Changes in GST laws to come into effect from 1 January onwards
There will be a host of changes in laws related to GST from 1 January 2022 onwards. The new law will require e-commerce operators to pay tax on services provided via them through restaurant services or transport availed by passengers.
The new law will also see correction in inverted duty structure in textile and footwear industries.
Mismatch in GSTR-1 and GSTR-3B sales can be directly recovered by GST officials
From 1 January 2022, any mismatch in GSTR-1 and GSTR-3B sales can be directly recovered by GST officials. The move will ensure a reduction in fake billings. Currently, show clause notices are initially issued, post which the recovery process will be initiated. The new changes are being introduced by the government under the Finance Act. A notification regarding the new changes was provided by the Central Board of Indirect Taxes and Customs (CBIC) on 21 December 2021.
GST Complexities for Swiggy and Zomato from New Year
E-commerce operators (ECOs) such as Zomato and Swiggy, which will be responsible for paying the 5% goods and service tax on restaurant services provided through them beginning 1 January 2021, face a difficult task of updating their software in less than two weeks, as invoicing responsibility has also shifted from restaurants to them. It was declared in September 2021 that ECOs will be liable for tax on restaurant services delivered through them. Procedures such as invoicing and other compliances, on the other hand, were only defined by a tax department circular issued on 17 December 2021. The invoicing of the above service has been delegated to ECOs, according to this circular.
GST Council meeting likely to be held in early January 2022
The GST Council will likely be held in early January 2022. The meeting will likely discuss the pre-budget talks between the state finance minister and the Union Finance Minister. The meeting will also look to rectify the inverted duty structure. On 23 December 2021, the Winter Session of Parliament will end.
Compliance burden reduced for GST taxpayers by the government
On 12 December 2021, the Ministry of Finance has announced relaxations for the GST taxpayers. The Ministry of Finance has announced that taxpayers who have an Annual Aggregate Turnover (AATO) of up to Rs.5 crore, will not have to file the Form GSTR-9C reconciliation statement from FY 2020-2021. For taxpayers who make an AATO of more than Rs.5 crore, the Form GSTR-9C reconciliation statement can be self-certified from FY 2020-2021. Taxpayers who make an AATO of up to Rs.2 core will not have to file Annual Returns for FY 2020-2021.
Employees may have to pay GST for skipping notice period
Employees may have to pay goods and services tax (GST) on their full and final salary in case they choose not to serve the notice period while leaving their current job as per a report issued by the Authority of Advance Ruling (AAR).
The AAR report mentioned that GST will be levied on recoveries such as the telephone bill, group insurance, and pay during notice.
Meghalaya GST revenue increases by 27%
Meghalaya had seen an increase in its Goods and Services Tax (GST) revenue by 27% in November 2021. The Ministry of Finance had released a statement saying that the GST revenue for Meghalaya in November last year was Rs.120 crore. In November 2021, the GST had increased to Rs.152 crore.
GST collections record the second highest monthly mop up in November 2021
Since the introduction of the new tax regime, GST collections touched second highest monthly mop up in the month of November. The collections for the month stood at Rs.1,31,576 crore. It was a shade higher than the Rs.1.3 lakh crore deposited in the treasury last month. It was 25 percent higher than the collections recorded a year ago. The previous record monthly collection was witnessed in the month of April where the collections were Rs.1,39,708 crore.
Gujarat registers second highest GST collection
The Goods and Services Tax (GST) collected in the state of Gujrat is Rs.8,497 crore for the month of October 2021. The revenue collected is 25% higher than the amount collected in the same month last year. A revenue of Rs.7,780 crore was collected in September 2021, which means the state has registered a 9.2% rise in the tax collection on a monthly basis.
The Principal Secretary of the State Finance Department, JP Gupta said that the increased tax collection is because of the improved sales across all sectors during Diwali.
4% GST collection growth in Chandigarh for the month of October 2021
The Goods and Services Tax (GST) collected in Chandigarh for the month of October 2021 is Rs.158 crores. This year’s collection is 4% higher than the revenue collected during the same period last year and Rs.6 crore more than the amount collected in September 2021. The night curfew is already been lifted by the administration in Chandigarh, and business activities are returning back to normal. The city has started picking up post relaxed restrictions, which has resulted in more business and an increased GST collection.
Real Estate Developers Contact Government Over GST on Redevelopment Projects
Various real estate developers have asked the government to provide concessions as well as clarification on the problem of double GST payments in rehabilitation projects. The double GST payments has resulted in cost increases at a time when margins are already thin.
