GST News Last Updated : 10 Jul 2020

Since the unveiling of the Goods and Services Tax (GST) in 2017, there have been several new notifications, amendments, and provisions which are important to understand for better compliance with the law.

The announcement of the Goods and Services Tax (GST) was a milestone in the history of indirect tax reforms in the country. Through the amalgamation of a large number of state and central taxes into a single tax, GST is expected to remove double taxation or the cascading effect of taxation in a significant way. This is in line with the government’s vision of creating a common national market as well. The Central Government rolled out the GST system on 1 July 2017 in a historic midnight session of both houses of parliament. The GST Council has fixed the rate of taxation on 1,211 items, most of which are in the 18% tax slab.

From the perspective of the consumer, the greatest advantage of the GST implementation would be a decrease in the overall tax burden, which is currently, at an average of 25%-30%. The GST regime is also expected to make products manufactured in India more competitive in the international markets, boosting economic growth of the nation.Apart from the above mentioned benefits, the Goods and Services Tax will also be easier to manage owing to the transparency that it offers.

What is new in GST?

Before the implementation of GST, the fiscal powers between states and the Centre were clearly demarcated with no overlaps. The Centre levied tax on goods manufacture (except for alcohol for human consumption, narcotics, etc.) and the states levied tax on the sale of goods.

After the implementation of GST, the Centre and states are concurrently empowered to levy and collect tax. The most important tax rules under the GST regime are as follows:

  1. GST is applicable on the “supply” of services and goods, as opposed to the sale or manufacture of goods and provision of services that existed previously.
  2. The new tax system is based on destination-based taxation unlike the origin-based taxation system earlier.
  3. The GST that is levied by the Centre is called Central GST (CGST) and that levied by the states is called State GST (SGST). Union territories will levy Union Territory GST (UTGST).
  4. Integrated GST (IGST) is levied on the inter-state supply of services and goods. This is collected by the Centre.
  5. Import of goods and services will be taxed under IGST.
  6. GST has subsumed the following taxes levied by the Centre previously:
    1. Duties of Excise - Medicinal and Toilet
    2. Central Excise Duty
    3. Additional Duties of Excise - Goods of Special Importance
    4. Additional Duties of Customs (CVD)
    5. Additional Duties of Excise - Textiles
    6. Special Additional Duty of Customs (SAD)
    7. Cesses and surcharges
    8. Service Tax
  7. GST has replaced the following taxes levied by the states previously:
    1. State VAT
    2. Purchase Tax
    3. Central Sales Tax
    4. Luxury Tax
    5. Entertainment Tax, except that levied by certain local entities
    6. Entry Tax
    7. Tax on advertisements
    8. Tax on gambling and lotteries
    9. State cesses and surcharges
  8. GST is applicable to all services and goods, apart from alcohol that is consumed by humans.
  9. There are 4 tax rates under GST, i.e., 5%, 12%, 18%, and 28%. Also, some services and goods fall under the list of tax-exempt items.
  10. Tobacco products will attract GST and Central Excise Duty.
  11. Input credit corresponding to CGST will be used for paying CGST on output. Similarly, input credit corresponding to SGST/UTGST will be used for paying SGST/UTGST on output. This implies that the two channels of input tax credit cannot cross over, except in the case of IGST payments.
  12. Electronic filing of tax returns will be available for different classes of taxpayers at varying cut-off dates.
  13. An anti-profiteering clause is provided which ensures that businesses pass on the tax benefits to consumers.
  14. Goods and Services Tax Network (GSTN) has been established as a private company by the Government. GSTN will offer mainly three front-end services to the taxpayer, i.e., registration, payment, and return.
  15. GSTN will also develop IT modules for the smooth transition from the old tax structure to GST. This service will be available to 25 states that have decided to opt for it.
  16. GSTN has identified 34 financial technology and IT companies that will act as GST Suvidha Providers (GSPs). These companies will develop applications that taxpayers will use.

Latest GST Notifications

GST Notifications are the latest amendments to the existing provisions under:

  1. Central Goods and Services Tax Act, 2017
  2. Integrated Goods and Services Tax Act, 2017
  3. Union Territory Goods and Services Tax Act, 2017
  4. Goods and Services Tax (Compensation to States) Act, 2017

Some of the latest GST notifications are listed below:

Central Tax Notifications:

Notification number and issue date Provision
16/2017-Central Tax, dt. 07-07-2017 Conditions for providing a Letter of Undertaking instead of a bond for export, when the integrated tax is not paid
15/2017-Central Tax, dt. 01-07-2017 Amendment to CGST Rules notification 10/2017-CT dated 28.06.2017
14/2017-Central Tax, dt. 01-07-2017 Assigning power and jurisdiction to officers from several directorates
13/2017-Central Tax, dt. 28-06-2017 Prescribes rates of interest under CGST Act, 2017
12/2017-Central Tax, dt. 28-06-2017 Notifies the number of HSN digits that should be present on the tax invoice

Integrated Tax Notifications:

