotics (NACIN).

“That change has taken place because it does not need legislative change. Only this one needs legislative change, so it will go to the Parliament. It has to be done formally,” she said.

The government had announced the renaming of the tax authority for indirect taxes towards the end of March itself, but the process has still not been completed because it needs a legislative change.

CBEC underwent reorganisation of the field formations of CBEC for the GST implementation. It now has 21 zones, 101 GST taxpayer services commissionerates comprising 15 sub-commissionerates, 768 divisions, 3,969 ranges, 49 audit commissionerates and 50 appeals commissionerates.

“In CBEC, we have made the organisational changes. So we are already well into the restructured organisation. But we kept the same 3-tier structure, which is commissionerate, division and range,” she said.

Sarna said that CBEC officials have adapted well to the new GST regime and are in a comfort zone.

“As far as states were concerned, they were dealing with VAT and had never done service tax. CBEC was the authority for service tax. So for GST on services, CBEC is very comfortable with. On the goods, we had the central excise duty. So basically, lot of GST law is built on the existing central excise and service tax provision and some part of VAT,” she said.

“So there is no difficulty for us at all,” she added.

CBEC is now administering both the GST as well as excise as a few products like petrol and diesel will attract excise duty.

Source : PTI

7 mn taxpayers have successfully activated GST accounts: GSTN Chairman : 20-07-2017


 Highlighting the smooth functioning of the Goods and Services Tax Network (GSTN), Chairman Navin Kumar has revealed that over 70 lakh taxpayers have successfully activated their GST accounts.

“There are two processes which are going on currently-migration and registration. More than 70 lakh taxpayers have activated their GST account. New registration is also happening in large numbers; almost eight lakh new applications have been received, out of which 5.3 lakh have been approved so far,” Navin Kumar told ANI.

While the number of new applications is increasing at a pace of 30,000-40,000 applications per day, Navin assured that the GSTN is fully prepared to cope with the increasing numbers.

With regards to the helpline number and call centres set up by the GSTN to assist taxpayers, he added that weekday queries are more than weekends, adding that this volume is expected to continue in the coming weeks.

“Most queries are to do with obtaining digital signature certificates (DSC). Although there is a user guide that is given, most users do not read it, and therefore end up facing difficulties,” added Navin.

On the GST Suvidha Providers (GSPs) front, Navin revealed that while the 34 recognised GSPs are fully functional, the GSTN is looking for more organisations, and are screening applications for the same, thus facilitating an increase in the number.

Source : Business Standard

GST rollout went well, but still a work in progress : 20-07-2017


A country rarely praised for its efficient bureaucracy, India has managed its biggest administrative reform in years pretty well. It’s new goods and services tax, replacing 40 other taxes and levies, came into force earlier this month without undue disruption. This policy deserves to be a great success — but to make the most of it, the government still has work to do.

Prime Minister Narendra Modi’s previous big idea — declaring 86 percent of India’s bank notes void overnight — took the public by surprise and caused the economy to seize up. Employers couldn’t pay wages and workers couldn’t buy even basic staples. The full cost of the disruption is still being calculated.

After that, fears about the GST roll-out ran high. Too high, as it turned out. It helped that the plan was not a shock: Successive administrations had debated the idea for years. The government also adjusted the rules to appease various constituencies and gave businesses a two-month cushion to comply.

Partly for that reason, though, the project is far from finished. In excluding certain goods from the scheme, the central government has given state governments discretion to raise taxes on them at any time. Some states have already tried to impose taxes and fees on products already taxed under GST, including automobiles and movie tickets. The infamous customs posts where truck drivers had to halt and fill out paperwork before crossing a state line have begun to come down — but local officials can still clog the roads by demanding inspections or fees.

The new tax is also giving rise to new kinds of regulation. An “anti-profiteering” clause threatens companies with fines or closure if they don’t pass GST-related savings on to consumers.

India’s Aspirations
All this undermines the whole purpose of GST — to simplify a complex and fractured system. The design of the tax itself makes things worse. Long negotiations have produced a convoluted structure. Goods are divided into four or five different tax brackets (some are subject to additional “sin” charges as well), in ways that don’t always make sense. Hotel rooms are charged at different rates depending on how expensive they are; food at restaurants with air-conditioning is taxed at a higher rate than at those without. This will encourage companies to game the system and agitate for shifting their goods into lower brackets.

Source: Economic Times

Notification No.64/2017 19-07-2017


SECTION 120 (1) AND (2) OF THE INCOME-TAX ACT, 1961 – INCOME-TAX AUTHORITIES – JURISDICTION OF – SUPERSESSION OF NOTIFICATIONS NO. SO 1612(E), DATED 26-9-2006; SO 2023(E), DATED 30-11-2007 AND SO 3251(E), DATED 25-10-2013 AND AMENDMENT IN NOTIFICATION NO. SO 2753(E), DATED 22-10-2014

NOTIFICATION NO. SO 2260(E) [NO.64/2017 (F.NO.189/1/2017 (ITA.I)]DATED 19-7-2017

In exercise of the powers conferred by sub-sections (1) and (2) of section 120 of the Income-tax Act, 1961 (43 of 1961), and in supersession of the notifications of the Government of India, Central Board of Direct Taxes numbers S.O.1612(E), dated the 26th September, 2006 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated the 26th September, 2006, S.O. 2023(E) dated the 30th November, 2007published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated the 30th November, 2007, S.O. 3251(E) dated the 25th October, 2013 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated the 25th October, 2013 respectively, except as respects things done or omitted to be done before such supersession, the Central Board of Direct Taxes hereby makes the following amendments in the Notification of the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, vide number S.O. 2753(E), dated the 22nd October, 2014, published in the Gazette of India Extraordinary, Part II, section 3, sub-section (ii), dated the 22 nd October, 2014 namely:—

In the said notification, in the Schedule, for serial numbers 8, 9, 10 and 38 and the entries relating thereto the following serial numbers and the entries shall be substituted, namely:-

SCHEDULE

Sl. No. Designation of the Income-tax Authorities Headquarters Jurisdiction
(1) (2) (3) (4)
8 Principal Chief Commissioner of Income-tax, Karnataka and Goa Bengaluru (i) Chief Commissioner of Income-tax, Bengaluru -1(ii) Chief Commissioner of Income-tax, Bengaluru -2

(iii) Chief Commissioner of Income-tax, Panaji

(iv) Chief Commissioner of Income-tax (TDS), Bengaluru

9 Chief Commissioner of Income-tax, Bengaluru -1 Bengaluru (i) Principal Commissioner/Commissioner of Income-tax, Bengaluru-1(ii) Principal Commissioner/Commissioner of Income-tax, Bengaluru-2

(iii) Principal Commissioner/Commissioner of Income-tax, Bengaluru-3

(iv) Principal Commissioner/Commissioner of Income-tax, Bengaluru-4

(v) Principal Commissioner/Commissioner of Income-tax, Mysuru

10 Chief Commissioner of Income-tax Bengaluru -2 Bengaluru (i) Principal Commissioner/Commissioner of Income-tax, Bengaluru-5(ii) Principal Commissioner/Commissioner of Income-tax, Bengaluru-6

(iii) Principal Commissioner/Commissioner of Income-tax, Bengaluru-7

(iv) Principal Commissioner/Commissioner of Income-tax, Davanagere

(v) Principal Commissioner/Commissioner of Income-tax, Gulbarga.

(vi) Commissioner of Income-tax (LTU), Bengaluru

38 Chief Commissioner of Income-tax, Kolkata-1 Kolkata (i) Principal Commissioner/Commissioner of Income-tax, Kolkata-1(ii) Principal Commissioner/Commissioner of Income-tax, Kolkata-10

(iii) Principal Commissioner/Commissioner of Income-tax, Asansol

(iv) Commissioner of Income-tax (LTU), Kolkata

2. This notification shall come into force with effect from the date of publication in the Official Gazette.

Notification No.63/2017 19-07-2017


MINISTRY OF FINANCE (Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION

New Delhi, the 19th July 2017

(INCOME TAX)

S.O. 2259(E).—In exercise of the powers conferred under section 118 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes being satisfied that it is necessary for the Public interest to do so hereby rescinds the following Notifications of the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes vide numbers as specified below, except as respects things done or omitted to be done before such recession namely :-

(i) S.O. 1614(E), dated the 26th September 2006, published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (ii), dated the 26th September 2006;

(ii) S.O. 2024(E), dated the 30th November 2007, published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (ii), dated the 30th November 2007; and

(iii) S.O. 3250(E), dated the 25th October 2013, published in the Gazette of India Extraordinary, Part II, Section 3, sub-section (ii), dated the 25th October 2013.

2. This notification shall come into force with effect from the date of its publication in the Official Gazette.

                                                                                       [Notification No. 63/2017/ F. No. 189/1/2017-ITA.I]                           DEEPSHIKHA SHARMA, Director

No.23/2017 Dated: 19-07-2017


SECTION 194J OF THE INCOME-TAX ACT, 1961 – DEDUCTION OF TAX AT SOURCE – FEES FOR PROFESSIONAL OR TECHNICAL SERVICES – CLARIFICATION REGARDING TDS UNDER CHAPTER XVII-B ON SERVICE TAX COMPONENT COMPRISED OF PAYMENTS MADE TO RESIDENTS – AMENDMENT IN CIRCULAR NO. 1/2014 [F.NO.275/59/2012-IT(B)], DATED 13-1-2014 IN VIEW OF SUBSTITUTION OF SERVICE TAX BY GOODS AND SERVICES TAX (GST)

CIRCULAR NO.23/2017 [F.NO.275/59/2012-IT(B)]DATED 19-7-2017

The Central Board of Direct Taxes (the Board) had earlier issued Circular No. 1/2014 dated 13-1-2014clarifying that wherever in terms of the agreement or contract between the payer and the payee, the Service Tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVI1-B of the Income-tax Act, 1961 (the Act) on the amount paid or payable without including such Service Tax component.

2. References have been received in the Board seeking clarification as to what treatment would be required to be given to the component of Goods and Services Tax (GST) on services, which has been introduced by the Government with effect from 1st of July, 2017 and into which the erstwhile Service Tax has been subsumed.

3. The matter has been examined. It is noted that the Government has brought in force a new Goods and Services Tax regime with effect from 1-7-2017 replacing, amongst others, the Service Tax which was being charged prior to this date as per the provisions of Finance Act, 1994. Therefore, there is a need to harmonize the contents of Circular No.1/2014 of the Board with the new system for taxation of services under the GST regime.

4. In the light of the fact that even under the new GST regime, the rationale of excluding the tax component from the purview of TDS remains valid, the Board hereby clarifies that wherever in terms of the agreement or contract between the payer and the payee, the component of ‘GST on services’ comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source under Chapter XVII-B of the Act on the amount paid or payable without including such ‘GST on services’ component. GST for these purposes shall include Integrated Goods and Services Tax. Central Goods and Services Tax, State Goods and Services Tax and Union Territory Goods and Services Tax.

5. For the purposes of this Circular, any reference to ‘service tax’ in on existing agreement or contract which was entered prior to 1-7-2017 shall he treated as ‘GST on services’ with respect to the period from 1-7-2017 onward till the expiry of such agreement or contract.

Do you have a Fundamental Right to privacy? Here’s what Supreme Court has ruled before : 19-07-2017


Aadhaar case: The Supreme Court of India has set up a nine-judge bench to decide if the much-debated issue of the right to privacy is a fundamental right under the Constitution. The new bench was set up on Tuesday by the five-judge bench which had to look into the validity of Aadhaar case and the right to privacy attached to the case. The SC is now faced with two judgements of 1954 and 1962 which had said that the right to privacy was not a fundamental right.

“During the course of the hearing today, it seems that it has become essential for us to determine whether there is any fundamental right of privacy under the Indian Constitution,” the SC said on Tuesday, adding, “The determination of this question will essentially entail whether the decision recorded by this court in M P Sharma and Ors vs. Satish Chandra, District Magistrate, Delhi and Ors. (of 1950) by an eight-judge Constitution bench, and also, in Kharak Singh vs. the State of UP and Ors. (of 1962) by a six-judge Constitution bench, that there is no such fundamental right, is the correct expression of the constitutional position,” it added.

While the nine-judge bench would look into the limited matter of right to privacy, the case challenging Aadhaar would be referred back to a smaller bench latter. Here we take a look at what the SC had said in the past two cases about right to privacy (source: indiankanoon.org):

MP Sharma and Ors vs. Satish Chandra, District Magistrate, Delhi, and Ors. (1954)

The petitioners had challenged a search and seizure on their premises by police in connection with a case, claiming it was the violation of their Constitutional right to privacy. However, the court observed, “A search and seizure is, therefore, only a temporary interference with the right to hold the premises searched and the articles seized. Statutory regulation in this behalf is necessary and reasonable restriction cannot per se be considered to be unconstitutional. The damage, if any caused by such temporary interference if found to be in excess of legal authority is a matter for redress in other proceedings.”

The court further said, “fundamental right to privacy, analogous to the American Fourth Amendment, we have no justification to import it, into a totally different fundamental right.”

Kharak Singh vs. the State of UP and Ors. (of 1962)

The case was about a petitioner, who was earlier released due to lack of evidence against him in a dacoity case. The police had put him on a surveillance and he approached the apex court claiming infringement of his fundamental right. The top court observed, “The right of privacy is not a guaranteed right under our Constitution and therefore the attempt to ascertain the movements of an individual which is merely a manner in which privacy is invaded is not an infringement of a fundamental right guaranteed by Part III.”

GST impact on employees: How employer, staff relationship has got complicated : 19-07-2017


The Goods and Services Tax (GST) laws have tried to address several ambiguities that prevailed under earlier tax laws leading to unnecessary litigation. One such provision which has been penned down differently in GST is services flowing from employer to the employee. Overall, GST is being seen as a very positive move by the government. However, at the same time, the new GST rules may prove to be a dampener for the relationship between the employer and the employee.

Supply of goods from employer to employee

The introduction of GST on the supply of goods and services flowing from the employer to the employee, other than gifts not exceeding Rs 50,000 in value, may compel employers to take a fresh look at the structure of employee remuneration and benefits outside the wage contract. The GST law clearly states that GST would be payable if there is a supply of free goods or services to an employee exceeding the sum of Rs 50,000, also if an employee avails the assets of the company for personal use, it would trigger GST.

Tax on services by employers

Employers generally provide certain facilities such as cafeteria, company vehicle, leave travel, gym, club membership, etc., free of charge and in arranging these supplies, employers are not permitted to avail input tax credit. Bringing in tax liability on such supply of goods and services without the facility of input tax credit is basically unfair and goes against fundamental VAT principles. GST inter-alia as a new “employee tax”, albeit not on salary and wages but on the non-salary receipts of goods and services from employers may force the latter to reduce the value of such facilities or recover the tax cost from the employees. If the GST is recovered from employees, the government could cushion the tax blow by permitting GST rebate in the computation of income tax liability of such employees.

Reworking salary packages

Another issue is that the term “gift” has not been defined in GST. The only relief in this regard is that input tax credit will not be denied in cases of services to be notified by the government, these will be where the employer is obligated under any law to provide the same to its employees.

The question that remains unanswered is whether provision of a certain facility like share cab used for dropping the employees back home or lunch provided at subsidised rate in the cafeteria or coffee provided during office hours is a ‘supply of goods and services’ or is it a provision of a benefit to employees arising out of an employment contractual obligation. Provision of these benefits are obligations of the employer arising out of the employment arrangement, these should remain out of the purview of GST. However, Indian employers would have to be cautious while drawing up CTC packages of its employees to include benefits that are incidental to employment.

Source : Business Standard

Tax departments keep a close watch on prices post GST rollout : 19-07-2017


NEW DELHI: Tax departments across the country are keeping a close watch on prices following the July 1 rollout of the goods and services tax (GST).

Makers of consumer goods and handsets, as well as some restaurant chains, have all got calls from local tax authorities seeking details of invoices before and after GST as part of the exercise.

“In order to study prices under the GST, you are requested to send selling price of your top commodity… in the relevant format,” read a notice sent to a company by local tax authorities in Tamil Nadu.

Similar messages have been sent to companies in states such as Maharashtra, Andhra Pradesh and Puducherry. Some have even got phone calls seeking price information, said a person aware of the development.

The government is keen to prevent any spike in inflation due to GST as happened in some countries that implemented the levy. India has opted for a two-pronged solution to make sure this doesn’t happen — a multi-rate GST structure and a proposed anti-profiteering agency.

The GST Council has tried to ensure that items are placed in slabs that are closest to the rate at which they were taxed earlier. The levy has four tiers — 5 per cent, 12 per cent, 18 per cent and 28 per cent.

Malaysia and Australia had put in place a mechanism to ensure prices didn’t shoot up after the indirect tax was implemented in those countries.

When industry had expressed concern that the anti-profiteering initiative may evolve into a modern-day inspector raj, it was assured that this wouldn’t be the case.

The government has so far maintained that the anti-profiteering provision is a deterrent and expects industry to pass on any cost reductions due to GST to consumers and not raise prices. Implicit in this was the assurance that investigations would be triggered by consumer complaints.

The latest move by tax authorities comes as the anti-profiteering framework is yet to be operationalised. Experts said it would be an added complication as companies seek to comply with new tax regime.

“These random enquiries by the authorities are not in line with the rules notified and lead to avoidable paperwork for companies at the time when they are trying to settle in the new tax regime,” said Pratik Jain, leader, indirect taxes, PwC .

“GST council should take a note of this and issue appropriate guidelines.”

The government is monitoring prices and the supply situation. More than 200 officials of the rank of joint secretary and additional secretary have been assigned four-five districts each to closely watch implementation.

Anti-Profiteering Framework

Rules empower a five-member National Anti-Profiteering Authority to order price cuts to the extent of lower taxes, impose penalties or even cancel registrations under the GST Act, effectively stopping the entity from doing business.

Besides that, a standing committee of nine members, consisting of state, central and GST Council officials, will examine complaints that will be passed on to the director general, safeguards, for investigation.

The proposed anti-profiteering authority will take the final call on whether a company has engaged in profiteering.

ET View:

Trust Competition to Lower Prices
The intent to protect the interest of consumers is laudable. But it should not become a potential source of harassment for the industry that is switching over to the new tax regime, and needs easier compliance. The best way to protect consumer interests’ is to trust competition in the market place to set fair prices. Enabling easy entry and exit for all industries will foster competition. GST cuts out the cascade of many taxes that products had to bear, and would bring down prices anyway .

Source :  Economic Times

Notification No.62/2017 18-07-2017


INCOME-TAX (TWENTY FIRST AMENDMENT) RULES, 2017 – AMENDMENT IN FORM NO.3CEFA

NOTIFICATION NO. GSR 891(E) [NO.62/2017 [FNO.370142/2017-TPL]DATED 18-7-2017

In exercise of the powers conferred by section 295 read with sub-section (2) of section 92CB of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (21st Amendment) Rules, 2017.

(2) They shall come into force and shall be deemed to have come into force from the 1st day of April, 2017.

2. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CEFA, in paragraph 2, under the heading “Eligible International Transaction”—

(I) in Sl. No. 3, —
(i) after item (d), following item shall be inserted, namely: —
“(e) Employee cost in relation to operating expense declared
“;
(ii) the existing items (e), (f) and (g) shall be renumbered as (f), (g) and (h) respectively;
(II) in Sl. No. 4, ___
(i) after item (d), the following items shall be inserted, namely:—
“(e) Currency of denomination of the amount of loan for each loan transaction
(f) Whether credit rating of AE has been done? If yes, the credit rating rank and the name of the credit rating agency
“;
(ii) the existing items (e) and (f) shall be renumbered as (g) and (h) respectively;
(III) after Sl. No. 9, the following Sl. No. 10 and entities relating thereto shall be inserted, namely:—
Sl. No. Particulars in respect of eligible international transaction Remarks
“10. Has the eligible assessee entered into any international transaction in respect of receipt of low value-adding intra-group services as referred to in item (x) of rule 10TC?
Yes No
If yes, provide the following details:
(a) Name and address of the associated enterprises (AE) with whom the eligible international transaction has been entered into.
(b) Name of the country or territory in which AE (s) is located.
(c) Whether country or territory is a no tax or low tax country or territory as defined in rule 10TA.
(d) Description of the eligible international transaction.
(e) Amount paid or payable in relation to such transaction.
(f) Mark-up charged in per cent.
(g) Whether transfer price is in accordance with the circumstances specified under rule 10TD.
“;

GST impact on cigarettes: Prices set to go up as council decides to hike cess; new rates effective from midnight : 18-07-2017


GST impact on cigarettes: Weeks after GST was implemented, the prices of cigarettes are set to go up. Union Finance Ministry Arun Jaitley on Monday announced that GST Council has decided to hike cess on cigarettes to take away the windfall manufacturers were making. According to Jaitley, “Change in cess on cigarettes to get Rs 5,000 crore additional revenue.” Also, Union Minister Jaitley confirmed that the new tax rate will be effective from midnight tonight. “GST council in its meet reviewed compensation cess rates on cigarettes and recommended increase in the same,” Jaitley added.

Earlier, Tobacco Institute of India (TII) had said that the GST is an unique opportunity for the government to address the growing illegal cigarettes trade in the country. The institute, a body representing interests of legal cigarette makers such as ITC, Godfrey Philips and VST, also said the government must also consider the plight of distressed tobacco farmers.

“GST presents a unique opportunity to government to address the growing illegal cigarette trade in the country,” said TII Director Syed Mahmood Ahmad. “This would also help distressed tobacco farmers, the legal cigarette industry and also inject buoyancy in revenue collection from this sector,” he added.

TII represents leading cigarette manufacturers accounting for more than 98 per cent of the country’s domestic sales of duty paid cigarettes.

Source : Financial Express

7 changes that affect income tax return filing this year : 18-07-2017


Like every year, income tax return filing is going to be little different this year as well. So, before you begin filing your income tax return, let’s see what has changed in income tax return filing this year.

1. Disclosure and linking of Aadhaar Number:

From 1st July onwards, the quoting of your Aadhaar number in your ITR is mandatory. If you don’t have one, but have filed an application for the same, then the 28 digit Aadhaar Enrolment number is required to be quoted in the ITR.

In addition to this, you are required to link your Aadhaar number with the PAN number as a precondition for filing your Income Tax Return. This follows from a recent CBDT press release clarifying the impact of the Supreme Court judgement on Aadhaar -PAN linkage.

The release stated, among other things: Everyone who has been allotted permanent account number as on the 1st day of July 2017, and who has Aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar.

Additionally, it has been practically observed that income tax servers are not accepting ITRs unless your PAN is linked with your Aadhaar.

2. Impact of demonetization:

If you have deposited cash equal to or more than Rs 2,00,000 in aggregate – old as well as new currency notes – in any of your Bank Account, be it Savings, Current or even a Loan Account) between 9th November, 2016 to 30th December 2016, the same has to be reported by you at the time of filing income tax return. This applies for all the ITR forms including the ITR 1 (Sahaj).

3. Change in ITR form numbers:
For simplification, the Income Tax Department has changed Income Tax Return form numbers. Following Forms are to be filled for assessment year 2017-2018, relevant for Financial Year 2016-17 return filing:
a) ITR 1 (Sahaj): For Individuals having Income from Salaries, one house property, other sources (Interest etc.) and having total income of up to Rs 50 lakh;

b) ITR 2: For Individuals and Hindu Undivided Families (HUFs) not carrying out a business or profession. This ITR has merged Form ITR 2/2A and 3 which were applicable for F.Y. 2015-16;

c) ITR 3: For individuals and HUFs having income from a proprietary business or profession. This form is renumbered and replaced ITR 4 applicable for F.Y. 2015-16;

d) ITR 4 (Sugam): For presumptive income from Business & Profession. It has replaced ITR 4S (Sugam) used for F.Y. 2015-16;

Other forms remain the same.

4. Filing of your ITR is mandatory even if you have only exempt long term capital gains (LTCG):
In case your aggregate income including tax-exempt Long Term Capital Gains (LTCG) exceeds Rs 2,50,000, i.e. the basic exemption limit, you will have to file your income tax return as per the amendment made in the last provision of section 139(1) of the Income Tax Act.

This means that even if your taxable income is less than the basic exemption limit of Rs 2,50,000 but because of exempt LTCG income, the total amount exceeds Rs 2,50,000, then filing of return of income is mandatory.

For example, your taxable income from all the sources is Rs 2, 00,000 before deduction of chapter VIA deductions, and then normally you are not required to file your return. But, if you have an exempt LTCG income of say Rs 1, 50,000, then, since your taxable income plus income from exempt LTCG exceeds the basic exemption limit of Rs 2,50,000, it will be mandatory to file your return of income.

As per section 10(38), long-term capital gain arising on transfer of equity share or units of equity oriented mutual fund (*) or units of business trust is not chargeable to tax in the hands of any person, if following conditions are satisfied: The transaction i.e. the transaction of sale of equity shares or units of an equity oriented mutual fund or units of business trust should be liable to securities transaction tax.

Such shares/units should be long-term capital asset as defined in the Income Tax Act. Transfer should have taken place on or after 01.10.2004.

5. Increased Rebate u/s 87A:
Section 87A of the Income Tax Act allows a rebate of up to Rs 5,000 for individuals whose taxable income (total income minus deductions under section 80) is Rs 5,00,000 or less. However, if your tax liability is lower than Rs 5,000 then the amount of rebate will be restricted to your tax liability. The amount of rebate earlier was Rs. 2000/-.

6. Additional Benefit for 1st Time home Owners (Sec 80EE):
For taxpayers who do not own any house, the Finance Act 2016 had introduced a new Section 80EE. Under this section, you can claim deduction for the interest paid up to Rs 50,000 for loan taken for a residential house. This would be in addition to the deduction of Rs. 2 Lacs under section 24(b). For availing this benefit, you need to satisfy certain conditions.

The first condition is that the loan should have been sanctioned between 1st April, 2016 to 31st March, 2017 and the amount of the loan should not exceed Rs. 35 lakhs for a residential house cost and the cost of this house does not exceed Rs. 50 lakh. Moreover, you should not be the owner of any residential house at the time of sanction of the house.

However there are no restrictions on your owning any commercial property or even a residential house later on as the condition of not owning house needs to be satisfied at the point of sanction of the loan and not continuously. This benefit unlike Section 24(b) and 80 C can be claimed during construction of the house and not necessarily after completion of the construction of the house.

7. Exemption from LTCG for Investment in Startups
This tax filing season, you can reap the benefits of investing in a startup under section 54GB. As per this section, if you have earned Long Term Capital Gains by selling your house or land, and have invested such income in equity shares of a startup business then such gain will not be taxed.

However, such investment in shares should be made before filing your Income Tax Return and the return should be filed before due date. Further, as a condition, the startup company has to invest this amount to purchase new plant and machinery within 1 year from the date of subscription of equity shares by you, otherwise, such exempt LTCG would be made taxable.

Taxpayers need to obtain the proofs from the Company to show that it has bought new plant and machinery. Proof may consist of the Invoice copy, bank payment and agreements etc.

Source : PTI

GST: New tax system brings pain, paperwork to India’s online sellers : 18-07-2017


India’s new tax regime is causing widespread headaches for small merchants and the e-commerce companies they work with.

The Goods and Services Tax, which went into effect July 1, has been touted as the biggest tax reform since the country’s independence seven decades ago, aimed at replacing hundreds of regional and federal levies with a standardized national tax. But retailers are discovering the new system is anything but simple.

They’re battling a dizzying array of documentation requirements and product classifications, which affect the percentage of tax charged, that threaten to choke businesses with bureaucracy. Thousands of small merchants have been dropped from e-commerce sites because they can’t meet the new requirements.

Seller Archit Agarwal is still struggling to get the new rules straight after months of preparation. The owner of A2A Trading sells imported wireless headphones on Amazon.com’s local site, but he’s scrambling to figure out how his existing warehouse stock should be taxed, how customer returns should be handled and how detailed record-keeping should be. In August, he’ll start filing three sets of monthly tax returns.

“The new system is overwhelming,” said the 32-year-old just days after the GST was put in place. The harried Agarwal was heading into a low-rise building in Bangalore to one of Amazon’s 16 pop-up GST Cafés. A sign outside advertises, “Get GST compliant and sell online chinta-free,” and dozens of sellers have come to offload their ‘chinta,’ or worries, before the online giant’s panel of taxation experts.

The rate of GST varies depends on the product and service, ranging from zero to 28 percent, as well as numerous exemptions. For example, fresh milk doesn’t incur GST, cream attracts a 5 percent rate while butter and cheese are charged at 12 percent.

While merchants didn’t always comply with their tax obligations under the old regime, the consequences of not filing proper returns now are dire. Penalties range from fines of 10,000 rupees ($155) to five years in jail. Those with large amounts of tax due will not be eligible for bail.

In the past weeks, e-commerce companies big and small have bounced thousands of non-compliant sellers off their websites. Some small businesses and restaurants have voluntarily dropped out because they can’t meet the new requirements.

Flipkart Online Services Pvt., the country’s largest online retailer, said “close to 95 percent” of its 100,000 merchants are compliant, but the rest were removed before the GST kicked in. Rival Amazon said it would retain nearly all of its 200,000 merchants.

“Small e-commerce businesses are getting knocked out by GST,” said Ravjeet Singh of the Delhi-based MS Trading Co., which sells men’s t-shirts on both sites. “The changeover is complicated and the penalties for not paying timely taxes are so harsh that people are scared.”

Mumbai-based fashion e-commerce startup Fynd said its sellers complained that the GST website had stopped taking registrations and was down, a sign of upcoming trouble. The site has dropped almost 10 percent of its 330 sellers.

“Merchants are seeking clarity on a number of vexing questions,” said Harsh Shah, the company’s co-founder. “They are also are not quite sure what happens in various scenarios like discounts or in bundled offers.”

Nevertheless, the e-commerce industry largely views the overhaul as paving the way for long-term growth. Businesses are no longer required to go to multiple agencies in different regions or pass through entry points in each region, where miles-long truck lines were common.

Companies like Flipkart and Amazon, which source products and locate warehouses at multiple locations for tax purposes, will be able to reduce costs as transportation expenses fall and deliveries arrive faster. “Online retail will be a lot more streamlined,” said Vivek Somareddy, an Amazon executive who has worked with merchants to prepare for the new tax.

The pain will last through the next few quarters, said Sampad Swain, co-founder and chief executive officer of Instamojo, an e-commerce platform that helps small businesses sell online. Only about half the 250,000 businesses that sell mangoes, umbrellas and cupcakes on his site are registered with the new tax website. But Swain expects the number of businesses on his platform to swell to one million in the next 18 months.

Source : Economic Times

Centre makes proposal for states to make their own Aadhaar Acts : 17-07-2017


The state government may soon enact their own “State Aadhaar Act”, as the central government has made a proposal for the same. Though a five-judge Constitution bench of the Supreme Court is set to hear challenges to the Aadhaar Act, the Centre put up the idea at the national conference of state chief secretaries, organised by governments think-tank NITI Aayog last week. However, the states need to follow the lines of the central Act passed by Parliament last year for enacting their separate Aadhaar Act, reports The Indian Express. The issue was emphasised by AR Sihag, Secretary (Coordination and Public Grievances) in the Cabinet Secretariat while giving the presentation on the topic of “effective implementation of DBT (direct benefit transfer) in states”. “Enactment of State Aadhaar Act” was one of the “interventions requested” by the Cabinet secretariat, said the report.

The Aadhaar Act of the Centre makes Aadhaar mandatory for every welfare subsidy or benefit given to any state from fully-funded or centrally-sponsored schemes in which states share a part of the fiscal burden. The Act clearly mentions that for any scheme for which the expenditure is borne fully or shared partially by the Consolidated Fund of India, there should be verification through Aadhaar. But besides these schemes, some states have their own subsidies or benefit schemes that are funded by the state exchequer like Nitish Kumar led-Bihar government’s bicycle scheme for girls or previous Uttar Pradesh government’s laptop scheme started by the then Chief Minister Akhilesh Yadav. Such schemes do not fall under central Aadhaar Act. However, the proposed State Aadhaar Act could provide the legal basis for making it mandatory for state-funded welfare schemes too, said the report.

But as the proposal suggested by the Cabinet Secretariat seems tricky as it may affect the freedom of the state governments to set up a mechanism for expenditure from the state exchequer as per the report, it is yet to see whether it will come into effect or not.

Source : Financial Express

Advancing Budget helped boost spending by 30%: PM Narendra Modi : 17-07-2017


NEW DELHI: Prime Minister Narendra Modi on Sunday said advancing the Budget by a month had helped increase overall expenditure by nearly 30%, with a 48% rise in spending on infrastructure development.

While thanking lawmakers for their support for historic economic reforms such as bringing the Budget session of Parliament forward and introduction of the goods and services tax (GST), Modi said higher spending was a huge achievement and would bring fiscal prudence in capital expenditure in future.

“A major impact of advancing the budgetary process by a month has been that the funds allotted to several departments for various schemes reached before the monsoon season. Earlier, it used to take two to three months for the funds allocated to the schemes to reach up to the departments. The implementation was delayed due to the monsoon. It did not happen this time and there has not been any lag period after March. It has also provided three months additional time for the completion of infrastrue development.

While thanking lawmakers for their support for historic economic reforms such as bringing the Budget session of Parliament forward and introduction of the goods and services tax (GST), Modi said higher spending was a huge achievement and would bring fiscal prudence in capital expenditure in future.

“A major impact of advancing the budgetary process by a month has been that the funds allotted to several departments for various schemes reached before the monsoon season. Earlier, it used to take two to three months for the funds allocated to the schemes to reach up to the departments. The implementation was delayed due to the monsoon. It did not happen this time and there has not been any lag period after March. It has also provided three months additional time for the completion of  infrastructure projects,“ he said during the allparty meeting. 

He said the trend of expenditure in schemes reflected that funds would be spent in a balanced manner throughout the year. “Earlier, the expenditure used to begin after the monsoon and unnecessary pressure was there to spend the money before March. It was one of the reasons for the faults in the system,“ he said.

Similarly ,introduction of the GST regime, with the support of all parties, had strengthened the federal structure and brought about economic solidarity in the country , the PM added. During the first fortnight of the new regime, the results had been positive with the removal of check posts for commercial taxes making the movement of trucks easier at state borders.

Several economic legislations are listed for discussion during the Parliament session, including amendments to the Companies Act, which have been pending.While the bill had been introduced, the revised legislation incorporating the suggestions of the standing committee will be debated in both the Houses.

The government also intends to introduce the Financial Resolution and Deposit Insurance (FRDI) Bill for dealing with stressed banks and financial institutions, while also strengthening the functioning of state-run banks by amending the Banking Regulation Act and the law governing SBI.

Source : Times Of India

Post GST, you will see prices falling: Piyush Goyal : 17-07-2017


Stressed power assets can be a source of low-cost electricity, replacing costly supplies, says power, coal, renewable energy and mines minister Piyush Goyal. In an interview with ET , he also said the goods and services tax (GST) had rolled out smoothly and that it will end corruption and create jobs. Excerpts:

What is the outlook for stressed assets and the ultra mega power projects?
In both, I have no role to play on the face of it. There’s no licensing, no power ministry approvals. At the same time, as an Indian, I do recognise these are assets where banks have lent money, investments have been made. They will ultimately generate power the country certainly needs. In many cases, I also recognise that some of them could be (stressed) for factors beyond their control.

Like the Indonesian coal issue?
True. One can argue that they should have foreseen that there may be a change, but there is no limit to how much one can imagine about change. I’m not directly a party. I do believe these are national assets, Indian money has been invested in them and an early resolution will be in India’s interest, more so because the more power we can generate, the more the competition and efficiency in the sector. I’ve met with the bankers. They have a  viewpoint that I’ve taken very seriously and I’m trying to play the role of a facilitator to see how we can help banks find a resolution. Wherever required, we’re also willing to help with management, technology, or interface with various departments to make processes smoother, approvals smoother.

On the coal side, my biggest stress is that I don’t have enough outlets to sell the large amounts India produces. I’ll be delighted if more plants come up. It will lead to more demand for low cost power and more consumption of coal. This is now a national issue. All of us have to work together to find a solution.

What is the way forward?
SBI Capital Markets is engaged with various stakeholders and trying to see the best way forward for consumers. The objective is for the consumer to get 24×7 affordable and quality power. Keeping that in mind, whatever needs to be done in national interest, should be done. This is certainly very attractively priced power but if companies keep making losses and banks stop funding them, or if they shut down totally, we’ll have to assess what is the is the impact on transmission of power in that region; on availability of power and the transmission infrastructure to move power. It’s a large quantity of power centred in one area, supplying to five or six states. We’ll have to see if alternative power is available at those prices, or will it make it more expensive.

Can states take over stressed assets?
That’s between bankers and states. If at all, the decision of what has to be done with it will rest with bankers and promoters, but states also will probably have an interest because if the large volume of low-cost power is removed from the system, (it may lead to) power shutdowns or inadequate availability. It could also be more expensive. In some states, it may be a zero-sum game, they may be able to live without it.

How optimistic are you on resolving issues?
Within the framework of law and keeping in mind that the consumer should not suffer, the larger perspective is that consumers should not have to pay for the problem. I think a solution can always be found.

What about the other stressed assets?
We’ll have to see what’s the cost to complete them and what will be cost of power. Some are very strategically located at pitheads. Those may be much easier to resolve and provide low-cost power. We’ve launched an app, Merit. In Merit, we’re transparently putting in public domain at what cost each discom is buying power from each supplier. Fixed cost, one can say, they have to pay. In variable costs we found some fantastic stuff. Some states have the ability to buy low-cost power but are still sourcing from a plant that is more expensive. Any such case they’ll have to justify (the reason) — technical or coal was not enough, or breakdown.

So, the system ensures corruption-free purchase of power. Earlier, this was very opaque, it was in the files of the government. We’ve demystified power purchase. Wherever states are buying expensive power, these stressed assets can go to serve and replace the expensive power.

Can the government take over these assets?
That’s for banks to do. I’m not in the picture at all.

In Gujarat, companies have offered to sell equity to the state for Re 1…
Gujaratis are smart people. That’s all I can say. The Gujarat government knows what’s in the interest of consumers. When they plan, they ensure they can save every single rupee, or earn every single rupee for the state government and bring power at lowest cost to the consumer. They are tightfisted in their approach. So, they must have looked at the entire scenario, what benefits they can get, what  alternatives are available. They might be approaching the issue clinically. So far, they’ve not intimated anything, but banks are still studying the whole scenario.

CIL has concerns about coal’s long-term outlook. Neyveli Lignite has bagged big solar projects. Is coal’s outlook uncertain?
Not at all. I can’t inject renewables into a grid that doesn’t have base load. Coal will be the mainstay of our energy needs. Coal has a very bright future. There are two causes of diversification: A) it’s a big business opportunity; B) I’ve been pushing them on renewables. While I genuinely believe they have to burn coal, they also have to be  responsible citizens. They have money and ability. My approach is that if NTPC has to go from 50,000-1,00,000 MW, that journey will have a lot of renewables.

You have set a target of 1 lakh MW for NTPC?
Our government believes in scale.

Will a government company like NTPC take over stressed assets?
Not taking over, but they will certainly support any such effort. There’s no proposal to take them over. We’ll let banks find ways. SBI Cap is working on this. Bankers have a very positive attitude… As we speak, power at Rs 2.23 is available; 5,322 MW surplus power is available at the exchange. If they all start buying this, there’s another 10,000 MW waiting to come. In a year or two, as these all get consumed these stressed assets will start feeding the power.

What is the assessment of GST rollout so far?
Frankly, the smooth way in which it’s been rolled out is very redeeming, very satisfying. The technology and systems they’ve created are outstanding. The business community, traders, industry have all adapted and adopted it in a very supportive fashion. They are willing to appreciate any such transformational change of this dimension never before embarked anywhere in the world is bound to have some transitional issues.  All these issues will be placed before the GST Council. Every party has supported it. Parties not in government have also supported it. This is the biggest example of cooperative and collaborative federalism that India has ever seen. It’s a shared legacy of the entire country. It belongs to every political party, to every citizen. You will see prices falling of everything. Almost universally, costs are coming down. Average household budgets will be lower.

Will the government’s revenue rise?
Direct and indirect revenue will rise. Jobs will go up. If a truck does 14 trips instead of 10 trips in a month, many more jobs will be created. Logistics is one of the biggest gainers. Corruption and leakages will certainly come down. For example, if excise (department) caught somebody, VAT and income tax would never come to know. Here, sales are being reported honestly, and the system is so beautifully designed that if you don’t report. your sales honestly, you’ll be caught somewhere in the chain. Gradually, we’ll move towards an honest society where people will not compete on the ability to evade taxes but on ability to compete on quality of goods, quality of service. That will be the determining factor.

Certainly, I’m quite confident that as revenue goes up, as more compliance is there, funds will be available to serve the poor, farmers, women and youth in a far more efficient way. At some stage, we can start looking at revising some rates to make them more market friendly. Gradually, it will lead to more investment. A lot of foreign investment didn’t come before 2014 because of uncertainty. To my mind, it’s a great move.

Source : Economic Times

GST to severely dent liquidity of exporters: FIEO : 15-07-2017


The initial procedural and software glitches of Goods and Services Tax have smoothen a lot, Calcutta Freight Brokers Association said today. “Initially, there were lot of problems with procedural issues since GST was rolled out from July 1. There were problems in generating shipping bills. But a lot had been eased and now export consignments has also picked up now,” Calcutta Freight Brokers Association chairman Rajiv Agarwall said here today on the sidelines of the 79th AGM.

“We hope GST will bring in benefits in the long run but we have to wait to see whether the new taxation regime help us,” former CFBA chairman Bharat Jain said. Jain said, “exporters are not happy with the imposition of five per cent GST on ocean freight which was exempted earlier. This will lock up working capital.”

Exporters are also facing confusion on GST on exports of SEZ cargo. Agarwall said draft remains problem for Kolkata Port and after Dhamra Port begins container cargo there is a risk of flight of cargo.

Source : Financial Express

Mark Zuckerberg is advocating Universal Basic Income, something PM Modi may give to India soon; here’s why : 15-07-2017


Facebook founder Mark Zuckerberg is advocating Universal Basic Income (UBI), which is something Modi government believes as “an idea whose time has come” for India. UBI aims to provide a fixed monthly pay to all citizens. In a Facebook post, Mark talks about how guaranteed Basic Income has proved “meaningful” for residents of Alaska in the US. Mark says that Alaska has form of basic income called the Permanent Fund Dividend (PFD). “Every year, a portion of the oil revenue the state makes is put into a fund. Rather than having the government spend that money, it is returned to Alaskan residents through a yearly dividend that is normally $1000 or more per person. That can be especially meaningful if your family has five or six people,” he writes. According to Mark, Alaska’s PFD is a novel approach to PFD for two reasons. One, it is funded by natural resources, not by raising taxes. Two, “It comes from conservative principles of smaller government, rather than progressive principles of a larger safety net.”

The Economic Survey of India this year noted, “UBI’s appeal to both ends of the political spectrum makes it an idea whose time has come perhaps not for immediate implementation but at least for serious public deliberation.” UBI can replace the existing subsidy-based poverty alleviation programmes in India. “Universal Basic Income is a radical and compelling paradigm shift in thinking about both social justice and a productive economy. It could be to the twenty-first century what civil and political rights were to the twentieth,” the Survey said.

Mark says he has learnt that “organizations think profoundly differently when they’re profitable than when they’re in debt. When you’re losing money, your mentality is largely about survival. But when you’re profitable, you’re confident about your future and you look for opportunities to invest and grow further. Alaska’s economy has historically created this winning mentality, which has led to this basic income.”

Alaska also has another type of basic income for the residents in the form of Native Corporations, according to the Facebook founder. “In Alaska, native land is owned and developed by private corporations, which are run and owned by Alaska Natives. These corporations also pay out annual dividends to their shareholders, who are largely natives, based on the resources they develop. So if you’re an Alaska Native, you would get two dividends: one from your Native Corporation and one from the state Permanent Fund.”

As Modi governments wants to make UBI a reality in India, it can certainly take some lessons for Alaska’s novel ways. But the country would need to create a “winning mentality” for this, as Alaska has done for itself over the years. UBI need not be implemented by raising taxes but by creating new sources of income.

Source : Business Standard

Why being GST-compliant can actually increase your creditworthiness : 15-07-2017


Goods & Service tax aka GST, is often dreaded and misunderstood. The confusion simply does not seem to go away. In this article, we are focusing on the impact of GST on creditworthiness for micro, small and medium industries.

Many of us know that our past credit behavior and the resultant credit score is instrumental while availing loan facility from banks. Even though creditworthiness of an individual loan applicant is one of the prime factors gauged by lenders, India has a long way to go when it comes to credit assessment in the business sector. It seems that the banking industry would probably face stress close to Rs 55,000 crore in its MSME exposure as per the recent reports from Transunion CIBIL. Small businesses have always found in procuring business loans due to ‘information asymmetry’, making the lenders hesitant to lend to them. However, this is expected to change post GST implementation.

A key aspect that keeps the enterprises safe from being scrutinized seems to be a myth that creditworthiness is calculated by size (income, net worth, strength of the company, vintage, reputation etc.) rather than sales and revenues. With the advent of GST, irregularity in data keeping and shoddy credit trails along with under-reporting of income and transactions will be a thing of past, which will inevitably pave way for MSEs and SMEs to get more financial backing and enter the organized sector .

The possible impacts of GST on creditworthiness of businesses are summed up in the points below.

i. Process & Resultant Impact of GST on Invoice Tracking:
Invoicing is a crucial part of any transactional execution. Post GST too, it will be considered mandatory for recording the details of a sale or purchase in the GST Network. Here, a streamlined flow of input credit right from the manufacturer to the end user, across the nation, can be ensured. This will force all the parties involved in the chain to record the invoice accurately to get the tax benefits.

For instance, under-invoicing was commonplace in import-businesses so as to avoid customs duty. With GST, all sale prices have to be entered in the GST network, making it literally impossible to under-declare or under-report the items and their prices. With the whole process becoming absolutely transparent, MSEs and SMEs will be deemed more creditworthy by lenders.

ii. Organized Vs Unorganized Lending:
Creditworthiness is not exact mathematics, but currently it is rather subjective (based on size, business performance and profit) when it comes to MSEs and SMEs. This will change post GST, when they will have no other way forward, but to report all their income. Lending market is quite gung-ho about the switch to GST because it means that small enterprises are automatically switched to organized sector with accurate and timely income  declaration.

With all the income and tax documentation in order, banks will have a better picture about a business’ creditworthiness. This can enable the businesses to avail business loans from organized lenders at better and more competitive interest rates compared to the high-interest business loans they usually get from unorganized lenders.

iii. Bad Loans Vs Good Loans of Businesses:
According to a recent CRISILBSE 0.19 % Survey, almost 25 percent of MSEs rated from 1 to 3 churned over an annual revenue of up to Rs. 5 crore in the previous financial year, 2016, with bigger profit margins compared to big companies. As Finance Minister Arun Jaitley reiterated, the core issue of Non-Performing Assets remains with the big corporates, mainly in the textile, steel, power and infrastructure sectors.

In the previous FY, India faced a situation, where a major chunk of MSEs and SMEs failed to get financial support thanks to NPAs by 25-30 corporates. However, with better repayment history and improved transaction trail along with accurate reporting of income, small businesses could be deemed more trustworthy by lenders once the GST is effective, leading to a fair distribution.

iv. All Tax Evasion Loopholes Closed:
On individual level too, Government is going all out to increase tax compliance. One way many people manage to evade taxes is by possessing multiple PAN Cards and filing tax returns using different PAN Cards. Unlike PAN Card, Aadhaar is biometric-authenticated and chances of replication are little to zero.