According to industry trackers, after the implementation of GST in 2017, the redevelopment projects economy went awry. This redevelopment project is a type of urban real estate renewal method that works by taking over old building and rebuilding them.
Services provided by government, except agencies are exempt from taxes
The services rendered by the State government, central government, Union territory or local authority are not taxable. However, there are a few exceptions such as business entities. The Authority for Advance Rulings (AAR) Telangana ruled that the transaction fee collected by an agency on behalf of the government will be taxable.
Therefore, business entities collecting charges on behalf of the government or the services offered by them to the government will not be exempt from the goods and services tax (GST).
Pen Manufacturers request the Finance Ministry for a reduction in GST
Pen manufacturers have requested the Finance Ministry to reduce the goods and services tax (GST). The government’s decision of imposing 18% GST on all pens has affected sales. Previously, ballpoint pens were subject to 12% GST while fountain pens and stylograph pens were taxed at 18%.
Two pen manufacturing associations have asked the finance ministry for a reduction in GST. The government is striving for rate rationalisation.
The Authority of Advance Ruling says that GST will be applicable on Wellness packages
The Authority of Advance Ruling (AAR) has recently stated that the packages offered by Wellness centres will be defined as ‘composite supply.’ Therefore, a Goods and Services Tax (GST) ranging between 5% and 12% can be levied on Wellness centres.
The GST will be imposed based on the number of rooms in these Wellness centres and resorts. The AAR ruled that the centres will not be considered independent facilities because they are a part of the wellness packages that are offered to the customers.
Centre refrains from borrowing additional funds to fulfill GST compensation
As per the officials, the government's current revenue position is improving with an increased contribution both in terms of direct and indirect taxes. Considering this steady rise, the Centre is sticking to its FY22 borrowing programme and is not tapping the market for additional funds to meet GST compensation. The total GST revenue collected in September 2021 is Rs 1,17,010 crore and the required run-rate for FY2022r to meet the estimated GST collection is Rs.1.18 lakh crore. Looking at the economy's steady recovery, achieving the target should not be a problem.
Calcutta HC says WFH due to Covid not an apt reason to cancel GST registration
The order passed by the GST authority to cancel the registration of a company on the grounds that the firm did not have active office operating during the time of investigation due to Covid-19 has been set aside by the High Court of Calcutta.
International Value Retail Pvt Ltd had filed a petition after their application for revocation of GST registration was revoked following which the court ordered the tax authority to grant a hearing opportunity to the firm and submit all the necessary documents and evidence following which the authority will have to pass an order within a period of thirty days.
The firm’s application was rejected by the GST authorities on the ground that they did not have an active operational office at its place of registration as the company was following a Work from Home (WFH) model due to the outbreak of the Covid-19 pandemic.
Rajat Mohan, senior partner AMRG & Associates, said that it is important that companies are allowed to follow the WFH model during a time when everything is digitalized. The cancellation of GST on such grounds is not appropriate as it will most likely stagnate the growth of the Indian industry.
GST to be levied on Diwali gifts
The Authority for Advance Rulings (AAR) has stated that GST will be levied on goods given by companies as free gifts. Companies giving off products like refrigerators and gold coins will be considered as normal goods and GST will be imposed on them.
Central government releases Rs.1,15,000 crore to states as GST compensation
There is a shortfall in the Goods and Services Tax (GST) compensation in the current financial year. For this reason, the central government has released Rs.1,15,000 crore as a back-to-back loan to all the union territories and states.
A total of Rs.40,000 was released on Thursday and Rs.75,000 in July to the union territories with the legislature and states. In the fiscal year 2021-22, Rs.2.59 lakh crore will exceed the GST compensation amount.
Nirmala Sitharaman Requested to Postpone Raising the GST on Railway Products
The Railway Suppliers Association (RASA) has urged Nirmala Sitharaman, the Union Finance Minister, to postpone the government's recent decision to raise the Goods and Services Tax (GST) on railway products to 18% from 12%. On 30 September 2021, the finance ministry announced that the GST rate for all railway products covered by Chapter 86 would be raised from 12% to 18%. In a letter to the minister, RASA president S Surulivel stated that the decision would hurt small industry suppliers due to rising raw material costs, which had increased manufacturing costs by 25-40%.