Notification number and issue date Provision
06/2017-Integrated Tax, dt. 28-06-2017 Prescribes the interest rate under CGST Act, 2017
05/2017-Integrated Tax, dt. 28-06-2017 Notifies the number of HSN digits that should be present on the tax invoice
04/2017-Integrated Tax, dt. 28-06-2017 Notifies the IGST Rules, 2017
03/2017-Integrated Tax, dt. 28-06-2017 Brings into force several sections of the IGST Act, 2017 from 1 July 2017
02/2017-Integrated Tax, dt. 19-06-2017 Empowers the Principal Commissioner of Central Tax, Bengaluru West to allow registration for access to online information or retrieval services

News on GST Act and changes in GST Rules

The GST structure is based on the GST Act that was composed by the GST Council, a committee comprising of the Union Finance Minister as the chairperson and ministers appointed by the state governments. Any changes in the law will affect the rules in the GST Act, such as the ones for penalty, invoicing, point of taxation, etc.

What becomes cheaper under GST?

Listed below are the items that have become cheaper from 1 July 2017, after GST was implemented.

Food Items:

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

Commodities for daily use:

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

Stationery:

  • Printers
  • Pens
  • Carbon paper
  • Notebooks
  • Parchment paper
  • All types of paper
  • Picture, drawing, and colouring books
  • Graph paper
  • Exercise books
  • School bag

Healthcare:

  • Medicines for cancer and diabetes
  • Insulin
  • Glasses for corrective spectacles
  • X-ray films for use in medicine
  • Diagnostic kits

Apparels:

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

Others:

  • Fly ash bricks and blocks
  • Diesel engines of power below 15HP
  • Cement
  • Tractor rear tyres and tubes
  • Hotels with tariff below Rs.7,500
  • Weighing machinery
  • Economy-class air tickets
  • Static converters (UPS)
  • Scooters
  • Electric transformers
  • Motorcycles
  • Winding wires
  • Luxury cars
  • Helmet
  • Kites
  • Crackers and explosives
  • Movie tickets less than Rs.100
  • Lubricants
  • Bikes

News About GST

  • Tamil Nadu extends its dates for compliances related to GST

    The Tamil Nadu state government had promulgated the state's Goods and Services Tax (Amendment) Ordinance, 2020 last Friday for amending the Tamil Nadu Goods and Services Tax Act, 2017 and extend the dates for different compliances because of the Coronavirus.

    This ordinance, which was promulgated by the Governor Banwarilal Purohit, has now extended all filing statements of outward supplies, filing appeals, and filing refund claims, prescribed, notified or specified, under Tamil Nadu Act 19 of 2017 which cannot be complied to because of force majeure.

    26 May 2020

  • GSTN Helpdesk handles over 56,000 taxpayer issues in one month of lockdown

    GST Network Helpdesk on Sunday said it took care of over 56,000 taxpayer issues in one month since the nationwide lockdown was imposed by the Central Government to fight the Coronavirus pandemic. According to data from GSTN, it resolved over 19,552 tickets raised by taxpayers between March 25 and April 24. The highest number of tickets it took care of in a day was 2,766 and the highest number of calls handled was 1,776.

    Prior to the lockdown, on an average, GST helpdesk would receive around 8,000 to 10,000 calls every day, while around 2,000 tickets were raised on the GRP portal on a daily basis.

    65% of the employees of the GST Helpdesk, worked from home, and were fully operational through its toll-free number from 09:00 a.m. to 09:00 p.m. serving in 12 languages.

    GSTN CEO Prakash Kumar said that calls were routed to the phones of the help desk agents who were working from home. This was done in a secured manner.

    Out of the 12 languages, the Hindi Helpdesk services received the highest number of calls comprising 61.66% of the total call volume, followed by English language with 14.80% volume. Marathi at 4.75% received the third-highest number of calls, followed by Gujarati at 3.65%. Telugu, Bengali, and Tamil had the next highest number of calls at 3%, 2.93%, and 2.86% respectively. The other languages are Kannada, Punjabi, Oriya, Malayalam and Assamese which registered lesser call volume respectively.

    08 May 2020

  • GST collection in Assam falls by 80%

    The Goods and Service Tax (GST) revenue collection in Assam has fallen by 80% this year. The main reason for the reduction in revenue was the coronavirus outbreak. In April 2020, the GST that has been collected is at Rs.193 crore. When compared to the same time last year, the GST that was collected was at Rs.932.26 crore. The Finance Minister of the state further added that the amount of foreign liquor tax that was collected in March 2020 was at Rs.65 crore. However, in April 2020, the foreign liquor tax fell to Rs.6.33 crore. According to the Finance Minister, many states have reduced the salaries of several government employees by up to 60%. However, government employees in Assam will be paid the full salary on 8 May 2020.

    04 May 2020

  • GST collections for the month of March fall below Rs.1 lakh crore

    In March, GST collections were at Rs.97,597, falling below the Rs.1 lakh crore mark. This is the first time in four months that the collections have been less than Rs.1 lakh crore.