When Aadhaar and PAN Card is linked, the duplicate PAN Cards become invalid by default once GST comes into effect. Banks have already intimated their customers to link their Aadhaar Card to bank accounts. This interconnection of Aadhaar Card, Bank Account(s) and PAN Card ensures a better tracking system for all transactions. As a result, government can monitor all financial transactions conducted by an enterprise. This creditworthiness and transparency could work favorably when small businesses try for government loans, aids and subsidy.

What it means for banking industry?
Banking is essentially a service sector and hence there is a level of paranoia that financial services and products, especially unsecured loans and business loans are going to be drastically effected. Yet, the industry predicts a dramatic rise in loan booking and decline in bad rates. Changes will always find resistance in one way or the other. But, it is too soon to judge.

(Aditya Kumar is Founder & CEO Qbera.com. Views expressed are his own)

Source : Economic times

GST impact: GSTIN not necessary if exempt goods imported or exported : 14-07-2017


Importers and exporters of goods, that are exempted from GST, do not need to obtain a GST registration number and can clear their consignments by quoting PAN, the customs department said. The department issued the clarification amid reports of some consignments being delayed at ports for want of clarity on rules governing the new Goods and Services Tax (GST) regime.

“It is being clarified and assured that there is no hold up of import and export consignments, wherever GSTIN is
legally not required. “Importers, exporters and customs brokers are requested to quote authorised PAN in the bills of entry or shipping bills for such clearance,” the Maharashtra wing of customs department said in a public notice.
The Goods and Services Taxpayer Identification Number (GSTIN) is a 15 digit unique code which is assigned to each
registered business or trader.

It replaces TIN (Taxpayer Identification Number) – the unique 11 digit number allotted to each business entity which
was registered with the commercial tax department in the previous indirect tax regime.
Post of the implementation of GST from July 1, there have been some confusion over requirement of GSTIN for clearance of consignments at ports.

The Central GST Act exempts businesses engaged exclusively in the supply of goods (import and export) which
are exempt from GST from obtaining registration under the new indirect tax regime. The customs department in Maharastra, which handles the largest container port of Nhava Sheva, has now clarified that PAN will be sufficient for clearance at ports for goods which does not require registration under GST. “Difficulty, if any may also be brought to the notice of Deputy / Assistant Commissioner in charge of Appraising Main (Export) through email/phones,” the notice said.

Further, Directorate of International Customs (DIC) has been set up on July 1 which will assist the CBEC in
international matters pertaining to customs, integrated GST and tariff matters. The DIC would be headed by a Principal Commissioner and will report to the chairman of Central Board of Excise and Customs (CBEC).

Source : Financial Express

GST impact on prices: Jayant Sinha says new tax regime brought down rates; indicates if differences sorted out, petrol, liquor will be brought under it too : 14-07-2017


GST impact on prices: Union Minister Jayant Sinha said today that the Goods and Services Tax (GST) has helped bring down prices of some commodities across the country. The tax reform launched on July 1 has kept inflation under check, the MoS for Civil Aviation said, according to a PTI report. Sinha was addressing traders and officials on GST at Central Institute of Mineral Fuel Research (CIMFR), Dhanbad. “There are differences over several issues between different states. Efforts are on to bring a consensus among them. If it is achieved, the prices of petrol, diesel and liquor will be brought under GST,” Sinha said at the event. Nearly 50 per cent of the commodities are under the 18 per cent tax slab after the implementation of GST. However, items like aviation, crude oil, natural gas, diesel, petrol and alcohol are out of the GST and states would apply their own taxes. According to an FE Bureau report, the tax paid on the final products of these commodities may not offset the production costs.

This poses a chance of inflation in these industries. Sinha has echoed Finance Minister Arun Jaitley on inflation having a lesser impact. Jaitley at the time of the launch had told PTI, “Inflation will come down, tax avoidance will be difficult, India’s GDP will be benefited and extra resources will be used for the welfare of poor and weaker section.” Sinha in his address also said that air transportation in India would be developed at a large scale and Dhanbad would soon have an airstrip as the government is looking for land spanning 300 to 400 acres.

Source : PTI

How to claim tax exemption on HRA without landlord’s PAN : 14-07-2017


The process of filing the Income Tax Return (ITR) could be simple and straightforward.

However, at times, certain peculiar and specific situations arise which requires proper solutions to avoid any tax liability in future. Here are few of them and the approach in tackling them

I am salaried and get HRA as a part of my salary. Currently, I am staying on rent but my landlord is not providing the PAN. How should I claim HRA as the employer is insisting on it?

If you are paying rent of more than Rs 1 lakh an annum but not being able to provide the PAN of the owner to the employer, the HRA benefit will not reflect in the TDS as the employer will not be able to provide any such benefit.

But, the employee may claim the tax benefit on HRA while filing the income tax return (ITR), for which the owner’s PAN, is not mandatory. “In the case of failure, the employer will deny the benefit of HRA while deducting tax on salary income. Having said that, the employee can still claim the benefit of HRA while filing his return of Income,” says CA (Dr.) Suresh Surana, founder, RSM Astute Consulting Group.

However, in doing so, one is likely to get a notice from the tax department due to the mismatch between the ‘salary income’ as per Form 26AS and what is shown in the ITR.

So, be prepared to provide evidence of the rent payment to the tax officer as you are likely to get a notice. Dr. Surana says, “Employee should keep all the documentary evidence such as rent agreement, rent receipt, bank statement for proof of rent payment so as to substantiate HRA claims before the tax officer if the case is selected for scrutiny.”

As per the Rule 26C of the Income Tax Act, it has become mandatory for the employee to furnish certain details to the employer for claiming the tax benefits on salary income. The employee needs to fill and submit Form 12BB to one’s employer, by mentioning the property owner’s name, address and the PAN.

But, at times the employee might fail to obtain the owner’s PAN. “The requirement of furnishing PAN details of Landlord under Rule 26C is only for the purpose of deduction of tax at source on ‘Salary income’ by the employer. There is no change in Section 10(13A) of the Income-tax Act, 1961 which provides for HRA exemption, says Dr. Surana.

I and my spouse have a joint home loan on a property jointly owned by both of us. We are currently staying in it. How should both of us claim the tax benefit for principal and interest?

It’s common nowadays for both spouses to work and earn independently. While searching for a home loan, the possibility of getting a higher home loan amount increases when both spouses earn. But, would the tax benefits available under the Income Tax Act for the principal and interest payments be allowed to both the spouses? Yes, they can, provided the ownership is also on joint basis. “Where property is owned by the taxpayer and his wife in joint names, having definite and ascertainable shares, and they have paid the interest and principal in respect of the loan jointly availed to acquire the property, then each individual co-owner can claim benefit of interest and principal repayment separately,” says Dr.Surana.

This means, in total Rs 7 lakh can be used to reduce the total household income and the total household tax saving if both are in the highest income slab, may be about Rs 2.1 lakh.

For tax benefits on a home loan, co-ownership is a must. In case one spouse pitches in and shares the EMI burden, the tax benefit may be lost unless he or she is the co-owner. Say, the ownership is on 50:50 basis and the principal repaid and interest paid during the year is Rs 1.3 lakh and Rs 1.8 lakh respectively, both can claim Rs 65,00 and Rs 90,000 respectively tax benefit.Rs 1.3 lakh and Rs 1.8 lakh respectively, both can claim Rs 65,00 and Rs 90,000 respectively tax benefit.

I have a home loan but staying in a different city on rent because of work. Can I claim tax benefit on the home loan as well the HRA?

Several salaried individuals have a residence in one city while they may be working and staying in a different city. If they are servicing a home loan and simultaneously getting HRA from the employer, claiming tax benefit from both can be tricky at times. “In order to claim the HRA benefit, one of the conditions is that accommodation occupied by a taxpayer is not owned by him and to claim the tax benefit on the home loan, a key condition is that he should be the owner of the house,” says Dr. Surana.

So, if the workplace is far away from one’s own residence, one can claim the HRA as well as tax benefits on the home loan. However, a word of caution from Dr. Surana, “Please note that, it would be difficult to claim both the tax benefits in respect of the own house and rented house which are within a commutable distance which is nearby to that of the employment locations.

Source : Economic Times

GST impact on jewellery: Selling gold items to attract 3 pct impost, says Hasmukh Adhia : 13-07-2017


Selling of old jewelry or bullion will attract a 3 per cent GST on the value realized, Revenue Secretary Hasmukh Adhia said today. But, if the jewelry is sold and a new one bought through the proceeds, the 3 per cent tax paid will be deducted from the Goods and Services Tax (GST) payable on buying new jewelry. “Supposing I am a jeweler. Somebody comes to me with old jewelry, it is as good as buying gold. You can later claim input tax credit,” he said at the GST Master Class.

Explaining further Adhia said a jeweler buying old jewelry from someone will charge 3 per cent GST under reverse charge. So, if old jewelry worth Rs 1 lakh is sold, a GST of Rs 3,000 will be deducted. If the proceeds from the old jewelry is used for buying new jewelry, the tax paid on sale will be adjusted against GST on the purchase, he said. However, if an old jewelry is given to the jeweler for some modification, then it would be considered as job works and 5 per cent GST would be levied.

“But, if I am saying that take my old jewelry melt it and give me a new one, then it means that trader is a registered person and it is as good as buying gold in form of old jewelry,” he said. Under the GST regime rolled out from July 1, a tax is levied at 3 per cent on gold, while any form of job work attracts 5 per cent levy. When asked about the tax to be levied on downloading of movies and television shows on Netflix, he said the US company is paying service tax, which will now be replaced by GST.

On advertisements given in website or blogs, Adhia said if the money is earned by way of providing services then GST would be levied. However, the ministry would soon clarify various provisions related to advertisements on websites after seeing stakeholder representation.

Adhia further said businesses and traders willing to avail the composition scheme will have to choose the option by logging into the GSTN portal by July 21. Whereas, for new registrations, they have to give their own choice at the time of filling up forms for registration. Besides, as per the rules, account records for GST will have to be preserved for six years. However, if any case is locked up in litigation, then the records have to be preserved till the litigation gets over.

Small businesses with a turnover of up to Rs 75 lakh can opt for composition scheme in which traders, manufacturers, and restaurants can pay tax at 1 per cent, 2 per cent and 5 per cent, respectively. Businesses opting for the composition scheme will see a lesser compliance burden as they will have to file returns only once in a quarter as against monthly returns to be filed by other businesses.

Source : Financial Express

With less than a fortnight under GST, here is how companies are already trying to game the system : 13-07-2017


A non-descript textile trading company registered in Mumbai with an annual turnover of Rs 1 crore or less has suddenly become active. The company has started selling goods outside the state in different categories and could be doing business of more than Rs 50 crore by the year end.

Indirect tax officials suspect this is one of the many shell companies being used to avoid GST. Taxmen are scrutinising sudden spurt of activity in old companies and formation of few companies and fear these are specifically created to game GST, said tax officials and consultants in know.

“Many dormant companies have become active and are trading in various product categories they never used to deal with earlier. In many cases these companies seem to be deliberately registered in prominent business areas,” a tax official based in Mumbai told ET.

Many companies, especially those with a turnover of between Rs 50 crore to Rs 200 crore, are creating shell companies specifically to take advantage of GST. These shell companies would be used to take credit in an interstate transaction and would accumulate input credit, only to be shut a year later before the tax audit comes.

There are some tricks these companies use. Like in the case of an artificial jewellery maker, a trick that could be replicated by many is being implemented, explains a senior tax expert with a law firm.

“The company would first sell outside the state through a shell company and claim 18% GST with the government. The promoters plan that they would stop paying GST after a couple of transactions,” a person in the know said. Others are planning to rig the system by outrightly lying about the products.

“If a Mumbai company sends goods that are at high GST rate of say 28% to a New Delhi company but the invoice shows they are transporting food grains, which are at 5%. The buyer in New Delhi would never show sales of the goods and never pay GST,” a tax expert said.

“These shell companies, after the GST credit transfer, can go back to being dormant and may not get caught if the avoidance per company is around Rs 5 crore,” a person in the know said.

Experts point out that while in many cases tax officials would come to know of the fraud, but it will take at least a year or more. By that time the companies would have shut shop and no one would be found at the registered address.

“The government can eventually catch hold all those who are using shell companies to accumulate credit and make money. The only way this could be effectively done is by monitoring this real time and through various channels,” said MS Mani, partner, Deloitte Haskins & Sells.

A senior tax official said some tax experts are helping businessmen create such shell companies and the department may first go after them. In a recent conference held in Mumbai, several industry experts including Kerala finance minister Isaac Thomas warned that in business to business (B2B) transactions, some people may be able to game the system.
Source : Business Standard

Eating out cheaper post-GST? Why it depends on your menu : 13-07-2017


If you are expecting your restaurant bill to go down, you will have to wait for some time. Revenue secretary Hasmukh Adhia did claim at a Goods and Services Tax (GST) masterclass that restaurants, hotels, and eateries could cut their food rates to reflect the benefit of input tax credit (ITC), but restaurateurs, only now coming to terms with GST, are still playing the waiting game to gauge the impact.

ITC, put simply, is the credit restaurants get on the taxes already paid on inputs (raw supplies, rentals, marketing, etc) that can be set off against the taxes they pay on outputs or earnings. Rather than applying for various credits like earlier, they can now avail the tax set-off under one broad service tax slab. Since the limits of credits are going to increase, Adhia urged eateries to pass those benefits to consumers.

Riyaaz Amlani, president of National Restaurant Association of India (NRAI) and CEO of Impresario Entertainment and Hospitality which has multiple outlets across the country, was keen to let consumers benefit from any price decreases but said he was still ascertaining the impact of GST and ITC on costs.

“Lower prices will definitely mean more customers, so we would be the first ones to pass on the benefits to consumers,“ said Riyaz.“But it is too early to comment on the benefits.“

Rahul Singh, CEO of The Beer Café and honorary secretary of NRAI, points out that such benefit would ac crue to food outlets and only minimally for places that have higher alcohol sales. “Alcohol is not a part of GST and still attracts VAT. If food accounts for 30% of the sales and alcohol for the rest, the benefits would not amount to much,“ he reckoned. Singh, however, added that while the actual benefits could be visible only after a quarter, “I broadly see a reduction in the food menu by 3-5%“ .

The fact that alcohol still attracts VAT while food comes sunder GST is one reason why restaurants are reluctant to directly decrease prices. As Priyank Sukhija of First Fiddle, which operates the popular Lord of the Drinks and Tamasha, explained, he is unable to register any input credit on alcohol, which is a major part of his sales, and so he would rather not charge additional on alcohol and cut food costs minimally.

Zoravar Kalra, founder and managing director of Massive Restaurants, which run 17 outlets across India such as Masala Library and Kode, similarly said, “Since our purchase costs will increase due to higher alcohol prices, we will wait to see how much benefits we can pass on.“ He called the new tax regime a “zero sum game“ due to the skew on differing benefits on food and alcohol.

Since the perception is gaining ground that eating out will become cheaper due to GST, Singh felt eateries would have to do a balancing act. “Put simply, alcohol costs are set to rise 15% and food prices to drop roughly 5%,“ he elaborated. “An outlet could let the rates remain unchanged, increase liquor prices and drop food prices or raise the price of every item by 10% to stay afloat.“

Ultimately, for restaurant owners, if the major proportion of their sales is based on alcohol, GST may not bring the expected dividend.

Source : Times Of India

Notification No.61/2017 12-07-2017


Income-tax (20th Amendment), Rules, 2017 – Determination of fair market value of unquoted equity shares and other than a quoted share – 61/2017 – Dated 12-7-2017 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

[CENTRAL BOARD OF DIRECT TAXES]

NOTIFICATION 61/2017

New Delhi, the 12th July, 2017

INCOME-TAX

G.S.R. 865(E).-In exercise of the powers conferred by section 50CA and sub-section (2) of section 56 read with section 295 of the Income-tax Act, 1961 ( 43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (20th Amendment), Rules, 2017.

(2) They shall come into force from the 1st day of April, 2018 and shall apply in relation to assessment year 2018-19 and subsequent years.

2. In the Income-tax Rules, 1962, -

(A) in rule 11UA, sub-rule (1), in clause (c), for sub-clause(b), the following sub-clause shall be substituted, namely:-

“(b) the fair market value of unquoted equity shares shall be the value, on the valuation date, of such unquoted equity shares as determined in the following manner, namely:-

the fair market value of unquoted equity shares =(A+B+C+D – L)× (PV)/(PE), where,

A= book value of all the assets (other than jewellery, artistic work, shares, securities and immovable property) in the balance-sheet as reduced by,-

(i) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any; and

(ii) any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset;

B = the price which the jewellery and artistic work would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer;

C = fair market value of shares and securities as determined in the manner provided in this rule;

D = the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property;

L= book value of liabilities shown in the balance sheet, but not including the following amounts, namely:-

(i) the paid-up capital in respect of equity shares;

(ii) the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company;

(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;

(iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;

(v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities;

(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares;

PV= the paid up value of such equity shares;

PE = total amount of paid up equity share capital as shown in the balance-sheet;”

(B) after rule 11UA, the following rule shall be inserted, namely:-

“ Determination of Fair Market Value for share other than quoted share.

11UAA. For the purposes of section 50CA, the fair market value of the share of a company other than a quoted share, shall be determined in the manner provided in sub-clause (b) or sub-clause(c),as the case may be, of clause (c) of sub-rule (1) of rule 11UA and for this purpose the reference to valuation date in the rule 11U and rule 11UA shall mean the date on which the capital asset, being share of a company other than a quoted share, referred to in section 50CA, is transferred.” .

[F. No. 149/136/2014-TPL]

PRAVIN RAWAL, Director (Tax Policy and Legislation)

Note: The principal rules were published in the Gazette of India Extraordinary, part III, section 3, sub-section (i), vide notification number S.O. 969(E), dated the, 26th March, 1962 and were last amended vide notification number G.S.R.No.826(E) dated the 4th July, 2017.

Bombay High Court dismisses PIL seeking deferment of GST implementation : 12-07-2017


The Bombay High Court today dismissed a public interest litigation seeking deferment of the implementation of the Goods and Services Tax (GST). A division bench, headed by Justice V K Tahilramani, said it was not inclined to interfere in the government’s decision to implement the GST. The PIL, filed by city resident K S Pillai last month, challenged the Union government’s decision to roll out the major tax reform in the middle of the financial year. The petition had sought a direction from the high court to the government for deferment of the implementation of the GST till the beginning of the next financial year. The Centre had opposed the petition and said the decision to implement the GST had been carefully considered by Parliament. The Union government also said that the implementation of the GST was in public interest. “There is no prohibition in the law to prevent the government from implementing any tax reform at any point in the year as long as it has the sanction of Parliament,” Additional Solicitor General Anil Singh had earlier argued.

The GST was rolled out from July one. It has replaced more than a dozen central and state taxes with an aim to create a seamless unified market for the Indian economy.

Source : Financial Express

Eateries should cut rates of food items post GST: Hasmukh Adhia : 12-07-2017


Restaurants, hotels and eateries should cut rates on food items in their menu to reflect the benefit of being able to set off tax paid on inputs under GST, Revenue Secretary Hasmukh Adhia said today.

He also said that GST will be levied on entire sum of food bill, including service charge, in a restaurant, while the value of alcohol or alcohol products consumed will attract VAT.

Previously, a service tax was levied on the bill. But the tax the hotel or restaurant operators paid on inputs could not be set off against the tax on final bill. This facility, called input tax credit (ITC), is available in the Goods and Services Tax (GST) regime.

“Most of the restaurants should revise downward the rate charged on food items in their menu because of ITC which is now available. So ITC should be accounted for now in form of reduction in the value of supplies which they are giving,” Adhia said in GST Master Class.

Under the GST regime, while non-airconditioned restaurants attract 12 per cent tax, AC restaurants and those serving liquor will attract 18 per cent.

Adhia further said that anything that is served as part of restaurant bill will be subject to GST, barring alcohol on which Value Added Tax (VAT) will be levied.

“On the entire value of food bill, including service charge, on that portion also GST will apply,” he said.

Adhia further said that the tax department has received representation for transition provision of lease service industry. As per the GST provisions, ITC will not be available for central excise already paid on cars which are on lease.

“There are a lot of representations on this about transition for lease service industry. We are looking at the representation but we are not sure how to handle this,” Adhia said.

Source : Business Standard

Businesses opting for low-tax composition scheme will have to declare so : 12-07-2017


Eateries and shops that opt for the low-tax composition scheme will have to prominently display a board stating this and can’t charge goods and services tax (GST) from customers. Small establishments in the Rs 20 lakh to Rs 75 lakh annual turnover range are eligible for composition scheme.

“They will need to upfront state that they are under the composition levy… They will not charge GST from customers,” said a government official.

Composition scheme norms specify that the entity has to mention the words ‘composition taxable person, not eligible to collect tax on supplies’ at the top of the bill of supply. ‘Composition taxable person’ has to be displayed prominently at all places of business.

“Since composition dealers are not allowed to collect GST from the customers, a display is needed for consumer’s information and protection,” said Pratik Jain, leader, indirect tax, PwC. “In the case of a normal dealer, GST has to be mentioned on the invoice along with applicable HSN (Harmonized System Nomenclature) codes.”

The scheme for small traders, manufacturers and restaurants allows for a low, flat GST levy. Also, they don’t need to maintain extensive documentation.

Those with a turnover from Rs 20 lakh to Rs 75 lakh-Rs 50 lakh in the case of special category states–can pay tax at a prescribed percentage of turnover every quarter instead of normal GST rates every three months. Businesses with a turnover up to Rs 20 lakh are exempt under GST. Those opting for the composition scheme won’t be eligible for input tax credit.

Under the scheme, manufacturers need to pay 2 per cent of turnover (1 per cent central tax and 1 per cent state tax), traders need to pay 1 per cent (0.5 per cent central tax and 0.5 per cent state tax) while restaurants face 5 per cent tax (2.5 per cent central and 2.5 per cent state tax). The composition levy saves small entities the hassle of audits and maintenance of books. The scheme is not open to those who deal in ice cream, pan masala and tobacco products. In services, only restaurants have the option.

ET View: Boost For Consumers

Transparency in the pricing of a product makes eminent sense as a measure of consumer protection. Dealers under the composition scheme do not pay GST .

They do not have to maintain detailed records as a normal tax payer , and are also not eligible to claim credit on the taxes paid on inputs in the production chain. But the need is to ensure that dealers do not face undue harassment from tax authorities. There should be no inspector raj.

Source : Economic Times

Commercial rental income beyond Rs 20 lakh to attract GST, says Hasmukh Adhia : 11-07-2017


Rental income from residential property has been exempt from GST but any earning over Rs 20 lakh annually from renting or leasing for commercial purposes would attract the levy.

Revenue Secretary Hasmukh Adhia said that if the house property is rent out for shop or office purpose, no Goods and Service Tax (GST) will be levied up to Rs 20 lakh.

“Rental income received from residential house is exempt. But if you have given your unit to commercial enterprise, then it is taxable if you are getting more than Rs 20 lakh as rent,” Adhia said at the GST Master Class.

The taxpayer earning more than the exempted threshold will have to register with the GST Network and pay taxes.

GSTN Chief Executive Prakash Kumar said that as many as 69.32 lakh registered excise, service tax and VAT payers have migrated to the GSTN portal. There are over 80 lakh such assessees in the earlier indirect taxation regime.

Out of the 69.32 lakh, as many as 38.51 lakh have completed the entire registration process and registration certicate is being issued to them.

The remaining 30.8 lakh taxpayers are being sent SMS and emails by GSTN so that they complete the registration process by giving the details of the business like main place of business, additional place of business, promoters details.

Adhia further said that the facility to amend the details of businesses provided to the GSTN portal at the time of registration will open on July 17. Also, registration for GST practioners will open on the same day.

Besides, cancellation of registration can be done online.

Source : Financial Ecpress

No GST on gifts worth up to Rs 50k from employer: Finmin : 11-07-2017


The government on Monday said gifts up to Rs 50,000 per year by an employer to his employee will be outside the ambit of the goods and services tax (GST) while free membership of a club, health or fitness center will not come under the new tax regime.

The finance ministry also said free housing to employees, when it is provided in terms of the contract between the employer and employee and is part of the cost-to-company will not be subject to GST.

“It is being reported that gifts and perquisites supplied by companies to their employees will be taxed under GST. However, gifts of value more than Rs 50,000 made without consideration are subject to GST, when made in the course or furtherance of business,“ the finance ministry said in a statement.

Stating that gift has not been defined in the GST law, the ministry said in common parlance, the gift is made without consideration, is voluntary in nature and is made occasionally. “It cannot be demanded as a matter of right by the employee and the employee cannot move a court of law for obtaining a gift,“ it said. On the issue of taxation of perks, the ministry said services by an employee to the employer in the course of or in relation to his employment is outside the scope of GST (neither supply of goods or supply of services).

“It follows therefrom that supply by the employer to the employee in terms of the contractual agreement entered into between the employer and the employee, will not be subjected to GST,“ the statement clarified.

It also said that the input tax credit (ITC) scheme under GST does not allow ITC of membership of a club, health and fitness center. “It follows, therefore, that if such services are provided free of charge to all employees by the employer then the same will not be subject to GST, provided appropriate GST was paid when procured by the employer,“ the statement added.

Experts said the clarification by the Ministry puts several issues at rest that the industry was worried about.

It has been clarified that anything done by the employer for an employee in terms of the employment contract will not be subject to GST. These should include benefits offered in terms of providing cars for official use, free meals, gym and such other amenities provided to employees as part of an employment contract.

Therefore, GST will have to pay only in the exceptional situation where gifts are given on voluntary basis, such as Diwali gifts to employees and that too if the value is more than Rs 50,000,“ said Pratik Jain, partner and leader indirect tax at consultancy firm PwC India.

Source : Times Of India

Centre assessing bureaucrats on integrity and reputation : 11-07-2017


India has put in place a comprehensive policy on promoting bureaucrats that goes way beyond the annual confidential report and takes into consideration factors such as integrity, reputation and ability to work hard.

This is the first time that officers are being assessed on such parameters before being promoted as secretaries or additional secretaries, senior officials told ET, describing the initiative as one of the most important administrative reforms at the Centre.

A group of five retired secretaries picked by the Prime Minister’s Office in 2014, after the Narendra Modi government took office, shaped the policy which evaluates bureaucrats on seven parameters including leadership, effectiveness in delivery, domain understanding and administrative skills.

“So the integrity of a bureaucrat and his or her general reputation as someone not prone to taking bribes or commissions or circumventing administrative processes to suit corporate groups or vested interests is being taken most seriously,” said one of the officials, who did not wish to be identified. The new system of evaluating bureaucrats is based on a lot of analysis and research.

“We studied the best practices in private sector companies, and administration in several countries and international organisations to structure the system here,” the official said. Earlier, the government used to consider the Central Vigilance Commission report as the basis for assessing candidates’ integrity. But the CVC could not ascertain a bureaucrat’s involvement in a case of corruption or impropriety unless it was in the records.

“Most bureaucrats are good at administrative record-keeping and hence escape processes that can get them into trouble later,” another official said. “But reputation is something that travels far and wide, and now we insist on evaluating a person on his past and present activities, many of which don’t make it to records.”

Under the new system, senior and junior colleagues of a bureaucrat being evaluated are asked questions about the bureaucrat’s general reputation. They are asked some specific questions about the general reputation and integrity of the person based on their information on the background of the bureaucrat, to which they can choose among “I strongly agree”, “I don’t agree completely” or “I strongly disagree”.

The intention is to reach as close to the truth as possible, according to senior officials, who said that a lot of psychometric and psychological research findings have gone into framing the questions.

This is a far cry from accepting the annual confidential report or ACR as the primary basis for promoting bureaucrats. Earlier, ACRs were given by “reporting, reviewing and accepting” officials who used to rank officers ‘poor’, ‘average’, ‘good’, ‘very good’ or ‘outstanding’, and more recently, on a ten-point scale.

A court order had mandated that the evaluated officers be shown their results, after which it became a norm for most officials to give outstanding ranks to the officers. “After this, there was no honest assessment as nobody wanted to displease the junior person openly… 90% of ACRs were outstanding. Also, the system was fully tilted towards bureaucrats who pleased the bosses. Now the evaluation goes beyond ACR to general reputation build over years,” an official said.

The checks don’t stop with this expert committee, though, and the candidates are further scrutinised by a Cabinet secretary-led team of senior officials. The five-member group of retired secretaries started evaluating the bureaucrats under the new system for the first time in 2015. In addition to charting out a plan to evaluate bureaucrats more holistically, it looked at what some of those in charge of framing the process saw as “unnecessary traditions”.

“The UPA government had made it a rule to appoint officers just short of 60 as secretaries of home and defence by giving an extension of two years only to reward some favourite officers,” a senior official said.

“This was started only to suit some of the officers they wanted to utilise for their purpose. We think if we have good younger officers fit for these positions, we should let them take charge.” Recently, senior bureaucrat Sanjay Mitra was appointed as the defence secretary and Rajiv Gauba the home secretary under the new system. Both belong to the 1982 batch of IAS and they will have more than two years before superannuation.

Source : Economic Times

E-way bill system in GST to come from October : 10-07-2017


The GST provision, requiring any good more than Rs 50,000 in value to be pre-registered online before it can be moved, is likely to kick in from October after a centralised software platform is ready, a top official said.

The provision, called the e-way bill, would be implemented after infrastructure for smooth generation of registration and its verification through hand-held devices with tax officials is ready.

The information technology platform for the e-way bill system is being developed by the National Informatics Centre (NIC) along with GST-Network — the company which has developed the IT backbone for the new indirect tax regime.

The Centre has also decided to relax the timeline provision under which the e-way bill generated by GSTN for 20 days for goods travelling more than 1,000 km. Earlier, this was 15 days.

As per the provision, GSTN would generate e-way bills that will be valid for 1-20 days, depending on the distance to be travelled — one day for 100 km, 3 days (100 to less than 300 km), 5 days (300-less than 500 km) and 10 days (500-less than 1,000 km).

The GST Commissioner may extend the validity period of the e-way bill for certain categories of goods.

“We hope the e-way bill can be implemented in three months time as by then, we hope to develop the infrastructure for the consolidated e-way bill,” a top official said.

Although the Goods and Services Tax (GST) has been rolled out from July 1, a centralised e-way bill could not be implemented as the rules and forms were not ready .

“The e-way bill rules may be taken up at the next meeting of the GST Council on August 5. After the rules are in place, the NIC and GSTN would develop an all-India platform for a consolidated system,” another official said.

Since states like West Bengal, Kerala, Bihar, Odisha and Andhra Pradesh already had a robust e-way bill system, the GST Council in its meeting last month has allowed the states having e-way bill rules to continue with the existing form till a central format is built.

Originally, GSTN was to develop the e-way bill platform, but last month only the GST Council decided to rope in NIC to develop it since it was felt that in the initial days of GST roll out, GSTN would be busy with other works like solving issues like registration and invoice generation.

The draft e-way bill rules, which was made public in April, provide that the person-in-charge of conveyance will be required to carry the invoice or bill of supply or delivery challan, and a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device (RFID) embedded onto the conveyance.

The rules authorise the tax commissioner or an officer empowered by him on his behalf to intercept any conveyance to verify the e-way bill or the number in physical form for all interstate and intra-state movement of goods.

Physical verification of conveyances can be carried out on specific information of evasion of tax, as per the rules.

The officer will be required to submit a summary report of every inspection of goods in transit within 24 hours and the final report within three days of inspection.

Source : Financial Express

Claim Income Tax Refund: How to file income tax return for tax refunds and what precautions to take : 10-07-2017


Sometimes an individual ends up paying more tax to the government than his/her actual tax liability. In such a scenario the individual becomes eligible for a tax refund. The government allows individuals to claim income tax refund while filing income tax return. An individual should make a point to understand the whole process in order to claim his/her tax refund from the tax authorities.

Having said so, there are several situations where a person becomes eligible for the same:

# If the taxpayer has paid more tax as self-assessment, but he is liable to pay less tax through regular assessment.

# If TDS (Tax Deducted at Source) deducted by bank or employer of the taxpayer is more than latter’s tax liability through regular assessment.

# Though taxes have been deducted at source on some of the income, it may be exempt or taxable at a lower rate under DTAA –Double Taxation Avoidance Agreement.

# If the taxpayer had not declared some investments or expenses to his employer which provides tax benefits to him.

You can claim tax refund while filing your return of income. The due date for which is approaching on 31st of July, 2017. Once you are done with your refund claim, you can see it in the Income Tax Return filed by you. After filling up the relevant ITR form, click on the calculate tax button. The system will automatically calculate the refund due to you or taxes payable by you on the basis of the data provided by you. If you are eligible for a refund, your refund amount will reflect in the ‘Refund’ row. In the next step, you have to e-file your tax return and verify it.

After you are done with filing and verification of your ITR, the IT department will process the return and verify your claims. Following this, an intimation under Section 143(1) will be sent to you basis the outcome of the processing. Possible intimation can be any one of the following:

# Your tax calculation matches that of the tax department. Hence no further tax is payable by you.

# Your tax calculation does not match that of the tax department. Hence you are liable to pay additional tax i.e. tax demand. Or, your refund claim is either rejected or accepted partially.

# Your tax calculation matches that of the tax department, and they have accepted the refund claim, in such a case the amount of refund payable is stated in the intimation.

For online returns, the intimation is sent through email. Also, an SMS is sent on the registered mobile number of the assessee stating that his/her ITR has been processed.

You can track your refund status by logging to the income tax e-filing website and clicking on the Refund/Demand Status under the ‘My Account’ tab. Also, you can visit the website http://tin.tin.nsdl.com. Then, once you enter your PAN and relevant Assessment Year, you can see your refund status. The tax refund will be paid either through direct credit to your bank account or by cheque.

It is equally important that you exercise the following precautions while filing ITR:

# You should ensure that you enter the correct bank details, such as IFSC code, bank account number, MICR code, etc.

# Take care not to commit any error while quoting your Permanent Account Number (PAN).

# Communication address should be correct because all the notices and other communication from the tax authorities will be posted to this address. Even a slight mistake on your behalf may lead to delay in credit of tax refund or omission of the refund altogether.

# Do ensure that you mention the correct TAN (Tax Deduction and Collection Account Number) of the employer or other deductors and TDS amount deducted by them in your income tax return.

# Details as mentioned in Form 16 should match with your Tax Credit Statement (Form 26AS).

# Mention all the deductions claimed on your investment under Section 80C and others so that you receive the right amount of refund in your account.

It is advisable if you file your return early. For the simple reason, that early filing will lead to early refund process. Another advantage of early filing of return is that you will not miss out on the interest on the refund amount.

(The author is Head of Tax Research, H&R Block India)

Source : Financial Express

GST intelligence agency gets new chief : 10-07-2017


A key intelligence agency tasked with checking evasion of Goods and Services Tax (GST) has got its new chief.

Senior bureaucrat John Joseph has been appointed Director General of Goods and Services Tax Intelligence (DG GSTI), as per an official order.

He is at present posted in Mumbai and expected to take the new charge soon.

Joseph, a 1983 batch officer of Indian Revenue Service (Customs and Central Excise), has worked in the Finance Ministry’s important departments, including the Directorate of Revenue Intelligence (DRI).

The DG GSTI is the new name given to the Directorate General of Central Excise Intelligence (DGCEI), mandated to check service tax and central excise duty evasion.

The post of chief of central excise intelligence (now GST intelligence) was lying vacant for over a month after R K Mahajan took charge as Member, Central Board of Excise and Customs (CBEC). Mahajan has been given the additional charge of the DG GSTI till the joining of the new chief.

The DRI, the premier agency to check smuggling and black money, has also got its new chief.

Debi Prasad Dash, a 1985 batch officer of IRS (Customs and Central Excise), has taken over as the Director General of the DRI.

Dash was the acting head of the DRI for the past five months.

He has earlier worked in the UN Security Council, New York, Commonwealth Secretariat, London and in the CBI.

He is a recipient of the president’s award for specially distinguished record of service and a merit award from the World Customs Organisation (WCO).

Dash was appointed by the UN Secretary General as the head of the International Panel of Experts of the UN Security Council, monitoring arms embargo, travel ban and financial sanctions in Africa and was a member of the Interpol working group on money laundering and financing of terrorism.

Source : Economic Times

Notification No. SO 2214(E) [F.NO.F.2/250/2006-SEZ], 7-7-2017


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – SUZLON INFRASTRUCTURE LTD.

NOTIFICATION NO. SO 2214(E) [F.NO.F.2/250/2006-SEZ]DATED 7-7-2017

Whereas, M/s. Suzlon Infrastructure Limited, a private organization in the State of Tamil Nadu, had proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act) to set up a sector specific Special Economic Zone for High Tech Engineering sector at Kittampalayam and Karumathampatti Village, Palladam Taluk, Coimbatore District in the State of Tamil Nadu;

AND, WHEREAS, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the said Act read with rule 8 of the Special Economic Zones Rules 2006, had notified and de-notified the following areas at above Special Economic Zone as per the details are given below :—

S. No. Notification No. Date Notified Area in Hectares De-notified Area in Hectares Total Area in Hectares
(i) S.O. 1387(E) 10th August 2007 104.60.4 - -
(ii) S.O. 2003(E) 28th November 2007 46.94.1 - 151.54.5
(iii) S.O. 1996(E) 7th August 2008 0.94.3 - 152.488
(iv) S.O. 4160(E) 20th December 2016 - 65.7775 86.7105

And, Whereas, The Central Government, Further Approved The Request Of Change Of Name From M/S. Suzlon Infrastructure Limited To M/S. Synefra Engineering And Construction Ltd Vide Letter Dated 7th September 2009;

And, Whereas, The Central Government, Also Approved The Request Of Change Of Name From M/S. Synefra Engineering And Construction Ltd To M/S Aspen Infrastructures Ltd Vide Letter Dated 12th August 2014;

And, Whereas, M/S Aspen Infrastructures Ltd SEZ Has Now Proposed For De-Notification Of 2.2338 Hectares At The Above Special Economic Zone;

And, Whereas, The State Government Of Tamil Nadu Has Given Its Approval To The Proposal Vide Letter No. 8333/MIE.2/2016-5, Dated 18th May, 2017;

And, Whereas, the Development Commissioner, MEPZ Special Economic Zone has recommended the proposal for de-notification of an area of 2.2338 hectares of the Special Economic Zone;

Now, Whereas, the Central Government is satisfied that the requirements under subsection (8) of section 3 of the said Act and other related requirements are fulfilled;

Now, Therefore, in exercise of the powers conferred by second proviso to sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government hereby de-notifies an area of 2.2338 hectares, thereby making resultant area as 84.4767 hectares, comprising the survey numbers and the area given below in the table, namely:—

TABLE

S. No. Survey No. Sub division Name of Village Proposed denotified area in hectares
1. 91 B Kittampalayam 0.0515
2. 93 1 Kittampalayam 0.1742
3. 94 3 Kittampalayam 0.0695
4. 95 1A Kittampalayam 0.3042
5. 104 2P Kittampalayam 0.0134
6. 104 2P Kittampalayam 0.0545
7. 96 1(P) Kittampalayam 0.0902
8. 880 1 Karumathampatti 0.0818
9. 880 2 Karumathampatti 0.0814
10. 877 1B Karumathampatti 0.2970
11. 881 2 Karumathampatti 0.0374
12. 881 1(P) Karumathampatti 0.0156
13. 881 3(P) Karumathampatti 0.1610
14. 881 4 Karumathampatti 0.0092
15. 879 1 Karumathampatti 0.1815
16. 885 2(P) Karumathampatti 0.1286
17. 881 1(P) Karumathampatti 0.1530
18. 881 3 Karumathampatti 0.0515
19. 780 2 Karumathampatti 0.1254
20. 780 3 Karumathampatti 0.1154
21. 881 2(P) Karumathampatti 0.0375
22. Total 2.2338
23. Grand total area after above deletion 84.4767 

Notification No. SO 2213(E) [F.NO.F.1/5/2014-SEZ], 7-7-2017


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – WIPRO LTD.

NOTIFICATION NO. SO 2213(E) [F.NO.F.1/5/2014-SEZ]DATED 7-7-2017

Whereas, M/s. Wipro Limited has proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act), to set up a Sector Specific Special Economic Zone for IT/ITES at Resapuvanipalem Village, Old TB Hospital Area, Visakhapatnam, in the State of Andhra Pradesh;

And, Whereas, the Central Government is satisfied that requirements under sub-section (8) of section 3 of the said Act, and other related requirements are fulfilled and it has granted letter of approval under sub-section (10) of section 3 of the said Act for development, operation and maintenance of the above sector specific Special Economic Zone on 21st December, 2015 and 30th March, 2017;

Now, Therefore, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, hereby notifies the 2.89 hectares (7.14 acres) area at above location with survey number given in the table below as a Special Economic Zone, namely:—

TABLE

S.No. Name of Village Survey No. Area (in hectares) Area (in Acres)
1. Resapuvanipalem, Old TB Hospital Area 39 2.89 7.14
Total 2.89 7.14

AND, THEREFORE, the Central Government, in exercise of the powers conferred by sub-section (1) of section 13 of the Special Economic Zones Act, 2005 (28 of 2005), hereby constitutes a Committee to be called the Approval Committee for the above Special Economic Zone for the purposes of section 14 of the said Act consisting of the following Chairperson and Members, namely:—

1. Development Commissioner of the Special Economic Zone Chairperson ex officio;
2. Director or Deputy Secretary to the Government of India, Ministry of Commerce and Industry, Department of Commerce or his nominee not below the rank of Under Secretary to the Government of India Member ex officio;
3. Zonal Joint Director General of Foreign Trade having territorial jurisdiction over the Special Economic Zone Member ex officio;
4. Commissioner of Customs or Central Excise having territorial jurisdiction over the Special Economic Zone or his nominee not below the rank of Joint Commissioner Member ex officio;
5. Commissioner of Income Tax having territorial jurisdiction over the Special Economic Zone or his nominee not below the rank of Joint Commissioner Member ex officio;
6. Director (Banking) in the Ministry of Finance, Banking Division, Government of India Member ex officio;
7. Two officers, not below the rank of Joint Secretary, to be nominated by the State Government Member ex officio;
8. Representative of the Developer of the zone Special invitee

And, Therefore, the Central Government, in exercise of the powers conferred by sub-section (2) of section 53 of the Special Economic Zones Act, 2005 (28 of 2005), hereby appoints the 7th day of July, 2017 as the date from which the above Special Economic Zone shall be deemed to be Inland Container Depot under section 7 of the Customs Act, 1962 (52 of 1962).

 

Sebi bats for at least one independent woman director on boards : 07-07-2017


The Securities and Exchange Board of India (Sebi) is in favour of having at least one woman as independent director (ID) on the board of listed companies, said two people in the know, including a senior Sebi official.

According to the Companies Act, 2013, all listed companies need to have at least one woman as a director on their board. While most companies have fulfilled this, some have done so by inducting family members of the promoters. And, women on India Inc boards are still low in number.

“The thinking within Sebi is that there should be at least a fifth of women on the boards of listed companies in the next three years. To achieve this, the regulator plans to make a recommendation to the ministry of corporate affairs of making one independent woman director mandatory,” said a person with knowledge of the development, asking not to be named. The person said the recommendation could be made after a newly set-up committee on corporate governance gave its report. The committee has had two meetings so far and, among other things, is looking at the issue of women as directors, the person added.

“The idea is to bring diversity on the board. It doesn’t matter if they are independent or nominee directors, as long as they are not just a symbolic appointment. Ideally, the women director count should reflect their representation in our overall population,” says Shriram Subramanian, founder and managing director at InGovern Research, a corporate governance entity.

At an event earlier this week, Ajay Tyagi, who recently became chairman of Sebi, stressed the importance of IDs. He said as most companies in India were promoter-driven, the selection procedure for IDs needed a re-look.

“In listed companies, the whole discipline is through audit committees and IDs, broadly. There is a need for improvement,” he said.

Source : PTI

women employees

Back Tax defaulters beware: I-T dept initiates plan to prosecute serial dodgers : 07-07-2017


Seeking to send a stern message, the income tax (I-T) department has initiated a plan to take strident action against tax evaders. This is to ensure they are prosecuted without requiring the assessment to get over.

This follows an action plan drawn up by the Central Board of Direct Taxes (CBDT) where an aggressive strategy was outlined to nab tax dodgers. The CBDT had circulated a strategy paper for the investigation team of the I-T wing, saying the taxman should prosecute tax evaders in large numbers to create a credible deterrence against the black money menace.

“Filing of prosecution complaints in cases where evidence is strong does not require completion of tax assessment,” the department said in its action plan prepared for FY18.

“The department has tweaked its strategy from just raising tax demand to going the extra mile of taking them to courts,” said a senior tax official with direct knowledge of the plan.

 Typically, the tax department launches a prosecution or charge sheets tax evaders under Section 276CC of the I-T Act after arriving at a decision post-tax assessment whether a particular case is fit for prosecution.

 Section 276CC provides for prosecution and makes tax evasion punishable with rigorous imprisonment of three months to seven years along with a monetary penalty depending on the amount dodged. “When a person is found to have committed offences under the said sections and there is evidence to prove he has wilfully done so, the assessing officer can file a complaint. According to the new plan of action, a prosecution can be initiated soon after a search is conducted or the following day,” said another tax official.

 “There have been chronic tax evaders who under-report their income, fudge accounts to hide their source of income, falsify statements, or disappear after being slapped with a tax demand notice to circumvent payments. A tough action plan was, therefore, needed,” the official added.

 The tax department is also addressing another important area of tax subterfuge that takes place via benami transactions. The action plan emphasised on ways to investigate benami transactions under the newly enforced Benami Transactions Act.

 The CBDT had asked the I-T wing to identify, examine and take prompt action against violators, and had also set a target and timeline to inspect and wind up the matter.

 The tax department will have to finalise benami cases for FY14, FY15 and FY16 by the end of this month, and the remaining by March 2018. Moreover, tax officials were also given directives to dispose suspicious transaction reports they receive from banks and other Intelligence units.

 According to the plan, the tax department has to first dispose of those investigations resulting in a detection of undisclosed income of Rs 100 crore and above, and to finalise them by December. In its action plan, the CBDT also revised the target of searches and seizures by tax officials.

 The new diktat said officials at the level of additional directorate would need to conduct at least two searches and seizures every week.

 According to official figures, the I-T department conducted over 1,000 searches and surveys during the last financial year, and slapped close to 100 prosecution complaints against serial tax evaders during this period.

 ACTION PLAN FOR FY18

 I-T cracks the whip on tax evaders

 Tax authorities prepare action plan against tax evaders To launch prosecution after searches in case of “strong evidence”At present, prosecution doesn’t start till tax assessment is doneRigorous imprisonment along with fine under Section 276CC of the I-T ActTo take prompt action in benami transaction cases by March 2018To conclude benami examination for FY14, FY15 and FY16 by JulyQuick disposal of suspicious transaction report (STR) flagged by banks and other Intelligence unit STRs of Rs 100 crore and above to be concluded by December

Source : Financial Express

How a single clause in GST shows the Indian state at its worst : 07-07-2017


Checking out of a hotel in the southern Indian state of Kerala this week took so long that I almost missed my flight. It wasn’t the hotel staff’s fault; their work, temporarily, had been doubled. As a polite note in my room reminded me when I checked in, they would have to present two invoices to me when I left — one for the days prior to July 1, and one for the days after. For at midnight on July 1, India migrated to a new, more comprehensive indirect tax regime, known as the goods and  services tax or GST.

The scenes of chaos at my hotel’s reception will have been repeated, to a greater or smaller degree, in countless shops and establishments across India. The transition to the GST — which aims to unite multiple federal and state indirect taxes into a single system — isn’t likely to be easy. That the government has rushed into it will only exacerbate the pain.

That said, the GST is a major step forward, one of the few real efforts in recent years to reform the Indian economy. The transition might be chaotic and the current GST itself may fall well short of what it should be. Nevertheless, it represents the hope that India will, in its own muddling way, continue in its efforts to build a modern, competitive economy. And these efforts depend crucially, as with the GST, on reforming the Indian state.