GST collections for September stand at Rs. 1.17 lakh crore
On Friday, Finance Ministry stated that Goods and Services Tax (GST) collections for the month of September was Rs.1.17 lakh crore. It was 23 percent higher when compared to last year’s collection in the same month. The ministry in a statement said that the average monthly gross GST collection for the second quarter of the current year was 5 percent higher than the average monthly collection in the first quarter. It added that the enhanced GST collections indicate economic growth and action against anti-evasion activities. Of the Rs.1,17,010 crore, CGST is Rs.20,578 crore, SGST is Rs.26,767 crore, and IGST is Rs.60,911 crore. The total revenue of Centre and the States after regular settlements in the month stood at Rs.49,030 crore for CGST and Rs.50,907 crore for SGST. On Friday, Finance Ministry stated that Goods and Services Tax (GST) collections for the month of September was Rs.1.17 lakh crore. It was 23 percent higher when compared to last year’s collection in the same month. The ministry in a statement said that the average monthly gross GST collection for the second quarter of the current year was 5 percent higher than the average monthly collection in the first quarter. It added that the enhanced GST collections indicate economic growth and action against anti-evasion activities. Of the Rs.1,17,010 crore, CGST is Rs.20,578 crore, SGST is Rs.26,767 crore, and IGST is Rs.60,911 crore. The total revenue of Centre and the States after regular settlements in the month stood at Rs.49,030 crore for CGST and Rs.50,907 crore for SGST.
GST rates for licensing content rights increased to 18%
The Goods and Service Tax (GST) Council has recommended hiking the GST rates on licensing services of recorded media to 18%. Earlier, the GST rates were at 12%. The main reason for increasing the GST rates is to bring parity between licensing services and distribution. The rates of GST and the classification codes are HSN 999614 for Option 2, which is at 18%, and HSN 997332 for Option 1, which is at 12%. Option 1 is for licensing services in the case of television programmes, sound recordings, and show original films. Option 2 is for the distribution services of motion picture, television programme, and videotape.
Aadhaar authentication mandatory for GST refund
According to the government, it is mandatory to complete Aadhaar authentication in the case of Goods and Service Tax (GST) refund. The CBIC has made several changes to stop tax evasion. Any refunds will also be deposited to the bank account that is linked to the PAN that was submitted at the time of GST registration. The notification further added that any companies that have defaulted in the filing the summary returns and do not pay the monthly GST cannot file GSTR-1 sales returns for the next month. The new rules will come into effect from 1 January 2022. The decisions were made at the GST council meeting that was held on 17 September 2021.
Group of Ministers set up to come up with GST systems reforms
An eight-member Group of Ministers (GoM) has been constituted by the Union Finance Ministry to come up with potential sources of GST evasion. The GoM will also look at identifying the possible use of data analysis for improving compliance and revenue augmentation. The recommendations will be submitted to the Council by the GoM from time to time. Apart from the GoM, another one has been set up to look into the GST rates. However, GST shortfall compensation may not be covered beyond June of next year.
The GST Council's Clarifications Provide Relief to Businesses
The GST Council issued two clarifications on Friday, 17 September 2021 that are expected to provide significant relief to businesses, including captives of foreign companies in India that cater to their parents' other foreign businesses, as well as Indian entities such as telecom companies, insurers, and banks with operations in multiple states. The Council of Union and State Finance Ministers met in Lucknow and resolved to allow unutilized balances in the CGST and IGST cash ledgers to be transferred between distinct people (entities with the same PAN but registered in different states) without having to go through the refund procedure.
From Next Year Non-filers of One Monthly GST Return Will be Banned from Submitting GSTR-1
Businesses that fail to file a summary return or pay monthly GST will be unable to file a GSTR-1 sales return for the following month beginning 1 January 2022. The GST Council met in Lucknow on 17 September 2021 and resolved on a slew of steps to simplify compliance, including requiring firms to use Aadhaar authentication when filing refund claims. These steps will aid in preventing revenue leakage from the Goods and Services Tax (GST), which went into effect on 1 July 2017. With effect from 1 January 2022, the Council agreed to alter Rule 59(6) of the Central GST Rules to specify that a registered person will not be allowed to file Form GSTR-1 if they have not filed the previous month's return in Form GSTR-3B.