    The main reason for the reductions in the collections was the lockdown due to the coronavirus outbreak. The lockdown has resulted in many businesses being shut in an economy that has already been sluggish. The Goods and Service Tax (GST) collection for March 2020 has reduced by 8.4% when compared to the same time last year. The main reason for the collection to decrease was the reduction in domestic transaction revenues and imports. In the last four months before March, GST collections had exceeded the Rs.1 lakh crore mark. Showing poor compliance, GST returns that were filed for the month of March was Rs.76.5 lakh. In February, GST returns that were filed were at Rs.83 lakh. Post March’s regular settlement, the revenue that has been earned by the state government and the central governments for SGST and CGST are at Rs.43,516 crore and Rs.41,901 crore, respectively. According to various tax experts, the GST collection could reduce further next month due to the disruption in the economy that has been caused by the coronavirus outbreak.

    02 April 2020

  • Amazon Growth Recorded at 1.5 Times Quicker than Flipkart Post GST Implementation

    Amazon India and Flipkart have both reported that there has been significant growth in their e-commerce businesses after the implementation of the Goods and Services Tax. Business was slow for both companies but they managed to recover within three months post GST implementation, from July to September.

    According to Flipkart, the company’s year-on-year e-commerce business growth was recorded at 85% so far as GMV (Gross Merchandise Volume) was concerned between April and September. One of the reasons behind the growth was the company’s flagship festive sales event, which helped in raising the growth percentage from 65-70%.

    The year-on-year growth recorded by Amazon India was 72% so far as GMS (Gross Merchandise Sales) were concerned between July and September, marking a relative increase from the 59% growth recorded between April and June.

    2nd January 2018

  • Electric Vehicle Policy to be Implemented by Maharashtra Government

    The government of Maharashtra is ready to finalise a policy which is expected to encourage not only the production of electric vehicles, but also the number of individuals who purchase these vehicles. The draft policy presented by the Maharashtra government includes State GST rebate to manufacturers for lowering manufacturing costs. Industrialists are not the only ones who will benefit from it, because the state is also set to offer a subsidy to those who take up the initiative of purchasing vehicles that run solely on electricity.

    Government officials state that the Maharashtra government is creating a three- to five-year plan in which one lakh vehicles will be manufactured per year. People who purchase these vehicles will receive 15% of the overall amount as subsidy based on the provisions of the draft policy. The maximum retail price of these vehicles will also be relatively low as the government wishes not to impose any SGST on the purchase of these vehicles.

    11 December 2017

  • Report Suggests that GST Compliance and Collection May Take a Long Time to Improve

    GST compliance and collection are not as good as anticipated. Targets have been nowhere close to attainable over the first four months since the implementation of the new regime. Kotak Securities released a report according to which, "Both collection as well as compliance of GST remains low, with the compliance being at around 50 per cent and is unlikely to increase significantly till the complete framework including returns matching, e-way bill, and reverse charges, are implemented fully."

    It is estimated that there will be a further decline in collections unless there is considerable improvement in compliance since the government had made significant reductions in tax rates on several different items. While the 28% tax slab now has only 50 items in comparison with the 250 items that fell under it before, as many as 200 items now fall under the 18% tax slab, having being brought down from the 28% bracket. India has around 9.6 registered taxpayers of which 1.5 million are composition dealers. Not all of these are paying taxes though, and if compliance is not reduced, it is feared that collections will reduce as a result.

    7 December 2017

  • Study Reveals that FMCG Logistics will be Transformed into Modern Business Thanks to GST

    A survey in New Delhi revealed that GST will transform the whole business landscape of the FMCG sector, logistics and retail in to an efficient and modern model. The study was conducted jointly by MRSS-Assocham and delved into the logistics of the FMCG sector. It also focussed on remodelling the operations of the sector into larger warehousing and logistics under the new tax structure. According to the joint study, all big corporations that have a positive impact for their supply chain are in the process of remodelling their operations into bigger warehousing and logistics. It added that this is being enabled due to the fact that IGST has turned out to be an enabler when it comes to setting up bigger warehousing unit and there will be no extra tax burden due to it.

    4 December 2017

  • Rates notified for apparel and textiles post GST

    In an effort to increase exports from ready-made garments along with generating employment in the textiles and apparel industry, the post-GST rates were notified by the government under the scheme for Remission of State Levies on exports of made-ups, ready-made garments and under Advance Authorisation-Remission of State Levies for garments. Post-GST rates as notified by the government are up to a maximum of 1.25% for man-made fibres, 1.7% for cotton garments, and 1.48% for apparel of blends, according to an official statement. It added, “Rates are up to a maximum of 2.20% for cotton made-ups, 1.40% for MMF and silk made-ups and 1.80% for made-ups of blends. For sacks and bags made of jute, the rate is 0.60%. The Revision of State Levies rate for garments under AA-All Industry Rates combination is 0.66%.”

    1 December 2017

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