Does the passage of GST mean that such reforms are more or less likely now? Well there’s some good news, some bad news and some pretty appalling news.

First, the good news: It seems the government at least recognizes that the Indian state is — in the words of Harvard political scientist Lant Pritchett — “flailing.” The central idea behind the GST is to privatize tax enforcement. This is not in fact as shocking as it sounds. Now, if you have to pay indirect taxes, you will only receive tax credits for your inputs if your supplier has also paid his or her share of taxes. Over time, it’s hoped, this will mean that larger businesses will pressure their smaller suppliers to enter the tax net.

I’ve already heard multiple stories from executives in larger businesses about how they’ve struggled to educate their suppliers about the GST. Some online shopping portals have had to remove suppliers that didn’t seem ready to comply with the new rules. Bureaucrats hope that this kind of pressure will succeed where enforcement has failed: It should create an incentive for small and medium-sized enterprises to sign up as GST payers. If they don’t, they could lose business rapidly. While this will make life more difficult for companies, the logic is at least grounded in an incentives-based view of the world. It’s worth a shot.

But it’s too soon to claim that Indian policymakers have suddenly become more realistic about the state. Here’s the bad news: The introduction of the GST doesn’t necessarily mean that tax administration — currently split up between various state agencies and the central government — will be reformed or unified. Indeed, the need to placate civil servant lobbies is one reason why the final GST falls so short of what it should be. Banks, for example, are expected to register for the “single” tax in each state rather than centrally.

Think about this for a moment: A new tax regime that is supposed to make businesses more competitive insists that additional profits should be passed on, regardless of demand and supply conditions. The government says that it doesn’t intend this clause to be used, that it will be temporary and that it’s meant only a “deterrent.” Yet which bureaucrat is going to resist the opportunity to make an example of companies? The “examples” chosen will be, in and of themselves, arbitrary — and who can believe that there will be no bribery and corruption involved in the choice? How will the facts of any case be determined without confidential information about costs and so forth being turned over to the authorities — and what are the chances that that information will remain confidential?

This sort of clause shows the Indian state at its worst: It is, in fact, one of the most intrusive rules introduced in the decades since liberalization. The GST is a big reform. Whether it signals that India’s leaders now have the instincts of reformers is another thing entirely.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Source: Economic Times

Notification No.60/2017 06-07-2017


Corrigendum Notification No. 58/2017 dated the 3rd July, 2017 – 60/2017 – Dated 6-7-2017 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

Notification No. 60/2017

CORRIGENDUM

New Delhi, the 6th July, 2017

INCOME-TAX

G.S.R. 841(E).-In the notification of the Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes), number 58/2017, dated the 3rd July, 2017, published vide number G.S.R. 821(E) dated the 3rd July, 2017, in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), at page 4,-

(i) in clause (d), in sub-clause (i),-

for “name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;” read as “name, address and Permanent Account Number (if available with the assessee) of the payer;”

(ii) in clause (e), in sub-clause (i),–

for “name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;” read as “name, address and Permanent Account Number (if available with the assessee) of the payer;”

[F. No. 370142/10/2017–TPL]

SALIL MISHRA, Director (Tax Policy & Legislation)

More than half of people in India not aware of GST: Survey : 06-07-2017


More than half of people in the country are unaware of the Goods and Services Tax, a survey by a mobile news application company has claimed.

The survey of over 3.6 lakh people across the country found that two Telugu speaking states of Andhra Pradesh and Telangana have the highest awareness on the GST with over 64 per cent of population knowing about it.

People in Tamil Nadu have the lowest awareness level, the survey by Way2Online found.

“Following an extensive research, the report concludes that less than half the population of India; 45 per cent to be precise, is aware of the new tax system. The remaining 55 per cent is unaware of what GST is,” Way2Online said in a statement.

Way2Online, a local language short news application, conducted this survey between June 26-30 with over 3,60,000 participants across the country.

The new tax regime, which became effective from July 1, aims to put an end to number of indirect taxes levied on goods and services and stop duplication of taxes over a product.

The new regime taxes various goods and services at 5, 12, 18 and 28 per cent, while keeping essential commodities out.

“Interestingly, even though many are aware about the GST in Telugu speaking States, majority is of the opinion that the change in the tax system is not a good news to them. Our survey showed that only 42 per cent of Telugites are convinced that GST is beneficial and the other 58 per cent responded with either ‘Not Beneficial’ or ‘Have No Idea’ about its pros and cons,” the statement said.

The survey found that 59 per cent of the urban audience know about GST but still 60 per cent of them think that the new tax regime would not make their lives better and 80 per cent assume that there will be a spike in prices or have no idea about its implications.

The survey found that 59 per cent of the urban audience know about GST but still 60 per cent of them think that the new tax regime would not make their lives better and 80 per cent assume that there will be a spike in prices or have no idea about its implications.

Source : PTI

Home ministry gives security clearance to GSTN : 06-07-2017


The home ministry has given security clearance to the GSTN, the information technology backbone of the Goods and Services Tax regime, paving the way for its operationalisation soon. Security clearance to the Goods and Services Tax Network (GSTN), a not-for-profit private limited company, was delayed as the home ministry was examining threat perception to national security from any of the stakeholders, a ministry official said. The Goods and Services Tax (GST), which replaces a host of taxes levied by the central and state governments, has come into force from July 1. In the GSTN, five private institutions have 51 per cent equity — HDFC Bank Ltd (10 per cent), HDFC Ltd (10 per cent), ICICI Bank Ltd (10 per cent), NSE Strategic Investment Corporation Ltd (10 per cent) and LIC Housing FinanceLimited (11 per cent).The central government has 24.5 per cent equity in the GSTN, whereas state governments, two Union territories and the empowered committee of state finance ministers together hold another 24.5 per cent stake in it. The procedure for granting security clearance to the GSTN involved background checking of its office-bearers and others concerned.The GSTN has been working overtime to ensure a smooth registration, and all the tax assessees have been given a provisional ID, using which they can start transacting business with the implementation of the GST.

When a business entity registers under GST, it is given a provisional GSTIN. After that, in the second stage, the entity has to log in to the GSTN portal and give details of its business such as the main place of business, additional place, directors and bank account details. BJP MP Subramanian Swamy had earlier opposed the majority stake for private entities in the GSTN and written to Prime Minister Narendra Modi in this regard.

Source : PTI

New window will defeat demonetisation reform, government likely to tell Supreme Court : 06-07-2017


While the Centre will “respectfully consider” the Supreme Court’s observation that the government and RBI provide another window for exchanging demonetised Rs 1,000 and Rs 500 currency notes, it will also tell the court that opening such a window “may defeat the purpose” of a radical reform like demonetisation.

Senior officials familiar with the government’s thinking on the matter told ET that opening another window for exchanging old notes may lead to “many abuses” of the facility.

“But if a facility for exchanging old currency is opened, high-denomination notes outside the country will come back,” a senior official said. “We share open borders with countries such as Nepal and Bhutan. There is a likelihood that a lot of currency will make its way back into the system… this will ruin the purpose of demonetisation. We will inform the Supreme Court of this and seek its advice,” he added.

 

New window will defeat demonetisation reform, government likely to tell Supreme Court

Officials also said demonetisation has had a “tremendous impact” on curbing funding of terrorism and Naxalite operations, and another window may also lead to “such elements” exploiting the facility.

SC on Tuesday asked the government and RBI to consider another note exchange window. The government is likely to reply on July 18, the next date of hearing.

“With due respect to the Supreme Court’s order, we would want to say that we have done everything to make it possible for people to exchange notes. We would want to list everything that we have done to facilitate the process and reduce the difficulty people faced. Any more exemptions will lead to dirtying a system that was cleaned up after much effort,” another official said.

Source : Economic Times

 

Notification No. SO 2178(E) [F.NO.F.1/17/2016-SEZ], 5-7-2017


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – PHOENIX LIVING SPACES PVT. LTD.

NOTIFICATION NO. SO 2178(E) [F.NO.F.1/17/2016-SEZ], DATED 5-7-2017

WHEREAS, M/s. Phoenix Living Spaces Private Limited has proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act), to set up a Sector Specific Special Economic Zone for IT/ITES at Ameenpur Village, Patancheru Mandal, Medak District, in the State of Telangana;

AND, WHEREAS, the Central Government is satisfied that requirements under sub-section (8) of section 3 of the said Act, and other related requirements are fulfilled and it has granted letter of approval under sub-section (10) of section 3 of the said Act for development, operation and maintenance of the above sector specific Special Economic Zone on 07th December, 2016;

NOW, THEREFORE, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, hereby notifies the 4.05 hectares (10 acres) area at above location with survey number given in the table below as a Special Economic Zone, namely:

TABLE

S. No. Name of Village Survey No. Area (in hectares) Area (in Acres)
1. Ameenpur 343/8 & 343/9 4.05 10
Total 4.05 10

AND, THEREFORE, the Central Government, in exercise of the powers conferred by sub-section (1) of section 13 of the Special Economic Zones Act, 2005 (28 of 2005), hereby constitutes a Committee to be called the Approval Committee for the above Special Economic Zone for the purposes of section 14 of the said Act consisting of the following Chairperson and Members, namely:—

1. Development Commissioner of the Special Economic Zone Chairperson ex officio;
2. Director or Deputy Secretary to the Government of India, Ministry of Commerce and Industry, Department of Commerce or his nominee not below the rank of Under Secretary to the Government of India Member ex officio;
3. Zonal Joint Director General of Foreign Trade having territorial jurisdiction over the Special Economic Zone Member ex officio;
4. Commissioner of Customs or Central Excise having territorial jurisdiction over the Special Economic Zone or his nominee not below the rank of Joint Commissioner Member ex officio;
5. Commissioner of Income Tax having territorial jurisdiction over the Special Economic Zone or his nominee not below the rank of Joint Commissioner Member ex officio;
6. Director (Banking) in the Ministry of Finance, Banking Division, Government of India Member ex officio;
7. Two officers, not below the rank of Joint Secretary, to be nominated by the State Government Member ex officio;
8. Representative of the Developer of the zone Special invitee

AND, THEREFORE, the Central Government, in exercise of the powers conferred by sub-section (2) of section 53 of the Special Economic Zones Act, 2005 (28 of 2005), hereby appoints the 5th day of July, 2017 as the date from which the above Special Economic Zone shall be deemed to be Inland Container Depot under section 7 of the Customs Act, 1962 (52 of 1962).

 

Notification No. SO 2177(E) [F.NO.F.1/17/2011-SEZ] , 5-7-2017


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – KAKINADA SEZ PRIVATE LTD.

NOTIFICATION NO. SO 2177(E) [F.NO.F.1/17/2011-SEZ] , DATED 5-7-2017

Whereas, M/s. Kakinada SEZ Private Limited, had proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act) to set up a Multi Product Special Economic Zone at Ponnada, Mulapeta, Ramanakkapeta Villages in Kakinada, East Godavari District, in the State of Andhra Pradesh;

AND, WHEREAS, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the said Act read with rule 8 of the Special Economic Zones Rules 2006, had notified an area of 1013.64 hectares vide Ministry of Commerce and Industry Notification Number S.O. 342(E), dated 6-2-2013;

AND, WHEREAS, M/s. Kakinada SEZ Private Limited ha proposed for clubbing of KSEZ-1 and KSEZ-II at above location over an area of 2049.3088 hectares and Central Government has granted letter of approval on 13.01.2016;

AND, WHEREAS, M/s. Kakinada SEZ Private Limited has now proposed for de-notification of 121.43 hectares at the above Special Economic Zone;

AND, WHEREAS, the State Government of Andhra Pradesh has given its approval to the proposal vide letter No.8400/Infra/A1/2015, dated 23-5-2017;

AND, WHEREAS, the Development Commissioner, Visakhapatnam Special Economic Zone has recommended the proposal for de-notification of an area of 121.43 hectares of the Special Economic Zone;

NOW, WHEREAS, the Central Government is satisfied that the requirements under sub-section (8) of section 3 of the said Act and other related requirements are fulfilled;

NOW, THEREFORE, in exercise of the powers conferred by second proviso to sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government hereby de-notifies an area of 121.43 hectares, thereby making resultant area as 1927.8788 hectares, comprising the survey numbers and the area given below in the table, namely:—

TABLE

S. No. Survey No. Name of Village Proposed denotified area in hectares
1. 235/Part Ponnada 3.26
2. 236 Ponnada 5.71
3. 238 Ponnada 5.45
4. 239 Ponnada 0.36
5. 243 Ponnada 4.73
6. 244/1 Ponnada 6.86
7. 244/2 Ponnada 5.64
8. 245 Ponnada 5.73
9. 247/1 Ponnada 5.58
10. 248 Ponnada 6.98
11. 286 Ponnada 5.04
12. 287 Ponnada 9.82
13. 288 Ponnada 25.80
14. 289 Ponnada 15.81
15. 367 Ponnada 10.12
16. 368 Ponnada 2.08
17. 246 Ponnada 0.59
18. 361 Ponnada 1.87
19. Total Area 121.43
20. Total remaining area of the SEZ after above deletion 1927.8788

Pre-GST stock receives government stamp of approval : 05-07-2017


Manufacturers and retailers can stamp new prices on their pre-GST stock of goods and sell them till end September, the government has said, ending the confusion over the stock that was left unsold on July 1, and checking potential malpractices. But a section of industry was upset that the government had not issued this clarification earlier .

“If we would have known this earlier, the industry could have planned the transition better. Retailers would have not have been under pressure to liquidate old stock at almost cost price and primary sales from companies to trade would not have declined the way it did in June,” said Videocon chief operating officer CM Singh.

Any increase in maximum retail price (MRP) due to GST on the older inventory will have to be advertised in two national papers, but there is no such requirement if the new MRP is lower, said a notification issued on Tuesday.

The government has also sought to cap the price increase because of the transition to new GST rates by explicitly stating in the notification that the difference between pre-GST retail price and the revised price “shall not, in any case, be higher than the extent of increase in tax”. The same principle will also apply in the case of imposition of fresh taxes.

“We have granted relaxation till 30.9.17 to industry under Packaged Commodities Rules to write new MRP on items of reduced prices due to GST,” consumer affairs minister Ram Vilas Paswan tweeted.

good

The minister added that fall in prices due to lower GST should be passed on to consumers and that the government would take legal action against vendors who did not declare revised MRP.

“This is basically to curtail potential malpractices by trade and manufacturers who may want to tweak pricing and make higher profit,” said B Krishna Rao, deputy marketing manager at Parle Products, the country’s largest biscuit maker.

Tax experts said the move to allow sale of old stock at revised prices will particularly help those companies whose products now fall in a higher tax category.

“MRP may need to be revised in certain cases, specially where the GST rate is now 28%,” said Pratik Jain, leader-indirect taxes, PwC.

Jain said even after factoring in the 60% deemed credit on the Central GST component allowed on existing stock, there would be a loss of 6-7% at retail level.

“This is a welcome relief for the industry. However, while increasing the MRP, it needs to be ensured that benefit of deemed credit is appropriately factored in,” Jain said.

The old MRP will have to be necessarily displayed on unsold inventory and stickers specifying the revised prices can be pasted alongside, said consumer affairs secretary Avinash Srivastava.

SMOOTH GST ROLLOUT
Revenue secretary Hasmukh Adhia said the new tax has been accepted in the country and that as of now, there had not been a single case where there had been any problem

He said the government was keeping a close watch on prices and the supply situation. Over 200 officials of the rank of joint secretary and additional secretary have been assigned 4-5 districts each to closely watch the implementation process. In addition, central monitoring committee of 16 secretaries will meet every Tuesday to keep a tab on supplies and prices.

The revenue secretary said toll, mandi charges, fee on vehicle entry into states will continue but there will be no levy of any entry tax on goods movement.

About 2 lakh new registrations have been done on the GST Network of which 39,000 have been already approved.

Source : Financial Express

Revenue secretary Hasmukh Adhia to hold masterclasses on GST for six days : 05-07-2017


Revenue secretary Hasmukh Adhia will be holding ‘masterclasses’ on GST for six days at the National Media Centre in the capital to clear any doubts about the new tax law.

“The government is committed to make the GST an all out success and not let the lack of any clarity or information act as a hurdle,” a senior government official said after a decision on Adhia’s master classes was taken at a high-level meeting on Tuesday morning.

Adhia and a team from Central Bureau of Excise and Customs (CBEC) will be holding these classes from Thursday in the form of a seminar for an hour daily to clarify any misconceptions or misinterpretations about the GST law, officials said

The government officials part of the GST roll out, trader bodies and media representatives will be invited to participate in the sessions.

Source : PTI

Linking Aadhaar and PAN is not mandatory for all. Read who all are exempt : 05-07-2017


It has now become mandatory for you to link your PAN with Aadhaar with effect from July 1, 2017, as per the income tax laws. However, the government has exempted certain class of individuals from linking these two documents subject to certain conditions.

Even before the Supreme Court Judgement was announced upholding the legality of section 139AA, the Central Board of Direct Taxes (CBDT) had, in its notification dated May 11, 2017 clarified the categories of individuals who are exempted from compulsorily linking their PAN with Aadhaar by exempting them from the purview of Section 139AA of the Income Tax Act.

CBDT has notified that Section 139AA of the Income Tax Act is not applicable to the following individuals:

(i) Those categorised as Non-resident Indians as per the Income Tax Laws
(ii) Not a citizen of India
(iii) Is of age 80 years or more at any time during the tax year
(iv) Residents of the states of Assam, Meghalaya and Jammu and Kashmir

The above mentioned categories of Individuals are exempted from the purview of section 139AA i.e. exempted from compulsory linking of PAN and Aadhaar, only if they do not possess Aadhaar or Aadhaar Enrolment ID.

The newly introduced section 139AA of the Income Tax Act states that every person who has been allotted PAN as on July 1, 2017 and who is eligible to obtain Aadhaar Number shall intimate the same to the tax authorities. The PAN of those who fail to do so will become invalid on a date to be notified later by the department.

The Aadhaar (Target Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 states that every resident shall be entitled to obtain Aadhaar number by submitting his demographic and biometric information by undergoing the process of enrolment. The Act has also defined the eligibility conditions for Aadhaar.

The CBDT, after the SC judgment on the matter, in its press release dated June 10, 2017 has clarified that every person, who possesses both PAN and Aadhaar/Aadhaar Enrolment ID, should intimate the same to the Income Tax department by linking these two as mandated by the tax laws. This requirement applies irrespective of whether the individuals file tax returns or not.

As per CBDT, the judgement has given partial relief to those who do not have Aadhaar and do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled so that other consequences under the Income Tax Act for failing to quote PAN may not arise.

Source : Economic Times

01 – 04-07-2017


REVISED LIMITS FOR INVESTMENT BY FOREIGN PORTFOLIO INVESTORS (FPIs) IN GOVERNMENT SECURITIES MEDIUM TERM FRAMEWORK

A.P. (DIR SERIES 2017-18) CIRCULAR NO.1DATED 3-7-2017

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 notified vide Notification No. FEMA.20/2000-RB dated May 3, 2000, as amended from time to time.

Review of the Medium term Framework

2. The current Medium Term Framework (MTF) for FPI investment in Central Government Securities (G-secs) and State Government Securities (SDLs) was introduced in October 2015 with the following major features:

a. Limits to be specified as a percentage of outstanding Stock – 5% for G-secs; 2% for SDLs, to be achieved by 31 March 2018, through half yearly reviews and quarterly increases.
b. Minimum tenor of investments at 3 years.
c. 20% cap on FPI investment in any particular security.
d. Preference for long-term investors – Allocation of 60% for ‘long term’ category and 40% for ‘General’ category.
e. Transfer of unutilized limits in ‘Long Term’ category to ‘General’ category.

3. Currently ‘long term’ category of FPI investors accounts for about 20% of the total investment by FPIs in Central Government securities. In order to recalibrate the Framework to meet the objective of a preference for long-term investors and also with a view to manage the macro-prudential implications of evolving capital flows, the MTF has been reviewed. Based on the review, the following modifications are made to the Framework.

a. The overall cap of 5% for Central Government securities (G-Secs) and 2% for State Development Loans (SDLs) remain unchanged.
b. Future increases in the limit for FPI investment in Central Government securities will be allocated in the following ratio – 75% for ‘Long-Term’ category of FPIs and 25% for ‘General’ category.
c. The practice of transferring unutilized limits of ‘Long-Term’ category to ‘General’ category of FPIs is done away with.
d. To harmonize the approach to FPI investments in SDLs with that for Central Government securities, future increases in SDLs would be in the ratio of 75% for ‘Long Term’ category and 25% for ‘General’ category of FPIs.

4. RBI may, in future, continue to calibrate some features of the MTF depending on the evolving macro-economic conditions.

Revision of Limits for the Jul-Sep 2017 Quarter

5. The limits for investment by FPIs in Central Government Securities and State Development Loans (SDLs) for the quarter July-September 2017 are increased by INR 110 billion and INR 61 billion, respectively, and allocated as under:—

Limits for FPI investment in Government Securities
(INR Billion)
Central Government securities State Development Loans Aggregate
General Long Term Total General Long Term Total
Existing Limits 1,849 461 2,310 270 270 2,580
Revised limits 1,877 543 2,420 285 46 331 2,751

6. The revised limits will be effective from July 4, 2017.

7. All other existing conditions, including the security-wise limits, investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, will continue to apply.

8. The operational guidelines relating to allocation and monitoring of limits will be issued by the Securities and Exchange Board of India (SEBI).

9. AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

10. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approval, if any, required under any other law.

Notification No. SO 2179(E) [F.NO.F.1/18/2016-SEZ], 4-7-2017


SECTION 4 OF THE SPECIAL ECONOMIC ZONES ACT, 2005 – PHOENIX EMBASSY TECH ZONE PVT. LTD.

NOTIFICATION NO. SO 2179(E) [F.NO.F.1/18/2016-SEZ], DATED 4-7-2017

WHEREAS, M/s. Phoenix Embassy Tech Zone Private Limited had proposed under section 3 of the Special Economic Zones Act, 2005 (28 of 2005), (hereinafter referred to as the said Act), to set up a Sector Specific Special Economic Zone for IT/ITES at Nanakramguda Village, Serilingampally Mandal, Ranga Reddy District, in the State of Telangana;

AND, WHEREAS, the Central Government, in exercise of the powers conferred by sub-section (1) of Section 4 of the said Act read with Rule 8 of the Special Economic Zone Rules 2006, had notified the areas of 3.95 hectares at above Special Economic Zone vide Ministry of Commerce and Industry Notification number S.O. 687 (E), dated 22-2-2017.

AND WHEREAS, M/s. Phoenix Embassy Tech Zone Private Limited, has now proposed to include an area of 2.30 hectares as a part of above Special Economic Zone;

NOW, THEREFORE, in exercise of the powers conferred by second proviso to sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government hereby notifies an additional area of 2.30 hectares, as a part of above Special Economic Zone, thereby making total area of the Special Economic Zone as 6.25 hectares, comprising the survey numbers and the area given below in the table namely:—

TABLE

S. No. Name of Village Survey No. Area (in hectares) Area (in Acres)
1. Nanakramguda 118 (P), 120 (P), 121 (P) 2.30 5.70
Total 2.30 5.70
Grand Total area of SEZ after above addition 6.25 15.46

GST reimbursement scheme on fast track, says government : 04-07-2017


The government is looking to expeditiously clear a reimbursement scheme for industries that have lost area-based excise exemption offered as incentives in states such as Himachal Pradesh and Uttarakhand under the new goods and services tax (GST) regime.

The Department of Industrial Policy and Promotion (DIPP) has finalised the GST reimbursement scheme, which will shortly be taken up by the expenditure finance committee, two senior government officials told ET. “It is the government’s commitment… It will get done,” said one official. The GST regime does not allow any tax exemptions and incentives can be offered only by way of tax refunds.

To promote industrialisation in special-category and hill states such as Himachal Pradesh, Uttarakhand and those in the North East, manufacturers enjoy benefits under the area-based exemption scheme and are not required to pay central taxes such as excise duty and other state levies. Industry expected the refund scheme to be in place before the GST was rolled out on July 1. Automobile, pharmaceutical and fast-moving consumer goods companies had set up units in such states and the reimbursement  scheme is crucial to work out the pricing of their products.

“It shall be resolved soon,” said the other official. GST has replaced 17 central and state taxes, besides 23 cesses. The number of product-wise exceptions has been pruned under the new indirect tax framework, but area-based incentives will be exempt.

“The industry is anxiously waiting for notification of benefits under areabased exemptions available in central excise regime to be continued in GST and there needs to be a clarity for the interim,” said Bipin Sapra, a partner at EY. The Centre, however, will make only part compensation – the portion of Central GST that remains with it after accounting for transfer to states. States have to separately take a call on their portion of GST.

As of now, units in erstwhile excise-free zones will have to pay GST, including Central GST. They have time till August 20 to deposit this tax, after which they will have to claim a refund of the CGST component, based on guidelines that are likely to come out. “If the refund is limited to 58 per cent of CGST component, as indicated by the government earlier, then the benefit available to industry (generally 12.5 per cent earlier) will get diluted to a large extent. Some of the companies may shift their manufacturing to other states, depending on logistics convenience,” said Pratik Jain, indirect tax leader at PwC.

Source : Business Standard

Border commercial tax checkposts in 22 states abolished after GST rollout : 04-07-2017


As many as 22 states have abolished border commercial tax checkposts after the rollout of goods and services tax (GST) on July 1, marking a big step towards ‘One nation, one tax’ goal of this reform.

These states include both NDA-ruled ones and those by the opposition, indicating a broad-based intent to implement the GST.

The states include Gujarat, Bihar, Karnataka, West Bengal, Tamil Nadu, Haryana, Kerala, Madhya Pradesh, Uttarakhand. Eight states including Assam, Himachal Pradesh, Manipur, Meghalaya, Nagaland, Punjab, Mizoram and Tripura are in the process of abolishing their checkposts, an official statement said on Monday.

“The Goods and Services Tax (GST) was rolled out on 1st of July 2017. With the rollout of the GST, 22 states in India have abolished their checkposts,” the statement said.

Many states have also issued advisories to field to not stop trucks. The abolition of checkposts will allow seamless movement of goods across the border, ending hours of waiting commercial vehicles had to endure at state boundaries.

Seamless transport is expected to cut transport costs, which will help make goods cheaper. In India, goods are largely transported by the most costly mode, roads, and the state boundaries escalated that costs.

Border checking is primarily for tax compliance issues and also scrutiny of materials. This causes delay and also has been identified as major source of pollution as trucks idle for hours.

According to a PhillipCapital study, logistics account for 14% of GDP in India compared to 8.5% for US. In the GST regime, Electronic Way Bills, also called E-way Bills will be the primary document for transportation of the goods. Any movement of goods worth over `50,000 can be done only after online registration of the consignment to secure an ‘e-way bill’ that tax officials can inspect anytime during the transit to check tax evasion.

NO RELIGION-BASED DISTINCTION

“There are some messages going around in the social media stating that the temple trusts have to pay the GST while the churches and mosques are exempt,” a finance ministry statement said.

This is completely untrue because no distinction is made in the GST Law on any provision based on religion, it said.

Source : PTI

Received Form 16? What figures to check and where : 04-07-2017


The last date for the employers to furnish Form 16 had been extended to June 15. Salaried individuals would have, by now, received the Form 16 from their employers while some of them would be getting them soon.

Based on the salary income and the investment declaration statement, the employer would have estimated the taxable income and deducted tax on a monthly basis in the form of tax deducted at source (TDS) before paying it to the employee. Form 16 is a summary of the total amount paid to the employee and the TDS on it. “The employer is required to deposit the tax deducted within 7 days of next month and for the month of March, the tax shall be deposited by 30 April of the next financial year, says Dr. Suresh Surana, Founder, RSM Astute Consulting.

As an employee, one may check whether the correct amount has been deducted by the employer and also whether it has been deposited with the government. “An employee can verify from time to time, his TDS (which has been deducted by the employer) in Form 26AS from the TRACES website. The employee can View Tax Credit Statement (Form 26AS) only if his PAN number is mapped to that particular account and this facility is available for free,” says Dr. Surana.

TRACES is a web-based application of the Income-tax Department that enables a PAN holder to register and view tax credit (Form 26AS) online which is updated on a near real-time basis. The facility of accessing Form 26AS is available to a PAN holder having a net banking account with any of authorised banks.

Discrepancies

Firstly, in Form 16, look at the PAN and see if its correct else asks your employer to make the change. Ask your employer to rectify it and send you a new Form 16. Simultaneously, make sure that your employer files revised return of TDS so that the credit of the TDS proceeds goes into the right PAN number.

Secondly, check if the figures in Form 16 matches with your declaration made to the employer in the beginning of the FY. There could be fewer deductions mentioned or maybe you could have invested at the last minute.

If the mistake has been there on employer’s part, ask for a revised Form 16. “In such case, the employee should note that he can legitimately claim a deduction based on such investment proof at the time of filing his tax return. In this way, he can claim excess amount deducted as a refund, if any. Please note that the employer does not generally provide a deduction of eligible donations made under section 80G and the employee is required to claim any such eligible donations separately while filing his return of income,” says Dr. Surana.

Source : Economic Times

Reverse Charge- an onerous requirement despite 8/2017-CTR – 03-07-2017


By S Sivakumar, LL.B., FCA, FCS, ACSI, MBA, Advocate

Section 9(4) of the CGST Act reads:

“9(4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.”

Similar provisions exist under the SGST Acts, as well.

The Central Government has issued Notification No. 8/2017-Central Tax (Rate) dated June 28, 2017 which is reproduced below -

G.S.R. (E).- In exercise of the powers conferred by   sub-section (1) of section 11 of the   Central Goods and Services Tax Act, 2017 (12 of 2017),   the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under   sub-section (4) of section 9   of the   Central Goods and Services Tax Act, 2017 (12 of 2017):

Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.

2. This notification shall come into force with effect from the 1st day of July, 2017.

A plain reading of this notification would suggest that the exemption from paying tax u/s 9(4) would not be available in cases where the aggregate value of goods or services or both, that are received by the registered person exceed Rs.5,000/- in a day.

The manner in which this notification is worded could lead to a lot of confusion. For instance, assuming that the unregistered tea vendor raises a monthly invoice for supply of tea, coffee, etc. for an amount of Rs.30,000/-, will this be treated as a daily supply of Rs.1,500/- (assuming a 20 working day month) or a supply of Rs.30,000/- on the day the bill is raised by the unregistered tea vendor. I would presume that the latter view would be more appropriate. There could be some confusion in respect of claims for reimbursements that are submitted by the employees of a company. Similarly, an employee could be on travel and might submit his travel claim, after his return. Since the employee is deemed to be procuring the goods or services on behalf of his employer, I would presume that the dates of these invoices/bills issued by the unregistered vendors would be the basis for recognizing the RCM liability by the employer/registered person, though these invoices/bills could get booked in the books of accounts at a much later date.

However, in some cases, the unregistered vendors might not issue invoices/bills at all. In these cases, I would presume that the date of payment of cash by the registered person would be the basis for applying the exemption notification No. 8/2017-CTR.It would be better if the Government can clarify that the exemption would be based on dates of invoices issued by the unregistered persons or on the basis of cash entries when there are no bills/invoices, so as to avoid litigation with the Department.

Fortunately, transactions between two unregistered persons would not attract Section 9(4). Also, supplies by a registered person who is covered by the composition levy and who, consequently, does not charge tax, would also require the recipient registered person to pay tax under this section.

It is not difficult to understand the mischief that section 9(4) can create for companies and other registered persons. Virtually, all purchases or expenses that are paid for by the registered person which are not supported by invoices or bills that carry the GSTIN of the suppliers would get covered under the reverse charge mechanism, including the hundreds (or perhaps, thousands) of transactions involving petty purchases and expenses that any large corporate would incur and pay for. These could involve Xeroxing/photocopying charges, procurement of coffee/tea/food items from vendors and small-time hotels, purchase of stationery items from shops, expenses involving payments to small time service providers like cleaning maids, helpers, gardeners, etc., wherein, the suppliers are not expected to be registered under the GST law.All of these transactions would now have to be covered under section 9(4), requiring the registered person to pay tax, subject to the exemption given in Notification No. 8/2017-CTR.

We can think of two situations where Section 9(4) could apply. Either the registered person could directly procure these goods or services from unregistered persons and directly pay for these procurements of goods or services or these could be procured by the employees or agents of the registered person/employer who could claim reimbursements from the registered person/employer. In both these cases, the registered person would be liable to pay tax under reverse charge basis, under section 9(4), as these procurements/expenses are booked by the registered person/employer and are claimed as expenses for purposes of income tax (possibly under section 37(1) of the Income Tax Act). The claim for reimbursements by the employees, though in relation to employment, cannot absolve the employer from being required to pay tax under Section 9(4), as these goods or services are ultimately for the benefit of the registered person/employer, in my view.

Considering the sweeping nature of Section 9(4) of the CGST Act, the exemption that is conferred by Notification No. 8/2017-CTR would not benefit most medium to large industries. Perhaps, a much higher daily limit of, say, Rs.50,000/- would be more relevant.

Be that as it may…. meeting the requirements of Section 9(4) of the CGST Act, which has already come effect, is going to be a highly onerous responsibility on the registered person. While paying tax under reverse charge, the registered person would be required to determine the tax rate for each of the goods items that is booked in his accounts and then determine the tax liability under the Section and this by itself, could cast a huge burden on the registered person. It would have been better if a standard rate of tax for transactions covered under Section 9(4) had been prescribed.

Taking this discussion forward…section 24 (iii) of the CGST Act requires any person required to pay tax under reverse charge in respect of notified services under Section 9(3) to compulsorily obtain registration and thus, business entities having annual aggregate turnovers of less than Rs. 20 lakhs would be required to obtain registration. Once these entities have taken registration in terms of section 24(iii) read with section 9(3), they would be covered by the onerous requirement prescribed under section 9(4) and consequently, even small business entities would be subjected to the rigours of reverse charge mechanism under section 9(4), subject of course, to the exemption granted by Notification No. 8/2017-CTR.

Before concluding…

The requirements of section 9(4) could create a lot of issues on the ground, especially in relation to employee related expenses. For instance, it is common for progressive companies to allow their employees to have office outings/parties in hotels, resorts, etc. In many of these cases, the team leader or one of the employee could be paying the invoice of the hotel, etc. who could charge tax under GST, being an air-conditioned hotel (let us assume). When the team leader/employee claims a reimbursement from his employer company, will this transaction trigger levy of tax under section 9(4)? While the employee would be exempted from paying tax as the reimbursement is in relation to employment, can the employer be treated as procuring services from an unregistered person being the employee and thus be required to pay tax on reverse charge basis under Section 9(4), subject to the exemption?

The mischief that section 9(4) could create would not end with the payment of the tax under reverse charge by the registered person. Under section 17(3), the registered person would also be required to reverse the input tax credit attributable to the value of goods or services procured from unregistered taxable persons, by treating these as ‘exempt supplies’. Surely, section 9(4) is going to create a lot of issues for registered persons including loss of ITC.

A reading of the exemption notifications suggests that, the exemption would be lost if the aggregate value of receipts from unregistered registered persons exceeds Rs.5,000/- in a day. Thus, if such value is, let’s say, Rs.5,550/- in a day, the registered person would be liable to pay tax under RCM, on the entire amount of Rs.5,550/-.

One wonders if the framers of the notification are aware of practical challenges that the Industry would face in implementing these provisions. I don’t think, any intelligent accounting software would be able to compute the RCM liability under Section 9(4), which, it would seem, would have to be a manual exercise. It would further seem that the accountants and auditors of companies would have to spend considerable time in working out the liability under section 9(4), especially, after the issuance of Notification No. 8/2017-CTR, the exemption in terms of which, is to be computed on the basis of daily accounting entries.

Certainly, the Accounting professionals would be overburdened but at the same time cannot be unhappy for GST has thrown open a sea of opportunities!

No.22/2017 Dated: 03-07-2017


Clarifications in respect of section 269ST of the Income-tax Act, 1961 – Circular – Dated 3-7-2017 – Income Tax

Circular No. 22 of 2017

F.No.370142/10/2017-TPL

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Direct Taxes)

(TPL Division)

***

Dated 03rd July, 2017

Clarifications in respect of section 269ST of the Income-tax Act, 1961

With a view to promote digital economy and create a disincentive against cash economy, a new section 269ST has been inserted in the Income-tax Act, 1961(the Act) vide Finance Act, 2017. The said section inter-alia prohibits receipt of an amount of two lakh rupees or more by a person, in the circumstances specified therein, through modes other than by way of an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account. Penal provisions have also been introduced by way of a new section 271DA, which provides that if a person receives any amount in contravention to the provisions of section 269ST, it shall be liable to pay penalty of a sum equal to the amount of such receipt.

2. Subsequently, representations have been received from non-banking financial companies (NBFCs) and housing finance companies (HFCs) as to whether the provisions of section 269ST of the Act shall apply to one instalment of loan repayment or the whole amount of such repayment.

3. In this context, it is clarified that in respect of receipt in the nature of repayment of loan by NBFCs or HFCs, the receipt of one instalment of loan repayment in respect of a loan shall constitute a ‘single transaction’ as specified in clause (b) of section 269ST of the Act and all the instalments paid for a loan shall not be aggregated for the purposes of determining applicability of the provisions section 269ST.

(Salil Mishra)

Director (Tax Policy & Legislation)

Copy to:-

1. PS to FM/ OSD to FM/ OSD to MoS(R).

2. PS to Secretary (Revenue).

3. The Chairperson, Members and all other officers in CBDT of the rank of Under Secretary and above.

4. All Pr. Chief Commissioners/ Pr. Director General of Income-tax – with a request to circulate amongst all officers in their regions/ charges.

5. Pr. DGIT (Systems)/ Pr. DGIT (Vigilance)/ Pr. DGIT (Admn.)/ Pr. DG (NADT)/ Pr. DGIT (L&R).

6. CIT (M&TP), CBDT.

7. Web manager for posting on the departmental website.

Notification No.59/2017 03-07-2017


Income-tax (19th Amendment) Rules, 2017 – 59/2017 – Dated 4-7-2017 – Income Tax

MINISTRY OF FINANCE

(Department of Revenue)

(CENTRAL BOARD OF DIRECT TAXES)

NOTIFICATION NO. 59/2017

New Delhi, the 4th July, 2017

INCOME-TAX

G.S.R. 826(E).-In exercise of the powers conferred by section 295 read with section 195 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes, hereby, makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (19th Amendment) Rules, 2017.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereafter referred to as the Principal rules), in rule 29B, in sub-rule (1), clause (i),for the words “interest on securities” the words and brackets and figures “interest on securities (other than interest payable on securities referred to in proviso to section 193)” shall be substituted.

3. In the principal rules, in Form No. 15C, for the words “interest on securities” the words, brackets and figures  “interest on securities (other than interest payable on securities referred to in the proviso to section 193)” shall be substituted.

[F. No. 370 142/8/2017-TPL]

LAKSHMI NARAYANAN, Under Secy. (Tax Policy and Legislation)

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended vide notification number G.S.R. 821(E), dated the 03.07.2017.

Notification No.58/2017 03-07-2017


TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 Notification New Delhi,

dated the 03 rd July, 2017

G.S.R. 821(E).—In exercise of the powers conferred by section 44AB read with section 295 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the Income-tax Act), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income –tax (18 th Amendment) Rules, 2017.

(2) They shall come into force from the 19th day of July 2017.

2. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CD, for serial number 31 and the entries relating thereto the following shall be substituted, namely:—

“31. (a) Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year :—

(i)                  name, address and Permanent Account Number (if available with the assessee) of the lender or depositor;

(ii)                amount of loan or deposit taken or accepted;

(iii)               whether the loan or deposit was squared up during the previous year;

(iv)               maximum amount outstanding in the account at any time during the previous year;

(v)                whether the loan or deposit was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account;

(vi)               in case the loan or deposit was taken or accepted by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

(b) Particulars of each specified sum in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the person from whom specified sum is received;

(ii) amount of specified sum taken or accepted;

(iii) whether the specified sum was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account;

(iv) in case the specified sum was taken or accepted by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

(Particulars at (a) and (b) need not be given in the case of a Government company, a banking company or a corporation established by the Central, State or Provincial Act.)

(c) Particulars of each repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T made during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the payee;

(ii) amount of the repayment;

(iii) maximum amount outstanding in the account at any time during the previous year;

(iv) whether the repayment was made by cheque or bank draft or use of electronic clearing system through a bank account;

(v) in case the repayment was made by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft.

(d) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;

(ii) amount of loan or deposit or any specified advance received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year.

(e) Particulars of repayment of loan or deposit or any specified advance in an amount exceeding the limit specified in section 269T received by a cheque or bank draft which is not an account payee cheque or account payee bank draft during the previous year:—

(i) name, address and Permanent Account Number (if available with the assessee) of the lender, or depositor or person from whom specified advance is received;

(ii) amount of loan or deposit or any specified advance received by a cheque or a bank draft which is not an account payee cheque or account payee bank draft during the previous year.

(Particulars at (c), (d) and (e) need not be given in the case of a repayment of any loan or deposit or any specified advance taken or accepted from the Government, Government company, banking company or a corporation established by the Central, State or Provincial Act)”.

[Notification No. 58/2017/F. No. 370142/10/2017-TPL]

SALIL MISHRA, Director (Tax Policy & Legislation)

Note : The principal rules were published vide notification number S.O. 969(E), dated the 26th March, 1962 and last amended by Income-tax (17th Amendment) Rules, 2017 vide notification number G.S.R. 642(E), dated the 27th June, 2017.

Notification No.57/2017 03-07-2017


TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 Notification New Delhi,

dated the 03 rd July, 2017

S.O. 2065(E) .- In exercise of the powers conferred by clause (iii) of the proviso to section 269ST of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies that the provision of section 269ST shall not apply to the following, namely:-

(a) receipt by a business correspondent on behalf of a banking company or co-operative bank, in accordance with the guidelines issued by the Reserve Bank of India;

(b) receipt by a white label automated teller machine operator from retail outlet sources on behalf of a banking company or co-operative bank, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007);

(c) receipt from an agent by an issuer of pre-paid payment instruments, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007);

(d) receipt by a company or institution issuing credit cards against bills raised in respect of one or more credit cards;

(e) receipt which is not includible in the total income under clause (17A) of section 10 of the Income-tax Act, 1961.

2. The notification shall be deemed to have come into force with effect from the 1 st day of April, 2017.

[Notification No. 57 /2017, F.No.370142/10/2017-TPL]

(Salil Mishra) Director

(Tax Policy & Legislation)

GST impact: New tax regime to boost GDP; positive for rating, says Moody’s VP William Foster : 03-07-2017


Implementation of the GST will be positive for India’s rating as it will lead to higher GDP growth and increased tax revenues, Moody’s Investors Service said today. “Over the medium term, we expect that the GST will contribute to productivity gains and higher GDP growth by improving the ease of doing business, unifying the national market and enhancing India’s attractiveness as a foreign investment destination,” Moody’s VP (Sovereign Risk Group) William Foster said. The GST will also support higher government revenue generation through improved tax compliance and administration. “Both will be positive for India’s credit profile, which is constrained by a relatively low revenue base,” Foster said. Moody’s has a ‘Baa3’ rating on India with a positive outlook.

The biggest tax reform in independent India was rolled out at the stroke of the midnight — the intervening night of June 30-July 1 — by President Pranab Mukherjee and Prime Minister Narendra Modi. The US-based agency expects improved tax compliance to be driven by incentivisation of tax credits in a GST system. It would also usher in greater ease of compliance through the usage of a common, shared IT infrastructure between the central government and the states; and a reduction in the overall cost of compliance from simplified tax rates, uniform across the country. “We expect the net impact of GST on government revenues to be positive,” Foster said.

The Goods and Services Tax (GST) will remove plethora of taxes like excise, service tax and VAT and transform India into a uniform market for seamless movement of goods and services. In the GST regime, goods and services will be taxed in the either of 5, 12, 18 and 28 per cent. Besides certain essential items like health care services, salt, unpacked food grains has been kept at zero rated.

Source : Financial Express

Business community seeks clarity on aspects of GST : 03-07-2017


On the surface, the going seemed calm with dealers in textiles, particularly the smaller establishments, making a note of every sale in the bill book, instead of scribbling the amount on piece of paper, which neither the customer nor the seller used to maintain in the past.

There was a note of surprise as some inquisitive, regular buyers at such shops, preferred a discount, not an invoice, even as the shopkeeper thrust the bill into the pack.

5% on textiles

Mukesh, proprietor of Mukesh Textiles, said his auditor had advised him to charge 5 per cent GST on every sale from July 1. “There is no clarity on the rates. It will take some time, this is just a beginning,” he said.

Elsewhere, a dealer in electrical goods and spare parts continued with his earlier practice of selling spares without raising a bill.

Most establishments on that stretch of Nanjappa Road in Coimbatore are dealers in electrical goods, pumps and motors and hardware products such as pipe fittings. A majority of them do not even maintain a register of the inventory.

“It would be just impossible to take stock of the goods here. In any case, the turnover is less than ₹20 lakh,” said a dealer in electrical goods and spare parts.

Bigger corporates though seem better prepared, but big or small, every businessman is hoping the government to be lenient to the mistakes during the initial stages of GST implementation.

Confusion

K Ilango, past chairman, Confederation of Indian Industry, Coimbatore, said he is clueless over several aspects of the Act, but top of the mind recall is “reverse charge”.

“Section 9(4) of the GST Act is the most complicated and difficult one to comprehend. This section deals with reverse charge and incidentally no one talks of this,” he said, adding, “We have not gone deeper into uploading and stuff like that. There is bound to be some hiccups.”

V Sundaram, president, Codissia, also felt that the government should not penalise traders for mistakes

Source : PTI

PM Narendra Modi’s reform agenda not yet done as India embraces GST : 03-07-2017


With a landmark goods and services tax now rolling out across India, Prime Minister Narendra Modi is likely to turn his focus to job creation and other key economic reforms.

Further big structural steps, such as revamping India’s land acquisition and labor laws, are unlikely to occur before the next national election, scheduled for 2019, as Modi’s Bharatiya Janata Party still lacks a majority in the upper house of parliament.

Instead, analysts suggest the BJP is likely to focus on creating jobs while it pursues smaller reforms, including on administrative measures, anti-corruption policies and tax evasion. While India remains one of the fastest growing economies in Asia, employment creation was the slowest on record in 2015, with just 135,000 net new jobs in the formal sector of the economy against the 12 million estimated new entrants to the workforce, government data show.

At the same time, Modi’s administration will also have to dedicate considerable resources to ensure the success of the new, nation-wide GST, which took effect on July 1 after a midnight launch ceremony and has already caused some economic disruption.

“Modi will want to ride on the coat tails of the GST success to make additional progress on the economic reform front,” said Michael Kugelman, a senior associate for South Asia at the Woodrow Wilson Center in Washington, D.C. “In particular he’s going to be focused on job creation. Modi remains popular in India, but the job issue is one area that could be a political liability for him and his party both in state and national elections.”

Inflation Fears
More urgently, Modi’s party will need to make sure the GST implementation goes smoothly and does not lead to a spike in inflation or sustained economic chaos. Despite a relaxation of initial filing requirements, there are early signs that businesses remain confused and consumers might be putting off purchases.

“Politically selling the GST and ensuring there are no wrinkles will take the best part of the next six months, if not longer,” said Ashok Malik, a distinguished fellow with the New Delhi-based Observer Research Foundation think-tank.

Given indirect taxes on almost 50 percent of the CPI basket are expected to come down under GST, the new tax is not expected to be inflationary, said Sujan Hajra, chief economist at Anand Rathi Financial Services Ltd.

“Prices are expected to decline under GST and inflation is the only link between RBI monetary policy decision and GST,” Hajra said. “That will open an elbow room for RBI to cut rates — we expect the central bank to ease the repo rate by 25 basis points in August as inflation is low.”If the GST-related disruption continues, it would be the second big hit to economic activity in less than a year, after Modi’s government demonetized the country’s high denomination notes last November, effectively eradicating 86 percent of currency in circulation.