GST Council Decides to Fix the Inverted Duty Structure to Reduce Tax Burden on the Leather Industry
The GST council’s decision to correct the inverted duty structure on leather footwear will come into effect from 1 January 2022. This decision by the council may help reduce the sector's tax burden and stimulate domestic manufacturing of manmade fiber (MMF) fabrics and garments. Sanjay Leekha, Chairman of the Council for Leather Exports (CLE), said that the GST (goods and services tax) on leather footwear costing less than Rs.1,000 is 5%, while the tax on footwear worth more than that is 18%, but the GST on inputs for these footwears might be as high as 18%.
GST Council to fix duty structure
After considering the revenue trend that dipped below the neutral levels, the Goods and Services Tax (GST) Council Are looking into measures like rate rationalizations for correcting the duty structure and to also take steps to increase revenues. The decision comes after four years of release of the indirect tax regime, with an acknowledgement that rate cuts across the years and spanning over 500 items led to the strain on finances of central and state governments.
The Council will try to make corrections to the inverted duty structure for items like footwear and textiles sectors starting from 1 January. The inverted duty structure arises when taxes on output is lower than the inputs taxes. This creates an inverse accumulation of input tax credit which has to be refunded. The inverted duty structure has implied revenue outflow for the government and has driven the government to look into the duty structure.
The Finance Ministry Extended the Deadline for Applying for the GST Amnesty Scheme till 30 November 2021
The Finance Ministry extended the deadline for applying for the GST amnesty plan, which allows taxpayers to pay a reduced cost for filing monthly returns late, by three months till 30 November 2021. In May, the GST council, chaired by Finance Minister Nirmala Sitharaman and made up of state ministers, decided to introduce an Amnesty Scheme to give taxpayers relief from late fees for pending returns. For those taxpayers who did not have any tax burden, the late fine for non-furnishing of GSTR-3B from July 2017 to April 2021 has been restricted at Rs 500 per return. Taxpayers who owe money will be penalised a maximum of Rs 1,000 in late fines if their returns are not filed by 31 August 2021.
GST Revenue Surpasses Rs.1 lakh Crore as the Economy Improves
The gross Goods and Services Tax (GST) for July 2021 (for June 2021) surpassed Rs.1 lakh crore and reached Rs.1,16,393 crore. In July, GST receipts climbed by 33% compared to the same month last year and by 25.4 percent over the preceding month. This indicates a pick in the economy after the second wave of Covid-19 that resulted in lockdowns all over India which affected commercial activities. Due to the lockdowns, revenues fell to a 10-month low of Rs.92,849 crore in June (for sales in May) after eight months of exceeding the Rs.1 lakh crore mark.
Schools, food supplies, and entrance test exempted from GST
Several tweets were written by the Central Board of Indirect Taxes (CBIC) in regard to the exemption of GST. The clarifications were based on the 43rd GST Council meeting. According to CBIC, GST is exempted in case food is supplied to schools under the mid-day meal scheme. The CBIC further added that catering services to educational institutions will also be exempted from GST. GST has also been exempted in case students have paid a fee to the National Board of Education, state education board, or Central education board for examinations.
GST rates revised for crucial Covid-19 treatment goods till September 2021
The Goods and Services Tax (GST) Council has reduced GST rates on several commodities that are essential for the treatment of Covid-19. These rates will be applicable till the month of September 2021. However, vaccine GST rates remain the same at 5%. The levy of 5% on vaccines will ensure that the chain for tax paid on input credit will remain intact.
8th month in row GST mop-up tops Rs.1 lakh crore; lockdown impact muted
The gross GTS (Goods and Services Tax) collection for the month of May was recorded to be at Rs.1 lakh crore for eighth month in a row which Indicated a lower-than-expected impact of lockdowns in the second wave of the Covid-19 pandemic.
The GST collection was recorded to be at Rs.1.02 lakh crore which was however, lower than April’s record collections of Rs 1,41,314 crore despite many Indian states imposing strict lockdown restrictions.
The GST collections during May 2020, had been recorded at Rs.62,009 crore. In the previous year, the GST collections had slipped to a record low of Rs.32,172 crore in April after the lockdown was announced.
It took six months for the collections of GST to recover and go above the Rs 1.lakh crore mark in the month of October to be recorded at Rs.1.05 lakh crore.
IGST exempted for COVID-19 relief items and Amphotericin-B drug for Black Fungus 31 May 2021
The GST Council had recently held the 43rd Council meeting and it was decided in the meeting that items for COVID-19 relief which are being brough into the country will be exempted from IGST till the 31st of August 2021.