“If that happens, it will provide political fodder for a beleaguered opposition in the run-up to elections in Modi’s home state of Gujarat,” said Pratyush Rao, a Singapore-based senior analyst for South Asia at Control Risks, a consultancy. Fear of significant political backlash in the lead up to the 2019 elections is likely to reduce the BJP’s appetite for riskier reforms, Rao added.

“Overall, we are likely to continue seeing a preference for an incremental approach towards reforms, one that prioritizes administrative reforms over structural ones.”

Second Term
Still, in the days before the GST was formally rolled out, Modi’s government was already by asking the finance ministry to suggest ways to potentially privatize the debt-laden the indebted state carrier Air India.

Even as the government tweaks the GST roll out and attempts to sell off the state airline, Modi’s administration is likely to continue policies that build on the legacy of his three-year reign while campaigning across the country to increase the BJP’s chances of securing a second five-year term.

“You’re likely to see some measures on tax avoidance and corruption, some sort of crackdown on high profile cases,” Malik said, adding that big structural economic reforms are now unlikely. “I think he’s done enough for his first term.”

Southern Support
The BJP is also likely to try and expand its base of support beyond north India by making political inroads in the southern state of Tamil Nadu, the eastern state of Odisha and attempting to shore up alliances in Andhra Pradesh and Telangana, said Shailesh Kumar, a Eurasia Group senior analyst for South Asia.

“Along the way, the administration is also going to do everything it can to keep inflation low as price stability will be critical for his electoral chances,” Kumar said. “This will have the added benefit of supporting additional inward investment, which has become an important driver of economic growth.”

Currently, bigger structural reforms are still stymied by the BJP’s lack of a majority in India’s Rajya Sabha, or upper house of parliament.

That means Modi’s party has been unable to push through politically-sensitive changes to the country’s land and labour laws, despite the BJP having a majority in India’s lower house of parliament, the Lok Sabha. However, the situation in the upper house should eventually improve if the BJP keeps winning state level elections the way the BJP won big in Uttar Pradesh, the country’s most populous state at 200 million people.

“It will open the door for ambitious, sweeping economic reforms that could lift India’s medium-term growth rate,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit.

“These could include long delayed reforms to land acquisition laws that should catalyze industrial investment as well as further foreign investment liberalization and additional financial services reforms.”

Source : Economic Times

Karnataka GST Bill Passed as on 01-07-2017


Karnataka GST BILL

[ GST (CGST) - Notifications ] Notification No : 15/2017 Dated: 01-07-2017


notfctn-15-central-tax

[ GST (CGST) - Notifications ] Notification No : 14/2017 Dated: 01-07-2017


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] G

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 14/2017 – Central Tax

New Delhi, the 1st July, 2017

10 Ashadha, 1939 Saka

G.S.R (E).- In exercise of the powers conferred under section 3 read with section 5 of the Central Goods and Services Tax Act, 2017 (12 of 2017) and section 3 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Board of Excise and Customs hereby appoints the officers in the Directorate General of Goods and Services Tax Intelligence, Directorate General of Goods and Services Tax and Directorate General of Audit as specified in column (2) of the Table below, as central tax officers and invests them with all the powers under the Central Goods and Services Tax Act, 2017 and the Integrated Goods and Services Tax Act, 2017 and the rules made there under, throughout the territory of India, as are exercisable by the central tax officers of the corresponding rank as specified in column (3) of the said Table, namely:-

 

Sl. No. (1) Officers(2) Officers whose powers are to be exercised (3)
1. Principal Director General, Goods and Services Tax Intelligence or Principal Director General, Goods and Services Tax Principal Chief Commissioner
2. Director General, Audit Chief Commissioner
3. Principal Additional Director General, Goods and Services Tax Intelligence or Principal Additional Director General, Goods and Services Tax or Principal Additional Director General, Audit Principal Commissioner
4. Additional Director General, Goods and Services Tax Intelligence or Additional Director General, Goods and Services Tax or Additional Director General, Audit Commissioner
5. Additional Director, Goods and Services Tax Intelligence or Additional Director, Goods and Services Tax or Additional Director, Audit Additional Commissioner
6. Joint Director, Goods and Services Tax Intelligence or Joint Director, Goods and Services Tax or Joint Director, Audit Joint Commissioner
7. Deputy/Assistant Director, Goods and Services Tax Intelligence or Deputy/Assistant Director Goods and Services Tax or Deputy/Assistant Director, Audit Deputy Commissioner or Assistant Commissioner
8. Senior Intelligence Officer, Goods and Services Tax Intelligence or Superintendent, Goods and Services Tax or Superintendent, Audit Superintendent
9. Intelligence Officer, Goods and Services Tax Intelligence or Inspector, Goods and Services Tax or Inspector, Audit Inspector

 

2. This notification shall come into force with effect from the 1st day of July, 2017.

 

[F. No. 349/52/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

Will we be better off now with GST? Depends on what the effective rate will be in your state : 01-07-2017


India made the biggest tax system reform in its history when it transitioned to the goods and service tax (GST) regime on Friday night. This is not only a change in the tax system, but this will also usher a big change in the federal system in the country. The states are giving up arguably much of their most important power: to impose taxes. So, on balance, will we, the people, be better off?

There seems to be a variety of taxation systems in place in several federal systems. For example, Australia has adapted a GST system in which the central government administers the GST, and the revenue is shared between the Centre and the states.

United States of Taxes

In Canada, it is a mixed model — a harmonised sales tax (a value-added tax, VAT) — that is administered by the central Canada Revenue Agency. But one state, Québec, imposes its own state-level taxes. In the world’s largest economy, the US, each state imposes a different sales tax, which differs across states, and there is no revenue-sharing.

How can adopting GST as a tax system across the country benefit us? The obvious answer is that by replacing a really messy system of indirect taxation, it will be easier for firms to do business across the country. This will increase investment and, through that, growth in the country. With added growth, welfare of citizens will rise. This is the strongest argument favouring the implementation of GST.

Till now, there were multiple and complex set of taxes that differed across states. This was a deterrent in establishing and expanding business.

Anything simpler is welcome. So, indeed, there will now be gains through this channel. Though even in this regard, the actual implementation of GST leaves something to be desired.

Source : Business Standard

Got weekend plans? You need to go through this GST checklist before that : 01-07-2017


The short-term impact of GST is expected to be neutral-tonegative for the broader economy.

Production processes are likely to take some time to align with the new framework as firms adjust to the input tax credit system and better manage working capital requirements.

For consumers, it will be a mixed bag as some goods become cheaper while others will be expensive.

The ET Intelligence Group provides a snapshot on the effect of GST on prices of daily needs, consumer discretionary and industrial products and services.

 

 

Source  : PTI

GST: PMO calls for all-out effort on part of Centre to ensure smooth transition : 01-07-2017


The government as well as the ruling BJP have drawn lessons from the widespread criticism that came their way during the demonetisation drive in November and will make all efforts to ensure the implementation of goods and services tax is a smooth affair. They will field ministers and office-bearers across the country to deal with any condemnation that comes from the Opposition and in the public sphere.

With clear indications that at least the first quarter post-GST implementation will be a “period of challenges”, the PMO has called for an all-out effort on part of the Centre to ensure a smooth transition period. Cooperation of states, too, will be vital. Union ministers will be using various public forums and media to assure people that GST is going to benefit them in the long run and they need not have any apprehensions. The government has asked its ministers to visit state capitals from July 2-7 and address bodies engaged in business to allay their fears. The exercise, which has already begun in a way with ministers talking to the media about the positive aspects of GST, will continue for three months.

“Centre and states have to work together to spread awareness about GST procedures to tide over the teething issues. Central ministries have been told to hold 100 awareness programmes apiece from July 1 to address any concerns and spread awareness about GST measures. Similarly, all BJP state chief ministers have been told to send their ministers and MLAs in the field to address concerns of people and traders so that the transition to GST is smooth over the next three months,” a senior government  official said.

Some states like UP, Gujarat, Maharashtra, Rajasthan and MP are said to have already prepared a roster for their ministers and MLAs to visit constituencies and address concerns of businessmen on GST.

PM Modi will address on Saturday a gathering of trader associations, chartered accountants, various chambers of commerce and industry and businesspeople at the Indira Gandhi Indoor Stadium in the Capital. Finance minister Arun Jaitley, power minister Piyush Goyal, external affairs minister Sushma Swaraj and petroleum minister Dharmendra Pradhan will also speak on GST in the programme.

The Institute of Chartered Accountants of India, which is organising the programme, has made similar arrangements in various state capitals. In Mumbai, roads minister Nitin Gadkari, minority affairs minister Mukhtar Abbas Naqvi and Maharashtra CM Devendra Fadnavis will address trader associations, chartered accountants and various chambers of business. Among others, commerce minister Nirmala Sitharaman will be in Chennai; while parliamentary affairs minister Ananth Kumar, HRD minister Prakash Javadekar and railway minister Suresh Prabhu will travel to Bengaluru. Union ministers Kalraj Mishra, Mahesh Sharma, Niranjana Jyoti and Anupriya Patel will be in Lucknow with UP CM Yogi Adityanath.

“Since the Opposition and the media may highlight the hitches that are likely to occur, we have to be ready to assuage the worries of the people,” a BJP office-bearer said.

 Source : Economic Times

CBEC’s guidance note for importers-exporters explains : 01-07-2017


guidnce-note-imprtrs-exprtrs

GST’s red-carpet entry: Impact on consumers, traders, government : 30-06-2017


With the biggest tax reform set to receive a red carpet welcome in Parliament’s Central Hall when the clock strikes midnight on June 30, the Goods and Services Tax will irreversibly impact consumers, traders, businesses as well as the revenue collection machines of the states and the centre.

Though the real impact of the government’s big-bang reform can be assessed only after a full year of its implementation, let us gauge its effect on the various aspects of trade, consumer prices and government revenue.

In many cases it may weigh heavily on your pockets while in others it may soothe the traders’ frayed nerves with input tax credit. In terms of GST’s effect on the government’s revenue kitty, it seems to be on the wait and watch mode.

- Services, including banking and telecom, will get more expensive, as will flats, ready-made garments, monthly mobile bills and tuition fees.

- From July 1, when you visit an air-conditioned restaurant, be ready to shell out 18 per cent as taxes. In case you prefer a non-air-conditioned food joint, then you will save six per cent as such restaurants will attract 12 per cent GST.

- Mobile bills, tuition fees and salon visits will also get costlier by three per cent, as GST at the rate of 18 per cent will be applicable on all services from July 1 as compared to the current service tax rate of 15 per cent.

- Apparels above Rs 1,000 will attract 12 per cent tax as compared to the current six per cent state VAT. It may be noted that apparels below 1,000 will attract GST at the rate of five per cent.

 - In GST regime, buying a flat or shop, will attract GST of 12 per cent as compared to current six per cent approximately.

“Though the developers are expected to pass on the benefits of input-credit available to them, with the government also issuing an advisory in this regard, practically how it will work is doubtful,” GST expert Pritam Mahure told IANS.

So what gets cheaper under GST?

- With 81 per cent of items falling under below 18 per cent tax rate, certain goods that will become cheaper are salad dressings, mayonnaise, weighing machinery, static converters (UPS), electric transformers, winding wires, transformers industrial electronics and two-way radio (walkie talkie) used be defence, police and paramilitary forces, which will attract 18 per cent tax rate.

- Postage or revenue stamps will also become cheaper as GST on these has been reduced to five per cent.

- Tax rate on cutlery, ketchup, sauces and pickle under GST will likely become cheaper as they will be taxed at 12 per cent.

- Salt, children’s picture, drawing or colouring books and cereal grains have been exempted under GST. Playing cards, chess board, carrom board and other board games have been reduced to 12 per cent GST rate. Rough precious and semi-precious stones have been kept at a special rate of 0.25 per cent under GST.

How will the traders be affected?

- Traders below Rs 20 lakh annual turnover are exempt under GST as compared to the current threshold of Rs 10 lakh in indirect taxes.

- Traders, manufacturers and restaurants with up to Rs 75 lakh turnover can go for the Composition Scheme and pay 1, 2 and 5 per cent tax respectively. Such businesses though will not get input tax credit but will have to file only one quarterly return.

- Rest of the traders will have to file three returns every month, out of which two will be auto-populated.

The input tax credit under Cenvat credit will be carried forward into the new regime.

Integrated GST (IGST) and GST Compensation Cess would be levied on cargo arriving on July 1. Cargo arrived up to June 30 would not attract IGST and compensation cess even though the clearance may happen after July 1.

However, additional duty of customs would continue to be levied for imports of petroleum and tobacco products.

It is mandatory for all importers/ exporters to declare GST Registration Number (GSTIN) along with Import Export Code (IEC) in the bills of entry, shipping bills and courier forms. Provisional IDs issued by Goods and Services Tax Network (GSTN) also be declared during the transition period. Input tax credit of IGST would be available based on GSTIN declared in the bill of entry.

Exports are zero-rated under GST. Exporter would be entitled to refund of IGST paid on exports or refund of accumulated tax credit on inputs used towards exports. Refund of IGST for exports would be based on GSTIN declared in the shipping bill.

So how much money will the government raise trough GST?

The revenue growth in the remaining nine months of the fiscal are expected to fall to eight per cent as compared to 22 per cent from indirect taxes in 2016-17. However, no prediction has been made by the government for the full year of indirect tax collection growth for the next fiscal.

Indirect tax collections (central excise, service tax and customs) in 2016-17 stood at Rs 8.63 lakh crore.

The government is yet to gauge the impact on revenue collection under GST as it had said that they are predicting a neutral growth as they do not know whether the tax growth will go up or down.

“In the first year (2017-18), because of implementation issues, there might be a little lag in income. We have kept a target of 8-9-10 per cent growth target (in indirect tax collections) this year as compared to 22 per cent indirect tax growth that we saw in 2016-17. We have kept it as neutral this year, as we don’t know whether it will go up or down,” Revenue Secretary Hasmukh Adhia had said earlier.

“Revenue in first year is uncertain, I am not sure, so can’t project it. It will go up overall but central government’s revenue will be same or not we will have to see. Because we are surrendering the cesses for the GST compensation,” he had said. Cesses imposed on taxpayers so far went to the centre without any share to the states.

The Centre will compensate the states for any revenue losses in the GST regime for the first five years, with 14 per cent growth rate in taxes with a base year of 2014-15.

Source : Financial Express

GST an efficient and simple system, will check tax evasion: Arun Jaitley : 30-06-2017


Finance minister Arun Jaitley told Deepshikha Sikarwar in an interview that prices should decline after the goods and services tax (GST) is in place July 1, while anticipating some teething troubles. Edited excerpts:

How disruptive will GST be? Some experts as well as economists have suggested a dip in growth.

Any change, even a small change in mode of filing a return, is disruptive. I see a minimal disruption in this considering the smooth manner in which most people have already migrated to the GST and some new registrants are joining now. I think in the medium and long term more revenue means more spending by the government. I do not want to get into numbers. No economist told me that oil would be at $40. No one told me that India would grow by more than 7% in the year of demonetisation. People talked of negative growth or growth rate falling to 3%. I do not want to get into their predictions. I believe GST is an efficient and simple system with less corruption.

GST has been in the works for long, but there is still some last-minute confusion. Industry still seems jittery. Software solution providers say they are not ready and have sought more time. 

Normally in a reform process private sector is ahead of the government. This time the government seems way ahead of the private sector. For an industry association to say postpone it in the face of a constitutional amendment was highly regrettable. There will be challenges initially. There can be hiccups even in the most perfect technology but the beauty of a perfect technology is that it removes those hiccups as soon as possible. This is a reform that is in the interest of the common man, traders, businesses, industry and the whole country. You need to be patient.

West Bengal has sought deferral of GST and the Opposition is planning to boycott the midnight rollout function.

Constitution does not permit (postponement of implementation). Every political party should have one position on GST. Either you are for or against it. There is no decision related to this tax that has not been endorsed by any political party. Rates have been decided by consensus. Every state government was party to the decision-making process. If any opposition party has objection to any rate, then it can refund the SGST portion of the state in which its party is in government. This is a ‘ saanjhi vyavastha’ (joint mechanism) for the whole country. We have had consultation at every stage of the formulation of the new tax. At the time of constitutional amendment, we incorporated suggestions made by Congress. All bills have been approved by them. Their state governments have passed GST legislations. Finance ministers of the states where their party is in power have participated in the council and agreed to the GST framework.

Will we see prices coming down? 

On an overall basis, the net weighted average of the whole consumption basket is less than what it was. So, in terms of weighted average, it should come down. Being a more efficient system, GST will check tax evasion. Quantum of tax collection will also go up in the long run.

There are apprehensions among smaller businesses who form the party’s base. Some are even planning protests.

It is not going to be difficult for small business. There will be no tax on neighbourhood mom and pop shops. Those with turnover of up to Rs 20 lakh do not have to pay any tax or register. For those with annual turnover between Rs 20 and Rs 75 lakh you can avail of the composition scheme. In the composition scheme, traders need to pay 1% tax and manufacturers have to pay 2%. Those with turnover above Rs 75 lakh are not that small and must be already availing services of a tax consultant or a CA (chartered accountant) even now.

Every change is opposed by one or other group. I am not so worried about it. The GST Council is a body of elected persons. It is a responsible body. If anyone feels calculations were not correct, they can represent, the council can consider. There is a fitment committee and council has considered more than 60 cases. You can’t expect the council to act under pressure. The argument that I did not pay tax under the old system and there was scope for me to evade taxes, this complaint cannot be entertained.

Traders fear GST will lead to a rise in inspector raj.

No, on the contrary, GST will end inspector raj as the person will be replaced by software. If you honestly pay your tax and file your return every month, you may not need to even see you assessing officer. It will be like income tax, where you file online. For businesses, manufacturers, traders there was no financial integration. Every state had their own rates and their own laws. GST integrates it. If you want to transfer goods from one state to another, you had to pay multiple taxes as also from one state to another, you had to pay multiple taxes as also file multiple returns. You had to go multiple times to your CA or even meet tax officer. There was scope for corruption, according to people. 

Now, there is one tax. You have to take one GSTIN number. People find any new technology challenging. When mobile came, older people found them challenging. If you can’t do it yourself you can ask someone to do it for you. You still go to the CA or tax consultant. After taking the GSTIN, if you sell goods directly to consumers then you have to file one return by the 10th of every month. Just give details of your sales and tax. We have extended this deadline for the first two months.
Just give details of your sales and tax. We have extended this deadline for the first two months. If you sell to businesses then you give a list of who you have sold to with their GSTIN. The software will automatically match files. You do not have to file that return, it will be generated by the software itself. States will assess 90% of small assessees. Those over Rs 1.5 crore it will be divided between states and centre. But you will deal with only one authority.

Experts say multiple tax rates have made the GST very complex.

It is not complex. If we had not gone for multiple rates it would have been a conspiracy against the common consumer. Those that write columns don’t have to run the country. It is every easy to say that there should be one rate. If for instance we were to have a single rate of 15% for GST, that would mean even food products that are consumed by poor will face 15%. We have kept food items at zero. We have to see who the consumer is. I had said in Parliament — should a hawai slipper and Mercedes  be taxed at one rate?

We adopted two principles while formulating the rate. We took the tax incidence on the day on that commodity or service and put it in the nearest slab it fell in. Secondly, the idea was that the exercise should be a revenue-neutral rate, otherwise government revenues will suffer. Reality is that the weighted average of taxes is lower than total tax incidence. There were a number of items which had a total tax incidence of over 31%, so they were put in 28%. But soaps and toothpaste are common-man items, so the rate on these was consciously brought down to 18%.

In the long run, rates would converge. As the tax base rises, rates would become more reasonable. If tax collection increases, government will have more resources in its hands and would be able to spend more on welfare schemes and infrastructure creation. This would bring significant benefits in the medium and long term. A rise in indirect taxes will also lead to a rise in direct taxes as the old system of pakka and kaccha bills’ (tax paid and nontax paid bills in cash) would end.

Some sectors that were exempted are protesting.

No commodity can claim a fundamental right to be exempted forever.

What about petroleum and real estate?

We have to see what is the comfort level of the council going forward. We would want petroleum products and realty to come under GST. For that the success of GST is very important.

There is a concern on some states continuing the check post system post GST.

As far as the e-way system is concerned, there was no final decision by the GST council. Some more discussions are required. Once we decide the mechanism, we will follow and till then states would be free to carry on with existing system. Many states have their own system but some others do not have it.

Globally there seems a lot of interest in GST implementation by India.

You have to see that global growth is yet to recover… Large countries are becoming protectionist themselves. The world accepts that if anyone has shown the potential to carry out structural reforms, it is India. We carried out FDI (foreign direct investment) reforms and we received the largest FDI in the world. The government and Prime Minister have shown that political-level corruption can be ended. Through insolvency ordinance, the government has created a framework that allows for large industrialists to be taken to insolvency proceedings… (On) Air India there had been discussions for decades…The cabinet has taken a decision on it just yesterday.

What is the next step on Air India?

A group of ministers has been set up. It will work out (the details).

Source : PTI

One nation, one tax: Is GST magic or mirage? : 30-06-2017


1. IS GST MAGIC…

The introduction of goods and services tax (GST) is called transformative because it is meant to benefit everybody and hurt none. Here’s how:

CONSUMER

Lower prices of most products and services.

Because post-GST tax rate on most products on services will be lower than pre-GST.

BUSINESS

Easier tax compliance, easier interstate movement, lower tax rates.

Because GST is digital and online, subsumes taxes that vary across states

GOVERNMENT

More tax payers, higher tax revenue, simpler tax administration.

Because less evasion, more taxpayers, digital trail of business and taxes.

OVERALL

More investments, higher growth, more jobs.

2. …OR MIRAGE?

But the form in which the tax is introduced in India has many experts worried that it will increase complexity and uncertainty, nullifying any gains. Here’s why:

TOO MANY TAX RATES

Most countries have one GST rate, a few have two. India has more than four. Even service tax, which earlier had one rate is now divided into four

COSTLY & TEDIOUS COMPLIANCE

Number of returns to be filed under GST could rise several times in some cases. Small business with limited computer literacy, interrupting power supply and poor net connectivity will struggle or go out of business.

SCOPE FOR EVASION

Business with less than Rs 20 lakh annual turnover are exempt from GST. This creates scope for mushrooming of dummy small companies that remain outside the tax system.

MANY BUSINESSES STILL OUTSIDE GST

Nearly 1/3rd of products (eg petrol, liquor, part of real estate… aren’t yet under GST). This will create problems for business that use these products as inputs.

3. THE IDEAL VS INDIAN GST

Most of the the shortcomings stem from the fact that the tax being ushered in from tomorrow is not the ideal GST, not even close.

Years of negotiations with political parties, state governments and industry associations has diluted and complicated the proposed tax system.

Having gone with the philosophy of ‘any GST is better than no GST’, the government’s task of implementing the real ‘one nation one tax’ GST will extend many months, may be years, We will prefer to have a single GST rate, beyond July 1.

Source : Economic Times

[ GST (CGST) Rate - Notifications ] Notification No : 02/2017 Dated: 28-06-2017


CGST exempt goods notified under section 11 (1) – 02/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 2/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R.     (E).- In exercise of the powers conferred by sub-section (1) of section 11 of  the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Schedule appended to this notification, falling under the tariff item, subheading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule, from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017).

Schedule

S. No.

Chapter / Heading /  Sub-heading / Tariff item

Description of Goods

(1) (2) (3)

1.

0101

Live asses, mules and hinnies

2.

0102

Live bovine animals

3.

0103

Live swine

4.

0104

Live sheep and goats

5.

0105

Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls.

6.

0106

Other live animal such as Mammals, Birds, Insects

7.

0201

Meat of bovine animals, fresh and chilled.

8.

0202

Meat of bovine animals frozen [other than frozen and put up in unit container]

9.

0203

Meat of swine, fresh, chilled or frozen [other than frozen and put up in unit container]

10.

0204

Meat of sheep or goats, fresh, chilled or frozen [other than frozen and put up in unit container]

11.

0205

Meat of horses, asses, mules or hinnies, fresh, chilled or frozen [other than frozen and put up in unit container]

12.

0206

Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh, chilled or frozen [other than frozen and put up in unit container]

13.

0207

Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen [other than frozen and put up in unit container]

14.

0208

Other meat and edible meat offal, fresh, chilled or frozen [other than frozen and put up in unit container]

15.

0209

Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled or frozen [other than frozen and put up in unit container]

16.

  0209

Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, salted, in brine, dried or smoked [other than put up in unit containers]

17.

0210

Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal, other than put up in unit containers

18.

3

Fish seeds, prawn / shrimp seeds whether or not processed, cured or in frozen state [other than goods falling under Chapter 3 and attracting 2.5%]

19.

0301

Live fish.

20.

0302

Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304

21.

0304

Fish fillets and other fish meat (whether or not minced), fresh or chilled.

22.

0306

Crustaceans, whether in shell or not, live, fresh or chilled; crustaceans, in shell, cooked by steaming or by boiling in water live, fresh or chilled.

23.

0307

Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled.

24.

0308

Aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled.

25.

0401

Fresh milk and pasteurised milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk

26.

0403

Curd; Lassi; Butter milk

27.

0406

Chena or paneer, other than put up in unit containers and bearing a registered brand name;

28.

0407

Birds’ eggs, in shell, fresh, preserved or cooked

29.

0409

Natural honey, other than put up in unit container and bearing a registered brand name

30.

0501

Human hair, unworked, whether or not washed or scoured; waste of human hair

31.

0506

All goods i.e. Bones and horn-cores, unworked, defatted, simply prepared (but not cut to shape), treated with acid or gelatinised; powder and waste of these products

32.

0507 90

All goods i.e. Hoof meal; horn meal; hooves, claws, nails and beaks; antlers; etc.

33.

0511

Semen including frozen semen

34.

6

Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage

35.

0701

Potatoes, fresh or chilled.

36.

0702

Tomatoes, fresh or chilled.

37.

0703

Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled.

38.

0704

Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled.

39.

0705

Lettuce (Lactuca sativa) and chicory (Cichorium spp.), fresh or chilled.

40.

0706

Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled.

41.

0707

Cucumbers and gherkins, fresh or chilled.

42.

0708

Leguminous vegetables, shelled or unshelled, fresh or chilled.

43.

0709

Other vegetables, fresh or chilled.

44.

0712

Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared.

45.

0713

Dried leguminous vegetables, shelled, whether or not skinned or split.

46.

0714

Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, fresh or chilled; sago pith.

47.

0801

Coconuts, fresh or dried, whether or not shelled or peeled

48.

0801

Brazil nuts, fresh, whether or not shelled or peeled

49.

0802

Other nuts, Other nuts, fresh such as Almonds, Hazelnuts or filberts (Coryius spp.), walnuts, Chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.), Areca nuts, fresh, whether or not shelled or peeled

50.

0803

Bananas, including plantains, fresh or dried

51.

0804

Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh.

52.

0805

Citrus fruit, such as Oranges, Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, Grapefruit, including pomelos, Lemons (Citrus limon, Citrus limonum) and limes (Citrus aurantifolia, Citrus latifolia), fresh.

53.

0806

Grapes, fresh

54.

0807

Melons (including watermelons) and papaws (papayas), fresh.

55.

0808

Apples, pears and quinces, fresh.

56.

0809

Apricots, cherries, peaches (including nectarines), plums and sloes, fresh.

57.

0810

Other fruit such as strawberries, raspberries, blackberries, mulberries and loganberries, black, white or red currants and gooseberries, cranberries, bilberries and other fruits of the genus vaccinium, Kiwi fruit, Durians, Persimmons, Pomegranates, Tamarind, Sapota (chico), Custard-apple (ata), Bore, Lichi, fresh.

58.

0814

Peel of citrus fruit or melons (including watermelons), fresh.

59.

9

All goods of seed quality

60.

0901

Coffee beans, not roasted

61.

0902

Unprocessed green leaves of tea

62.

0909

Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries [of seed quality]

63.

0910 11 10

Fresh ginger, other than in processed form

64.

0910 30 10

Fresh turmeric, other than in processed form

65.

1001

Wheat and meslin [other than those put up in unit container and bearing a registered brand name]

66.

1002

Rye [other than those put up in unit container and bearing a registered brand name]

67.

1003

Barley [other than those put up in unit container and bearing a registered brand name]

68.

1004

Oats [other than those put up in unit container and bearing a registered brand name]

69.

1005

Maize (corn) [other than those put up in unit container and bearing a registered brand name]

70.

1006

Rice [other than those put up in unit container and bearing a registered brand name]

71.

1007

Grain sorghum [other than those put up in unit container and bearing a registered brand name]

72.

1008

Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi] [other than those put up in unit container and bearing a registered brand name]

73.

1101

Wheat or meslin flour [other than those put up in unit container and bearing a registered brand name].

74.

1102

Cereal flours other than of wheat or meslin, [maize (corn) flour, Rye flour, etc.] [other than those put up in unit container and bearing a registered brand name]

75.

1103

Cereal groats, meal and pellets [other than those put up in unit container and bearing a registered brand name]

76.

1104

Cereal grains hulled

77.

1105

Flour, of potatoes [other than those put up in unit container and bearing a registered brand name]

78.

1106

Flour, of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8 i.e. of tamarind, of singoda, mango flour, etc. [other than those put up in unit container and bearing a registered brand name]

79.

12

All goods of seed quality

80.

1201

Soya beans, whether or not broken, of seed quality.

81.

1202

Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken, of seed quality.

82.

1204

Linseed, whether or not broken, of seed quality.

83.

1205

Rape or colza seeds, whether or not broken, of seed quality.

84.

1206

Sunflower seeds, whether or not broken, of seed quality.

85.

1207

Other oil seeds and oleaginous fruits (i.e. Palm nuts and kernels, cotton seeds, Castor oil seeds, Sesamum seeds, Mustard seeds, Saffower (Carthamus tinctorius) seeds, Melon seeds, Poppy seeds, Ajams, Mango kernel, Niger seed, Kokam) whether or not broken, of seed quality.

86.

1209

Seeds, fruit and spores, of a kind used for sowing.

87.

1210

Hop cones, fresh.

88.

1211

Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled.

89.

1212

Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh or chilled.

90.

1213

Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form of pellets

91.

1214

Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets.

92.

1301

Lac and Shellac

93.

1404 90 40

Betel leaves

94.

1701 or 1702

Jaggery of all types including Cane Jaggery (gur) and Palmyra Jaggery

95.

1904

Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki

96.

1905

Pappad, by whatever name it is known, except when served for consumption

97.

1905

Bread (branded or otherwise), except when served for consumption and pizza bread

98.

2106

Prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc.

99.

2201

Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container]

100.

2201

Non-alcoholic Toddy, Neera including date and palm neera

101.

2202 90 90

Tender coconut water other than put up in unit container and bearing a registered brand name

102.

2302, 2304,

2305, 2306,

2308, 2309

Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake

103.

2501

Salt, all types

104.

2716 00 00

Electrical energy

105.

  2835

Dicalcium phosphate (DCP) of animal feed grade conforming to IS specification No.5470 : 2002

106.

3002

Human Blood and its components

107.

3006

All types of contraceptives

108.

3101

All goods and organic manure [other than put up in unit containers and bearing a registered brand name]

109.

3304

Kajal [other than kajal pencil sticks], Kumkum, Bindi, Sindur, Alta

110.

3825

Municipal waste, sewage sludge, clinical waste

111.

3926

Plastic bangles

112.

4014

Condoms and contraceptives

113.

4401

Firewood or fuel wood

114.

4402

Wood charcoal (including shell or nut charcoal), whether or not agglomerated

115.

4802 / 4907

Judicial, Non-judicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorized by the Government

116.

4817 / 4907

Postal items, like envelope, Post card etc., sold by Government

117.

48 / 4907

Rupee notes when sold to the Reserve Bank of India

118.

4907

Cheques, lose or in book form

119.

4901

Printed books, including Braille books

120.

4902

Newspapers, journals and periodicals, whether or not illustrated or containing advertising material

121.

4903

Children’s picture, drawing or colouring books

122.

4905

Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed

123.

5001

Silkworm laying, cocoon

124.

5002

Raw silk

125.

5003

Silk waste

126.

5101

Wool, not carded or combed

127.

5102

Fine or coarse animal hair, not carded or combed

128.

5103

Waste of wool or of fine or coarse animal hair

129.

52

Gandhi Topi

130.

52

Khadi yarn

131.

5303

Jute fibres, raw or processed but not spun

132.

5305

Coconut, coir fibre

133.

63

Indian National Flag

134.

6703

Human hair, dressed, thinned, bleached or otherwise worked

135.

6912 00 40

Earthen pot and clay lamps

136.

7018

Glass bangles (except those made from precious metals)

137.

8201

Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry.

138.

8445

Amber charkha

139.

8446

Handloom [weaving machinery]

140.

8802 60 00

Spacecraft (including satellites) and suborbital and spacecraft launch vehicles

141.

8803

Parts of goods of heading 8801

142.

9021

Hearing aids

143.

92

Indigenous handmade musical instruments

144.

9603

Muddhas made of sarkanda and phool bahari jhadoo

145.

9609

Slate pencils and chalk sticks

146.

9610 00 00

Slates

147.

9803

Passenger baggage

148.

Any chapter

Puja samagri namely,-

(i) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd);

(ii) Sacred thread (commonly known as yagnopavit);

(iii) Wooden khadau;

(iv) Panchamrit,

(v) Vibhuti sold by religious institutions,

(vi) Unbranded honey [proposed GST Nil]

(vii) Wick for diya.

(viii) Roli

(ix) Kalava (Raksha sutra)

(x) Chandan tika

149.

-

Supply of lottery by any person other than State Government, Union Territory or Local authority subject to the condition that the supply of such lottery has suffered appropriate central tax, State tax, Union territory tax or integrated tax, as the case may be, when supplied by State Government, Union Territory or local authority, as the case may be, to the lottery distributor or selling agent appointed by the State Government, Union Territory or local authority, as the case may be.

Explanation.- For the purposes of this Schedule,-

(i)  The phrase “unit container” means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a predetermined quantity or number, which is indicated on such package.

(ii)  The phrase “registered brand name” means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person, and which is registered under the Trade Marks Act, 1999.

(iii)  “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(iv)  The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2.   This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

Arun Jaitley turns down demands for deferring GST rollout : 29-06-2017


Finance Minister Arun Jaitley today rejected demands for deferring the Goods and Services Tax (GST) rollout saying the Constitution does not give luxury to delay the nation’s biggest economic reform by six months. Not ruling out a few initial glitches when more than a dozen state and central taxes are abolished and barriers between 29 states done away with, Jaitley said the system is fully geared up and will eventually smoothen itself out. While there have been sporadic protests in some cities against implementing the GST without giving businesses more time to prepare, Trinamool Congress has decided not to attend the gala event planned in Central Hall of Parliament on June 30 midnight to usher in the mega tax reform. West Bengal Chief Minister Mamata Banerjee termed the “hurried” roll out of the GST as “epic blunder” by the Centre and demanded deferring it by six months to help small businesses. Jaitley, however, said the date of GST implementation, rules and tax rates had been decided through a consensus by the GST Council — a body that is made up of representatives from each state as also the central government.

“Those who are talking in terms of deferring (GST) by 6 months and so on, that’s a constitutionally impossible thing,” the finance minister said. The Constitutional amendment approved by Parliament in September last year gives time only till mid-September to replace the existing indirect tax structure by the GST. In absence of the GST, there will be a constitutional crisis as no tax can be levied on goods and services. “More importantly there is a constitutional mandate, and the mandate is on September 15 you will lose your right to collect existing taxes. So, therefore, the alternate system has to come in place and hopefully, by that date the (GST) system will come into place in a more smooth manner,” he said. The GST Constitutional Amendment Bill provides for roll out of the Goods and Services Tax by September 15, failing which the government will lose its legal entitlement to collect taxes.

Jaitley said the government has been successful in taking every decision on the GST through consensus, the constitutional amendment bill was also passed by Parliament through consensus. Besides, the SGST bill was passed unanimously by the state legislatures, barring one or two. With regard to Jammu and Kashmir, which is yet to pass the SGST bill, the Union finance minister said, “The state government has been making efforts to pass it through larger consensus.” “They (J&K) have their own legislative system and I hope they are able to do its own. I have emphasised on the state government that if they don’t join the GST, or till such time that they don’t join, their consumers and traders will have to pay tax twice over,” he said. Earlier this week, Jaitley had written to J&K Chief Minister Mehbooba Mufti nudging the state to roll out the GST from July 1 as failure to implement it will lead to “adverse impact” of price rise and put local industry at a disadvantage.

“The same product is going to be cheaper in other parts of the country than in that state. So it is in the interest of consumers, citizens of the state to join the GST,” Jaitley said. Asked if there is a rethink on the tax rates as demanded by sectors like textiles, he said the GST Council is always working with an open mind. “…If you see great force in some argument, the Council has always shown its openness. No one Central or state government can decide this. It is collectively decided by all of us. So far, every decision has been merit based. It is neither being partisan, nor being dictated by any form of pressure,” Jaitley said. Over the two months, the GST Council, chaired by Jaitley and comprising state representatives, fitted goods and services in the tax bracket of 5, 12, 18 and 28 per cent. The Council has met 17 times since September and decided on rules and regulations for the new indirect tax regime.

Source : Financial Express

From July 1, PAN must be linked to Aadhaar : 29-06-2017


All those allotted permanent account number (PAN) as on July 1 will have to link it with their existing 12-digit biometric Aadhaar number, the government has said.

Those applying for a new PAN will have to also mandatorily quote their Aadhaar number or Aadhaar enrolment ID. Both Aadhaar and PAN have already been made mandatory for filing tax returns, opening of bank accounts and financial transactions over Rs 50,000.

“Every person who has been allotted permanent account number as on the 1st day of July 2017, and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the said authorities,” a notification issued by the government said.

The Finance Act for 2017-18 had made Aadhaar mandatory for filing income tax returns and provided for linking of PAN with Aadhaar. Linking Aadhar with PAN is expected to help check tax evasion through use of multiple PAN cards.

The Supreme Court had earlier upheld the validity of an Income Tax Act provision making Aadhaar mandatory for allotment of PAN cards and ITR filing, but had put a partial stay on its implementation till a Constitution bench addressed the larger case related to the issue of privacy.

“Only a partial relief by the court has been given to those who do not have Aadhaar and who do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled, so that other consequences under the I-T Act for failing to quote PAN may not arise,” the CBDT had said after the Supreme Court ruling.

Those who do not map their PAN with Aadhar will have their PAN cancelled, making it difficult for them to do transactions. Even those not required to file income tax return but having both PAN and Aadhaar are mandatorily required to link them as per section 139AA.

As many as 2.07 crore taxpayers have already linked their Aadhaar with PAN. There are over 25 crore PAN card holders in the country while Aadhaar has been issued to 115 crore people.

Source : PTI

7th pay commission: HRA hike impact on inflation maybe lower than estimates : 29-06-2017


Allowances dole out under the Seventh Pay Commission may push up retail inflation by 0.25-0.5 per cent, less than the Reserve Bank of India’s estimates of 1-1.5 per cent.

Further, though the estimated cost is similar to that recommended by the seventh pay commission, the entire amount may not have been included by the government in the Budget estimates for 2017-18, which may pose a mild risk to the planned fiscal consolidation, say experts.

“When HRA increases, the cost of rent rises and thereby consumer inflation. The increase in inflation could be 0.25-0.5 per cent,” said Madan Sabnavis, chief economist at CARE Ratings

Kotak Mahindra Bank expects the upside to inflation between 30-50 basis points.

“The allowances increase is line with expectations but it is not budgeted for in FY18. So government will need to curb spending or generate more revenue to offset this rise,” said Upasna Bhardwaj, principal economist at Kotak Mahindra Bank.

The commission in its report, had projected the additional financial implication on allowances at Rs 29,300 crore per annum, but the actual impact is marginally higher at Rs 30,748.23 crore per annum.

Consumer inflation fell to its lowest in at least five years in May to 2.1 per cent from 2.99 per cent in April. It is near the lower end of the 2.0-3.5 per cent range forecast by the RBI in the first half of the year.

The expected uptick in inflation on account of HRA would be one of the crucial factors for the Monetary Policy Committee (MPC) to consider in the August 2017 review, said ICRA’s principal economist Aditi Nayar.

Reserve Bank of India in the policy review held in April expected the HRA increase “to push up the baseline trajectory by an estimated 100-150 basis points over a period of 12-18 months, with this initial statistical impact on the CPI followed up by second-order effect”.

“With the revised HRA rates being applicable from July 1, a large portion of the inflationary impact would be felt within the current fiscal, with some spillover to FY18,” Nayar added.

“There will be an increase in housing inflation in the next few months but it is difficult to quantify the rise. Since rental values are down at present and retail inflation is low, the increased HRA is unlikely to push it to very high levels,” noted India Ratings chief economist Devendra Pant.

Housing inflation was 4.84% in May from 4.86% in April.

Source : Economic Times

 

Integrated [ GST (IGST) - Notifications ] Notification No : 05/2017 Dated: 28-06-2017


Seeks to notify the number of HSN digits required on tax invoice – 05/2017 – Dated 28-6-2017 – Integrated GST (IGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 5/2017 – Integrated Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. …..(E).- In pursuance of the first proviso to rule 46 of the Central Goods and Services Tax Rules, 2017 read with notification No. 4/2017-Integrated Tax, dated the 28th June 2017, the Central Board of Excise and Customs, on the recommendations of the Council, hereby notifies that a registered person having annual turnover in the preceding financial year as specified in column (2) of the Table below shall mention the digits of Harmonised System of Nomenclature (HSN) Codes, as specified in the corresponding entry in column (3) of the said Table, in a tax invoice issued by such person under the said rules.

Table

Serial Number

Annual Turnover in the preceding Financial Year

Number of Digits of HSN Code

(1)

(2)

(3)

1.

Upto rupees one crore fifty lakhs

Nil

2.

more than rupees one crore fifty lakhs and upto rupees five crores

2

3.

more than rupees five crores

4

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F. No.349/72/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 05/2017 Dated: 28-06-2017


Supplies of goods in respect of which no refund of unutilised input tax credit shall be allowed under section 54 (3) – 05/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.5/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by clause (ii) of the proviso to sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, heading, sub-heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, in respect of which no refund of unutilised input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such goods (other than nil rated or fully exempt supplies).

TABLE

 S. No. Tariff item, heading, sub-heading or Chapter Description of Goods

(1)

(2)

(3)

1. 5007 Woven fabrics of silk or of silk waste
2. 5111 to 5113 Woven fabrics of wool or of animal hair
3. 5208 to 5212 Woven fabrics of cotton
4. 5309 to 5311 Woven fabrics of other vegetable textile fibres, paper yarn
5. 5407, 5408 Woven fabrics of manmade textile materials
6. 5512 to 5516 Woven fabrics of manmade staple fibres
7. 60 Knitted or crocheted fabrics [All goods]
8. 8601 Rail locomotives powered from an external source of electricity or by electric accumulators
9. 8602 Other rail locomotives; locomotive tenders; such as Diesel-electric locomotives, Steam locomotives and tenders thereof
10. 8603 Self-propelled railway or tramway coaches, vans and trucks, other than those of heading 8604
11. 8604 Railway or tramway maintenance or service vehicles, whether or not self-propelled (for example, workshops, cranes, ballast tampers, trackliners, testing coaches and track inspection vehicles)
12. 8605 Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches and other special purpose railway or tramway coaches, not self-propelled (excluding those of heading 8604)
13. 8606 Railway or tramway goods vans and wagons, not self-propelled
14. 8607 Parts of railway or tramway locomotives or rolling-stock; such as Bogies, bissel-bogies, axles and wheels, and parts thereof
15. 8608 Railway or tramway track fixtures and fittings; mechanical (including electro-mechanical) signalling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations or airfields; parts of the foregoing

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

Union Territory [ GST (UTGST) - Notifications ] Notification No : 05/2017 Dated: 28-06-2017


Notification specifying supplies of goods in respect of which no refund of unutilised input tax credit shall be allowed under section 54 (3) of CGST Act – 05/2017 – Dated 28-6-2017 – Union Territory GST (UTGST) Rate

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.5/2017-Union Territory Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by clause (ii) of the proviso to sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) the Central Government, on the recommendations of the Council, hereby notifies the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, heading, sub-heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, in respect of which no refund of unutilised input tax credit shall be allowed, where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on the output supplies of such goods (other than nil rated or fully exempt supplies).

TABLE

S. No.

Tariff item, heading, sub-heading or Chapter

Description of Goods

(1)

(2)

(3)

1.

5007 Woven fabrics of silk or of silk waste

2.

5111 to 5113 Woven fabrics of wool or of animal hair

3.

5208 to 5212 Woven fabrics of cotton

4.

5309 to 5311 Woven fabrics of other vegetable textile fibres, paper yarn

5.

5407, 5408 Woven fabrics of manmade textile materials

6.

5512 to 5516 Woven fabrics of manmade staple fibres

7.

60 Knitted or crocheted fabrics [All goods]

8.

8601 Rail locomotives powered from an external source of electricity or by electric accumulators

9.

8602 Other rail locomotives; locomotive tenders; such as Diesel-electric locomotives, Steam locomotives and tenders thereof

10.

8603 Self-propelled railway or tramway coaches, vans and trucks, other than those of heading 8604

11.

8604 Railway or tramway maintenance or service vehicles, whether or not self-propelled (for example, workshops, cranes, ballast tampers, trackliners, testing coaches and track inspection vehicles)

12.

8605 Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches and other special purpose railway or tramway coaches, not self-propelled (excluding those of heading 8604)

13.

8606 Railway or tramway goods vans and wagons, not self-propelled

14.

8607 Parts of railway or tramway locomotives or rolling-stock; such as Bogies, bissel-bogies, axles and wheels, and parts thereof

15.

8608 Railway or tramway track fixtures and fittings; mechanical (including electro-mechanical) signalling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations or airfields; parts of the foregoing

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

 

[ GST (CGST) - Notifications ] Notification No : 13/2017 Dated: 28-06-2017


Seeks to prescribe rate of interest under CGST Act, 2017 – 13/2017 – Dated 28-6-2017 – Central GST (CGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 13/2017 – Central Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. …..(E).-In exercise of the powers conferred by sub-sections (1) and (3) of section 50, sub-section (12) of section 54 and section 56 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby fixes the rate of interest per annum, for the purposes of the sections as specified in column (2) of the Table below, as mentioned in the corresponding entry in column (3) of the said Table.

Table

Serial Number

Section

Rate of interest (in per cent)

(1)

(2)

(3)

1.

Sub-section (1) of section 50

18

2.

sub-section (3) of section 50

24

3.

sub-section (12) of section 54

6

4.

section 56

6

5.

proviso to section 56

9

2. This notification shall come into force from the 1st day of July, 2017.

[F. No.349/72/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 11/2017 Dated: 28-06-2017


Seeks to amend Notification no 6/2017-Central Tax dt 19.06.2017 – 11/2017 – Dated 28-6-2017 – Central GST (CGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 11/2017 – Central Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. (E).- In pursuance of sub-rule (1) of rule 26 of the Central Goods and Services Tax Rules, 2017, the Central Board of Excise and Customs hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.6/2017-Central Tax, dated the 19th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 608 (E), dated the 19th June, 2017, namely:-

In the said notification for the clause (ii), the following shall be substituted, namely:–

“(ii) Electronic verification code generated through net banking login on the common portal;

(iii) Electronic verification code generated on the common portal.”

2. This notification shall be deemed to have come into force with effect from the 22nd day of June, 2017.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 12/2017 Dated: 28-06-2017


Seeks to notify the number of HSN digits required on tax invoice – 12/2017 – Dated 28-6-2017 – Central GST (CGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 12/2017 – Central Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. …..(E).- In pursuance of the first proviso to rule 46 of the Central Goods and Services Tax Rules, 2017, the Central Board of Excise and Customs, on the recommendations of the Council, hereby notifies that a registered person having annual turnover in the preceding financial year as specified in column (2) of the Table below shall mention the digits of Harmonised System of Nomenclature (HSN) Codes, as specified in the corresponding entry in column (3) of the said Table, in a tax invoice issued by him under the said rules.

Table

Serial Number

Annual Turnover in the preceding Financial Year

Number of Digits of HSN

Code

(1)

(2)

(3)

1.

Upto rupees one crore fifty lakhs

Nil

2.

more than rupees one crore fifty lakhs and upto rupees five crores

2

3.

more than rupees five crores

4

2. This notification shall come into force from the 1st day of July, 2017.

[F. No.349/72/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 04/2017 Dated: 28-06-2017


Reverse charge on certain specified supplies of goods under section 9 (3) – 04/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.4/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the supply of goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, made by the person as specified in the corresponding entry in column (4), in respect of which the central tax shall be paid on reverse charge basis by the recipient of the intra-state supply of such goods as specified in the corresponding entry in column (5) and all the provisions of the said Act shall apply to such recipient, namely:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter Description of supply of Goods Supplier of goods Recipient of supply

(1)

(2)

(3)

(4)

(5)

1.

0801 Cashew nuts, not shelled or peeled Agriculturist Any registered person

2.

1404 90 10 Bidi wrapper leaves (tendu) Agriculturist Any registered person

3.

2401 Tobacco leaves Agriculturist Any registered person

4.

5004 to 5006 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person

5.

- Supply of lottery. State Government, Union Territory or any local authority Lottery distributor or selling agent.

Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the

provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

 

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

 

Union Territory [ GST (UTGST) - Notifications ] Notification No : 04/2017 Dated: 28-06-2017


Notification prescribing reverse charge on certain specified supplies of goods under section 7 (3) – 04/2017 – Dated 28-6-2017 – Union Territory GST (UTGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.4/2017-Union Territory Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (3) of section 7 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the supply of goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, made by the person as specified in the corresponding entry in column (4), in respect of which the Union territory tax shall be paid on reverse charge basis by the recipient of the intra-state supply of such goods as specified in the corresponding entry in column (5) and all the provisions of the said Act shall apply to such recipient, namely:-

TABLE

 S. No. Tariff item, sub-heading, heading or Chapter Description of supply of Goods Supplier of goods Recipient of supply

(1)

(2)

(3)

(4)

(5)

1.  0801 Cashew nuts, not shelled or peeled Agriculturist Any registered person
2.  1404 90 10 Bidi wrapper leaves (tendu) Agriculturist Any registered person
3.  2401 Tobacco leaves Agriculturist Any registered person
4.  5004 to 5006 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person
5.  - Supply of lottery. State Government, Union Territory or any local authority Lottery distributor or selling agent.Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

Explanation.–

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

 

Integrated [ GST (IGST) Rate - Notifications ] Notification No : 04/2017 Dated: 28-06-2017


Reverse charge on certain specified supplies of goods under section 9 (3) – 04/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.4/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the supply of goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, made by the person as specified in the corresponding entry in column (4), in respect of which the central tax shall be paid on reverse charge basis by the recipient of the intra-state supply of such goods as specified in the corresponding entry in column (5) and all the provisions of the said Act shall apply to such recipient, namely:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter Description of supply of Goods Supplier of goods Recipient of supply

(1)

(2)

(3)

(4)

(5)

1.

0801 Cashew nuts, not shelled or peeled Agriculturist Any registered person

2.

1404 90 10 Bidi wrapper leaves (tendu) Agriculturist Any registered person

3.

2401 Tobacco leaves Agriculturist Any registered person

4.

5004 to 5006 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person

5.

- Supply of lottery. State Government, Union Territory or any local authority Lottery distributor or selling agent.

Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the

provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

 

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 10/2017 Dated: 28-06-2017


Notification_No._10

Integrated [ GST (IGST) - Notifications ] Notification No : 04/2017 Dated: 28-06-2017


Seeks to notify IGST Rules, 2017 – 04/2017 – Dated 28-6-2017 – Integrated GST (IGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 4/2017 – Integrated Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. (E).- In exercise of the powers conferred by section 22 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) read with section 20 of the said Act, the Central Government hereby makes the following rules, namely:-

1. Short title and commencement.-(1) These rules may be called the Integrated Goods and Services Tax Rules, 2017.

(2) They shall be deemed to have come into force on the 22nd day of June, 2017.

2. Application of Central Goods and Services Tax Rules.-The Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax.

[F. No. 349/76/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 09/2017 Dated: 28-06-2017


Seeks to bring into force certain sections of the CGST Act, 2017 w.e.f 01.07.2017 – 09/2017 – Dated 28-6-2017 – Central GST (CGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 9/2017 – Central Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. …..(E).- In exercise of the powers conferred by sub-section (3) of section 1 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby appoints the 1st day of July, 2017, as the date on which the provisions of sections 6 to 9, 11 to 21, 31 to 41, 42 except the proviso to sub-section (9) of section 42, 43 except the proviso to sub-section (9) of section 43, 44 to 50, 53 to 138, 140 to 145, 147 to 163, 165 to 174 of the said Act, shall come into force.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

 

Integrated [ GST (IGST) - Notifications ] Notification No : 04/2017 Dated: 28-06-2017


Seeks to notify IGST Rules, 2017 – 04/2017 – Dated 28-6-2017 – Integrated GST (IGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 4/2017 – Integrated Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. (E).- In exercise of the powers conferred by section 22 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) read with section 20 of the said Act, the Central Government hereby makes the following rules, namely:-

1. Short title and commencement.-(1) These rules may be called the Integrated Goods and Services Tax Rules, 2017.

(2) They shall be deemed to have come into force on the 22nd day of June, 2017.

2. Application of Central Goods and Services Tax Rules.-The Central Goods and Services Tax Rules, 2017, for carrying out the provisions specified in section 20 of the Integrated Goods and Services Tax Act, 2017 shall, so far as may be, apply in relation to integrated tax as they apply in relation to central tax.

[F. No. 349/76/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

Integrated [ GST (IGST) Rate - Notifications ] Notification No : 04/2017 Dated: 28-06-2017


Reverse charge on certain specified supplies of goods under section 5 (3) – 04/2017 – Dated 28-6-2017 – Integrated GST (IGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 4/2017-Integrated Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (3) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the supply of goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, made by the person as specified in the corresponding entry in column (4), in respect of which the integrated tax shall be paid on reverse charge basis by the recipient of the intra-state supply of such goods as specified in the corresponding entry in column (5) and all the provisions of the said Act shall apply to such recipient, namely:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter

Description of supply of Goods

Supplier of goods

Recipient of supply

(1)

(2)

(3)

(4)

(5)

1.

0801

Cashew nuts, not shelled or peeled

Agriculturist

Any registered person

2.

1404 90 10

Bidi wrapper leaves (tendu)

Agriculturist

Any registered person

3.

2401

Tobacco leaves

Agriculturist

Any registered person

4.

5004 to 5006

Silk yarn

Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn

Any registered person

5.

-

Supply of lottery.

State Government, Union Territory or any local authority

Lottery distributor or selling agent. Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998).

Explanation.–

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, sub-heading, heading or chapter, as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 03/2017 Dated: 28-06-2017


2.5 concessional CGST rate for supplies to Exploration and Production notified under section 11 (1) – 03/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Notification_No.3-2017-Central_Tax_(Rate)

Integrated [ GST (IGST) - Notifications ] Notification No : 03/2017 Dated: 28-06-2017


Seeks to bring into force certain sections of the IGST Act, 2017 w.e.f 01.07.2017 – 03/2017 – Dated 28-6-2017 – Integrated GST (IGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 3/2017 – Integrated Tax

New Delhi, the 28th June, 2017

7 Ashadha, 1939 Saka

G.S.R. …..(E).- In exercise of the powers conferred by sub-section (3) of section 1 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government hereby appoints the 1st day of July, 2017, as the date on which the provisions of sections 4 to 13, 16 to 19, 21, 23 to 25 of the said Act, shall come into force.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 17/2017 Dated: 28-06-2017


To notify the categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator – 17/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 17/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R……(E).- In exercise of the powers conferred by sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies that in case of the following categories of services, the tax on intra-State supplies shall be paid by the electronic commerce operator –

(i) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;

(ii) services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act.

Explanation.- For the purposes of this notification,-

(a) “radio taxi” means a taxi including a radio cab, by whatever name called, which is in two-way radio communication with a central control office and is enabled for tracking using Global Positioning System (GPS) or General Packet Radio Service (GPRS);

(b) “maxicab”, “motorcab” and “motor cycle” shall have the same meanings as assigned to them respectively in clauses (22), (25) and (26) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).

2. This notification shall come into force with effect from the 1st day of July, 2017

[F.No. 334/1/2017-TRU]

(Ruchi Bisht)

Under Secretary to the Government of India

Integrated [ GST (IGST) Rate - Notifications ] Notification No : 03/2017 Dated: 28-06-2017


Concessional rate of IGST on inter-State supplies of certain goods – 03/2017 – Dated 28-6-2017 – Integrated GST (IGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.3/2017-Integrated Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 6 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts inter-State supplies of goods, the description of which is specified in column (3) of the Table below read with relevant List appended hereto and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, from so much of the integrated tax leviable thereon under section 5 of the Integrated Good and Services Tax Act, 2017 (13 of 2017) as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions annexed to this notification, as specified in the corresponding entry in column (5) of the Table aforesaid.

TABLE

 S. No. Chapter / Heading / Sub-heading / Tariff item Description of Goods Rate Condition No.

(1)

(2)

(3)

(4)

(5)

1. Any Chapter Goods specified in the List annexed to this Table required in connection with:

(1) Petroleum operations undertaken under petroleum exploration licenses or mining leases, granted by the Government of India or any State Government to the Oil and Natural Gas Corporation or Oil India Limited on nomination basis, or

(2) Petroleum operations undertaken under specified contracts, or

(3) Petroleum operations undertaken under specified contracts under the New Exploration Licensing Policy, or

(4) Petroleum operations undertaken under specified contracts under the Marginal Field Policy (MFP), or

(5) Coal bed methane operations undertaken under specified contracts under the Coal Bed Methane Policy.

5% 1

ANNEXURE

Condition No. Conditions
1. If,-

(a) the goods are supplied to,-

(i) the Oil and Natural Gas Corporation or Oil India Limited (hereinafter referred to as the “licensee”) or a sub-contractor of the licensee and in each case in connection with petroleum operations to be undertaken under petroleum exploration licenses or mining leases, as the case may be, granted by the Government of India or any State Government on nomination basis; or

(ii) an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the “contractor”) or a sub-contractor of the contractor and in each case in connection with petroleum operations to be undertaken under a contract with the Government of India; or

(iii) an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the “contractor”) or a sub-contractor of such Company or Companies or such consortium and in each case in connection with petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract signed with the Government of India, on or after the 1st day of April,1998, under the New Exploration Licensing Policy, or on or after the 1st day of April 2001 in terms of the Coal Bed Methane Policy, or on or after the 14th day of October, 2015 in terms of the Marginal Field Policy, as the case may be;

(b) where the recipient of outward supply of goods,-

(i) is a licensee, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply of goods, the following, namely, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for petroleum operations referred to in sub-clause (i) of clause (a);

(ii) is a contractor, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for

(A) petroleum operations referred to in sub-clause (ii) of clause (a) under the contract referred to in that sub-clause, or

(B) petroleum operations or coal bed methane operations referred to in sub-clause (iii) of clause (a), as the case may be, under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be;

(c) where the recipient of outward supply of goods is a sub-contractor, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply, the following, namely :-

(i) a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for :-

(A) petroleum operations referred to in sub-clause (i) of clause (a) under the licenses or mining leases, as the case may be, referred to in that sub-clause and containing the name of such sub-contractor, or

(B) petroleum operations referred to in sub-clause (ii) of clause (a) under the contract referred to in that sub-clause and containing, the name of such sub- contractor, or

(C) petroleum operations or coal bed methane operations, as the case may be, referred to in sub- clause (iii) of clause (a) under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be, and containing the name of such sub-contractor;

(ii) an affidavit to the effect that such sub-contractor is a bonafide sub-contractor of the licensee or lessee or contractor, as the case may be;

(iii) an undertaking from such licensee or lessee or contractor, as the case may be, binding him to pay any tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by such sub-contractor or licensee or lessee or contractor, as the case may be;

(d) where the goods so supplied to the licensee or a sub-contractor of the licensee, or the contractor or a sub-contractor of the contractor are sought to be transferred to another sub-contractor of the licensee or another licensee or a sub- contractor of such licensee, or another sub-contractor of the contractor or another contractor or a subcontractor of such contractor (hereinafter referred to as the “transferee”), such transferee produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over such transferee, at the time of such transfer, the following, namely:-

(i) a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods may be transferred in the name of the transferee and that the said goods are required for petroleum operations to be undertaken under :-

(A) petroleum exploration or mining leases referred to in sub-clause (i) of clause (a), or

(B) petroleum operations to be undertaken under a contract referred to in sub-clause (ii) of clause (a), or

(C) petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract referred to in sub-clause (iii) of clause (a)

(ii) undertaking from the transferee to comply with all the conditions of this entry, including that he shall pay tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by himself, where he is the licensee/ contractor or by the licensee/ contractor of the transferee where such transferee is a sub-contractor.

(iii) a certificate,-

(A) in the case of a petroleum exploration license or mining lease, as the case may be, granted by the Government of India or any State Government on nomination basis, that no foreign exchange remittance is made for the transfer of such goods undertaken by the transferee on behalf of the licensee or lessee, as the case may be;

(B) in the case of a contract entered into by the Government of India and a Foreign Company or Companies or, the Government of India and a consortium of an Indian Company or Companies and a Foreign Company or Companies, that no foreign exchange remittance is made for the transfer of such goods undertaken by the transferee on behalf of the Foreign Company or Companies, as the case may be:

Provided that nothing contained in this sub-clause shall apply if such transferee is an Indian Company or Companies.

(e) where the goods so supplied are sought to be disposed of, the recipient of outward supply or the transferee, as the case may be, may pay the tax which would have been payable but for the exemption contained herein, on the depreciated value of such goods subject to the condition that the recipient of outward supply or the transferee, as the case may be, produces before the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods are no longer required for the petroleum operations or coal bed methane operations, and the depreciated value of the goods shall be equal to the original value of the goods at the time of import reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of clearance of the goods, namely:-

(i) for each quarter in the first year at the rate of 4 per cent.;

(ii) for each quarter in the second year at the rate of 3 per cent.;

(iii) for each quarter in the third year at the rate of 2.5 per cent.; and

(iv) for each quarter in the fourth year and subsequent years at the rate of 2 per cent.,

subject to the maximum of 70 per cent.

 

List

[See S.No.1 of the Table]

(1) Land Seismic Survey Equipment and accessories, requisite vehicles including those for carrying the equipment, seismic survey vessels, global positioning system and accessories, and other materials required for seismic work or other types of Geophysical and Geochemical surveys for onshore and offshore activities.

(2) All types of drilling rigs, jackup rigs, submersible rigs, semi-submersible rigs, drill ships, drilling barges, shot-hole drilling rigs, mobile rigs, workover rigs consisting of various equipment and other drilling equipment required for drilling operations, snubbing units, hydraulic workover units, self-elevating workover platforms, Remote Operated Vessel (ROV).

(3) Helicopters including assemblies/parts.

(4) All types of marine vessels to support petroleum operations including work boats, barges, crew boats, tugs, anchor handling vessels, lay barges and supply boats, marine ship equipment including water maker, DP system and Diving system.

(5) All types of equipment/ units for specialised services like diving, cementing, logging, casing repair, production testing, simulation and mud services, oil field related lab equipment, reservoir engineering, geological equipment, directional drilling, stimulation, Coil Tubing units, Drill Stem Testing (DST), data acquisition and processing, solids control, fishing (as related to downhole retrieval in oil field operations or coal bed methane operations), well control, blowout prevention(BOP), pipe inspection including Non Destructive Testing, coring, gravel pack, well completion and workover for oil/gas/CBM wells including wireline and downhole equipment.

(6) All types of casing pipes, drill pipes, production tubing, pup joints, connections, coupling, kelly, cross overs and swages, Drive Pipes.

(7) All types of drilling bits, including nozzles, breakers and related tools.

(8) All types of oil field chemicals or coal bed methane chemicals including synthetic products used in petroleum or coal bed methane operations, oil well cement and cement additives, required for drilling, production and transportation of oil or gas.

(9) Process, production and well platforms/ installation for oil, gas or CBM and water injection including items forming part of the platforms/ installation and equipment required like process equipment, turbines, pumps, generators, compressors, primemovers, water makers, filters and filtering equipment, telemetery, telecommunication, tele-control and other material required for platforms/ installations.

(10) Line pipes for flow lines and trunk pipelines including weight-coating and wrapping.

(11) Derrick barges, Mobile and stationary cranes, trenchers, pipelay barges, cargo barges and the like required in the construction/ installation of platforms and laying of pipelines.

(12) Single buoy mooring systems, mooring ropes, fittings like chains, shackles, couplings marine hoses and oil tankers to be used for oil storage and connected equipment, Tanks used for storage of oil, condensate, coal bed methane, water, mud, chemicals and related materials.

(13) All types of fully equipped vessels and other units /equipment required for pollution control, fire prevention, fire fighting, safety items like Survival Craft, Life Raft, fire and gas detection equipment, including H2S monitoring equipment.

(14) Mobile and skid mounted pipe laying, pipe testing and pipe inspection equipment.

(15) All types of valves including high pressure valves.

(16) Communication equipment required for petroleum or coal bed methane operations including synthesized VHF Aero and VHF multi channel sets/ VHF marine multi channel sets.

(17) Non-directional radio beacons, intrinsically safe walkie-talkies, directional finders, EPIRV, electronic individual security devices including electronic access control system.

(18) Specialized antenna system, simplex telex over radio terminals, channel micro wave systems, test and measurement equipment.

(19) X-band radar transponders, area surveillance system.

(20) Common depth point (CDP) cable, logging cable, connectors, geo-phone strings, perforation equipment and explosives

(21) Wellhead and Christmas trees, including valves, chokes, heads spools, hangers and actuators, flexible connections like chicksons and high pressure hoses, shut down panels.

(22) Cathodic Protection Systems including anodes.

(23) Technical drawings, maps, literature, data tapes, Operational and Maintenance Manuals required for petroleum or coal bed methane operations.

(24) Sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods specified in this List.

Explanation. –

(1) In this notification, “tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

 

Integrated [ GST (IGST) Rate - Notifications ] Notification No : 01/2017 Dated: 28-06-2017


Rate of IGST on goods under the Integrated Goods and Services Tax Act, 2017 – 01/2017 – Dated 28-6-2017 – Integrated GST (IGST) Rate

Notification_No.1-2017-Integrated_Tax_(Rate)

Union Territory [ GST (UTGST) - Notifications ] Notification No : 03/2017 Dated: 28-06-2017


Seeks to appoints the 1stday of July, 2017, as the date on which the provisions of sections 6 to 16, 18 to 20 and 23 to 26 of Union Territory Goods and Services Tax Act, 2017 (14 of 2017)shall come into force – 03/2017 – Dated 28-6-2017 – Union Territory GST (UTGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 3/2017 – Union Territory Tax

New Delhi, the 28th June, 2017

7 Ashadha, Saka 1939

G.S.R. …..(E).- In exercise of the powers conferred by sub-section (3) of section 1 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government hereby appoints the 1st day of July, 2017, as the date on which the provisions of sections 6 to 16, 18 to 20 and 23 to 26 of the said Act shall come into force.

[F. No. S-31011/25/2017-ST-I-DOR]

(S. R. Meena)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 16/2017 Dated: 28-06-2017


To notify specialised agencies entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them under CGST Act – 16/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 16/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R.….(E).-In exercise of the powers conferred by section 55 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby specifies, -

(i) United Nations or a specified international organisation; and

(ii) Foreign diplomatic mission or consular post in India, or diplomatic agents or career consular officers posted therein,

for the purposes of the said section subject to the following conditions:-

(a) United Nations or a specified international organisation shall be entitled to claim refund of central tax paid on the supplies of goods or services or both received by them subject to a certificate from United Nations or that specified international organisation that the goods and services have been used or are intended to be used for official use of the United Nations or the specified international organisation.

(b) Foreign diplomatic mission or consular post in India, or diplomatic agents or career consular officers posted therein shall be entitled to claim refund of central tax paid on the supplies of goods or services or both received by them subject to, -

(i) that the foreign diplomatic mission or consular post in India, or diplomatic agents or career consular officers posted therein, are entitled to refund of central tax, as stipulated in the certificate issued by the Protocol Division of the Ministry of External Affairs, based on the principle of reciprocity;

(ii) that in case of supply of services, the head of the foreign diplomatic mission or consular post, or any person of such mission or post authorised by him, shall furnish an undertaking in original, signed by him or the authorised person, stating that the supply of services received are for official purpose of the said foreign diplomatic mission or consular post; or for personal use of the said diplomatic agent or career consular officer or members of his/her family;

(iii) that in case of supply of goods, concerned diplomatic mission or consulate or an officer duly authorized by him will produce a certificate that,–

(I) the goods have been put to use, or are in the use, as the case may be, of the mission or consulate;

(II) the goods will not be supplied further or otherwise disposed of before the expiry of three years from the date of receipt of the goods; and

(III) in the event of non-compliance of clause (I), the diplomatic or consular mission will pay back the refund amount paid to them;

(iv) in case the Protocol Division of the Ministry of External Affairs, after having issued a certificate to any foreign diplomatic mission or consular post in India, decides to withdraw the same subsequently, it shall communicate the withdrawal of such certificate to the foreign diplomatic mission or consular post;

(v) the refund of the whole of the central tax granted to the foreign diplomatic mission or consular post in India for official purpose or for the personal use or use of their family members shall not be available from the date of withdrawal of such certificate.

Explanation. – For the purposes of this notification, unless the context otherwise requires,“specified international organisation” means an international organisation declared by the Central Government in pursuance of section 3 of the United Nations (Privileges and Immunities Act) 1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply.

2. This notification shall come into force with effect from the 1st day of July, 2017

[F. No. 334/1/2017-TRU]

(Ruchi Bisht)

Under Secretary to the Government of India

Union Territory [ GST (UTGST) Rate - Notifications ] Notification No : 03/2017 Dated: 28-06-2017


2.5 concessional UTGST rate for supplies to Exploration and Production notified under section 8 (1) – 03/2017 – Dated 28-6-2017 – Union Territory GST (UTGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.3/2017-Union Territory Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Table below read with relevant List appended hereto and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table, from so much of the Union territory tax leviable thereon under section 7 of the Union Territory Good and Services Tax Act, 2017 (14 of 2017) as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions annexed to this notification, as specified in the corresponding entry in column (5) of the Table aforesaid.

TABLE

S. No.

Chapter / Heading / Sub-heading / Tariff item

Description of Goods

Rate

Condition No.

(1)

(2)

(3)

(4)

(5)

1. Any Chapter Goods specified in the List annexed to this Table required in connection with:

(1) Petroleum operations undertaken under petroleum exploration licenses or mining leases, granted by the Government of India or any State Government to the Oil and Natural Gas Corporation or Oil India Limited on nomination basis, or

(2) Petroleum operations undertaken under specified contracts, or

(3) Petroleum operations undertaken under specified contracts under the New Exploration Licensing Policy, or

(4) Petroleum operations undertaken under specified contracts under the Marginal Field Policy (MFP), or

(5) Coal bed methane operations undertaken under specified contracts under the Coal Bed Methane Policy.

2.5% 1

ANNEXURE

Condition No.

Conditions

1. If,-

(a) the goods are supplied to,-

(i) the Oil and Natural Gas Corporation or Oil India Limited (hereinafter referred to as the “licensee”) or a sub-contractor of the licensee and in each case in connection with petroleum operations to be undertaken under petroleum exploration licenses or mining leases, as the case may be, granted by the Government of India or any State Government on nomination basis; or

(ii) an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the “contractor”) or a sub-contractor of the contractor and in each case in connection with petroleum operations to be undertaken under a contract with the Government of India; or

(iii) an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the “contractor”) or a sub-contractor of such Company or Companies or such consortium and in each case in connection with petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract signed with the Government of India, on or after the 1st day of April,1998, under the New Exploration Licensing Policy, or on or after the 1st day of April 2001 in terms of the Coal Bed Methane Policy, or on or after the 14th day of October, 2015 in terms of the Marginal Field Policy, as the case may be;

(b) where the recipient of outward supply of goods,-

(i) is a licensee, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply of goods, the following, namely, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for petroleum operations referred to in sub-clause (i) of clause (a);

(ii) is a contractor, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for

(A) petroleum operations referred to in sub-clause (ii) of clause (a) under the contract referred to in that sub-clause, or

(B) petroleum operations or coal bed methane operations referred to in sub-clause (iii) of clause (a), as the case may be, under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be;

(c) where the recipient of outward supply of goods is a sub-contractor, he produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, at the time of outward supply, the following, namely :-

(i) a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the goods are required for :-

(A) petroleum operations referred to in sub-clause (i) of clause (a) under the licenses or mining leases, as the case may be, referred to in that sub-clause and containing the name of such sub-contractor, or

(B) petroleum operations referred to in sub-clause (ii) of clause (a) under the contract referred to in that sub-clause and containing, the name of such sub- contractor, or

(C) petroleum operations or coal bed methane operations, as the case may be, referred to in sub- clause (iii) of clause (a) under a contract signed under the New Exploration Licensing Policy or the Coal Bed Methane Policy or the Marginal Field Policy, as the case may be, and containing the name of such sub-contractor;

(ii) an affidavit to the effect that such sub-contractor is a bonafide sub-contractor of the licensee or lessee or contractor, as the case may be;

(iii) an undertaking from such licensee or lessee or contractor, as the case may be, binding him to pay any tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by such sub-contractor or licensee or lessee or contractor, as the case may be;

(d) where the goods so supplied to the licensee or a sub-contractor of the licensee, or the contractor or a sub-contractor of the contractor are sought to be transferred to another sub-contractor of the licensee or another licensee or a sub- contractor of such licensee, or another sub-contractor of the contractor or another contractor or a subcontractor of such contractor (hereinafter referred to as the “transferee”), such transferee produces to the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over such transferee, at the time of such transfer, the following, namely:-

(i) a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods may be transferred in the name of the transferee and that the said goods are required for petroleum operations to be undertaken under :-

(A) petroleum exploration or mining leases referred to in sub-clause (i) of clause (a), or

(B) petroleum operations to be undertaken under a contract referred to in sub-clause (ii) of clause (a), or

(C) petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract referred to in sub-clause (iii) of clause (a)

(ii) undertaking from the transferee to comply with all the conditions of this entry, including that he shall pay tax, fine or penalty that may become payable, if any of the conditions of this entry are not complied with by himself, where he is the licensee/ contractor or by the licensee/ contractor of the transferee where such transferee is a sub-contractor;

(iii) a certificate,-

(A) in the case of a petroleum exploration license or mining lease, as the case may be, granted by the Government of India or any State Government on nomination basis, that no foreign exchange remittance is made for the transfer of such goods undertaken by the transferee on behalf of the licensee or lessee, as the case may be;

(B) in the case of a contract entered into by the Government of India and a Foreign Company or Companies or, the Government of India and a consortium of an Indian Company or Companies and a Foreign Company or Companies, that no foreign exchange remittance is made for the transfer of such goods undertaken by the transferee on behalf of the Foreign Company or Companies, as the case may be:

Provided that nothing contained in this sub-clause shall apply if such transferee is an Indian Company or Companies.

(e) where the goods so supplied are sought to be disposed of, the recipient of outward supply or the transferee, as the case may be, may pay the tax which would have been payable but for the exemption contained herein, on the depreciated value of such goods subject to the condition that the recipient of outward supply or the transferee, as the case may be, produces before the Deputy Commissioner of Central tax or the Assistant Commissioner of Central tax or the Deputy Commissioner of State tax or the Assistant Commissioner of State tax, as the case may be, having jurisdiction over the supplier of goods, a certificate from a duly authorised officer of the Directorate General of Hydro Carbons in the Ministry of Petroleum and Natural Gas, Government of India, to the effect that the said goods are no longer required for the petroleum operations or coal bed methane operations, and the depreciated value of the goods shall be equal to the original value of the goods at the time of import reduced by the percentage points calculated by straight line method as specified below for each quarter of a year or part thereof from the date of clearance of the goods, namely:-

(i) for each quarter in the first year at the rate of 4 per cent.;

(ii) for each quarter in the second year at the rate of 3 per cent.;

(iii) for each quarter in the third year at the rate of 2.5 per cent.; and

(iv) for each quarter in the fourth year and subsequent years at the rate of 2 per cent.,

subject to the maximum of 70 per cent.

List

[See S.No.1 of the Table]

(1) Land Seismic Survey Equipment and accessories, requisite vehicles including those for carrying the equipment, seismic survey vessels, global positioning system and accessories, and other materials required for seismic work or other types of Geophysical and Geochemical surveys for onshore and offshore activities.

(2) All types of drilling rigs, jackup rigs, submersible rigs, semi-submersible rigs, drill ships, drilling barges, shot-hole drilling rigs, mobile rigs, workover rigs consisting of various equipment and other drilling equipment required for drilling operations, snubbing units, hydraulic workover units, self-elevating workover platforms, Remote Operated Vessel (ROV).

(3) Helicopters including assemblies/parts.

(4) All types of marine vessels to support petroleum operations including work boats, barges, crew boats, tugs, anchor handling vessels, lay barges and supply boats, marine ship equipment including water maker, DP system and Diving system.

(5) All types of equipment/ units for specialised services like diving, cementing, logging, casing repair, production testing, simulation and mud services, oil field related lab equipment, reservoir engineering, geological equipment, directional drilling, stimulation, Coil Tubing units, Drill Stem Testing (DST), data acquisition and processing, solids control, fishing (as related to downhole retrieval in oil field operations or coal bed methane operations), well control, blowout prevention(BOP), pipe inspection including Non Destructive Testing, coring, gravel pack, well completion and workover for oil/gas/CBM wells including wireline and downhole equipment.

(6) All types of casing pipes, drill pipes, production tubing, pup joints, connections, coupling, kelly, cross overs and swages, Drive Pipes.

(7) All types of drilling bits, including nozzles, breakers and related tools.

(8) All types of oil field chemicals or coal bed methane chemicals including synthetic products used in petroleum or coal bed methane operations, oil well cement and cement additives, required for drilling, production and transportation of oil or gas.

(9) Process, production and well platforms/ installation for oil, gas or CBM and water injection including items forming part of the platforms/ installation and equipment required like process equipment, turbines, pumps, generators, compressors, primemovers, water makers, filters and filtering equipment, telemetery, telecommunication, tele-control and other material required for platforms/ installations.

(10) Line pipes for flow lines and trunk pipelines including weight-coating and wrapping. (11) Derrick barges, Mobile and stationary cranes, trenchers, pipelay barges, cargo barges and the like required in the construction/ installation of platforms and laying of pipelines.

(12) Single buoy mooring systems, mooring ropes, fittings like chains, shackles, couplings marine hoses and oil tankers to be used for oil storage and connected equipment, Tanks used for storage of oil, condensate, coal bed methane, water, mud, chemicals and related materials.

(13) All types of fully equipped vessels and other units /equipment required for pollution control, fire prevention, fire fighting, safety items like Survival Craft, Life Raft, fire and gas detection equipment, including H2S monitoring equipment.

(14) Mobile and skid mounted pipe laying, pipe testing and pipe inspection equipment.

(15) All types of valves including high pressure valves.

(16) Communication equipment required for petroleum or coal bed methane operations including synthesized VHF Aero and VHF multi channel sets/ VHF marine multi channel sets.

(17) Non-directional radio beacons, intrinsically safe walkie-talkies, directional finders, EPIRV, electronic individual security devices including electronic access control system.

(18) Specialized antenna system, simplex telex over radio terminals, channel micro wave systems, test and measurement equipment.

(19) X-band radar transponders, area surveillance system.

(20) Common depth point (CDP) cable, logging cable, connectors, geo-phone strings, perforation equipment and explosives

(21) Wellhead and Christmas trees, including valves, chokes, heads spools, hangers and actuators, flexible connections like chicksons and high pressure hoses, shut down panels.

(22) Cathodic Protection Systems including anodes.

(23) Technical drawings, maps, literature, data tapes, Operational and Maintenance Manuals required for petroleum or coal bed methane operations.

(24) Sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods specified in this List.

Explanation. –

(1) In this notification, “tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

Union Territory [ GST (UTGST) Rate - Notifications ] Notification No : 02/2017 Dated: 28-06-2017


UTGST exempt goods notified under section 8 (1) – 02/2017 – Dated 28-6-2017 – Union Territory GST (UTGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.2/2017-Union Territory Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 8 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods, the description of which is specified in column (3) of the Schedule appended to this notification, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedule, from the whole of the Union territory tax as leviable thereon under section 7 of the Union Territory Good and Services Tax Act, 2017 (14 of 2017).

Schedule

S. No.

Chapter / Heading / Sub-heading / Tariff item

Description of Goods

(1)

(2)

(3)

1.

0101 Live asses, mules and hinnies

2.

0102 Live bovine animals

3.

0103 Live swine

4.

0104 Live sheep and goats

5.

0105 Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls.

6.

0106 Other live animal such as Mammals, Birds, Insects

7.

0201 Meat of bovine animals, fresh and chilled.

8.

0202 Meat of bovine animals frozen [other than frozen and put up in unit container]

9.

0203 Meat of swine, fresh, chilled or frozen [other than frozen and put up in unit container]

10.

0204 Meat of sheep or goats, fresh, chilled or frozen [other than frozen and put up in unit container]

11.

0205 Meat of horses, asses, mules or hinnies, fresh, chilled or frozen [other than frozen and put up in unit container]

12.

0206 Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh, chilled or frozen [other than frozen and put up in unit container]

13.

0207 Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen [other than frozen and put up in unit container]

14.

0208 Other meat and edible meat offal, fresh, chilled or frozen [other than

frozen and put up in unit container]

 

15.

0209 Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled or frozen [other than frozen and put up in unit container]

16.

0209 Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, salted, in brine, dried or smoked [other than put up in unit containers]

17.

0210 Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal, other than put up in unit containers

18.

3 Fish seeds, prawn / shrimp seeds whether or not processed, cured or in frozen state [other than goods falling under Chapter 3 and attracting 2.5%]

19.

0301 Live fish.

20.

0302 Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304

21.

0304 Fish fillets and other fish meat (whether or not minced), fresh or chilled.

22.

0306 Crustaceans, whether in shell or not, live, fresh or chilled; crustaceans, in shell, cooked by steaming or by boiling in water live, fresh or chilled.

23.

0307 Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled.

24.

0308 Aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled.

25.

0401 Fresh milk and pasteurised milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk

26.

0403 Curd; Lassi; Butter milk

27.

0406 Chena or paneer, other than put up in unit containers and bearing a registered brand name;

28.

0407 Birds’ eggs, in shell, fresh, preserved or cooked

29.

0409 Natural honey, other than put up in unit container and bearing a registered brand name

30.

0501 Human hair, unworked, whether or not washed or scoured; waste of human hair

31.

0506 All goods i.e. Bones and horn-cores, unworked, defatted, simply prepared (but not cut to shape), treated with acid or gelatinised; powder and waste of these products

32.

0507 90 All goods i.e. Hoof meal; horn meal; hooves, claws, nails and beaks; antlers; etc.

33.

0511 Semen including frozen semen

34.

6 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage

35.

0701 Potatoes, fresh or chilled.

36.

0702 Tomatoes, fresh or chilled.

37.

0703 Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled.

38.

0704 Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled.

39.

0705 Lettuce (Lactuca sativa) and chicory (Cichorium spp.), fresh or chilled.

40.

0706 Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled.

41.

0707 Cucumbers and gherkins, fresh or chilled.

42.

0708 Leguminous vegetables, shelled or unshelled, fresh or chilled.

43.

0709 Other vegetables, fresh or chilled.

44.

0712 Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared.

45.

0713 Dried leguminous vegetables, shelled, whether or not skinned or split.

46.

0714 Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, fresh or chilled; sago pith.

47.

0801 Coconuts, fresh or dried, whether or not shelled or peeled

48.

0801 Brazil nuts, fresh, whether or not shelled or peeled

49.

0802 Other nuts, Other nuts, fresh such as Almonds, Hazelnuts or filberts (Coryius spp.), walnuts, Chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.), Areca nuts, fresh, whether or not shelled or peeled

50.

0803 Bananas, including plantains, fresh or dried

51.

0804 Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh.

52.

0805 Citrus fruit, such as Oranges, Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, Grapefruit, including pomelos, Lemons (Citrus limon, Citrus limonum) and limes (Citrus aurantifolia, Citrus latifolia), fresh.

53.

0806 Grapes, fresh

54.

0807 Melons (including watermelons) and papaws (papayas), fresh.

55.

0808 Apples, pears and quinces, fresh.

56.

0809 Apricots, cherries, peaches (including nectarines), plums and sloes, fresh.

57.

0810 Other fruit such as strawberries, raspberries, blackberries, mulberries and loganberries, black, white or red currants and gooseberries, cranberries, bilberries and other fruits of the genus vaccinium, Kiwi fruit, Durians, Persimmons, Pomegranates, Tamarind, Sapota (chico), Custard-apple (ata), Bore, Lichi, fresh.

58.

0814 Peel of citrus fruit or melons (including watermelons), fresh.

59.

9 All goods of seed quality

60.

0901 Coffee beans, not roasted

61.

0902 Unprocessed green leaves of tea

62.

0909 Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries [of seed quality]

63.

0910 11 10 Fresh ginger, other than in processed form

64.

0910 30 10 Fresh turmeric, other than in processed form

65.

1001 Wheat and meslin [other than those put up in unit container and bearing a registered brand name]

66.

1002 Rye [other than those put up in unit container and bearing a registered brand name]

67.

1003 Barley [other than those put up in unit container and bearing a registered brand name]

68.

1004 Oats [other than those put up in unit container and bearing a registered brand name]

69.

1005 Maize (corn) [other than those put up in unit container and bearing a registered brand name]

70.

1006 Rice [other than those put up in unit container and bearing a registered brand name]

71.

1007 Grain sorghum [other than those put up in unit container and bearing a registered brand name]

72.

1008 Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi] [other than those put up in unit container and bearing a registered brand name]

73.

1101 Wheat or meslin flour [other than those put up in unit container and bearing a registered brand name].

74.

1102 Cereal flours other than of wheat or meslin, [maize (corn) flour, Rye flour, etc.] [other than those put up in unit container and bearing a registered brand name]

75.

1103 Cereal groats, meal and pellets [other than those put up in unit container and bearing a registered brand name]

76.

1104 Cereal grains hulled

77.

1105 Flour, of potatoes [other than those put up in unit container and bearing a registered brand name]

78.

1106 Flour, of the dried leguminous vegetables of heading 0713 (pulses) [other than guar meal 1106 10 10 and guar gum refined split 1106 10 90], of sago or of roots or tubers of heading 0714 or of the products of Chapter 8 i.e. of tamarind, of singoda, mango flour, etc. [other than those put up in unit container and bearing a registered brand name]

79.

12 All goods of seed quality

80.

1201 Soya beans, whether or not broken, of seed quality.

81.

1202 Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken, of seed quality.

82.

1204 Linseed, whether or not broken, of seed quality.

83.

1205 Rape or colza seeds, whether or not broken, of seed quality.

84.

1206 Sunflower seeds, whether or not broken, of seed quality.

85.

1207 Other oil seeds and oleaginous fruits (i.e. Palm nuts and kernels, cotton seeds, Castor oil seeds, Sesamum seeds, Mustard seeds, Saffower (Carthamus tinctorius) seeds, Melon seeds, Poppy seeds, Ajams, Mango kernel, Niger seed, Kokam) whether or not broken, of seed quality.

86.

1209 Seeds, fruit and spores, of a kind used for sowing.

87.

1210 Hop cones, fresh.

88.

1211 Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled.

89.

1212 Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh or chilled.

90.

1213 Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form of pellets

91.

1214 Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets.

92.

1301 Lac and Shellac

93.

1404 90 40 Betel leaves

94.

1701 or 1702 Jaggery of all types including Cane Jaggery (gur) and Palmyra Jaggery

95.

1904 Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki

96.

1905 Pappad, by whatever name it is known, except when served for consumption

97.

1905 Bread (branded or otherwise), except when served for consumption and pizza bread

98.

2106 Prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc.

99.

2201 Water [other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container]

100.

2201 Non-alcoholic Toddy, Neera including date and palm neera

101.

2202 90 90 Tender coconut water other than put up in unit container and bearing a registered brand name

102.

2302, 2304, 2305, 2306, 2308, 2309 Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake

103.

2501 Salt, all types

104.

2716 00 00 Electrical energy

105.

2835 Dicalcium phosphate (DCP) of animal feed grade conforming to IS specification No.5470 : 2002

106.

3002 Human Blood and its components

107.

3006 All types of contraceptives

108.

3101 All goods and organic manure [other than put up in unit containers and bearing a registered brand name]

109.

3304 Kajal [other than kajal pencil sticks], Kumkum, Bindi, Sindur, Alta

110.

3825 Municipal waste, sewage sludge, clinical waste

111.

3926 Plastic bangles

112.

4014 Condoms and contraceptives

113.

4401 Firewood or fuel wood

114.

4402 Wood charcoal (including shell or nut charcoal), whether or not agglomerated

115.

4802 / 4907 Judicial, Non-judicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorized by the Government

116.

4817 / 4907 Postal items, like envelope, Post card etc., sold by Government

117.

48 / 4907 Rupee notes when sold to the Reserve Bank of India

118.

4907 Cheques, lose or in book form

119.

4901 Printed books, including Braille books

120.

4902 Newspapers, journals and periodicals, whether or not illustrated or containing advertising material

121.

4903 Children’s picture, drawing or colouring books

122.

4905 Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed

123.

5001 Silkworm laying, cocoon

124.

5002 Raw silk

125.

5003 Silk waste

126.

5101 Wool, not carded or combed

127.

5102 Fine or coarse animal hair, not carded or combed

128.

5103 Waste of wool or of fine or coarse animal hair

129.

52 Gandhi Topi

130.

52 Khadi yarn

131.

5303 Jute fibres, raw or processed but not spun

132.

5305 Coconut, coir fibre

133.

63 Indian National Flag

134.

6703 Human hair, dressed, thinned, bleached or otherwise worked

135.

6912 00 40 Earthen pot and clay lamps

136.

7018 Glass bangles (except those made from precious metals)

137.

8201 Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry.

138.

8445 Amber charkha

139.

8446 Handloom [weaving machinery]

140.

8802 60 00 Spacecraft (including satellites) and suborbital and spacecraft launch vehicles

141.

8803 Parts of goods of heading 8801

142.

9021 Hearing aids

143.

92 Indigenous handmade musical instruments

144.

9603 Muddhas made of sarkanda and phool bahari jhadoo

145.

9609 Slate pencils and chalk sticks

146.

9610 00 00 Slates

147.

9803 Passenger baggage

148.

Any chapter Puja samagri namely,-

(i) Rudraksha, rudraksha mala, tulsi kanthi mala, panchgavya (mixture of cowdung, desi ghee, milk and curd);

(ii) Sacred thread (commonly known as yagnopavit);

(iii) Wooden khadau;

(iv) Panchamrit,

(v) Vibhuti sold by religious institutions,

(vi) Unbranded honey [proposed GST Nil]

(vii) Wick for diya.

(viii) Roli

(ix) Kalava (Raksha sutra)

(x) Chandan tika

149.

- Supply of lottery by any person other than State Government, Union Territory or Local authority subject to the condition that the supply of such lottery has suffered appropriate central tax, State tax, Union territory tax or integrated tax, as the case may be, when supplied by State Government, Union Territory or local authority, as the case may be, to the lottery distributor or selling agent appointed by the State Government, Union Territory or local authority, as the case may be.

Explanation.- For the purposes of this Schedule,-

(i) The phrase “unit container” means a package, whether large or small (for example, tin, can, box, jar, bottle, bag, or carton, drum, barrel, or canister) designed to hold a pre-determined quantity or number, which is indicated on such package.

(ii) The phrase “registered brand name” means brand name or trade name, that is to say, a name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person, and which is registered under the Trade Marks Act, 1999.

(iii) “Tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(iv) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 15/2017 Dated: 28-06-2017


To notify the supplies not eligible for refund of unutilized ITC under CGST Act – 15/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 15/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R……(E).- In exercise of the powers conferred by sub-section (3) of section 54 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council hereby notifies that no refund of unutilised input tax credit shall be allowed under sub-section (3) of section 54 of the said Central Goods and Services Tax Act, in case of supply of services specified in sub-item (b) of item 5 of Schedule II of the Central Goods and Services Tax Act.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F. No.334/1/2017 -TRU]

(Ruchi Bisht)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 14/2017 Dated: 28-06-2017


To notify the supplies which shall be treated neither as a supply of goods nor a supply of service under the CGST Act – 14/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 14/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R……(E).- In exercise of the powers conferred by sub-section (2) of section 7 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council hereby notifies that the following activities or transactions undertaken by the Central Government or State Government or any local authority in which they are engaged as public authority, shall be treated neither as a supply of goods nor a supply of service, namely:-

“Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution.”

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F. No.334/1/2017 -TRU]

(Ruchi Bisht)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 13/2017 Dated: 28-06-2017


To notify the categories of services on which tax will be payable under reverse charge mechanism under CGST Act – 13/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Government of India

Ministry of Finance

(Department of Revenue)

Notification No. 13/2017- Central Tax (Rate)

New Delhi, the 28th June, 2017

GSR……(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) of the Table below, supplied by a person as specified in column (3) of the said Table, the whole of central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services as specified in column (4) of the said Table:-

Table

 Sl. No. Category of Supply of Services Supplier of service Recipient of Service

(1)

(2)

(3)

(4)

1 Supply of Services by a goods transport agency (GTA) in respect of transportation of goods by road to-(a) any factory registered under or governed by the Factories Act, 1948(63 of 1948);or

(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or

(c) any co-operative society established by or under any law; or

(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act; or

(e) any body corporate established, by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons; or

(g) any casual taxable person.

Goods Transport Agency (GTA) (a) Any factory registered under or governed by the Factories Act, 1948(63 of 1948); or(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India; or

(c) any co-operative society established by or under any law; or

(d) any person registered under the Central Goods and Services Tax Act or the Integrated Goods and Services Tax Act or the State Goods and Services Tax Act or the

Union Territory Goods and Services Tax Act; or

(e) any body corporate established, by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons; or

(g) any casual taxable person;

located in the taxable territory.

2 Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to a business entity. An individual advocate including a senior advocate or firm of advocates. Any business entity located in the taxable territory.
3 Services supplied by an arbitral tribunal to a business entity. An arbitral tribunal. Any business entity located in the taxable territory.
4 Services provided by way of sponsorship to any body corporate or partnership firm. Any person Any body corporate or partnership firm located in the taxable territory.
5 Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, -(1) renting of immovable property, and

(2) services specified below-

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and  agency services provided to a person other than Central Government, State Government or Union territory or local authority;

(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii) transport of goods or passengers.

Central Government, State Government, Union territory or local authority Any business entity located in the taxable territory.
6 Services supplied by a director of a company or a body corporate to the said company or the body corporate. A director of a company or a body corporate The company or a body corporate located in the taxable territory.
7 Services supplied by an insurance agent to any person carrying on insurance business. An insurance agent Any person carrying on insurance business, located in the taxable territory.
8 Services supplied by a recovery agent to a banking company or a financial institution or a non-banking financial company. A recovery agent A banking company or a financial institution or a non-banking financial company, located in the taxable territory.
9 Supply of services by an author, music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright covered under clause (a) of sub-section (1) of section 13 of the Copyright Act, 1957 relating to original literary, dramatic, musical or artistic works to a publisher, music company, producer or the like. Author or music composer, photographer, artist, or the like Publisher, music company, producer or the like, located in the taxable territory.

Explanation.- For purpose of this notification,-

(a)The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.

(b) “Body Corporate” has the same meaning as assigned to it in clause (11) of section 2 of the Companies Act, 2013.

(c) the business entity located in the taxable territory who is litigant, applicant or petitioner, as the case may be, shall be treated as the person who receives the legal services for the purpose of this notification.

(d) the words and expressions used and not defined in this notification but defined in the Central Goods and Services Tax Act, the Integrated Goods and Services Tax Act, and the Union Territory Goods and Services Tax Act shall have the same meanings as assigned to them in those Acts.

2. This notification shall come into force on the 1st day of July, 2017.

[F. No. 334/1/2017- TRU]

(Ruchi Bisht)

Under Secretary to the Government of India

Union Territory [ GST (UTGST) Rate - Notifications ] Notification No : 01/2017 Dated: 28-06-2017


Notification_No.1-2017-Union_Territory_Tax_(Rate)

[ GST (CGST) Rate - Notifications ] Notification No : 12/2017 Dated: 28-06-2017


To notify the exemptions on supply of services under CGST Act – 12/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Notification_No._12-2017-_Central_Tax_(Rate)

[ GST (CGST) Rate - Notifications ] Notification No : 11/2017 Dated: 28-06-2017


To notify the rates for supply of services under CGST Act – 11/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Notification_No._11-2017-Central_Tax_(Rate)

[ GST (CGST) Rate - Notifications ] Notification No : 10/2017 Dated: 28-06-2017


CGST exemption for dealers operating under Margin Scheme notified under section 11 (1) – 10/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.10/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the central tax on the value of outward supply of such second hand goods as determined under sub-rule (5) of rule 32 of the Central Goods and Services tax Rules, 2017, from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017).

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 09/2017 Dated: 28-06-2017


Exempting supplies to a TDS deductor by a supplier, who is not registered, under section 11 (1) – 09/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.9/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a deductor under section 51 of the said Act, from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the said Act, subject to the condition that the deductor is not liable to be registered otherwise than under sub-clause (vi) of section 24 of the said Act.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 08/2017 Dated: 28-06-2017


CGST exemption from reverse charge upto ₹ 5000 per day under section 11 (1) – 08/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.8/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts intra-State supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017):

Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 07/2017 Dated: 28-06-2017


Exemption from CGST supplies by CSD to Unit Run Canteens and supplies by CSD / Unit Run Canteens to authorised customers notified under section 11 (1) and section 55 CSD – 07/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.7/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts, supplies of goods, the description of which is specified in column (3) of the Table below, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2), from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017), namely:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter

Description of supply of Goods

(1)

(2)

(3)

1.

Any chapter The supply of goods by the CSD to the Unit Run Canteens

2.

Any chapter The supply of goods by the CSD to the authorized customers

3.

Any chapter The supply of goods by the Unit Run Canteens to the authorized customers

Explanation. –

(1) In this notification, “tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 06/2017 Dated: 28-06-2017


Refund of 50 of CGST on supplies to CSD under section 55 – 06/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.6/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

G.S.R. (E).- In exercise of the powers conferred by section 55 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the Canteen Stores Department (hereinafter referred to as the CSD), under the Ministry of Defence, as a person who shall be entitled to claim a refund of fifty per cent. of the applicable central tax paid by it on all inward supplies of goods received by it for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the authorized customers of the CSD.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2007-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 01/2017 Dated: 28-06-2017


CGST Rate Schedule notified under section 9 (1) – 01/2017 – Dated 28-6-2017 – Central GST (CGST) Rate

Notification_No.1-2017-Central_Tax_(Rate)

[ GST (CGST) Rate - Notifications ] Notification No : 07/2017 Dated: 28-06-2017


[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.7/2017-Central Tax (Rate)

New Delhi, the 28th June, 20177

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts, supplies of goods, the description of which is specified in column (3) of the Table below, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2), from the whole of the central tax leviable thereon under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017), namely:-

 

S. No.

Tariff item, sub-heading, heading or Chapter

Description of supply of Goods

(1)

(2)

(3)

1 Any chapter The supply of goods by the CSD to the Unit Run Canteens
2 Any chapter The supply of goods by the CSD to the authorized customers
3 Any chapter The supply of goods by the Unit Run Canteens to the authorized customers

 

Explanation. –

 

(1) In this notification, “tariff item”, “sub-heading” “heading” and “Chapter” shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 06/2017 Dated: 28-06-2017


[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.6/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

 

G.S.R. (E).- In exercise of the powers conferred by section 55 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the Canteen Stores Department (hereinafter referred to as the CSD), under the Ministry of Defence, as a person who shall be entitled to claim a refund of fifty per cent. of the applicable central tax paid by it on all inward supplies of goods received by it for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the authorized customers of the CSD.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2007-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) Rate - Notifications ] Notification No : 06/2017 Dated: 28-06-2017


[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No.6/2017-Central Tax (Rate)

New Delhi, the 28th June, 2017

 

G.S.R. (E).- In exercise of the powers conferred by section 55 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby specifies the Canteen Stores Department (hereinafter referred to as the CSD), under the Ministry of Defence, as a person who shall be entitled to claim a refund of fifty per cent. of the applicable central tax paid by it on all inward supplies of goods received by it for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD or to the authorized customers of the CSD.

2. This notification shall come into force with effect from the 1st day of July, 2017.

[F.No.354/117/2007-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

With 3 days to go, government sets up special war room to deal with GST queries : 28-06-2017


With days to go before India launches its biggest tax reform in decades on July 1, the government is trying to ensure that doubts arising over the goods and services tax get answered in real time as much as possible.

“A special war room has been created… This will address issues, if they crop up, in implementation,” said a senior government official. It will operate from eight in the morning to 10 in the evening, providing a single window for the resolution of any GST-related issue.

The GST Feedback and Action Room set up by the Central Board of Excise and Customs is keeping a close watch to ensure all processes are in place for a smooth rollout, a CBEC official told ET. The war room has been kitted out with state-of-the-art communications equipment with experts on hand to ensure that any technology-related concerns are also addressed.

The war room is a key element in the government’s GST launch effort that’s being backed up by an army of officials in the field and in ministries and departments. Every ministry and department has created GST cells dedicated to the sectors they deal with.

The customs department has begun dry runs at ports. Exporters and traders will start filing bills of entry and shipping in the new format aligned with the GST framework starting Wednesday.

CBEC, the apex indirect taxes body, has directed field formations to be alive to any issue that industry, particularly small businesses, may be confronting. They have also been asked to expect and respond to those who walk into their offices seeking clarification.

The GST Council has already allowed a relaxation of two months in filing returns.

CBEC is meanwhile keeping a close watch on the migration of existing taxpayers to the GST Network that began on June 25. Most of this process is over with the rest expected to register this week.

Field officials have been directed to assist taxpayers and businesses not just with migration but also if they need clarifications with regard to aspects of the tax or its implementation.

Barring Jammu and Kashmir, all states have the legislative framework in place for implementation of GST.

GST seeks to replace multiple state taxes such as value-added tax, purchase tax, entertainment tax and central taxes including central excise duty, countervailing duty, service tax and a number of cesses by a single levy to create a seamless national market. The move is expected to increase efficiency and boost growth.

Source : Business Standard

Why GST’s anti-profiteering rule will prove to be a minefield of litigation : 28-06-2017


When the GST Council issued Anti-profiteering Rules 2017 on June 19, it left out some critical provisions. The notification on Anti-profiteering in the current form relate to the way anti-profiteering complaints and cases will be handled, rather than the “how”, the “what” and the “why” of such rules in practice. That is a crucial miss.

What does the law currently say?
So what does this mean for businesses – who is affected, why, in what way and how? What to do on the basis of the laws as they currently stand?

As the GST Council continues to ponder approach, one needs to understand the anti-profiteering law as it now stands.

Section 171 of the CGST Act (and the corresponding provisions of the state GST Acts) create the obligation on businesses to pass on to the recipients any reduction in the rate of tax or the benefit of input tax credit by way of commensurate reduction in prices. It provides enablement to the central government to set up the Authority or authorise an existing Authority to monitor and enforce compliance with the requirements of the provision – hence the Anti-profiteering Rules 2017 issued earlier  this week.

Clearly one needs to look at the way such rules have worked in the past in relation to Indirect Tax, particularly in relation to VAT. The best and most recent example of such measures can be found in Malaysia though, and it is quite conceivable that the Government will look to those measures for guidance on how to address the issue.

Possibly one other source would be to look at the manner in which the issue was dealt with in Australia when introducing the GST there in 2000, or in Singapore in 1994. After all there is currently no clarity on the yardsticks or standards that would be adopted for determining whether or not the requirements have been met in a given case.

Ideally these should have been in place well before the GST implementation for industry to be prepared for compliance. It is of utmost importance that clarity is imparted to this issue – ideally some simple do’s and don’ts’s for taxpayers to adopt should be published at the earliest opportunity.

The potential inflationary impact of GST and the likelihood of its benefits not being passed on by businesses, resulting in public disaffection with this radical reform, are areas of highest concern for the government and this is abundantly clear from the public pronouncements of senior politicians as well as civil servants.

Consequently, this is also a matter of high concern for industry and the continued uncertainty arising from the complete absence of any details of how this provision will be implemented remains a serious worry for businesses. In the absence of clear guidelines being spelt out, there are fears that this area would prove to be a minefield of litigation.

Anti-profiteering Rules 2017
The Rules published this week provide a substantial, potentially time-consuming process for oversight of the GST rollout to ensure that anti-profiteering behaviour is rooted out. They provide for the establishment of a five member Anti-profiteering Authority at the heart of driving anti-profiteering efforts.

The Authority will be headed by a current or retired Secretary level officer, plus four technical members that are or were Commissioners of State or Central Tax (or its equivalent). The Authority will be supported by a Standing Committee (made up of Centre and State officers), plus state level Screening Committees in every state (comprised of one officer of the State concerned and one from the Centre).

How will the process work?
Essentially in three stages. First of all the state level Screening Committees will be eyes and ears on the ground in each state, responsible for reviewing cases of alleged anti-profiteering. The Screening Committees make recommendations to the Standing Committee, which will in turn (or together with a Screening Committee) “examine accuracy and adequacy of the evidence” to determine whether a case goes further.

When the Standing Committee is satisfied of as “prima facie” case to answer, then a referral will be made to the Director General of Safeguards as a second stage. The DGS will initiate and conclude within 3 months (extendable by 3 months) an investigation, and file a report of findings to the Authority.

The Authority then finally at stage three has the power to punish or compensate a case proved. It could order a reduction in prices, a return of an amount “not passed on”, a penalty and potentially a cancellation of GST registration. In the event where an affected or aggrieved party cannot be identified, the compensation due would go instead to a consumer welfare fund.

Locating this function inside the tax administration is a departure from the global best practices wherein the anti-profiteering authority is independent of the tax administration. For instance, in Malaysia, the provisions for anti-profiteering were not a part of the GST Act but were a part of the Price Control and Anti-Profiteering Act.

Earlier, Australia followed a similar course and the price monitoring regime was set up under the Trade Practices Act with the task being assigned to the Australian Competition and Consumer Commission (Malaysia did a similar thing with the Ministry of Domestic Trade there taking on the mantle of watchdog). The time scales and limits mentioned in the Rules are of course necessary, but point to a process that may end up tying up officials and taxpayers for months if not years. As with many other aspects of the new GST the devil is in the detail – the proof will be in the doing.

What about the how and the why of the anti-profiteering rules?
Rule 7 says that the Authority “may determine the methodology” for determination of whether pricing amounts to anti-profiteering. Unfortunately no methodology has so far emerged – with GST just around the corner this leaves businesses in a real bind. When the methodology does emerge it will likely retrospectively apply or at least come into force on 1 July 2017. Ignorance of the methodology is unlikely on past precedent to be an excuse for not complying with the methodology.

Whatever mechanism the GST Council ultimately decides to set up, it is to be hoped that certain key principles will be kept in mind while designing the methodology in order for it to be purposeful and enjoy public confidence.

Some of these principles include:

a. Adoption of an approach similar to the current, revised Malaysian framework for anti-profiteering cases being taken up – have a narrow sector or industry focus, plus primarily react to consumer “whistleblowers”

b. Clearly there should be adequate checks and balances to ensure fair and objective decisions

c. Time limits for completion of enquiries and decisions should be strictly adhered to and prolonged proceedings avoided

d. The criteria for making determination should be objective and easy to follow

e. They should be aligned with generally accepted accounting norms and practices, so that they do not create additional compliance burden .

f. The approach should be selective such that it secures the interest of relatively more vulnerable consumers against unreasonable profiteering

g. Market factors should be a part of the calculus of decision making and a balanced approach should be adopted, so that on the one hand industry is not allowed to make profits out of tax to the detriment of consumers and the regulation does not end up punishing pursuit of efficiency gains arising from GST on the other. Wherever necessary, there should be the willingness to take assistance from independent expertise.

So what do I do now?
For businesses the question remains as to what they should do, given that rules are not published yet. They need to recognize that even in the absence of publication of rules etc., the obligation on them would, one would expect, arise on the day the GST Act takes effect.

Hence at this point in time, they would be well advised to be prepared to demonstrate their compliance by ensuring that the impacts of tax rate reduction and input tax credit are carefully taken into consideration, calculated and recorded. Keep good record! Further, the cost calculations underlying their pricing decisions should be able to reflect the transmission of these elements further in the supply chain.

Communication with your customers and clients is key in this whole area of managing anti-profiteering compliance. The experience of anti-profiteering rules in other countries has demonstrated that those businesses that manage communication and dialogue in their supply chains best have the fewest issues.

Most anti-profiteering cases are initiated by disgruntled clients or angry customers, by those in the supply chain who have not been properly kept abreast of what the enterprise is doing in the brave new world of GST. Also reflect that marketing promises and idle boasts of say “passing on all my GST savings” can land a taxpayer in hot water.

One important to-do post July 1 will be for businesses to put anti-profiteering rules on their post-GST checklist – as the methodology emerges, make sure you are able to comply.

History also shows that for industry, managing anti-profiteering rules well to be a key sign of a successful GST implementation. That is not myth, but reality. Will your experience be the same? We shall see!

Yashodhan Parande is Senior Advisor, Robert Tsang is Senior Director & India GST Implementation Leader with Deloitte Haskins and Sells LLP.

Source : PTI

Companies can avail input tax credit for most business expenses : 28-06-2017


NEW DELHI: Buying cleaning liquids for ‘Swachh Bharat’ as part of corporate social responsibility or taking a business associate out for lunch, companies will be able to set off all taxes paid on their consumption of goods and services when they clear their own GST liability.

The upcoming indirect tax reform seeks to revamp the entire credit process, allowing credit for any tax paid towards the furtherance of business barring a few items.

“Uninterrupted and seamless chain of input tax credit is one of the key features of GST, which will prevent cascading of taxes,” a government official said on condition of anonymity.

This will bring down the incidence of taxation on business, which can be shared with consumers through lower prices.

Goods and services tax (GST), India’s most ambitious indirect tax reform, is set to roll out from July 1.

Tax charged by central and state governments would also be part of the same tax regime with credit available for tax paid at every stage for set off against GST liability.

“Any registered person can avail credit of tax paid on the inward supply of goods or services or both which is used or intended to be used in the course or furtherance of business,” the provision reads.

Under the current tax regime, if a retailer purchases a refrigerator to store perishable goods, he is not able to claim credit for tax paid on it. But under GST, he will be able to claim credit for tax paid on new refrigerator when he files his own taxes.

Similarly, credit could be claimed on tax paid on taking business associates out for lunch, or on goods or service used for corporate social responsibility. There are some exceptions, such as contribution towards employee provident fund and car lease, which are not covered under input tax credit.

“Under GST, input credit is available on all business expense except few that are specifically denied, such as employee benefits and construction,” said Pratik Jain, leader, indirect tax, at PwC.

“This is much more liberal than the current laws and would significantly increase the credit pool for the businesses,” he said.

“One would hope that authorities will interpret the law also liberally as this would need in change in mindset both for the industry as well as the government,” Jain said.

There is a pass through available for tax paid on a good or service consumed to ensure that tax is not levied on tax.

Source : Economic Times

[ GST (CGST) - Notifications ] Notification No : 08/2017 Dated: 27-06-2017


Seeks to to notify the turnover limit for Composition Levy for CGST – 08/2017 – Dated 27-6-2017 – Central GST (CGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 8/2017-Central Tax

New Delhi, the 27th June, 2017

G.S.R. 647 (E).- In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on the recommendations of the Council, hereby prescribes that an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed seventy five lakh rupees, may opt to pay, in lieu of the central tax payable by him, an amount calculated at the rate of,––

(i) one per cent. of the turnover in State in case of a manufacturer,

(ii) two and a half per cent. of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act, and

(iii) half per cent. of the turnover in State in case of other suppliers:

Provided that the aggregate turnover in the preceding financial year shall be fifty lakh rupees in the case of an eligible registered person, registered under section 25 of the said Act, in any following States, namely: -

(i) Arunachal Pradesh,

(ii) Assam,

(iii) Manipur,

(iv) Meghalaya,

(v) Mizoram,

(vi) Nagaland,

(vii) Sikkim,

(viii) Tripura,

(ix) Himachal Pradesh:

Provided further that the registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10 of the said Act if such person is a manufacturer of the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter

Description

(1)

(2)

(3)

1.

2105 00 00

Ice cream and other edible ice, whether or not containing cocoa.

2.

2106 90 20

Pan masala

3.

24

All goods, i.e. Tobacco and manufactured tobacco substitutes

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 07/2017 Dated: 27-06-2017


Central Goods and Services Tax (Amendment) Rules, 2017 – 07/2017 – Dated 27-6-2017 – Central GST (CGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 7/2017 – Central Tax

New Delhi, the 27th June, 2017

6 Ashadha, 1939 Saka

G.S.R. 644 (E).- In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules to amend the Central Goods and Services Tax Rules, 2017, namely:-

1. (1) These rules may be called the Central Goods and Services Tax (Amendment) Rules, 2017.

(2) They shall be deemed to have come into force with effect from the 22nd day of June, 2017.

2. In the Central Goods and Services Tax Rules, 2017,-

(a) in rule 1, in the heading, the word “, Extent” shall be omitted;

(b) in rule 10, in sub-rule (4), for the words “digitally signed”, the words “duly signed or verified through electronic verification code” shall be substituted;

(c) in rule 13, in sub-rule (4), for the word “signed”, the words “duly signed or verified through electronic verification code” shall be substituted;

(d) in rule 19, in sub-rule (1), in the second proviso, for the words “the said rule”, the words, brackets and figures “sub-rule (2) of rule 8” shall be substituted;

(e) in rule 21, for clause (b), the following clauses shall be substituted, namely:-

“(b) issues invoice or bill without supply of goods or services in violation of the provisions of the Act, or the rules made thereunder; or

(c) violates the provisions of section 171 of the Act or the rules made thereunder.”;

(f) in rule 22, in sub-rule (3), the words, brackets and figure “sub-rule (1) of ” shall be omitted;

(g) in rule 24,-

(i) in sub-rule (1), the second proviso shall be omitted;

(ii) after sub-rule (3), the following sub-rule shall be inserted, namely:-

“(3A) Where a certificate of registration has not been made available to the applicant on the common portal within a period of fifteen days from the date of the furnishing of information and particulars referred to in clause (c) of sub-rule (2) and no notice has been issued under sub-rule (3) within the said period, the registration shall be deemed to have been granted and the said certificate of registration, duly signed or verified through electronic verification code, shall be made available to the registered person on the common portal.”;

(h) in rule 26, in sub-rule (3), for the words “specified under the provisions of the Information Technology Act, 2000 (21 of 2000)”, the words “or through esignature as specified under the provisions of the Information Technology Act, 2000 (21 of 2000) or verified by any other mode of signature or verification as notified by the Board in this behalf.” shall be substituted;

(i) in Form GST CMP-04, in the table, for serial number 5 and the entries related thereto, the following shall be substituted, namely:-

“5. Category of Registered Person

(i) Manufacturers, other than manufacturers of such goods as may be notified by the Government

(ii) Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II

(iii) Any other supplier eligible for composition levy.”;

(j) in Form GST CMP-07, for the brackets, words and figures “[See rule 6(6)]”, the brackets, words and figures “[See rule 6(5)] shall be substituted;

(k) in Form GST REG-12, for the words and figures “within 30 days”, the words and figures “within 90 days” shall be substituted;

(l) in Form GST REG-25,-

(i) for the words and letters, “Provisional ID”, the letters “GSTIN” shall be substituted;

(ii) the words “Place” and “” shall be omitted.

[F. No. 349/58/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June, 2017 published vide G.S.R number 610 (E), dated the 19th June, 2017.

Union Territory [ GST (UTGST) - Notifications ] Notification No : 02/2017 Dated: 27-06-2017


Seeks to notify the turnover limit for Composition Levy for UTGST – 02/2017 – Dated 27-6-2017 – Union Territory GST (UTGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 2/2017-Union Territory Tax

New Delhi, the 27th June, 2017

G.S.R. 648 (E).- In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 21of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government, on the recommendations of the Council, hereby prescribes that an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed seventy five lakh rupees, may opt to pay, in lieu of the tax payable by him, an amount calculated at the rate of,––

(i) one per cent. of the turnover in Union territory in case of a manufacturer,

(ii) two and a half per cent. of the turnover in Union territory in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act, and

(iii) half per cent. of the turnover in Union territory in case of other suppliers:

Provided that a registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10of the said Act read with section 21 of the Union Territory Goods and Services Tax Act, 2017 if such person is a manufacturer of the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter

Description

(1)

(2)

(3)

1.

2105 00 00

Ice cream and other edible ice, whether or not containing cocoa.

2.

2106 90 20

Pan masala

3.

24

All goods, i.e. Tobacco and manufactured tobacco substitutes

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 08/2017 Dated: 27-06-2017


Seeks to to notify the turnover limit for Composition Levy for CGST – 08/2017 – Dated 27-6-2017 – Central GST (CGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(Department of Revenue)

Notification No. 8/2017-Central Tax

New Delhi, the 27th June, 2017

G.S.R. 647 (E).- In exercise of the powers conferred under the proviso to sub-section (1) of section 10 of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act), the Central Government, on the recommendations of the Council, hereby prescribes that an eligible registered person, whose aggregate turnover in the preceding financial year did not exceed seventy five lakh rupees, may opt to pay, in lieu of the central tax payable by him, an amount calculated at the rate of,––

(i) one per cent. of the turnover in State in case of a manufacturer,

(ii) two and a half per cent. of the turnover in State in case of persons engaged in making supplies referred to in clause (b) of paragraph 6 of Schedule II of the said Act, and

(iii) half per cent. of the turnover in State in case of other suppliers:

Provided that the aggregate turnover in the preceding financial year shall be fifty lakh rupees in the case of an eligible registered person, registered under section 25 of the said Act, in any following States, namely: -

(i) Arunachal Pradesh,

(ii) Assam,

(iii) Manipur,

(iv) Meghalaya,

(v) Mizoram,

(vi) Nagaland,

(vii) Sikkim,

(viii) Tripura,

(ix) Himachal Pradesh:

Provided further that the registered person shall not be eligible to opt for composition levy under sub-section (1) of section 10 of the said Act if such person is a manufacturer of the goods, the description of which is specified in column (3) of the Table below and falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Table:-

TABLE

S. No.

Tariff item, sub-heading, heading or Chapter

Description

(1)

(2)

(3)

1.

2105 00 00

Ice cream and other edible ice, whether or not containing cocoa.

2.

2106 90 20

Pan masala

3.

24

All goods, i.e. Tobacco and manufactured tobacco substitutes

Explanation. –

(1) In this Table, “tariff item”, “sub-heading”, “heading” and “chapter” shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975).

(2) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification.

[F.No.354/117/2017-TRU]

(Mohit Tewari)

Under Secretary to the Government of India

Notification No.56/2017 27-06-2017


INCOME-TAX (SEVENTEENTH AMENDMENT) RULES, 2017 – AMENDMENT IN RULE 114 AND FORM NO.49A

NOTIFICATION NO. GSR 642(E) [NO.56/2017 (F.NO.370142/40/2016-TPL)]DATED 27-6-2017

In exercise of the powers conferred by section 139A and section 139AA, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (17th Amendment) Rules, 2017.

(2) They shall come into force from the 1st day of July, 2017.

2. In the Income-tax Rules, 1962,—

I. in rule 114, for sub-rule (5), following shall be substituted, namely:—
“(5) Every person who has been allotted permanent account number as on the 1st day of July, 2017 and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the said authorities.
(6) The Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall specify the formats and standards alongwith procedure, for the verification of documents filed with the application under sub-rule (4) or intimation of Aadhaar number in sub-rule (5), for ensuring secure capture and transmission of data in such format and standards and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing of the application forms for allotment of permanent account number and intimation of Aadhaar number”;
II. in Appendix II, in Form No. 49A,—

(i) for Column number 12 and entries relating thereto, the following shall be substituted namely:—

“12. In case of a person, who is required to quote Aadhaar number or the Enrolment ID of Aadhaar application form as per section 139AA,—

Please mention your AADHAAR number (if allotted):

If AADHAAR number is not allotted, please mention the Enrolment ID of Aadhaar application form:

Name as per AADHAAR letter or card or as per the Enrolment ID of Aadhaar application form:”

(ii) in column number 15, in heading, for the words, brackets and letters, “Documents submitted as Proof of Identity (POI) and Proof of Address (POA)” the words, brackets and letters “Documents submitted as Proof of Identity (POI), Proof of Address (POA) and Proof of date of Birth (POB)” shall be substituted.

 

[ GST (CGST) - Notifications ] Notification No : 07/2017 Dated: 27-06-2017


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 7/2017 – Central Tax

 New Delhi, the 27th June, 2017

6 Ashadha, 1939 Saka

G.S.R. (E).- In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules to amend the Central Goods and Services Tax Rules, 2017, namely:-

1. (1) These rules may be called the Central Goods and Services Tax (Amendment) Rules, 2017.

(2) They shall be deemed to have come into force with effect from the 22nd day of June, 2017.

2. In the Central Goods and Services Tax Rules, 2017,-

(a) in rule 1, in the heading, the word “, Extent” shall be omitted;

(b) in rule 10, in sub-rule (4), for the words “digitally signed”, the words “duly signed or verified through electronic verification code” shall be substituted;

(c) in rule 13, in sub-rule (4), for the word “signed”, the words “duly signed or verified through electronic verification code” shall be substituted;

(d) in rule 19, in sub-rule (1), in the second proviso, for the words “the said rule”, the words, brackets and figures “sub-rule (2) of rule 8” shall be substituted;

(e) in rule 21, for clause (b), the following clauses shall be substituted, namely:- “(b) issues invoice or bill without supply of goods or services in violation of the provisions of the Act, or the rules made thereunder; or (c) violates the provisions of section 171 of the Act or the rules made thereunder.”;

(f) in rule 22, in sub-rule (3), the words, brackets and figure “sub-rule (1) of ” shall be omitted;

(g) in rule 24,-

(i) in sub-rule (1), the second proviso shall be omitted;

(ii) after sub-rule (3), the following sub-rule shall be inserted, namely:-

“(3A) Where a certificate of registration has not been made available to the applicant on the common portal within a period of fifteen days from the date of the furnishing of information and particulars referred to in clause (c)

of sub-rule (2) and no notice has been issued under sub-rule (3) within the said period, the registration shall be deemed to have been granted and the said certificate of registration, duly signed or verified through electronic verification code, shall be made available to the registered person on the common portal.”;

(h) in rule 26, in sub-rule (3), for the words “specified under the provisions of the Information Technology Act, 2000 (21 of 2000)”, the words “or through esignature as specified under the provisions of the Information Technology Act, 2000 (21 of 2000) or verified by any other mode of signature or verification as notified by the Board in this behalf.” shall be substituted;

(i) in Form GST CMP-04, in the table, for serial number 5 and the entries related thereto, the following shall be substituted, namely:-

“5. Category of Registered Person

(i)                  Manufacturers, other than manufacturers of such goods as may be notified by the Government

(ii)                Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II

(iii)               Any other supplier eligible for composition levy.”;

(j) in Form GST CMP-07, for the brackets, words and figures “[See rule 6(6)]”, the brackets, words and figures “[See rule 6(5)] shall be substituted;

(k) in Form GST REG-12, for the words and figures “within 30 days”, the words and figures “within 90 days” shall be substituted;

(l) in Form GST REG-25,-

(i) for the words and letters, “Provisional ID”, the letters “GSTIN” shall be substituted;

(ii) the words “Place” and “” shall be omitted

 

[F. No. 349/58/2017-GST]

(Dr. Sreeparvathy S.L.)

Under Secretary to the Government of India

Note:- The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification No. 3/2017-Central Tax, dated the 19th June, 2017 published vide G.S.R number 610 (E), dated the 19th June, 2017.

 

GST – Adding to burden of employer – 26-06-2017


Sivakumar_Vidyashree_Vaidyanathan

By S Sivakumar, Advocate, K Vidhyashree, Advocate and R Vaidyanathan, Consultant

AS per Schedule III of the Central GST Act, 2017, services by an employee to the employer in the course of or in relation to his employment will not be treated as supply of goods or services. Thus, the salaries and other allowances that are paid by the employer to the employee, as part of the employment contract are outside the purview of GST. Also, all reimbursements of expenses incurred by employees, in the course of their employment, would be outside the levy of tax under GST.

The employer and the employees are deemed to be ‘related persons’, in terms of Section 15(5) of the CGST Act. As per Entry No.2 of the Schedule I to the CGST Act, supply of goods or services or both between related persons when made in the course or furtherance of business would be subject to levy of tax under GST even when they are made without consideration. Moreover, as per Schedule I, gifts exceeding Rs 50,000/- in value in a financial year by an employer to an employee shall be treated as supply of goods or services or both.

Given the above, we can discuss certain specific issues concerning the GST law, as it applies to transactions between the employer and the employees.

Notice pay recovery by employer - in our view, this would be subject to levy of tax under GST, as this is a supply of service effected by the employer to the employee and the employer would be liable to pay tax under GST. This issue is being litigated under the current service tax regime, as well.

Referral bonus paid to employees - this cannot be treated, in our view, as a payment made to an employee in relation to his employment and would consequently be subject to levy of tax under GST. Since the employee would not be registered, the employer may be liable to pay tax under the reverse charge mechanism. Though there can be acontrary opinion that, these services are to be treated as employment related payments and consequently, no tax can be levied under GST, it would be difficult to justify this point of view.

Mediclaim and personal accident policy related payments by the employer - it is common for companies to take group Mediclaim policies covering the employees and their dependents. While in some cases, such premiums are treated as part of the employee’s salary calculated on a cost-to-company basis (‘CTC’), in some other cases, the employer treats such premium as a business expense. It is also very common for employees to be covered for personal accidents, etc. under a group policy wherein the premium is paid by the employer. In some cases, the employer directly pays or reimburses the expense incurred for annual check-up, etc. In our view, since these benefits are extended to employees in relation to their employment, tax cannot be levied under GST.

Providing subsidized food or free food - in many cases, the employer maintains a canteen or deploys an external caterer to provide free or subsidized food to the employees. Except in cases where food is to be provided by the employer (in terms of Factories Act, 1948, or employees working in night shifts, Call Center, etc) whether under any statute or as part of the employment contract, tax would be leviable on all other free or subsidized supplies of food . When the employer provides free food, the employer would be liable to pay tax. When the employer provides food at concessional rates, the difference between the cost incurred by the employer and the amounts recovered from the employees, could get subjected to the levy of tax under GST.

Joining Bonus paid by employer - would be exempt, as this would be in the nature of a payment made to the employee in relation tohis employment.

Incentives/performance bonus - In many cases, the employees get performance related payments and incentives and all of these payments would be exempt under GST as these are paid to employees, in relation to their employment.

Usage of car and other assets etc. for personal purposes - many employers allow employees to make use of the company assets like car, laptops, etc. for their personal purposes in addition to official purposes. In some cases, the employer allows the employee to use the car procured under a hire purchase or leasing arrangement, for personal purposes. Since the car is also used for personal purposes, the employee would be liable as the recipient of supply, to pay tax. Since the employee would not be registered as a taxable person, the employer could be liable to pay tax under reverse charge mechanism . The determination of the value of this supply would be extremely complex and would need to be based on the actual costs incurred by the employer, based on the valuation rules. Under the Income tax Act, the usage of the company car by the employee is treated as a taxable perquisite and is subjected to the levy of income tax at very nominal rates. However, for levy of tax under the GST law, the income tax law based valuation may not be relevant. Our view is the same for usage of other company assets by the employees, for their personal purposes.

Sale of company assets at concessional rates - It is more or less settled under the VAT law that sale of assets of the company (e.g., used car, computers, furniture, etc.) would be treated as a ‘sale’ within the meaning of the VAT law. In our view, these transactions would attract tax under GST on the basis of the prevailing market values of these assets.

‘Gift’ payments made to employees - all payments which are not in relation to the employment are to be subjected to tax under GST, except for festival (eg. Diwali) gifts, for which, an exemption up to Rs 50,000/- per employee per year has been provided for.The term ‘gift’ has not been defined under the GST law and consequently, even cash payments can be treated as gifts, especially when these are given on account of Diwali etc. Thus, Diwali gifts given in cash would also qualify for exemption, subject to the limit of Rs 50,000/- per employee per person.

Free pick-up and drop facility - Many employers provide pick up and drop facility to their employees. While in many cases, these benefits are provided free of cost to the employees, in some cases, the employer subsidizes the cost of this supply. In many States, for women employed in the night shifts, it is mandatory for the employer to use cabs to pick up and drop these employees working in night shifts. In our view, these transactions would be outside the purview of levy of tax under GST, as these are to be treated as being provided to employees , in the course of employment or in relation to employment as these supplies cannot be treated as not being in relation to employment, whether the employment contract specifically covers these benefits or not.

Interest free loans provided to employees - It is common for some companies to provide interest free loans to employees to pursue specific higher education courses or attend specified training sessions or for meeting personal exigencies. Since these are financial transactions (with no ‘supply’ involved), tax is not leviable under GST.

Service awards - it is common for companies to pay specified amounts to employees who have completed specified years of service. Employees are given either cash or gifts, on these occasions. In our view, no tax would be leviable, as these are to be treated in relation to employment.

Uniforms, shoes, etc . – in many factories, uniforms, shoes, soaps, etc. are given to workers. In our view, no tax is leviable under GST.

Sponsorship and training related expenses - it is also common for companies to sponsor their employees for specified training programmes, sometimes, in a foreign country. Since these payments are made in relation to the employment, no tax is leviable under GST.

Usage of company guest house by employees - some companies allow their corporate guest houses to be used by their employees for personal purposes, eg. during vacation, etc. In our view, this facility cannot be treated as being related to the employment especially, as the employees’ families would also be allowed to use the guest house. The Employer would be liable to pay tax under GST and the valuation could be based on the actual costs incurred by the employer.

Recoveries made by the employer towards parking fee, etc - these payments would be subject to levy of tax under GST and these payments cannot be treated as being related to the employment. The employer would be liable to pay tax as this cannot be treated as being in relation to employment.

Outing expenses incurred by employees  - in a place like Bangalore, it is very common for employers to allow their employees to organize parties, celebrations, etc. (with or without purpose). It is common for the team leaders to incur these expenses and then claim reimbursement from the employer. In some cases, employers take their employees (with or without families) for tours or excursions. In our view,  no tax is leviable under GST, as these are to be treated as being in relation to employment . In some large multinational companies, it is also common to have beer parties during specified weekends, involving employees, with the expense being borne by the employer. In our view, no tax can be levied under GST, as these too are to be treated as being incurred in relation to employment.

Claims for reimbursements, etc from employees for all business expenses - since all of these payments are for the purposes of business and are related to the employment, there would no levy of tax under GST.

Payment of club related fees - if these payments can be treated as business/official expenses, no tax would be leviable on the amounts reimbursed to the employees. However, for any payments for personal use by the employees, the employer would be liable to pay tax under GST

Payments to consultants - since consultants cannot be treated as employees, all payments made by the employer to the consultants would be liable to tax under GST and the employer would be liable to pay tax under reverse charge mechanism in all cases where the consultants are not in the tax bracket under GST.

Gratuitous payments by the employer - in our view, any payments that are not related to employment, eg. Diwali /festival gifts, etc. would be covered by the exemption of Rs 50,000/- -irrespective of whether these are paid in cash or in the form of goods (eg. gold coins).

ESOP related payments - in our view, no tax would be leviable under GST on these transactions, as these are to be treated as transactions covered by the employment contracts, apart from being financial transactions.

Relocation/transfer related payments - no tax would be leviable under GST, as these are to be treated as part of the employment.

Providing rent free accommodation - since this benefit is provided as part of the employment contract, no tax would be leviable under GST.

Payments to trainees, apprentices, etc - since trainees and apprentices cannot be treated as employees, these payments will be subjected to the levy of tax under GST and the employer might be liable to pay tax under reverse charge mechanism.

Sitting fee paid to non-executive Directors - would be covered under Reverse Charge Mechanism, requiring the employer to pay tax under GST. Payments made to executive Directors would be exempt from the levy of tax under GST.

Before concluding…

Since most employees would be treated as unregistered suppliers within the meaning of Section 9(4) of the CGST Act, employers would be required to pay tax under the reverse charge mechanism in respect of transactions where the employees are treated as the outward suppliers. Apart from being a huge procedural requirement requiring the employer to upload these details in his GSTR 1 return, the employer would also be required to reverse the ITC on common input services with the value of these services being treated as ‘exempted services’ under Section 17(3) of the CGST Act, in respect of cases which are covered under the reverse charge mechanism under Section 9(4) of the CGST Act.

There is little doubt that the employer, as the taxable person, would be eligible to avail of input tax credit, on the tax paid by him in respect of employee related transactions except for specified transactions like premium paid on Mediclaim policies. Companies would be well advised to plan their employee related activities in such a manner that ITC is available including routing these transactions through intermediaries. Similarly, companies could look at the possibility of having the outdoor caterers to directly supply food to the employees and raise invoices on the companies and companies can take a view that they are not engaged in any ‘supply’ of good to the employees.

This area is likely to see a lot of litigation under the GST law, to the utter delight of Advocates and Consultants. The very process of determining the employer’s liability could be onerous requiring a workable knowledge of accounting and employment policies and it would seem that most companies are ill-equipped to handle this challenge, especially, with regard to valuation of these supplies.

India’s GST: Is it a modified Value Added Tax ? : 24-06-2017


Under the Indirect taxes structure in India, indirect taxes like VAT, Excise, Service Tax, Entry Tax etc. are levied on consumption whereas the direct taxes (Income Tax) are levied on the income earned.

Increasing the indirect taxes makes consumption more and more costly and therefore has an inflationary effect, which makes the poor to suffer the most. Because of this reason indirect taxes are usually seen as regressive, whereas the direct taxes, which targets the richer section of the society, generally seen as progressive.

The Goods and Service Tax (GST) regime will put an end to the cascading effect of tax levied on various products, beginning from the initial stage of production to reaching the ultimate end consumer.

Under the Goods and Service Tax regime, the total amount of indirect tax in the form of GST for any sale/manufacture of goods or rendering of services will be proportionately distributed in both Central and States exchequers.

How is Goods and Service Tax will be different from Value Added Tax?

The Value Added Tax commonly known as VAT is applicable on sale of goods and not rendering of services. Whereas the Service tax levied on services rendered. However, Goods and Service Tax have the application on both goods as well as on services, and it will have a uniform pricing.

 

In the GST example stated above, the tax paid on the sale within the state can be claimed against the tax paid on the sale outside the state, which is not possible under the current scenario.

The Credit of SGST cannot be avail against CGST and vice versa but both can be avail against IGST.

The GST framework works on the existing principles but is to some extent different when it comes to calculating the sales made outside the state. The sales made outside the states are managed by an integrated Goods and Service Tax model. This GST framework makes sure that the correct apportionment of CGST and SGST, and the accurate flow of money between the central and state exchequers.

The bottom line
GST is much more than just a repackaged VAT, as the way GST is structured solves most of the challenges encountered by the Indian businesses with the existing VAT regime today.
From the global tax viewpoint, there is a very thin line between VAT and GST, to a point both of these regimes are conceptually alike. But in India, the two tax regimes differ completely from each other due to the ways they are implemented.

Though GST is set to replace the existing VAT system in the country, GST was a much-required step in preparing the nation for a robust and data-driven tax system which is simple and promises transparency at every level.
Source : PTI

 

Ahead of GST, customs dept reworks systems : 24-06-2017


The Centre is working with exporters and importers to prepare them for the Goods and Services Tax (GST) that will be implemented from next month.

Customs duty will not be subsumed under the new levy, which includes only central excise duty and service tax. However, imports will be considered an inter-state supply and will attract IGST (Integrated GST), while exports will be zero-rated. Full refund of tax will be available.

For many imports, counterveiling duty and special additional duty of customs will also not be levied. Accordingly, laws and procedures as well as IT systems of the two levies are being synced to process refunds and check duty evasion.

Launch campaigns

While the Department of Commerce and the Directorate General of Foreign Trade have already been working on creating awareness, the Central Board of Excise and Customs has also asked the customs department to launch such campaigns and clarify doubts.

Apart from the levy of IGST and compensation cess, the refund on exports of goods will depend on the filing of shipping bills along with the GST invoice and export general manifest.

“The readiness of the customs administration and trade shall be crucial for the smoothroll out of GST,” said a recent CBEC missive.

It further said changes in customs law and procedures have to be accompanied by changes in the electronic data interchange system.

The information in the bill of entry by importers will be cross-checked with their GSTN returns. Further, importers will also be expected to declare their GST registration number or GSTIN to claim credit on the IGST paid.

Similarly, the CBEC has modified the shipping bills to electronically capture details such as GSTIN of the exporter and GST export invoice. Gradually, only details of GSTIN and Permanent Account Number will be required in the shipping bills, CBEC has further said.

Earlier, the Department of Commerce had also announced that it would align the mid-term review of Foreign Trade Policy with the rollout of GST for the convenience of exporters and industry.

Source : Business Line

GST will lower overall tax burden over time: RBI governor Urjit Patel : 24-06-2017


Reserve Bank governor Urjit Patel on Thursday said the soon-to-be implemented goods and services tax (GST) will not only create a national market but will also broaden the tax base which in turn will lower the overall taxes in the long-term.

“The prudent point is that GST itself is part of the digitisation revolution, which along with the reforms on the information tax side in terms of the processes and operations, have the potential to broaden the tax base considerably,” Patel told an event organised by industry lobby IMC Chamber of Commerce and Industry here today.

With a four-rate structure, GST will come into force from the midnight of June 30. Except J&K, all the states have passed enabling laws for its implementation.

He said the broadening of tax base is an important outcome of the new uniform taxation regime and other initiatives on e-payments and digitisation.

Besides creation of a national market, GST will also reduce many inefficiencies within the states while moving goods from within a state and also across the country, the governor said.

Talking about fintech, he said with the emergence of technology-enabled innovation in financial services there will both opportunities and risks to financial sector stability which need to be addressed by policy makers, regulators and supervisors, as many innovations have not been tested through a full financial cycle.

“You really come to know what works and what doesn’t when you go through a full cycle. The decision taken at an early stage can set important precedence on what is the right time and the wrong time. Therefore, caution in this respect is not unwarranted especially when you consider that the world is yet to recover even from the 2008 global financial crisis,” he said.

Patel said even the country’s fintech industry has almost tripled its size since 2013 and the value of transactions has touched $30 billion already.

Patel said the central bank has taken several steps such as the licencing payment banks, Bharat Bill Payment System and launch of UPI, IMPS, among others to facilitate innovations, payment systems and digital banking.

The RBI has also issued a discussion paper on peer-to-peer lending and will be soon issuing guidelines on it.

“We had to wait for one or two clearances in this area before we move forward and we have those clearances now,” Patel said.

He also said enough focus or publicity has not been given to IndiaStack, which is a set of APIs that allows governments, businesses, start-ups and developers to utilise a unique digital infrastructure to resolve problems towards presence-less, paperless, and cashless services delivery.

The APIs which are part of IndiaStack are the UPI, the Aadhaar authentication, Aadhaar e-kyc, digital locker, digital user.

“IndiaStack is a game-changer in our macro fundamentals as financialisation of our savings continues. The most important and durable implication of this is going to be an increase in financial savings compared to where we are now,” he said.

Patel said IndiaStack can also help improve growth rates in the future and its full implication will come in short to medium-term.

Source : Economic Times

Notification No. GSR 635 (E) [No.FEMA.23(R)/(1)/201 [23-06-2017]


FEM (EXPORT OF GOODS AND SERVICES (AMENDMENT) REGULATIONS, 2017 – AMENDMENT IN REGULATION 6

NOTIFICATION NO. GSR 635(E) [NO.FEMA.23(R)/(1)/2017-RB], DATED 23-6-2017

In exercise of the powers conferred by sub-section (3) of Section 7 and sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendments in the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 [Notification No. FEMA 23(R)/2015-RB dated January12, 2016], namely:—

Short title and commencement

1. (i) These Regulations may be called the Foreign Exchange Management (Export of Goods & Services) (Amendment) Regulations, 2017.

(ii) They shall come into force from the date of publication in the Official Gazette.

Amendment of the Regulation 6

2. In sub-regulation (C), after the words, “viz. EDF and SOFTEX”, the words “and Exchange Control copies of the shipping bills” shall be deleted.

Notification No.F. No. 225/157/2017/ITA.II – Dated: 23-6-2017


SECTION 143 OF THE INCOME-TAX ACT, 1961 – ASSESSMENT – GENERAL – ISSUE OF NOTICES UNDER SECTION 143(2) IN REVISED FORMAT

LETTER [F.NO.225/157/2017/ITA.II]DATED 23-6-2017

With reference to the above, I am directed to state that Central Board of Direct Taxes has decided to modify format of notice(s) issued under section 143(2) of the Income-tax Act which intimate the concerned assessee about selection of his/her case for scrutiny. This has become necessary in view of Board’s decision to utilise ‘E-Proceeding’ facility for electronic conduct of assessment proceedings in a widespread manner from this financial year (Annex).

2. The three formats of notice(s) are:

Limited Scrutiny (Computer Aided Scrutiny Selection) (Annex-I).
Complete Scrutiny (Computer Aided Scrutiny Selection) (Annex-II)
Compulsory Manual Scrutiny (Annex-III)

The revised format of 143(2) notice(s) with a note on benefits & Procedures of ‘E-Proceeding’ facility are enclosed for information of the field authorities.

3. I am further directed to state that all scrutiny notices under section 143(2) of the Act, shall henceforth, be issued in these revised formats only. The Systems Directorate is effecting necessary changes in the ITBA module in this regard.

4. The above may be brought to the notice of all for necessary compliance.

Notification No.55/2017 23-06-2017


INCOME-TAX (THIRTEENTH AMENDMENT) RULES, 2017 – AMENDMENT IN RULES 30, 31, & 31A AND INSERTION OF FORM NO.16C AND FORM NO. 26QC – CORRIGENDUM TO NOTIFICATION NO. GSR 561(E) [NO.48/2017 (F.NO.370142/16/2017-TPL)], DATED 8-6-2017

NOTIFICATION NO. GSR 631(E) [NO.55/2017 (F.NO.370142/16/2017-TPL)]DATED 23-6-2017

In the notification of the Government of India, Ministry of Finance, Department of Revenue (Central Board of Direct Taxes), number 48/2017, dated the 8th June, 2017, published vide number G.S.R. 561(E), dated the 8th June, 2017, in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), at page 8, in Form No. 26QC,—

for

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6 reasons you need not fear the GST regime : 22-06-2017


The goods and services tax (GST) is set for a July 1 launch. While businesses have adjustments to make, consumers do not have much to worry about, apart from some possible disruption in supply. ET explains

1) MANY RATES
Pundits say multiple rates have distorted GST, but consumers are gainers

WHAT IT MEANS

GST rates will be as close as possible to earlier effective rates

2) NO REVENUE GAIN FOR GOVT

The government expects a net revenue loss from GST. Increased compliance could make up for this
On the whole, tax incidence will go down for the consumer

3) EXEMPT GOODS
Items and aam aadmi goods exempt or pegged at lower rates

WHAT IT MEANS

The common consumption basket is not likely to get any more expensive

4) SERVICE TAX RATE UP BUT EFFECTIVE TAX LOWER
Service tax rate will be higher under GST, but service providers will also get input tax credit for VAT and cascading of taxes will disappear

WHAT IT MEANS
Even if rates are higher, end prices for consumers may not go up

5) STABLE RATES
Neither the Centre nor states will be able to raise rates easily

WHAT IT MEANS
Tax rates will remain stable

6) BIG BROTHER WILL BE WATCHING
An antiprofiteering body is being set up

WHAT IT MEANS
If any business does not pass on benefits of lower taxes to consumers, it can get into trouble

Source : PTI

GST roll out will be historic, it will set an example for the world: PM Narendra Modi : 22-06-2017


Prime Minister Narendra Modi today said that the roll-out of the Goods and Services (GST) tax from July 1 will be “historic” and the world will witness how political parties of different ideological hues came together to usher in this major reform. He also strongly favoured making the country self-reliant in defence and technology sectors. Addressing a gathering at the APJ Abdul Kalam Technical University (AKTU) here after inaugurating its new building, Modi said, “The roll out of the GST from July 1 will be historic. It will set an example for the world.” The prime minister said he was grateful to all those who had contributed towards the formation of a consensus over the tax reform. I am grateful to all the vidhan sabhas, Lok Sabha, Rajya Sabha and political parties, Modi said. “The world will witness a transformation (in India) and how all the political parties subscribing to different ideologies united for the implementation of the GST,” he said.

The biggest tax reform since Independence, GST will re- shape India’s business landscape by making the country an easier place to do business in and would bring down barriers between states. It is all set to be launched at a grand function in the Central Hall of Parliament on the midnight of June 30. GST over the medium to long term is expected to lead to higher revenues for the Centre and the states while also increasing the size of the economy and having a positive impact on the GDP. It would unify the $2 trillion Indian economy and 1.3 billion people into a single market.

In his speech here, Modi also strongly favoured making the country self-reliant in defence sector. “We are moving forward with the dream of how to make India self-dependent in the field of defence and security,” he said. Presently India imports upto 65 percent of its defence requirements, it is estimated. Can we not make India self-reliant in defence sector?, the prime minister asked here. “We are marching ahead with this dream and for this we have made policy changes and allowed 100 per cent FDI in defence sector,” Modi said. His impassioned plea to make the country self-reliant in defence sector came against the backdrop of the government recently finalising a policy under which private sector companies will be roped-in to manufacture hi-tech defence equipment like submarines and fighter jets in India in partnership with foreign entities.

Modi also lauded the Indian Space Research Organisation (ISRO) saying that “the world took notice when India launched 104 satellites. We have such potential and have to take it forward.” He said that India “reached Mars in a budget less than that of a Bollywood movie due to the technological advancement. Our expense to reach Mars was Rs 7 per kilometer.” Lauding scientists, Modi called them “modern rishis”. “Scientists are facing a challenge to produce cheap but effective drugs for the poor and needy. They are devoted to the objective of ridding the humanity of pain. Science is universal, but technology is local. We have to defeat diseases with science,” he said.

Speaking here, Modi also appreciated the efforts of UP Chief Minister Yogi Adityanath in taking the state forward. “Everyone is watching the developments in UP. They are curious about what is happening here. The Yogi government has intitiated steps to check the diseases and various hindrances prevalent in UP for years. I congratulate Yogi and his team for this,” he said. Earlier Modi also visited the premier CSIR-Central Drugs Research Institute (CDRI) here and evinced a keen interest in the research work conducted by the state-run institute. Soon after arriving here on a two-day visit, the prime minister flew in a chopper from the Amausi airport to the CDRI complex. During his 40-minute stay at the institute, he took a round of the two laboratories.

The prime minister even used a microscope to follow the experiments and also had a brief interaction with senior scientists. CDRI officials briefed him about certain new drugs being developed by the institute for treatment of diseases like osteoporosis and malaria. Modi as prime minister is the president of CSIR and this was his first visit to one of its labs. He also planted a sapling of a medicinal plant in the CDRI premises, flanked by Governor Ram Naik and Chief Minister Yogi Adityanath. On the first day of his visit to Lucknow, Modi also distributed sanction letters for houses under the Pradhan Mantri Aawas Yojana and inaugurated a 400 KV power line. Hours before he landed in the state capital, UP police detained 22 persons were detained over apprehensions that there may be an attempt to block his convoy or create some other kind of disturbance. “We have detained 22 persons apprehending that they might breach security during today’s VVIP visit,” Senior Superintendent of Police (SSP) Deepak Kumar said.Those detained included some youth leaders belonging to the Samajwadi Party.

Source : Business Standard

Retailers need to file single GST return every month: Adhia : 22-06-2017


New Delhi- Days before the rollout of the landmark GST, the government today sought to dispel the notion that the new tax regime will be cumbersome and compliance-heavy, saying taxpayers need to file only one return every month, similar to what they presently do.

In an interview to , Revenue Secretary Hasmukh Adhia said the notion that assessees will have to file three returns every month is unfounded and retailers or B2C dealers need not give invoice wise details every month.Hasmukh Adhia said the notion that assessees will have to file three returns every month is unfounded and retailers or B2C dealers need not give invoice wise details every month.

“Eighty per cent of the businesses will have to simply file total turnover detail in return because they are all B2C dealers or retailers. Return filing is very easy, people need not worry about filing process, it is very transparent and is done by machine,” Adhia said.

Explaining filing of returns, he said when a supplier uploads details of sale invoices, a GST Return-1 is generated by 10th of next month.

The details from the suppliers in GSTR-1 automatically gets updated in the GST Return-2 (GSTR 2) of the purchaser.GSTR-2 is to be filed by 15th of next month and is just a few clicks on computer. GSTR-2 doesn’t need full filing of return.

“GSTR 2 is not to be filed by anybody. It will be appearing in the computer on their own account and they can confirm it. If there is any transaction missing in purchase which computer is not showing because the person from whom you bought has forgotten to put it, then you get a right to add it. It is an auto-populated return. Click it and accept it online,” he said.

Adhia said retailer and B2C suppliers need not worry about the return filing procedure as they have to file only turnover wise detail in GSTR-1.

While only B2B dealers have to file both GSTR-1 and GSTR-2, retailers do not need to file the GSTR-2 as they have to only match with what the dealer has uploaded on the GST Network.

“Ordinary people need not worry…It is not at all complex and people need not worry. 80 per cent of the businesses will have to just file total turnover,” Adhia said.

By 17th of the month, both the supplier and the recipient would have to reconcile the invoice details and file the third return (GSTR-3) by 20th of the month.

GSTR-3 is combination of GSTR-1 and 2 and is computer generated. It gives the summary of the total output tax liability, input tax credit and the difference is the tax liability for the month.

“Out of three returns which are prescribed, only one return has to be filed by the retailer. The remaining two returns are auto-generated by the computer which is only a facility given to them to see so that if there is any mistake they can correct it,” Adhia said.

Adhia said only in case of B2B dealers, invoice wise details are required. “Those number of dealers are very few in the country”.

The GSTN will launch an excel sheet format for B2B dealers so that they can keep the invoice wise details ready and can upload it on the 10th of every month.

In the excel sheet, the businesses would have to give details of transaction, like invoice number, GSTIN of buyer,commodity sold or services given, value of the goods or services sold, the tax incidence and taxes paid.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, has already relaxed return filing rules for businesses for the first two months of the rollout of the new indirect tax regime.

As per the revised return filing timeline decided by the Council, for July, the sale returns will have to be filed by September 5 instead of August 10. Companies will have tofile sale invoice for August with the GST Network by September 20 instead of September 10 earlier.

As regards traders, manufacturers or eateries opting having turnover up to Rs 75 lakh and have opted for composition scheme, they will just have to give their total turnover in GSTR-1 and no invoice wise detail is required.

These businesses will have to file just one return every three months, Adhia said.

Such returns are to be filed by 18th of the month in the succeeding quarter.

Source : Economic Times

Union Territory [ GST (UTGST) - Notifications ] Notification No : 01/2017 Dated: 21-06-2017


Certain sections of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) came into force w.e.f. 22.06.2017 – 01/2017 – Dated 21-6-2017 – Union Territory GST (UTGST)

MINISTRY OF FINANCE

(Department of Revenue)

NOTIFICATION No. 1/2017–UNION TERRITORY TAX

New Delhi, the 21st June, 2017

G.S.R. 616(E).-In exercise of the powers conferred by sub-section (3) of section 1 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017), the Central Government hereby appoints the 22nd day of June, 2017, as the date on which the provisions of sections 1, 2, 3, 4, 5, 17, 21 and section 22 of the said Act shall come into force.

[F. No. S-31011/25/2017-ST- I-DOR]

S. R. MEENA, Under Secy.

Notification No.54/2017 21-06-2017


SECTION 138 OF THE INCOME-TAX ACT, 1961 – DISCLOSURE OF INFORMATION RESPECTING ASSESSEES TO SPECIFIED OFFICER, AUTHORITY OR BODY PERFORMING FUNCTIONS UNDER ANY OTHER LAW – NOTIFIED AUTHORITY UNDER SECTION 138(1)(a)(ii)

NOTIFICATION NO.54/2017 [(F.NO.225/300/2016-ITA.II)]DATED 21-6-2017

In pursuance of sub-clause (ii) of clause (a) of sub-section (1) of Section 138 of the Income-tax Act, 1961, the Central Government, hereby specifies Joint Secretary (Ops.), NATGRID, Ministry of Home Affairs, Government of India, for purposes of the said clause.

This Notification has to be read with order (Annex) under section 138(1)(a) of Income- tax Act, 1961 dated 21-6-2017 in file of even number, issued by the Central Board of Direct Taxes, notifying Principal Director General of Income-tax (Systems) as the ‘designated authority’ for furnishing the ‘bulk information’ on certain identified parameters to the above authority, being notified. .

ANNEX

SECTION 138 OF THE INCOME-TAX ACT, 1961 – DISCLOSURE OF INFORMATION RESPECTING ASSESSEES TO SPECIFIED OFFICER, AUTHORITY OR BODY PERFORMING FUNCTIONS UNDER ANY OTHER LAW – NOTIFIED DESIGNATED AUTHORITY FOR FURNISHING BULK INFORMATION ON CERTAIN IDENTIFIED PARAMETERS TO NOTIFIED AUTHORITY UNDER SECTION 138(1)(a)(ii)

ORDER (F.NO.225/300/2016-ITA.II), DATED 21-6-2017

In exercise of powers conferred under section 138(l)(a) of Income-tax Act, 1961 (‘Act’), the Central Board of Direct taxes hereby directs that Principal Director General of Income-tax (Systems), New-Delhi shall be the specified authority for furnishing information to the Joint Secretary (Ops.), NATGRID, Ministry of Home Affairs, Government of India, as notified vide Notification No. 54/2017 dated 21-6-2017 under sub-clause (ii) of clause (a) of sub-section (1) of section 138 of the Act.

2. Following ‘bulk information’ shall be furnished:

(a) All Pan Number(s);
(b) Name, father’s name, gender, date of birth, photograph, signature/thumb impression of all PAN Card holders; and
(c) All information available in ITD database regarding residential/office addresses, addresses for communication, E-mail addresses and phone/mobile numbers of all PAN Card holders.

3. To facilitate the process of furnishing information, Principal Director General of Income-tax (Systems) would enter into a Memorandum of Understanding (‘MoU’) with NATGRID which inter-alia, would include the mode of transfer of data, maintenance of confidentiality, mechanism for safe preservation of data, weeding out after usage etc. The time line for furnishing information shall be decided by the Principal Director General of Income-tax (Systems) in consultation with NATGRID and included in the said MoU.

4. A copy of the MoU shall be forwarded to this division for record purposes.

Won’t blink on GST launch, no excuse for business not being ready: FM Arun Jaitley : 21-06-2017


The government will not blink on rolling out the GST from July 1, Finance Minister Arun Jaitley said today, emphasising that businesses cannot give any excuse for not being ready as enough time was given to them for preparation. However, implementation of the Goods and Services Tax (GST), which will unify more than a dozen separate levies to create a single market, may result in “some disruption” and “technological glitches” initially as traders and the smallest of businesses will have to file returns online, he added. GST, which was originally planned to be implemented from April 1 but was deferred by three months, will be launched at a grand function in the historic Central Hall of Parliament on the midnight of June 30. The biggest tax reform since Independence, which will gradually re-shape India’s business landscape by making the world’s fastest-growing major economy an easier place to do business in, would bring down barriers between 30 states and unifying the $2 trillion economy and 1.3 billion people into a single market.

Jaitley said GST over the medium to long term will lead to higher revenues to Centre and states while also increasing the size of the economy and having a positive impact on the GDP. “We should be prepared that when the switchover will take place. In the short-term, there will be some challenges,” he said. “The reform step is for betterment. All reforms initially are seen as disruptive, and in the long run are seen as result yielding reform.” Jaitley said the process of registration of existing central excise, service tax and state VAT payers in the new system was “going on well”. “It is not a very complicated process,” he said adding GST will check tax evasion and in the long run lead to rise in number of the assessees.

As many as 65 lakh assesses have already registered and more are expected to sign up. “65 lakh who have registered they did not face problem, the five who have faced problems are on Twitter,” he quipped. Ruling out deferring the rollout because of a small number of people who say businesses are not ready, he said when reforms are implemented “the first principle is you should never blink. If you blink, then you get derailed.” “We have for the last six months saying that the date is July 1. Nobody had any business to be not ready,” he said. Jaitley said the government has already relaxed the dates for filing of initial returns and traders and businesses now have time till September 5, instead of previous August 10, for filing the returns and being ready.

“There is still two and a half months to be ready, but if he (business) is still not ready, I am afraid, but he doesn’t want to be ready,” he said. Reminiscent of India’s tryst with destiny at the mid- night of August 14-15, 1947, Parliament’s historic Central Hall will host an hour-long function on the intervening night of June 30-July 1 to mark the rollout of GST Jaitley said the GST Council has arrived at tax rates on most of the commodities on the basis on “equivalence” so that incidence of tax remains at the current level. “The tax rates that has been fixed, that will apparently lower our tax revenues. But we are hoping that even after reducing rates the revenues won’t come down because evasion would be checked in an efficient system,” he said. Asked about GST’s impact on inflation, he said when tax rates come down it also has an impact on inflation, but it would also depend on monsoon and oil prices.

“In some cases, because there are public interest involved, we have in fact brought down the tax rates. On first principle, Centre and states have suffered a revenue loss but we are hoping to make up for that loss because of more efficient system,” he said. The anti-profiteering clause is transient and should act as a deterrent. “I hope we are not compelled to use it,” he said. He said almost all states have cleared the State GST (SGST) Act, with the exception of Jammu and Kashmir and Kerala.

“I strongly believe that any state keeps out, both its traders and consumers will suffer loss. Because they will not get the benefit of input tax, they will have to pay tax twice and the consumers will get materials which is costlier than rest of the country. Also compensation package won’t be given to states who do not implement GST,” Jaitley said.

Source : Financil Express

GST roll out will be historic, it will set an example for the world: PM Narendra Modi : 21-06-2017


Prime Minister Narendra Modi today said that the roll-out of the Goods and Services (GST) tax from July 1 will be “historic” and the world will witness how political parties of different ideological hues came together to usher in this major reform. He also strongly favoured making the country self-reliant in defence and technology sectors. Addressing a gathering at the APJ Abdul Kalam Technical University (AKTU) here after inaugurating its new building, Modi said, “The roll out of the GST from July 1 will be historic. It will set an example for the world.” The prime minister said he was grateful to all those who had contributed towards the formation of a consensus over the tax reform. I am grateful to all the vidhan sabhas, Lok Sabha, Rajya Sabha and political parties, Modi said. “The world will witness a transformation (in India) and how all the political parties subscribing to different ideologies united for the implementation of the GST,” he said.

The biggest tax reform since Independence, GST will re- shape India’s business landscape by making the country an easier place to do business in and would bring down barriers between states. It is all set to be launched at a grand function in the Central Hall of Parliament on the midnight of June 30. GST over the medium to long term is expected to lead to higher revenues for the Centre and the states while also increasing the size of the economy and having a positive impact on the GDP. It would unify the $2 trillion Indian economy and 1.3 billion people into a single market.

In his speech here, Modi also strongly favoured making the country self-reliant in defence sector. “We are moving forward with the dream of how to make India self-dependent in the field of defence and security,” he said. Presently India imports upto 65 percent of its defence requirements, it is estimated. Can we not make India self-reliant in defence sector?, the prime minister asked here. “We are marching ahead with this dream and for this we have made policy changes and allowed 100 per cent FDI in defence sector,” Modi said. His impassioned plea to make the country self-reliant in defence sector came against the backdrop of the government recently finalising a policy under which private sector companies will be roped-in to manufacture hi-tech defence equipment like submarines and fighter jets in India in partnership with foreign entities.

Modi also lauded the Indian Space Research Organisation (ISRO) saying that “the world took notice when India launched 104 satellites. We have such potential and have to take it forward.” He said that India “reached Mars in a budget less than that of a Bollywood movie due to the technological advancement. Our expense to reach Mars was Rs 7 per kilometer.” Lauding scientists, Modi called them “modern rishis”. “Scientists are facing a challenge to produce cheap but effective drugs for the poor and needy. They are devoted to the objective of ridding the humanity of pain. Science is universal, but technology is local. We have to defeat diseases with science,” he said.

Speaking here, Modi also appreciated the efforts of UP Chief Minister Yogi Adityanath in taking the state forward. “Everyone is watching the developments in UP. They are curious about what is happening here. The Yogi government has intitiated steps to check the diseases and various hindrances prevalent in UP for years. I congratulate Yogi and his team for this,” he said. Earlier Modi also visited the premier CSIR-Central Drugs Research Institute (CDRI) here and evinced a keen interest in the research work conducted by the state-run institute. Soon after arriving here on a two-day visit, the prime minister flew in a chopper from the Amausi airport to the CDRI complex. During his 40-minute stay at the institute, he took a round of the two laboratories.

The prime minister even used a microscope to follow the experiments and also had a brief interaction with senior scientists. CDRI officials briefed him about certain new drugs being developed by the institute for treatment of diseases like osteoporosis and malaria. Modi as prime minister is the president of CSIR and this was his first visit to one of its labs. He also planted a sapling of a medicinal plant in the CDRI premises, flanked by Governor Ram Naik and Chief Minister Yogi Adityanath. On the first day of his visit to Lucknow, Modi also distributed sanction letters for houses under the Pradhan Mantri Aawas Yojana and inaugurated a 400 KV power line. Hours before he landed in the state capital, UP police detained 22 persons were detained over apprehensions that there may be an attempt to block his convoy or create some other kind of disturbance. “We have detained 22 persons apprehending that they might breach security during today’s VVIP visit,” Senior Superintendent of Police (SSP) Deepak Kumar said.Those detained included some youth leaders belonging to the Samajwadi Party.

Source : PTI

GST: Registration of firms can be cancelled for not passing on benefits : 21-06-2017


Companies not passing on benefits of reduced prices on account of the proposed goods and services tax (GST) to customers may lose their registration.

An anti-profiteering authority that will be set up will have the powers to debar an errant assessee from conducting business if he does not pass on lower prices on account of the GST to customers.

Finance Minister Arun Jaitley has said the anti-profiteering provisions are not to be used unless the government is forced to do so.

The authority can order a reduction in prices and ask companies to return money to customers. In case customers do not claim their money or are not identifiable, the money will go into a customer welfare fund. The authority can also impose a penalty.

M S Mani of Deloitte said the provision of de-registering a company was “draconian” and added it should be used only against repeat offenders. De-registering an assessee is the last of four actions the authority can take. It has to first tell an assessee to reduce prices, followed by returning money to customers and then imposing a penalty.

At a press conference, Jaitley said, “We hope we do not have to use it (the anti-profiteering clause).”

The authority will have a chairman of the rank of a secretary and four nominated members who have been commissioners of central or state taxes. The GST Council will have the power to constitute a Standing Committee on Anti-profiteering, which will consist of officers of state governments and the central government.

It will also constitute state-level screening committees, which will have one officer of the state government, to be nominated by the commissioner, and one officer of the central government, to be nominated by the chief commissioner. The additional director general of safeguards will be the secretary to the authority.

It will be up to the authority to determine whether the reduction in the rate of tax on goods or services or the benefit of input tax credit has been passed on by companies and dealers to customers.

The standing committee will, within two months from the receipt of a written application from a complainant, establish whether there is evidence to support the claim. All applications will first be examined by state level screening committees, which will forward them with their recommendations to the standing committee.

Source : Economic Times

GST rollout to take place with grand midnight ceremony: Here’s everything Narendra Modi government has planned for India’s second tryst with destiny : 20-06-2017


After months of speculation and hype, the Goods and Service Tax will be finally launched at midnight on June 30 at a grand ceremony in the national capital, New Delhi. GST is believed to be the biggest tax reform since achieving Independence on the midnight of August 15, 1947. The GST Council, that brings together the central and state governments, has met 17 times to thrash out how the tax will work. It will simplify a web of taxes, regulations and border levies by subsuming an array of central and state levies including excise duty, service tax and VAT. Under GST, four tax slabs have been created. A low rate of tax of 5 per cent on essential items and top rate of 28 per cent on cars and consumer durables has been finalised. The other slabs of tax are 12 and 18 per cent.

Coming back to the launch event, the historic Central Hall of Parliament will host a midnight function on June 30. Here’s what the government has planned for the historic night:

1. Earlier the GST launch was planned at Vigyan Bhawan which is the largest convention centre in the national capital and has hosted the majority of the meetings of the GST Council. But, the government thought that the Central Hall of Parliament might be a better place.

2. The Central Hall was selected considering the importance of the new tax code that unifies more than a dozen separate levies to create a single market with a population greater than the US, Europe, Brazil, Mexico and Japan put together.

3. The circular-shaped Central Hall of the Parliament will perhaps be used for the first time by the government to launch a new taxation system. GST is likely to re-shape the over USD 2 trillion economy.

4. The launch event is scheduled to start at 11 pm on June 30 and will be extended to midnight, coinciding with the rollout of the Goods and Services Tax (GST) regime, official sources told PTI.

5. To mark the beginning of the GST era, a gong will be sounded at midnight.

6. The event will be attended by all the senior leaders in the country along with Prime Minister Narendra Modi and Pranab Mukherjee. The Prime Minister will be the key speaker at the event.

7. Since the GST bill was originally being crafted by Mukherjee himself during the UPA regime, former Prime Minister Manmohan Singh has also been invited and will occupy the high table along with another former Prime Minister HD Deve Gowda in the Central Hall during the event.

9. The GST Council members will also attend the event as guests. The GST Council had met 17 times to come up with the final draft.

Source : Financial Express

10. GST is expected to re-shape the Indian economy making the country a better place to conduct business.

Will be switching to GST regulation from June 30 midnight: FM Arun Jaitley : 20-06-2017


Finance Minister Arun Jaitley on Tuesday reaffirmed that the GST rollout is well and truly on track.

“All GST Council decisions have been taken through consensus. SGST has been approved by all states barring J&K and Kerala. Kerala govt will pass SGST this week,” he said.

“A launch function will be held in Central Hall of Parliament at midnight in the presence of the President, Vice President. Every Parliamentarian, Chief Ministers of states, GST Council members and all those who have assisted in the entire GST process. Two former Prime Ministers Manmohan Singh, Deve Gowda will also be present,” Jaitley told reporters during a press conference.

Jaitley admitted that in the short-term, there will be some challenges but he added that size of formal economy to increase under GST.

Source : PTI

From 11% to 2.2%, five charts explain India’s vanishing inflation : 20-06-2017


Four years ago Indian inflation was running at more than 11 percent. Now it’s melted to a record low 2.2 percent, below Mexico, Turkey and the U.K., as the central bank’s battle against price pressures gains traction.

The slide has prompted the Reserve Bank of India, led by Urjit Patel, to slashed its inflation forecasts and led one members of its six-person monetary policy committee to break ranks at its June 6 announcement, stoking market speculation the bank could next cut rates, perhaps as early as August.

So what’s changed? Economists say cyclical or temporary issues like a stronger currency and weaker domestic demand, combined with structural factors such as better food management by Prime Minister Narendra Modi’s government are in play.

There are risks the cyclical factors could easily unwind, but for now, economists increasingly see structural factors winning out. Inflation is expected to hug the lower band of the RBI’s 2 percent to 3.5 percent forecast for the first half of the financial year ending in March and remain below the 3.5 percent to 4.5 percent target for the second half .

Becoming Anchored

To be sure, India is benefiting from subdued inflation globally, especially in oil, the country’s biggest import. Along with a 5.4 percent rise in the rupee this year, the cost of imports have been held in check. Crucially, inflation expectations are becoming anchored.

“Inflation expectations, both backward and forward, have declined,” said Pranjul Bhandari, chief India economist at HSBC Holdings. “Inflation each quarter is coming out to be lower than the previous quarter.” One-year forward inflation forecasts have fallen steadily since 2014 with underlying inflation — stripping out food, fuel, petrol and diesel — in the 4 percent ballpark which the RBI targets in the medium term, she said.

Food Prices

Radhika Rao, a Singapore-based economist at DBS Group, expects inflation to be below 2 percent for June, July and possibly August and only come within the 4 percent target by the March 2018 quarter. That will be nearly 100 basis points lower than the 5 percent estimate the RBI made in April.

Food prices have been a big reason for the decline. Vegetable prices declined nearly 20 percent last month from a year ago with potato prices, a key staple, contracting for the sixth straight month, the country’s wholesale price index last week showed. After averaging 11 percent between 2007 and 2013, food inflation has averaged 4.5 percent since the start of 2016.

Adroit Management

The government’s cash ban in November led to “fire sales” by farmers as 500 and 1,000 rupee notes were rendered useless overnight for purchases. More importantly, structural changes like better food management by the government and a muted rise in support prices for farmers have kept a lid on prices, economists say.

While falling food prices are good news for India’s rising middle-class, they haven’t gone down well with farmers, some of whom have taken to the streets to protest.

“We believe the backdrop continues to be that of adroit food management by the current government in terms of use of buffer stocks and the crackdown of hoarding, aided by softening in global food prices,” said Prasanna Ananthasubramanian, Mumbai-based chief economist at ICICI Securities Primary Dealership Ltd.

Monsoons, which are critical to the water supply, are forecast to be normal for a second year running and are likely to exert downward pressure on food prices.

New Base

Last month, India also moved to new base year to calculate wholesale prices, bringing it in line with the 2012 base year of the consumer price index. This will reduce volatility in wholesale prices and provide a clearer signal for the RBI, said Soumya Kanti Ghosh, group chief economic adviser at State Bank of IndiaBSE 0.57 %, the country’s largest bank.

Meanwhile, Bloomberg Intelligence economist Abhishek Gupta says that a raft of structural reforms, from the introduction of the goods and sales tax on July 1, to easier foreign direct investment rules, should boost India’s growth potential over the longer term.

“At the same time, actual growth is lagging due to demonetization and high real interest rates,” Gupta wrote in a report earlier this month. “The upshot — a widening output gap that is pulling down inflation.”

Wage increases for India’s government employees and farm-loan waivers could start to pressure inflation higher again, economists say. “Even if inflation bottoms out later this year, its recovery is likely to be modest,” said DBS’s Rao. “Apart from inflation, lower financing costs will help investment growth.”

Source : Economic Times

[ GST (CGST) - Notifications ] Notification No : 06/2017 Dated: 19-06-2017


Modes of verification under CGST Rules, 2017 – 06/2017 – Dated 19-6-2017 – Central GST (CGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 6/2017 – Central Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R. (E).- In exercise of the powers conferred by sub-rule (1) of rule 26 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said Rules), the Central Board of Excise and Customs hereby notifies the following modes of verification, for the purpose of the said rule, namely:-

(i) Aadhaar based Electronic Verification Code (EVC);

(ii) Bank account based One Time Password (OTP):

Provided that where the mode of authentication of any document is through any of the aforesaid modes, such verification shall be done within two days of furnishing the documents.

2. This notification shall come into force on the 22nd day of June, 2017.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 05/2017 Dated: 19-06-2017


Seeks to exempt persons only engaged in making taxable supplies, total tax on which is liable to be paid on reverse charge basis – 05/2017 – Dated 19-6-2017 – Central GST (CGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 5/2017 – Central Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R. (E).- In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration under the aforesaid Act.

2. This notification shall come into force on the 22nd day of June, 2017.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 04/2017 Dated: 19-06-2017


Common Goods and Services Tax Electronic Portal – www.gst.gov.in – 04/2017 – Dated 19-6-2017 – Central GST (CGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 4/2017 – Central Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R.….(E).- In exercise of the powers conferred by section 146 of the Central Goods and Services Tax Act, 2017 (12 of 2017) read with section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government hereby notifies www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns, computation and settlement of integrated tax and electronic way bill.

Explanation.- For the purposes of this notification, “www.gst.gov.in” means the website managed by the Goods and Services Tax Network, a company incorporated under the provisions of section 8 of the Companies Act, 2013 (18 of 2013).

2. This notification shall come into force on the 22nd day of June, 2017.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 02/2017 Dated: 19-06-2017


Jurisdiction of Central Tax Officers – CGST officers – 02/2017 – Dated 19-6-2017 – Central GST (CGST)

notfctn-2-central-tax-english

[ GST (CGST) - Notifications ] Notification No : 03/2017 Dated: 19-06-2017


CGST Rules, 2017 on registration and composition levy – 03/2017 – Dated 19-6-2017 – Central GST (CGST)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 3 /2017 – Central Tax

New Delhi, 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R. ( ) E.:- In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules, namely:-

Chapter I

PRELIMINARY

1. Short title, Extent and Commencement.-

(1) These rules may be called the Central Goods and Services Tax Rules, 2017.

(2) They shall come into force with effect from 22nd June, 2017.

2. Definitions.- In these rules, unless the context otherwise requires,-

(a) “Act” means the Central Goods and Services Tax Act, 2017 (12 of 2017);

(b) “FORM” means a Form appended to these rules;

(c) “section” means a section of the Act;

(d) “Special Economic Zone” shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005);

(e) words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act.

Chapter II

COMPOSITION RULES

3. Intimation for composition levy.- (1) Any person who has been granted registration on a provisional basis under clause (b) of sub-rule (1) of rule 24 and who opts to pay tax under section 10, shall electronically file an intimation in FORM GST CMP-01, duly signed or verified through electronic verification code, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the appointed day, but not later than thirty days after the said day, or such further period as may be extended by the Commissioner in this behalf:

Provided that where the intimation in FORM GST CMP-01 is filed after the appointed day, the registered person shall not collect any tax from the appointed day but shall issue bill of supply for supplies made after the said day.

(2) Any person who applies for registration under sub-rule (1) of rule 8 may give an option to pay tax under section 10 in Part B of FORM GST REG-01, which shall be considered as an intimation to pay tax under the said section.

(3) Any registered person who opts to pay tax under section 10 shall electronically file an intimation in FORM GST CMP-02, duly signed or verified through electronic verification code, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, prior to the commencement of the financial year for which the option to pay tax under the aforesaid section is exercised and shall furnish the statement in FORM GST ITC-03 in accordance with the provisions of sub-rule (4) of rule 44 within a period of sixty days from the commencement of the relevant financial year.

(4) Any person who files an intimation under sub-rule (1) to pay tax under section 10 shall furnish the details of stock, including the inward supply of goods received from unregistered persons, held by him on the day preceding the date from which he opts to pay tax under the said section, electronically, in FORM GST CMP-03, on the common portal, either directly or through a Facilitation Centre notified by the Commissioner, within a period of sixty days from the date on which the option for composition levy is exercised or within such further period as may be extended by the Commissioner in this behalf.

(5) Any intimation under sub-rule (1) or sub-rule (3) in respect of any place of business in any State or Union territory shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number.

4. Effective date for composition levy.- (1) The option to pay tax under section 10 shall be effective from the beginning of the financial year, where the intimation is filed under sub-rule (3) of rule 3 and the appointed day where the intimation is filed under sub-rule (1) of the said rule.

(2) The intimation under sub-rule (2) of rule 3, shall be considered only after the grant of registration to the applicant and his option to pay tax under section 10 shall be effective from the date fixed under sub-rule (2) or (3) of rule 10.

5. Conditions and restrictions for composition levy.- (1) The person exercising the option to pay tax under section 10 shall comply with the following conditions, namely:-

(a) he is neither a casual taxable person nor a non-resident taxable person;

(b) the goods held in stock by him on the appointed day have not been purchased in the course of inter-State trade or commerce or imported from a place outside India or received from his branch situated outside the State or from his agent or principal outside the State, where the option is exercised under sub-rule (1) of rule 3;

(c) the goods held in stock by him have not been purchased from an unregistered supplier and where purchased, he pays the tax under sub-section (4) of section 9;

(d) he shall pay tax under sub-section (3) or sub-section (4) of section 9 on inward supply of goods or services or both;

(e) he was not engaged in the manufacture of goods as notified under clause (e) of sub-section (2) of section 10, during the preceding financial year;

(f) he shall mention the words “composition taxable person, not eligible to collect tax on supplies” at the top of the bill of supply issued by him; and

(g) he shall mention the words “composition taxable person” on every notice or signboard displayed at a prominent place at his principal place of business and at every additional place or places of business.

(2) The registered person paying tax under section 10 may not file a fresh intimation every year and he may continue to pay tax under the said section subject to the provisions of the Act and these rules.

6. Validity of composition levy.- (1) The option exercised by a registered person to pay tax under section 10 shall remain valid so long as he satisfies all the conditions mentioned in the said section and under these rules.

(2) The person referred to in sub-rule (1) shall be liable to pay tax under sub-section (1) of section 9 from the day he ceases to satisfy any of the conditions mentioned in section 10 or the provisions of this Chapter and shall issue tax invoice for every taxable supply made thereafter and he shall also file an intimation for withdrawal from the scheme in FORM GST CMP-04 within seven days of the occurrence of such event.

(3) The registered person who intends to withdraw from the composition scheme shall, before the date of such withdrawal, file an application in FORM GST CMP-04, duly signed or verified through electronic verification code, electronically on the common portal.

(4) Where the proper officer has reasons to believe that the registered person was not eligible to pay tax under section 10 or has contravened the provisions of the Act or provisions of this Chapter, he may issue a notice to such person in FORM GST CMP-05 to show cause within fifteen days of the receipt of such notice as to why the option to pay tax under section 10 shall not be denied.

(5) Upon receipt of the reply to the show cause notice issued under sub-rule (4) from the registered person in FORM GST CMP-06, the proper officer shall issue an order in FORM GST CMP-07 within a period of thirty days of the receipt of such reply, either accepting the reply, or denying the option to pay tax under section 10 from the date of the option or from the date of the event concerning such contravention, as the case may be.

(6) Every person who has furnished an intimation under sub-rule (2) or filed an application for withdrawal under sub-rule (3) or a person in respect of whom an order of withdrawal of option has been passed in FORM GST CMP-07 under sub-rule (5), may electronically furnish at the common portal, either directly or through a Facilitation Centre notified by the Commissioner, a statement in FORM GST ITC-01 containing details of the stock of inputs and inputs contained in semi-finished or finished goods held in stock by him on the date on which the option is withdrawn or denied, within a period of thirty days from the date from which the option is withdrawn or from the date of the order passed in FORM GST CMP-07, as the case may be.

(7) Any intimation or application for withdrawal under sub-rule (2) or (3) or denial of the option to pay tax under section 10 in accordance with sub-rule (5) in respect of any place of business in any State or Union territory, shall be deemed to be an intimation in respect of all other places of business registered on the same Permanent Account Number.

7. Rate of tax of the composition levy.- The category of registered persons, eligible for composition levy under section 10 and the provisions of this Chapter, specified in column (2) of the Table below shall pay tax under section 10 at the rate specified in column (3) of the said Table:-

Sl. No.

Category of registered persons

Rate of tax

(1)

(2)

(3)

1.

Manufacturers, other than manufacturers of such goods as may be notified by the Government one per cent.

2.

Suppliers making supplies referred to in clause (b) of paragraph 6 of Schedule II two and a half per cent.

3.

Any other supplier eligible for composition levy under section 10 and the provisions of this Chapter half per cent.

Chapter III

REGISTRATION

8. Application for registration.- (1) Every person, other than a non-resident taxable person, a person required to deduct tax at source under section 51, a person required to collect tax at source under section 52 and a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) who is liable to be registered under sub-section (1) of section 25 and every person seeking registration under sub-section (3) of section 25 (hereafter in this Chapter referred to as “the applicant”) shall, before applying for registration, declare his Permanent Account Number, mobile number, e-mail address, State or Union territory in Part A of FORM GST REG-01 on the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that a person having a unit(s) in a Special Economic Zone or being a Special Economic Zone developer shall make a separate application for registration as a business vertical distinct from his other units located outside the Special Economic Zone:

Provided further that every person being an Input Service Distributor shall make a separate application for registration as such Input Service Distributor.

(2) (a) The Permanent Account Number shall be validated online by the common portal from the database maintained by the Central Board of Direct Taxes.

(b) The mobile number declared under sub-rule (1) shall be verified through a one-time password sent to the said mobile number; and

(c) The e-mail address declared under sub-rule (1) shall be verified through a separate one-time password sent to the said e-mail address.

(3) On successful verification of the Permanent Account Number, mobile number and e-mail address, a temporary reference number shall be generated and communicated to the applicant on the said mobile number and e-mail address.

(4) Using the reference number generated under sub-rule (3), the applicant shall electronically submit an application in Part B of FORM GST REG-01, duly signed or verified through electronic verification code, along with the documents specified in the said Form at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(5) On receipt of an application under sub-rule (4), an acknowledgement shall be issued electronically to the applicant in FORM GST REG-02.

(6) A person applying for registration as a casual taxable person shall be given a temporary reference number by the common portal for making advance deposit of tax in accordance with the provisions of section 27 and the acknowledgement under sub-rule (5) shall be issued electronically only after the said deposit.

9. Verification of the application and approval.- (1) The application shall be forwarded to the proper officer who shall examine the application and the accompanying documents and if the same are found to be in order, approve the grant of registration to the applicant within a period of three working days from the date of submission of the application.

(2) Where the application submitted under rule 8 is found to be deficient, either in terms of any information or any document required to be furnished under the said rule, or where the proper officer requires any clarification with regard to any information provided in the application or documents furnished therewith, he may issue a notice to the applicant electronically in FORM GST REG-03 within a period of three working days from the date of submission of the application and the applicant shall furnish such clarification, information or documents electronically, in FORM GST REG-04, within a period of seven working days from the date of the receipt of such notice.

Explanation.- For the purposes of this sub-rule, the expression “clarification” includes modification or correction of particulars declared in the application for registration, other than Permanent Account Number, State, mobile number and e-mail address declared in Part A of FORM GST REG-01.

(3) Where the proper officer is satisfied with the clarification, information or documents furnished by the applicant, he may approve the grant of registration to the applicant within a period of seven working days from the date of the receipt of such clarification or information or documents.

(4) Where no reply is furnished by the applicant in response to the notice issued under sub-rule (2) or where the proper officer is not satisfied with the clarification, information or documents furnished, he shall, for reasons to be recorded in writing, reject such application and inform the applicant electronically in FORM GST REG-05.

(5) If the proper officer fails to take any action, -

(a) within a period of three working days from the date of submission of the application; or

(b) within a period of seven working days from the date of the receipt of the clarification, information or documents furnished by the applicant under sub-rule (2),

the application for grant of registration shall be deemed to have been approved.

10. Issue of registration certificate.- (1) Subject to the provisions of sub-section (12) of section 25, where the application for grant of registration has been approved under rule 9, a certificate of registration in FORM GST REG-06 showing the principal place of business and additional place or places of business shall be made available to the applicant on the common portal and a Goods and Services Tax Identification Number shall be assigned subject to the following characters, namely:-

(a) two characters for the State code;

(b) ten characters for the Permanent Account Number or the Tax Deduction and Collection Account Number;

(c) two characters for the entity code; and

(d) one checksum character.

(2) The registration shall be effective from the date on which the person becomes liable to registration where the application for registration has been submitted within a period of thirty days from such date.

(3) Where an application for registration has been submitted by the applicant after the expiry of thirty days from the date of his becoming liable to registration, the effective date of registration shall be the date of the grant of registration under sub-rule (1) or sub-rule (3) or sub-rule (5) of rule 9.

(4) Every certificate of registration shall be digitally signed by the proper officer under the Act.

(5) Where the registration has been granted under sub-rule (5) of rule 9, the applicant shall be communicated the registration number, and the certificate of registration under sub-rule (1), duly signed or verified through electronic verification code, shall be made available to him on the common portal, within a period of three days after the expiry of the period specified in sub-rule (5) of rule 9.

11. Separate registration for multiple business verticals within a State or a Union territory.- (1) Any person having multiple business verticals within a State or a Union territory, requiring a separate registration for any of its business verticals under sub-section (2) of section 25 shall be granted separate registration in respect of each of the verticals subject to the following conditions, namely:-

(a) such person has more than one business vertical as defined in clause (18) of section 2;

(b) the business vertical of a taxable person shall not be granted registration to pay tax under section 10 if any one of the other business verticals of the same person is paying tax under section 9;

(c) all separately registered business verticals of such person shall pay tax under the Act on supply of goods or services or both made to another registered business vertical of such person and issue a tax invoice for such supply.

Explanation.- For the purposes of clause (b), it is hereby clarified that where any business vertical of a registered person that has been granted a separate registration becomes ineligible to pay tax under section 10, all other business verticals of the said person shall become ineligible to pay tax under the said section.

(2) A registered person eligible to obtain separate registration for business verticals may submit a separate application in FORM GST REG-01 in respect of each such vertical.

(3) The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.

12. Grant of registration to persons required to deduct tax at source or to collect tax at source.- (1) Any person required to deduct tax in accordance with the provisions of section 51 or a person required to collect tax at source in accordance with the provisions of section 52 shall electronically submit an application, duly signed or verified through electronic verification code, in FORM GST REG-07 for the grant of registration through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(2) The proper officer may grant registration after due verification and issue a certificate of registration in FORM GST REG-06 within a period of three working days from the date of submission of the application.

(3) Where, upon an enquiry or pursuant to any other proceeding under the Act, the proper officer is satisfied that a person to whom a certificate of registration in FORM GST REG-06 has been issued is no longer liable to deduct tax at source under section 51 or collect tax at source under section 52, the said officer may cancel the registration issued under sub-rule (2) and such cancellation shall be communicated to the said person electronically in FORM GST REG-08:

Provided that the proper officer shall follow the procedure as provided in rule 22 for the cancellation of registration.

13. Grant of registration to non-resident taxable person.- (1) A non-resident taxable person shall electronically submit an application, along with a self-attested copy of his valid passport, for registration, duly signed or verified through electronic verification code, in FORM GST REG-09, at least five days prior to the commencement of business at the common portal either directly or through a Facilitation Centre notified by the Commissioner:

Provided that in the case of a business entity incorporated or established outside India, the application for registration shall be submitted along with its tax identification number or unique number on the basis of which the entity is identified by the Government of that country or its Permanent Account Number, if available.

(2) A person applying for registration as a non-resident taxable person shall be given a temporary reference number by the common portal for making an advance deposit of tax in accordance with the provisions of section 27 and the acknowledgement under sub-rule (5) of rule 8 shall be issued electronically only after the said deposit in his electronic cash ledger.

(3) The provisions of rule 9 and rule 10 relating to the verification and the grant of registration shall, mutatis mutandis, apply to an application submitted under this rule.

(4) The application for registration made by a non-resident taxable person shall be signed by his authorised signatory who shall be a person resident in India having a valid Permanent Account Number.

14. Grant of registration to a person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient.- (1) Any person supplying online information and database access or retrieval services from a place outside India to a non-taxable online recipient shall electronically submit an application for registration, duly signed or verified through electronic verification code, in FORM GST REG-10, at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(2) The applicant referred to in sub-rule (1) shall be granted registration, in FORM GST REG-06, subject to such conditions and restrictions and by such officer as may be notified by the Central Government on the recommendations of the Council.

15. Extension in period of operation by casual taxable person and non-resident taxable person.- (1) Where a registered casual taxable person or a non-resident taxable person intends to extend the period of registration indicated in his application of registration, an application in FORM GST REG-11 shall be submitted electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner, by such person before the end of the validity of registration granted to him.

(2) The application under sub-rule (1) shall be acknowledged only on payment of the amount specified in sub-section (2) of section 27.

16. Suo moto registration.- (1) Where, pursuant to any survey, enquiry, inspection, search or any other proceedings under the Act, the proper officer finds that a person liable to registration under the Act has failed to apply for such registration, such officer may register the said person on a temporary basis and issue an order in FORM GST REG- 12.

(2) The registration granted under sub-rule (1) shall be effective from the date of such order granting registration.

(3) Every person to whom a temporary registration has been granted under sub-rule (1) shall, within a period of ninety days from the date of the grant of such registration, submit an application for registration in the form and manner provided in rule 8 or rule 12:

Provided that where the said person has filed an appeal against the grant of temporary registration, in such case, the application for registration shall be submitted within a period of thirty days from the date of the issuance of the order upholding the liability to registration by the Appellate Authority.

(4) The provisions of rule 9 and rule 10 relating to verification and the issue of the certificate of registration shall, mutatis mutandis, apply to an application submitted under sub-rule (3).

(5) The Goods and Services Tax Identification Number assigned, pursuant to the verification under sub-rule (4), shall be effective from the date of the order granting registration under sub-rule (1).

17. Assignment of Unique Identity Number to certain special entities.- (1) Every person required to be granted a Unique Identity Number in accordance with the provisions of sub-section (9) of section 25 may submit an application electronically in FORM GST REG-13, duly signed or verified through electronic verification code, in the manner specified in rule 8 at the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(2) The proper officer may, upon submission of an application in FORM GST REG-13 or after filling up the said form, assign a Unique Identity Number to the said person and issue a certificate in FORM GST REG-06 within a period of three working days from the date of the submission of the application.

18. Display of registration certificate and Goods and Services Tax Identification Number on the name board.- (1) Every registered person shall display his certificate of registration in a prominent location at his principal place of business and at every additional place or places of business.

(2) Every registered person shall display his Goods and Services Tax Identification Number on the name board exhibited at the entry of his principal place of business and at every additional place or places of business.

19. Amendment of registration.- (1) Where there is any change in any of the particulars furnished in the application for registration in FORM GST REG-01 or FORM GST REG-07 or FORM GST REG-09 or FORM GST REG-10 or for Unique Identity Number in FORM GST-REG-13, either at the time of obtaining registration or Unique Identity Number or as amended from time to time, the registered person shall, within a period of fifteen days of such change, submit an application, duly signed or verified through electronic verification code, electronically in FORM GST REG-14, along with the documents relating to such change at the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that – (a) where the change relates to,-

(i) legal name of business;

(ii) address of the principal place of business or any additional place(s) of business; or

(iii) addition, deletion or retirement of partners or directors, Karta, Managing Committee, Board of Trustees, Chief Executive Officer or equivalent, responsible for the day to day affairs of the business,-

which does not warrant cancellation of registration under section 29, the proper officer shall, after due verification, approve the amendment within a period of fifteen working days from the date of the receipt of the application in FORM GST REG-14 and issue an order in FORM GST REG-15 electronically and such amendment shall take effect from the date of the occurrence of the event warranting such amendment;

(b) the change relating to sub-clause (i) and sub-clause (iii) of clause (a) in any State or Union territory shall be applicable for all registrations of the registered person obtained under the provisions of this Chapter on the same Permanent Account Number;

(c) where the change relates to any particulars other than those specified in clause (a), the certificate of registration shall stand amended upon submission of the application in FORM GST REG- 14 on the common portal;

(d) where a change in the constitution of any business results in the change of the Permanent Account Number of a registered person, the said person shall apply for fresh registration in FORM GST REG-01:

Provided further that any change in the mobile number or e-mail address of the authorised signatory submitted under this rule, as amended from time to time, shall be carried out only after online verification through the common portal in the manner provided under the said rule.

(2) Where the proper officer is of the opinion that the amendment sought under sub-rule (1) is either not warranted or the documents furnished therewith are incomplete or incorrect, he may, within a period of fifteen working days from the date of the receipt of the application in FORM GST REG-14, serve a notice in FORM GST REG-03, requiring the registered person to show cause, within a period of seven working days of the service of the said notice, as to why the application submitted under sub-rule (1) shall not be rejected.

(3) The registered person shall furnish a reply to the notice to show cause, issued under sub-rule (2), in FORM GST REG-04, within a period of seven working days from the date of the service of the said notice.

(4) Where the reply furnished under sub-rule (3) is found to be not satisfactory or where no reply is furnished in response to the notice issued under sub-rule (2) within the period prescribed in sub-rule (3), the proper officer shall reject the application submitted under sub-rule (1) and pass an order in FORM GST REG -05.

(5) If the proper officer fails to take any action,-

(a) within a period of fifteen working days from the date of submission of the application, or

(b) within a period of seven working days from the date of the receipt of the reply to the notice to show cause under sub-rule (3),

the certificate of registration shall stand amended to the extent applied for and the amended certificate shall be made available to the registered person on the common portal.

20. Application for cancellation of registration.- A registered person, other than a person to whom a registration has been granted under rule 12 or a person to whom a Unique Identity Number has been granted under rule 17, seeking cancellation of his registration under sub-section (1) of section 29 shall electronically submit an application in FORM GST REG-16, including therein the details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock and of capital goods held in stock on the date from which the cancellation of registration is sought, liability thereon, the details of the payment, if any, made against such liability and may furnish, along with the application, relevant documents in support thereof, at the common portal within a period of thirty days of the occurrence of the event warranting the cancellation, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that no application for the cancellation of registration shall be considered in case of a taxable person, who has registered voluntarily, before the expiry of a period of one year from the effective date of registration.

21. Registration to be cancelled in certain cases.- The registration granted to a person is liable to be cancelled, if the said person,-

(a) does not conduct any business from the declared place of business; or

(b) issues invoice or bill without supply of goods or services in violation of the provisions of this Act, or the rules made thereunder.

22. Cancellation of registration.- (1) Where the proper officer has reasons to believe that the registration of a person is liable to be cancelled under section 29, he shall issue a notice to such person in FORM GST REG-17, requiring him to show cause, within a period of seven working days from the date of the service of such notice, as to why his registration shall not be cancelled.

(2) The reply to the show cause notice issued under sub-rule (1) shall be furnished in FORM REG–18 within the period specified in the said sub-rule.

(3) Where a person who has submitted an application for cancellation of his registration is no longer liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order in FORM GST REG-19, within a period of thirty days from the date of application submitted under sub-rule (1) of rule 20 or, as the case may be, the date of the reply to the show cause issued under sub-rule (1), cancel the registration, with effect from a date to be determined by him and notify the taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable to be paid under sub-section (5) of section 29.

(4) Where the reply furnished under sub-rule (2) is found to be satisfactory, the proper officer shall drop the proceedings and pass an order in FORM GST REG –20.

(5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased proprietor, as if the application had been submitted by the proprietor himself.

23. Revocation of cancellation of registration.- (1) A registered person, whose registration is cancelled by the proper officer on his own motion, may submit an application for revocation of cancellation of registration, in FORM GST REG-21, to such proper officer, within a period of thirty days from the date of the service of the order of cancellation of registration at the common portal, either directly or through a Facilitation Centre notified by the Commissioner:

Provided that no application for revocation shall be filed, if the registration has been cancelled for the failure of the registered person to furnish returns, unless such returns are furnished and any amount due as tax, in terms of such returns, has been paid along with any amount payable towards interest, penalty and late fee in respect of the said returns.

(2) (a) Where the proper officer is satisfied, for reasons to be recorded in writing, that there are sufficient grounds for revocation of cancellation of registration, he shall revoke the cancellation of registration by an order in FORM GST REG-22 within a period of thirty days from the date of the receipt of the application and communicate the same to the applicant.

(b) The proper officer may, for reasons to be recorded in writing, under circumstances other than those specified in clause (a), by an order in FORM GST REG-05, reject the application for revocation of cancellation of registration and communicate the same to the applicant.

(3) The proper officer shall, before passing the order referred to in clause (b) of sub-rule (2), issue a notice in FORM GST REG–23 requiring the applicant to show cause as to why the application submitted for revocation under sub-rule (1) should not be rejected and the applicant shall furnish the reply within a period of seven working days from the date of the service of the notice in FORM GST REG-24.

(4) Upon receipt of the information or clarification in FORM GST REG-24, the proper officer shall proceed to dispose of the application in the manner specified in sub-rule (2) within a period of thirty days from the date of the receipt of such information or clarification from the applicant.

24. Migration of persons registered under the existing law.- (1) (a) Every person, other than a person deducting tax at source or an Input Service Distributor, registered under an existing law and having a Permanent Account Number issued under the provisions of the Income-tax Act, 1961 (Act 43 of 1961) shall enrol on the common portal by validating his e-mail address and mobile number, either directly or through a Facilitation Centre notified by the Commissioner.

(b) Upon enrolment under clause (a), the said person shall be granted registration on a provisional basis and a certificate of registration in FORM GST REG-25, incorporating the Goods and Services Tax Identification Number therein, shall be made available to him on the common portal:

Provided that a taxable person who has been granted multiple registrations under the existing law on the basis of a single Permanent Account Number shall be granted only one provisional registration under the Act:

Provided further that a person having centralised registration under the provisions of Chapter V of the Finance Act, 1994 (32 of 1994) shall be granted only one provisional registration in the State or Union territory in which he is registered under the existing law.

(2) (a) Every person who has been granted a provisional registration under sub-rule (1) shall submit an application electronically in FORM GST REG–26, duly signed or verified through electronic verification code, along with the information and documents specified in the said application, on the common portal either directly or through a Facilitation Centre notified by the Commissioner.

(b) The information asked for in clause (a) shall be furnished within a period of three months or within such further period as may be extended by the Commissioner in this behalf.

(c) If the information and the particulars furnished in the application are found, by the proper officer, to be correct and complete, a certificate of registration in FORM GST REG-06 shall be made available to the registered person electronically on the common portal.

(3) Where the particulars or information specified in sub-rule (2) have either not been furnished or not found to be correct or complete, the proper officer shall, after serving a notice to show cause in FORM GST REG-27 and after affording the person concerned a reasonable opportunity of being heard, cancel the provisional registration granted under sub-rule (1) and issue an order in FORM GST REG-28:

Provided that the show cause notice issued in FORM GST REG- 27 can be withdrawn by issuing an order in FORM GST REG- 20, if it is found, after affording the person an opportunity of being heard, that no such cause exists for which the notice was issued.

(4) Every person registered under any of the existing laws, who is not liable to be registered under the Act may, within a period of thirty days from the appointed day, at his option, submit an application electronically in FORM GST REG-29 at the common portal for the cancellation of registration granted to him and the proper officer shall, after conducting such enquiry as deemed fit, cancel the said registration.

25. Physical verification of business premises in certain cases.- Where the proper officer is satisfied that the physical verification of the place of business of a registered person is required after the grant of registration, he may get such verification done and the verification report along with the other documents, including photographs, shall be uploaded in FORM GST REG-30 on the common portal within a period of fifteen working days following the date of such verification.

26. Method of authentication.- (1) All applications, including reply, if any, to the notices, returns including the details of outward and inward supplies, appeals or any other document required to be submitted under the provisions of these rules shall be so submitted electronically with digital signature certificate or through e-signature as specified under the provisions of the Information Technology Act, 2000 (21 of 2000) or verified by any other mode of signature or verification as notified by the Board in this behalf:

Provided that a registered person registered under the provisions of the Companies Act, 2013 (18 of 2013) shall furnish the documents or application verified through digital signature certificate.

(2) Each document including the return furnished online shall be signed or verified through electronic verification code-

(a) in the case of an individual, by the individual himself or where he is absent from India, by some other person duly authorised by him in this behalf, and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;

(b) in the case of a Hindu Undivided Family, by a Karta and where the Karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of such family or by the authorised signatory of such Karta;

(c) in the case of a company, by the chief executive officer or authorised signatory thereof;

(d) in the case of a Government or any Governmental agency or local authority, by an officer authorised in this behalf;

(e) in the case of a firm, by any partner thereof, not being a minor or authorised signatory thereof;

(f) in the case of any other association, by any member of the association or persons or authorised signatory thereof;

(g) in the case of a trust, by the trustee or any trustee or authorised signatory thereof;

or

(h) in the case of any other person, by some person competent to act on his behalf, or by a person authorised in accordance with the provisions of section 48.

(3) All notices, certificates and orders under the provisions of this Chapter shall be issued electronically by the proper officer or any other officer authorised to issue such notices or certificates or orders, through digital signature certificate specified under the provisions of the Information Technology Act, 2000 (21 of 2000).

[ GST (CGST) - Notifications ] Notification No : 01/2017 Dated: 19-06-2017


Certain sections of the CGST Act, 2017 came into force w.e.f. 22.06.2017 – i.e Definitions, Administrations, Composition, Registration, Migration, Common Portal, Power to make rule – 01/2017 – Dated 19-6-2017 – Central GST (CGST)

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 1/2017 – Central Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R. …..(E).- In exercise of the powers conferred by sub-section (3) of section 1 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby appoints the 22nd day of June, 2017, as the date on which the provisions of sections 1, 2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 of the said Act shall come into force.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

 

 

GST Rates – 19-06-2017


GST Rates of Goods

Chapter wise GST rate Schedule for Goods decided in the GST Council Meeting held on 18.05.2017

gst-compensation-cess-rates-18.05.2017

addendum_ gst_rate_schedule_22.05.2017

chapter-wise-rate-wise-gst-schedule-03.06.2017

addendum-gst-rate-schedule-03.06.2017

igst-exemption-concession-list-03.06.2017

igst_exemptions_approved_by_gst_council_11.06.2017

gst_rates_approved _by_gst_council _11.06.2017

revised_threshold_for_composition_scheme_11.06.2017

Decisions of the GST Council on Composition Levy & GST rate on certain goods taken in 17th Meeting – 18.06.2017

GST Rates of Services

Schedule of GST rates for services

list-of-services-under-reverse-charge-2

decisions_taken_gst_16th_meeting_11.06.2017_revised1

Decisions taken by the GST Council in the 17th Meeting – 18.06.2017

 

 

 

Decisions taken by the GST Council in the 17th meeting – 18 June 2017 : 19-06-2017


I. Decisions with respect to GST rates for Services

1. It has been decided in respect of the service of transport of goods by a vessel that GST rate of 5% will be available with ITC in respect of input services and GST paid on ships, vessels including bulk carriers and tankers.

2. It has been decided that accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes where room tariff is ₹ 2500/- and above but less than ₹ 7500/- per room per day shall attract GST rate of 18% with full ITC.

3. Accommodation in hotels including 5 star and above rated hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, where room rent is ₹ 7500/- and above per day per room shall attract GST rate of 28% with full ITC.

4. Supply of Food/drinks in air-conditioned restaurant in 5-star or above rated Hotel shall attract GST rate of 18% with full ITC.

Accordingly, the following entries of the schedule of GST Rates for Services as approved by the GST Council shall be modified as under:

Sl. No.

Description of Services GST Rate

5

Transport of goods in a vessel including services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India 5% with ITC of input services and ITC of GST paid on ships, vessels including bulk carriers and tankers

24

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes where room tariff is ₹ 2500/ and above but less than ₹ 7500/- per room per day 18% With Full ITC

31

Supply of Food/drinks in air-conditioned restaurant in 5-star or above rated Hotel 18% With Full ITC

32

Accommodation in hotels including 5 star and above rated hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, where room rent is ₹ 7500/- and above per room per day 28% With Full ITC

II. It has been decided that supply of lottery shall attract GST rates as under –

1. Lottery run by State Governments – 12% of face value of lottery ticket

2. Lottery authorized by State Governments – 28% of face value of lottery ticket

Integrated [ GST (IGST) - Notifications ] Notification No : 02/2017 Dated: 19-06-2017


Seeks to empower the Principal Commissioner of Central Tax, Bengaluru West to grant registration in case of online information and database access or retrieval services provided or agreed to be provided by a person located in non-taxable territory and received by a non-taxable online recipient. – 02/2017 – Dated 19-6-2017 – Integrated GST (IGST)

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 2/2017 – Integrated Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R . 604 (E). - In exercise of the powers conferred by sub-section (2) of section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) (hereinafter referred to as the said Act), read with sub-rule (2) of rule 14 of the Central Goods and Services Tax Rules, 2017, the Central Government hereby notifies the Principal Commissioner of Central Tax, Bengaluru West and all the officers subordinate to him as the officers empowered to grant registration in case of online information and database access or retrieval services provided or agreed to be provided by a person located in non-taxable territory and received by a non-taxable online recipient.

Explanation.- For the purposes of this notification,-

(a) “online information and database access or retrieval services” has the same meaning as assigned to it in sub-section (17) of section 2 of the said Act;

(b) “non-taxable online recipient” has the same meaning as assigned to it in sub-section (16) of section 2 of the said Act.

2. This notification shall come into force on the 22nd day of June, 2017.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

Integrated [ GST (IGST) - Notifications ] Notification No : 01/2017 Dated: 19-06-2017


Certain sections of the IGST Act, 2017 came into force w.e.f. 22.06.2017 i.e Definitions, Officers, Registration, Application of certain provision of CGST to IGST, Power to make rules – 01/2017 – Dated 19-6-2017 – Integrated GST (IGST)

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 1/2017 – Integrated Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R. 603 (E).- In exercise of the powers conferred by sub-section (3) of section 1 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government hereby appoints the 22nd day of June, 2017, as the date on which the provisions of sections 1, 2, 3, 14, 20 and 22 of the said Act shall come into force.

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

[ GST (CGST) - Notifications ] Notification No : 06/2017 Dated: 19-06-2017


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No. 6/2017 – Central Tax

New Delhi, the 19th June, 2017

29 Jyaistha, 1939 Saka

G.S.R. (E).- In exercise of the powers conferred by sub-rule (1) of rule 26 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the said Rules), the Central Board of Excise and Customs hereby notifies the following modes of verification, for the purpose of the said rule, namely:-

(i) Aadhaar based Electronic Verification Code (EVC);

(ii) Bank account based One Time Password (OTP):

Provided that where the mode of authentication of any document is through any of the aforesaid modes, such verification shall be done within two days of furnishing the documents. 2. This notification shall come into force on the 22nd day

 

2. This notification shall come into force on the 22nd day of June, 2017.

 

[F. No. 349/72/2017-GST]

(Dr. Sreeparvathy.S.L.)

Under Secretary to the Government of India

GST: If businesses do not pass on benefits of price reduction to consumers, anti-profiteering authority to impose penalties : 19-06-2017


A five-member anti-profiteering authority will be set up to decide on levying penalty if businesses do not pass on the benefit of price reduction to consumers under the goods and services tax regime. The authority, to be headed by a retired secretary-level officer, can take suo motu action, besides acting on complaints of profiteering. The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state finance ministers as members, today approved the anti-profiteering rules. As per the norms, the authority will have a sunset date of two years and will decide on penalty to be levied. It would ask the businesses to refund the price reduction on a proportionate basis to consumers.

Where the consumer cannot be identified, the amount would be credited to the consumer welfare fund, an official said. A search-cum-selection committee will be set up forfinalising the members of the anti-profiteering authority. Officials said it is likely to take about two months to finalise the members.

Besides the chairman, the four other members of the authority will be joint secretary-level officers who have been commissioners in central excise and service tax either at the Centre or states. As per the structure, the complaints of profiteering would first come to the Standing Committee comprising tax officials from states and the Centre. It would forward the complaint to the Directorate of Safeguards (DGS) for investigation, which is likely to take about 2-3 months to complete the inquiry. On completion of investigation, the report would be submitted to the anti-profiteering authority which would decide on the penalty.

 The Section 171 of the Central GST Act provides that any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit will be passed on to the recipient by way of commensurate reduction in prices.

Source : PTI

GST: Central Board of Excise and Customs to soon notify new procedural framework : 19-06-2017


It’s a green light from Indian customs for the pre-run of the GST on June 23. Central Board of Excise and Customs will soon notify the new procedural framework for the country’s over $650-billion trade sector, which will be among the first to face tax regime change from July 1.

“We have already restructured the field force in line with the GST… Necessary systems are being put in place and we will start the dry run from June 23,” a senior government official, privy to the discussions on the matter, told ET.

The official said a detailed directive would be issued soon for the field, explaining the rate schedule of the Integrated GST, which will be levied on imports.

IGST will be the sum of central GST and State GST levied on a local product and will be in addition to the basic customs duty. IGST replaces countervailing duty, the special additional duty levied in lieu of central excise.

Field officials have already been sounded out to ensure that traders do not face any glitches. I-GST on imports will be completely administered by the Centre’s customs officials.

Separately, changes to the forms in line with those announced by the director general of foreign trade (DGFT) as also others would be notified this week, the official said.

DGFT has already made permanent account number as the new Import Export Code or IEC, which will also facilitate migration to GSTIN (GS Tax Identification Number) that will be needed for payment of IGST or claiming refund or rebate.

GSTIN is a 15-digit alpha numeric code with PAN prefixed by State Code and suffixed by three-digit details of business verticals of the PAN holder.

Source : Economic Times

Engage realtors to pass GST benefit to buyers: FinMin to HUPA : 19-06-2017


The finance ministry has asked the housing and urban poverty alleviation (HUPA) ministry to sensitise states and the real estate regulator to hold consultations with developers to pass on benefits of GST to home buyers.

The tax department and states have received complaints that those who have booked flats and made part payment are being asked to make entire payment before July 1, 2017, or to face higher tax incidence for payment made thereafter.

Replying on this issue, Finance Minister Arun Jaitley said “this is wrong” and real estate developers should pass on the benefits of input tax credit to buyers or else they would have to face action under anti-profiteering rules.

Revenue Secretary Hasmukh Adhia has written to HUPA secretary and asked him to sensitise all the states as well as the regulator under the Real Estate (Regulation and Development) Act, 2016 (RERA).

“We have requested the HUPA secretary to hold meetings with real estate developers associations and make them understand,” Adhia told reporters here.

Construction of flats, complex, buildings will attract a 12 per cent goods and services tax (GST) compared to about 11 per cent tax, which includes excise duty, VAT and service tax.

Jaitley said the real estate builder will enjoy the benefit of input credit, which will be deducted from tax liability.

“The lowered tax liability should lead to price reduction. The price reduction has to be be passed on to the customer,” Jaitley said.

Asked if the anti-profiteering rules will apply if the home builder fails to pass on benefit, the minister said: “Anti-profiteering rules can apply. But we want to use the anti-profiteering rule as a deterrent. I hope we are not compelled to use it.”

The GST Council, chaired by Jaitley and comprising state finance ministers, today cleared the anti-profiteering rules.

As per the rules, if the Directorate General of Safeguards (DGS) after investigation finds that the benefit of price reduction has not been passed to consumers, the anti- profiteering authority will ask the business to refund the same to the consumers.

Source : Deccan Herald

CAD expected to be around 1.4% of GDP in 2017: Nomura : 17-06-2017


India’s current account deficit is expected to be around 1.4 per cent of GDP in 2017 compared to 0.6 per cent in 2016, owing to stronger domestic growth, says a report. The Japanese financial services major Nomura has revised India’s 2017 CAD forecast to 1.4 per cent of GDP from 1.6 per cent earlier, but still expects current account deficit to be higher than the 2016 figure. Nomura expects India’s CAD to widen in 2017 against last year as import growth should pick up in the second half 2017 due to a stronger domestic recovery, even as protectionist policies will likely hurt services exports. “We are revising our 2017 CAD forecast to 1.4 per cent of GDP (as against 1.6 per cent earlier) but we still expect it to be wider than in 2016 (0.6 per cent) owing to stronger domestic growth,” Nomura said in a research note. The key risks to this outlook are rise in protectionism, weaker global growth or a surge in oil prices.

According to Reserve Bank of India, the current account deficit soared to $3.4 billion, or 0.6 per cent of gross domestic product (GDP) in the fourth quarter of fiscal 2017, compared to $0.3 billion a year ago.

For the full fiscal 2017, CAD narrowed to 0.7 per cent of GDP compared to 1.1 per cent in the previous fiscal on the back of a contraction in trade deficit. Commenting on the first quarter CAD data, Nomura said it was better than expected and the positive surprise was led by a narrower merchandise trade deficit and moderation in investment outflows.

Source : Financial Express

TV, fridge, smartphone, gold coin: List of what gets expensive after GST : 17-06-2017


With the Parliament clearing the way for four crucial GST bills in its April session, India’s landmark tax reform is all set for its rollout on July 1. While it is expected that most goods may become cheaper after the implementation of the Goods and Services Tax, quite a few services and some goods will become more expensive after the tax comes into effect. It is also expected that the Indian economy will see an inflationary effect immediately after the implementation of the GST.

The current taxes are levied on account of central excise duty rates, embedded central excise duty rates, service tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax, among others.

Consumers pay 23 to 28 per cent tax on these currently. Some states charge 5 per cent octroi over and above this. Television sets could become marginally dearer at places that don’t charge octroi, such as Delhi. For places that do, like Mumbai, prices could fall marginally.
Source : Business Standard

 

If WhatsApp can run in rural areas, so will GST platform: GSTN chief : 17-06-2017


GST Network, the company that is readying the technology backbone for the new regime, has dismissed fears that the online tool will be too cumbersome to handle for small businesses, arguing that even under the current regime they are using web-based service for VAT and service tax registration and filing returns.

GSTN chief executive Prakash Kumar told TOI in an interview that even uploading the data will not be difficult since the file will not be too large. “The file size is 5MB, which is equivalent to one minute of WhatsApp video. People say that it will be difficult to file in semi-urban or rural areas. But doesn’t WhatsApp work there? People download plenty of videos. If WhatsApp can work in semi-urban or rural areas, this will also work.”

In any case, the file size will be much smaller for a majority of taxpayers, Kumar said. “Nearly 80% will have a few hundred invoices. A retailer is not making sales to business but to people like you and me. For him supply is probably five lines — what is the gross turnover for five products? For them, the return is very simple.”

State finance ministers such as West Bengal’s Amit Mitra and some of the tax consultants have said the system is not ready, especially for small traders. While the GSTN boss acknowledged that the spreadsheet for recording transactions and the forms may be getting released close to the launch and filing dates, every effort was being made to ensure that tools were thoroughly tested. In fact, based on the feedback from 3,200 businesses from across the country, several changes had been incorporated. He also allayed security concerns, detailing the multi-layer approach and sharing data on a need-to-know basis. Besides, he said the data was encrypted and one person did not have access to full data, including returns.

Asked about concern of small traders, who say that they do not have the technological wherewithal to deal with online registration and other formalities, Kumar said: “Even today VAT registration is online in a majority of states, and for service tax also. In every state, you are filing VAT returns online and you are giving the same details, including the details of the parties involved. In nine states, you are giving invoice-level data. If you are doing it today, what is different tomorrow? Today, 97% of the service tax is paid online and it is similar for VAT. Now, the government is allowing you to pay online as also offline in a bank if it is less than Rs 10,000 in a month,” said Kumar.

While suggesting that some of the concerns may be overstated, he said that in nine states, including Gujarat, Kerala, Karnataka, Tamil Nadu, Uttar Pradesh and Andhra, invoice data has to be filed electronically. “If your counterpart, large and small, is doing it in other states, you can also do. Even today everyone maintains data in the supplier and purchase registers,” he said, adding that invoice details were required for those who were selling to other businesses and not to retail consumers.

GSTN also said that it was working on a scalable model and had enough capacity to deal with the large volume of invoices. “We had estimated around 3.2 billion invoices, which was based on the number of invoices in nine states. This is not scanned invoices. We are handling data and the size of one invoice is 2.6KB and it will come down further. The number of transactions that we will handle will be nowhere near that of National Stock Exchange, which is settled in seconds. The system is scalable.  We had estimated 65 lakh taxpayers and the system can easily handle 1.3 crore,” Kumar said.

Source : Times of India

Notification No.53/2017 16-06-2017


INCOME-TAX (SIXTEENTH AMENDMENT) RULES, 2017 – AMENDMENT IN FORM NO.3CED

NOTIFICATION NO. SO 1927(E) [53/2017 (F.NO.370142/34/2016-TPL)]DATED 16-6-2017

In exercise of the powers conferred by section 295 read with sub-section (9) of section 92CC of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (16th Amendment) Rules, 2017.

(2) They shall come into force from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CED, under sub-heading “General”,—

(i) for item 3, following item shall be substituted, namely:—
3. Particular(s) of the Associated Enterprises with whom the APA is requested for:
a. Name(s) of the Associated Enterprise(s):
b. Name(s) of the country(ies) in which the associated enterprises mentioned in clause (a) are located:
c. Taxpayer Registration Number/Taxpayer Identification Number/Functional equivalent/Any unique number used for identification of the Associated Enterprise by the Government of that country/specified territory in which the Associated Enterprise claims to be located:”;
(ii) for item 4, the following item shall be substituted, namely:—
“4. Particulars of the Parent Company(ies) of the applicant:
a. Name of Immediate parent company of applicant:
b. Address of Immediate parent company of applicant:
c. Country of residence of Immediate parent company of applicant:
d. Taxpayer Registration Number/Taxpayer Identification Number/Functional equivalent/Any unique number used for identification of the Immediate parent company by the Government of that country/specified territory of which it claims to be a resident:
e. Name of Ultimate parent company of applicant:
f. Address of Ultimate parent company of applicant:
g. Country of residence of Ultimate parent company of applicant:
h. Taxpayer Registration Number/Taxpayer Identification Number/Functional equivalent/Any unique number used for identification of the Ultimate parent company by the Government of that country/specified territory of which it claims to be a resident:”;

GST Councils June18 meet to finalise e-way bill, anti-profiteering rules : 16-06-2017


The all powerful GST Council will meet on June 18 to finalise tax rates on lottery as well as rules relating to e-way bill and anti-profiteering measures.

This will be the 17th meeting of the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts. The Council has already finalised tax rates on almost all goods and services in the bracket of 5, 12, 18 and 28 per cent.

The Council may also review rates on certain items, and approve draft GST rules and related forms for advance ruling, appeals and revision, and assessment and audit.

In the last meeting of the Council on June 11, tax rates on 66 items, including agarbatti, packaged food and insulin, were lowered.

With regard to hybrid cars on which industry has been seeking a reduction, Jaitley had hinted that it will not be reviewed, saying the industry demands were not in sync with a study conducted by tax officers.

The Council had last month fixed 43 per cent tax (28 per cent GST plus 15 per cent cess) on hybrid cars, a rate that industry felt was too high for the fuel efficient vehicles.

Once the rules on ‘e-way bill’ are finalised it would be clear whether the GST Network alone would be developing the platform for it or National Informatics Centre (NIC) would be roped in.

The GST Council had in April come out with the draft e- way bill rules that made it necessary for any movement of goods, within or outside the state, having value of more than Rs 50,000 to be registered with the GST-Network (GSTN) website.

As per the draft, GSTN would generate e-way bills that will be valid for 1-15 days, depending on distance to be travelled — one day for 100 km and 15 days for more than 1,000 km transit. The tax officials can inspect the ‘e-way bill’ anytime during the transit to check tax evasion.

Industry however has expressed concerns over this saying that the Rs 50,000 limit was too low and that the timeline for completion of transport operation was “impractical and removed from reality”.

They also felt that the e-way bill would be applicable to movement of all kinds of goods without making any distinction between goods that were evasion prone or not.

With regard to anti-profiteering rules, the final structure of the authority as also who will have the power to levy penalty would become clear.

According to the draft rules agreed upon, when a complaint is received about any company or a trader making undue profit by not passing on the benefit of lower tax incidence because of GST, it would be referred to a standing committee appointed by the Council.

 The committee would decide whether an inquiry should be initiated on a complaint. The new anti-profiteering authority will carry out an investigation only when the committee recommends so.
The inquiry report with recommendations would be referred back to the standing committee, and any penalty or action would be taken by either the committee or the Council.
Source : Times of India

Builders must pass on lower GST to buyers: Finance Ministry : 16-06-2017


The government on Thursday asked builders to pass on the benefit of lower tax under the GST system to buyers by reducing prices and instalments, otherwise, the action will be violative of the anti-profiteering clause. “The builders are expected to pass on the benefit of lower tax burden under the Goods and Services Tax (GST) system to buyers of property by way of reduced prices/ instalments. It is, therefore, advised to all builders/construction companies that for flats under construction, they should not ask customers to pay a higher tax rate on instalments to be received after GST imposition,” a Finance Ministry statement said here.

“Despite this clarity, if any builder resorts to such practice, the same can be deemed to be profiteering under Section 171 of the GST law,” the statement said. The clarification came as the government said that the Central Board of Excise and Customs (CBEC) and states have received several complaints that in view of the works contract service tax rate under GST at 12 per cent in respect of under-construction flats and complexes, people who have booked flats and made part payments are being asked to make the full payment before July 1 or face higher tax.

“This is against the GST law,” the government said. The construction of flats, complexes, and buildings will have a lower GST as compared with a plethora of central and state indirect taxes under the existing regime, it added. Under the GST, the full input credit will be available for offsetting the headline rate of 12 per cent. “The input taxes embedded in the flat will not form a part of the flat’s cost. The input credits should take care of the headline rate of 12 per cent and it is for this reason that refund of the overflow of input tax credits to the builder has been disallowed,” the statement said.

Central excise duty is payable on most construction materials at the rate of 12.5 per cent. It is higher in a case of cement. In addition, value-added tax (VAT) is also payable on construction material at 12.5-14.5 percent in most states. Besides, construction material is also at present liable to entry tax by states. Input tax credit of the above taxes is not currently allowed for payment of service tax. The credit of these taxes is also not available for payment of VAT on the construction of flats under composition scheme. Thus, there is cascading of input taxes on constructed flats, it said.

“As a result, the incidence of central excise duty, VAT and entry tax on construction material is also currently borne by the builders, which they pass on to the customers as part of the price charged for them. This is not visible to the customer as it forms a part of the flat’s cost,” the statement said. The current headline rate of service tax on construction of flats, residences, and offices is 4.5 per cent. Over and above this, VAT at 1 per cent under composition scheme is also charged. The buyer only looks at the headline rate of 5.5 per cent.

“In other cities/states, where VAT is levied under the composition scheme at 2 percent or above, the headline rate visible to the customer is above 6.5 per cent. What the customer does not see is the embedded taxes on account of cascading and sticking of input taxes in the cost of the flat,” it said.

Source : Business Standard

Finmin cautions builders against overcharging customers : 16-06-2017


The Finance Ministry on Thursday asserted that construction of flats, complex, buildings will attract lower tax incidence under the proposed GST regime as compared to a plethora of central and state indirect taxes suffered under the existing regime.

The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/instalments, an official release said.

The Finance Ministry has now advised all builders/construction companies that in the flats under construction, they should not ask customers to pay higher tax rate on instalments to be received after imposition of GST .

“Despite this clarity on law position, if any builder resorts to such practice, the same can be deemed to be profiteering under Section 171 of GST law”, the release added.

The Ministry statement came in the wake of complaints received by CBEC and States that in view of the works contract service tax rate under GST at 12 per cent in respect of under construction flats, complex etc, the people who have booked flats and made part payment are being asked to make entire payment before July 1, 2017 or to face higher tax incidence for payment made after July 1. This is against the GST law, the release added.

Source : Economic Times

Restricted exemption to sports under GST – 15-06-2017


sivakumar_s

   By S Sivakumar, LL.B., FCA, FCS, ACSI, MBA, Advocate

In terms of the current Mega Exemption Notification No. 25/2012-ST dated 20-6-2012 the following activity covered by Sl. No. 8 is exempted from levy of service tax, viz.

“Services by way of training or coaching in recreational activities relating to arts, culture or sports”.

However, under Sl. No. 61 of the exemption list of services under GST, the following activity is exempted from levy of tax, viz.

Services by way of training or coaching in recreational activities relating to,-

(i) arts or culture. or

(ii) sports by charitable entities registered under section 12AA of Income tax Act, 1961;

Under the existing l0aw, exemption from the levy of service tax in respect of services related to arts or culture or sports is available to all service providers, irrespective of whether they are registered under Section 12AA of the Income Tax Act, 1961 or not. Now, under the GST law, exemption from the levy of tax would be available only to entities that are registered under Section 12AA of the Income Tax Act, 1961, at least, insofar as sports is concerned. As a student of tax laws, I presume that, going by the manner in which this exemption entry under Sl. No. 61 is worded, the requirement related to registration under Section 12AA of the Income tax Act, is applicable only to training or coaching in recreational activities related to sports (and not to arts or culture).

Be that as it may…Section 12AA of the Income Tax Act deals with entities that are registered as religious or charitable trusts. While one can understand some connection between religious/charitable trusts and arts/cultural activities, one completely fails to understand the connection between sports and religious/charitable trusts.

Under the current service tax law, exemption is available to sports related activities carried out by commercial training institutes and sports clubs who are not registered under Section 12AA of the Income tax Act. In a cosmopolitan city like Bangalore, one can find umpteen establishments that train youngsters in sports like cricket, badminton, table tennis, football, etc. Now, all of these establishments will have to charge tax under GST, to the utter detriment of the sports fraternity.

I wonder if the Sports Ministry is aware of this dangerous development related to sports, under GST. To restrict the exemption related to sports under GST, to religious or charitable trusts seems completely bereft of logic. One does hope that the Central Government amends Entry No. 61 of the exemption list under GST to delete reference to Section 12AA of the Income tax Act, to ensure that the benefit of exemption that is currently available to all players is not restricted to religious or charitable trusts.

Interestingly, the Tabulation notifying the list of services which are exempted carries the caption “Service Tax Exemptions to be continued in GST as decided by GST Council”.

The usage of the word “continued” would presuppose that the services that were exempted earlier under the FA, 1994 continue to be exempted under the GST regime. But as highlighted in the preceding paragraphs, the addition of the words “by charitable entities registered under section 12AA of Income tax Act, 1961″makes the exemption go topsy-turvy.

If this is an unintended gaffe, which it seems to be, it would be in the interest of all concerned to rectify it quickly.

Incidentally, the full-stop/period appearing in the clause (i) of Sl. No. 61 (supra) also appears to be a typographical error.

Are we going to carry the legacy of such unbridled errors from the earlier taxation regime into the metamorphosed one? Hopefully, not!

Note : This Article was carried on by Taxindiaonline.com website on 15-06-2017

7th Pay Commission report implementation to push demand, consumer spending; here’s how to calculate salary as per 7th CPC : 15-06-2017


7th Pay Commission report: Singns of the implementation of the 7th Central Pay Commission (CPC) recommendations are now becoming visible. However, there still exist issues in terms of disbursement of arrears and allowances. The 7th Pay Commission is expected to benefit over 1 crore employees with an additional financial impact of Rs 1,02,100 crore on account of implementation of all its recommendations in 2016-17. Further, an additional implication of Rs 12,133 crore will be there on account of payments of arrears of pay and pension for 2 months of 2015-16.

“It has been observed that the implementation of the commission’s recommendations earlier was very time-consuming. However, the 7th CPC recommendations have been implemented within six months from the due date. On the other hand, the key aspect is that how efficiently and timely the disbursements of the allowances are being made to the Central employees. Generally, when Central Pay Commission is implemented, it takes about two years for the disbursement of all allowances,” says Dr S.P Sharma, Chief Economist, PHD Chamber of Commerce & Industry.

Implementation of the 7th CPC have come into effect since Jan 2016 and are presently running in the second year. It is expected that all the disbursements will be made gradually by the Central government by the end of this year. It is also anticipated that the additional income in the hands of Central employees may give a boost to consumer goods manufacturing coupled with good monsoon season as forecast by the India Meteorological Department (IMD), favourable inflationary scenario and GST implementation leading to reduced inputs costs in the coming times. In a nutshell, “with timely disbursements of allowances to employees, it is expected that the demand and consumer spending in the economy will be boosted and likely to witness a huge push in terms of manufacturing activity, creation of jobs, revenue generation and would boost the overall growth sentiments, going ahead,” says Sharma.

As per the 7th CPC, the present system of Pay Bands and Grade Pay has been dispensed and a new Pay Matrix has been introduced. In this regard, separate Pay Matrices have been drawn up for Civilians, Defence Personnel and for Military Nursing Service. The CPC has introduced index of rationalisation for arriving at minimum pay in each Level of the Pay Matrix, depending upon the increasing role, responsibility and accountability at each step in the hierarchy. In this context, CPC has enhanced the minimum pay from Rs 7000 to 18000 per month and the starting salary of a newly-recruited employee at lowest level is now Rs 18000 whereas for a newly-recruited Class I officer, it is Rs 56100.

Under the 7th Central Pay Commission (CPC), the salaries of the employees are obtained by multiplying the existing basic pay by a factor of 2.57 and the figure so arrived will be added to all the applicable allowances such as Transport Allowance (TA), House Rent Allowance (HRA), Medical Allowance, etc.

A hypothetical example of calculating an employee’s salary as per 7th CPC is illustrated below:

A. Basic pay of an employee as on 1st January 2016 is Rs 10,000

B. Multiply basic pay by 2.57 fitment factor = Rs 10,000 x 2.57 = Rs 25,700

C. Addition of TA, HRA, medical Allowance as applicable to the amount Rs. 25,700

D. New Pay = (Basic pay (as on 1st Jan 2016) x 2.57)+ All Allowances
Going ahead, “disbursement of allowances may have an effect on aggregated demand in the economy and will trigger higher consumption. In addition, as household income expands, savings of the employees will expand too. However, the government’s fiscal deficit is likely to be impacted as they have to accommodate the increased salary and pension payments. In overall, pay hike is a kind of stimulus to the economy which will lead to push demand and consumer spending in the coming times,” says Sharma.

Source : Financial Express

Government to go soft on GST monitoring for a few months : 15-06-2017


There will be some leniency in monitoring and implementation of the new goods and services tax in initial months to allow businesses to settle into the new tax regime, a review of GST preparations by a group of senior ministers was told.

The discussions held on Wednesday saw the ministers being given a presentation of the planning done by the government so far, with officials informing that more than 4,500 meetings had been held all over the country to familiarise traders and businesses with the landmark tax reform.

With the review going over feedback such as lack of internet connectivity in some parts which could affect uploading of data and the sheer novelty of the new measures, the ministers were assured that the government will provide leeway in the initial rollout period.

“The idea is to allow all concerned to understand the operational requirements and we understand that there will be some teething troubles. The government machinery will give time for the system to fall in place,” said a minister.

The government has pointed out that internet connectivity will be tackled where it is a chronic problem but the process of updating records will not be more than a day or two of work for traders. Similarly, the session saw officials point out that reports that GST will need frequent filing are not correct and the system will be more user-friendly as months go by.

The deliberations were intended to check for possible loopholes and anticipate problems that need to be addressed. The government is banking on the tax reform to invigorate the economy and is sensitive to bad press miring the effort.

Though there have been several exercises to prepare for the rollout, ministers agreed that there is a lot that may not be fully anticipated and there is need for a quick response. The perception battle will see BJP ministers and organisation engage in a major outreach and this has been the subject of planning in the government as well.

 PM Modi has urged ministers and officials concerned to ensure a massive outreach over GST and ensure that its benefits are fully explained.

The review also discussed measures to take the message to both consumers and businesses and improve compliance in an effort to win the perception battle.

Source : Times of India

Paying Rs 50,000 rent? Better cut 5% TDS : 15-06-2017


From June 1, individuals who pay a rent of over Rs 50,000 per month are required to deduct tax at source at 5%. The relevant section in the Income Tax (I-T) Act — section 194-IB — was introduced by the Finance Act, 2017 and it widened the scope of withholding tax by making individuals also responsible for tax deduction at source (TDS) on rental payments exceeding the specified sum.

Rents in metros are sky-high and it’s likely that many tenants will have to meet with the obligations of withholding tax, depositing it with the government and also filing the relevant documentation .

The silver lining is that compliance formalities have been made easier for individuals who are tenants. The Central Board of Direct Taxes (CBDT) issued on June 8 a notification relating to some compliance requirements

The dos and the don’ts are explained below.

Do not revise your rent agreement

According to tax experts, revising your tax agreement to get out of your TDS obligations is not a sound idea. Let’s use an illustrative case study: Sharon has been staying as a tenant in a 2BHK flat in the upscale area of Bandstand, Bandra, for the past eight months.

Out of the blue, her landlady asked her whether she wanted to revise the three-year lease agreement and split up the monthly rental of Rs 85,000 into Rs 40,000 as rent and the balance of Rs 45,000 as furniture hire. Sharon learnt that some other tenants in the same vicinity were asking for such a split to avoid their TDS obligations.

“Revising an agreement mid-way is bound to catch the wrong attention of the tax authorities and should not be undertaken. Only if an individual is entering into a new agreement and is actually paying for furniture hire could the drawing up of two separate agreements be considered. Besides, the charges for furniture hire need to be realistic,” cautions Amarpal S Chadha, partner (people advisory services) at EY India.

Ameet Patel, tax partner at CA firm Manohar Chowdhry & Associates, says, “There have been instances where people trying to wriggle out of their TDS responsibilities resort to various devices, such as splitting up of the rent agreement. This is clearly done with a view to violate the law and I would never advise anyone to take such a step. Further, several pitfalls are involved. First, there should be actual assets that have been rented out to justify the payment towards furniture hire. Second, the agreement should bring out a list of such assets. Third, the payments towards such assets should be reasonable and justified. Obviously, it would be difficult to prove that payment towards furniture hire of Rs 45,000 is reasonable if the rent for the flat itself is just Rs 40,000. The TDS authorities would definitely take a strong view of such an arrangement and take action against the tenant who has paid rent without deducting tax at source.”

Chadha adds, “Tenants should also keep in mind that non-compliance entails penalties. Non-deduction of tax results in a levy of interest at 1% per month, it is 1.5% per month for non-payment after deduction. Further, non-filing of required statement would attract penal fee of Rs 200 per day for the period of delay.”

Comply with TDS norms

The government has provided for some compliance-related concessions. Tenants who are individuals and have to meet TDS obligations are absolved from obtaining a Tax Deduction Account Number (TAN). Further, the tax is not to be deducted each month, but merely once a year.

“The tax is required to be deducted at the time of credit or payment (whichever is earlier) of the rent, in the last month of the financial year, or the last month of tenancy if the flat is to be vacated during the year. Since individuals would not be maintaining books of accounts, the tax would typically be deducted at the time of payment,” says Chadha.

To continue with our illustration: As the rent paid by Sharon is Rs 85,000 per month for the period June 1, 2017 (being the date the new provision comes into force) up to March 31, 2018 (which is the last month in the financial year 2017-18), the total rent works out to Rs 8.50 lakh. The TDS at 5% is Rs 42,500. Sharon will have to deduct this amount from her March rental payment and pay the balance of Rs 42,500 to her landlady.

If the landlady doesn’t have a permanent account number (PAN), this means a higher tax of 20% is to be withheld. However, in such cases, the deduction is not to exceed the amount of rent payable for the last month of the financial year or the last month of tenancy, as the case may be.

The tax deducted is required to be paid within 30 days from the end of the month in which the deduction was made. It can be remitted electronically to the RBI or SBI or any authorised bank and form 26QC (which serves as a challan-cum-TDS) is to be filed electronically through the NSDL portal.

The same web portal also provides form 16C, which needs to be downloaded and issued to the landlady. This needs to be done within 15 days from the due date of filing form no 26QC.

Both form 26QC and 16C typically call for details such as the name, address, PAN, contact details of the tenant and the landlady. The period of tenancy, the amount of rent and details of TDS are also required.

It must be noted that if the rent is being paid to a non-resident, then section 194-IB doesn’t apply. Section 195 relates to withholding of tax on payments made to non-residents and the applicable tax rates would apply.

Source : Economic Times

Notification No.52/2017 15-06-2017


INCOME-TAX (FIFTEENTH AMENDMENT) RULES, 2017 – INSERTION OF RULE 10CB

NOTIFICATION NO. GSR 590(E) [52/2017 (F.NO.370142/12/2017-TPL)]DATED 15-6-2017

In exercise of the powers conferred by sub-section (2) to section 92CE and section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes, hereby, makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (15th Amendment) Rules, 2017.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, after rule 10CA, the following rule shall be inserted, namely:-

’10CB. Computation of interest income pursuant to secondary adjustments.— (1) For the purposes of sub-section (2) of section 92CE of the Act, the time limit for repatriation of excess money shall be on or before ninety days,—

(i) from the due date of filing of return under sub-section (1) of section 139 of the Act where primary adjustments to transfer price has been made suo-moto by the assessee in his return of income;
(ii) from the date of the order of Assessing Officer or the appellate authority, as the case may be, if the primary adjustments to transfer price as determined in the aforesaid order has been accepted by the assessee;
(iii) from the due date of filing of return under sub-section (1) of section 139 of the Act in the case of agreement for advance pricing entered into by the assessee under section 92CD ;
(iv) from the due date of filing of return under sub-section (1) section 139 of the Act in the case of option exercised by the assessee as per the safe harbour rules under section 92CB;or
(v) from the due date of filing of return under sub-section (1) section 139 of the Act in the case of an agreement made under the mutual agreement procedure under a Double Taxation Avoidance Agreement entered into under section 90 or 90A;

(2) The imputed per annum interest income on excess money which is not repatriated within the time limit as per sub-section (1) of section 92CE of the Act shall be computed,—

(i) at the one year marginal cost of fund lending rate of State Bank of India as on 1st of April of the relevant previous year plus three hundred twenty five basis points in the cases where the international transaction is denominated in Indian rupee; or
(ii) at six month London Interbank Offered Rate as on 30th September of the relevant previous year plus three hundred basis points in the cases where the international transaction is denominated in foreign currency.

Explanation— For the purposes of this rule “International transaction” shall have the meaning assigned to it in section 92B of the Act.’

Explanatory Memorandum – In order to make the actual allocation of funds consistent with that of the primary transfer pricing adjustment, Finance Act, 2017 inserted Section 92CE in the Income-tax Act, 1961 with effect from 1st day of April, 2018 to provide for secondary adjustment by attributing income to the excess money lying in the hands of the associated enterprise. The provision shall be applicable to primary adjustments exceeding one crore rupees made in respect of the assessment year 2017-18 and on wards.

The said rule prescribes the time limit of repatriation of excess money and the rate at which the interest income shall be computed in the case of failure to repatriate the excess money within the prescribed time limit. In order to provide for an uniform treatment in respect of various types /situations of primary adjustments as referred to in sub-section(1) of section 92CE, it prescribes for a time limit of 90 days for repatriation of excess money .

With regard to the rate of interest to be computed in the case of failure to repatriate the excess money within the prescribed time limit, it provides for separate interest rates for international transactions denominated in Indian rupee and those denominated in foreign currency. The rate of interest is applicable on annual basis.