The Finance Minister of India Nirmala Sitharaman has recently made the announcement. With the rising cases of Black Fungus across the country, the medicine for the same Amphotericin-B has been added to the list of exemption as well. The FM has also mentioned that the exemptions will be applicable irrespective of the fact that the relief items and medicines are being purchased or being donated to the government or to relief agency as per the state authorities’ directives.
Gross revenues from GST hit record high in April 2021
GST revenues touch all-time high of Rs.1.41 lakh crore in April. April’s GST collections surpassed the previous highest collections of Rs.1.24 lakh crore recorded in the previous month i.e., March 2021. The collections were up by 14 percent when compared to March. April was the seventh straight month that GST revenues have crossed the mark of Rs.1 lakh crore. Of the Rs.1,41,384 crore GST collected in April, Central GST (CGST) collections stood at Rs.27,837 crore while State GST (SGST) collections stood at Rs.35,621 crore. Integrated GST (IGST) and Cess collections stood at Rs.68,481 crore and Rs.9,445 crore respectively. The record collections suggest that economic activity have not yet been badly affected amidst the ongoing second wave of coronavirus as compared to last year. The IGST includes ?29,599 crore collected on import of goods. It needs to be mentioned here that the total revenue of Centre and the States after regular and ad-hoc settlements in April 2021 was Rs.57,022 crore for Central GST and Rs.58,377 crore for the State GST.
No notice from the finance department regarding payment of maximum GST liability in cash
In the latest development, the Finance Ministry of India had stated that there were no instructions given to officials regarding the payment of maximum GST liability in cash. This was given as a response to previous reports where GST officers were using phone calls, WhatsApp and messaging services asking many taxpayers to pay the maximum tax liability in cash.
According to reports, the GST officers were trying to ensure that that their GST revenue collection targets were met for the FY. In the latest statement issued by the Finance Department, the government or the Central Board of Indirect Taxes and Customs have not given any instruction of the sort.
GST taxpayers will be able to use the Input Tax Credit in their credit ledger to pay off their GST dues for March, as per the notification sent by the Finance Ministry.
GST field units set to identify defaulters and increase collection
Goods and Service Tax (GST) officials have authorised field units to identify top taxpayers as well as defaulters to increase tax collections. The top 200 return defaulters for February belonging to the Central jurisdiction and ask them to file the tax returns. The top 300 taxpayers will also be encouraged to make cash payments of the state GST for the financial year 2020. The top taxpayers who are defaulters with 25% decline will be personally contacted by the AC/GSTO and explanations would have to be provided and motivated to increase their contributions to tax in the country. The interest on the cash liability of tax should be levied in major cases within the regulations of the GST Act provisions. There will be notices issued for discrepancies in the GST returns if there are mismatches between the monthly and quarterly returns. There will also be audit and reconciliation statements that have to be filed by taxpayers for the financial years 2018, 2019, 2020, and 2021. This will also be done for mismatches between any input tax credit for GSTR 3B and ITC that is auto drafted in the GSTR 2B.
E-invoicing under GST regime to become mandatory for entities with a turnover of Rs.50 crore or more
The government on Monday in a notification stated that e-invoicing under the goods and services tax (GST) regime will become mandatory for entities with a turnover of Rs.50 crore and more from April 1. This will be the third phase of e-invoicing roll out. The government had rolled it out for entities with Rs.500 crore and more turnover from October 1 last year and later extended to entities with Rs.100 crore and above from January 1 this year. It needs to be mentioned here that the government had earlier planned to extend e-invoicing to all entities from 1 April 2021 but it has refrained from doing so after taking into consideration small entities.
The system is aimed at bringing in more transparency in sales reporting, minimising errors, automating data entry work, and improving compliance. It will also help in preventing tax evasion. Under e-invoicing, companies have to generate an invoice registration number (IRN) from a government portal and shown to the authorities while moving goods.
GST collection for the month of February stands at Rs.1.13 lakh crore
According to a data released by the Finance Ministry of India, the total GST collected during the month of February stood at Rs.1.13 lakh crore.
This is the fifth straight month when the total GST collected has exceeded Rs.1 lakh crore. Comparatively, the total GST collection for the month of February 2021 as compared to the numbers observed for the same month last year saw a growth of 7%.
The ministry of finance said that the growth in GST collection clearly indicated that the economy is slowly recovering due to the various measures taken by the tax authorities.
January 2021 GST collections reach all-time high
The Goods and service tax (GST) collections for January 2021 had reached Rs.1.19 lakh crore since the launch of the GST regime. The GST revenues in January was the highest after the introduction of GST and reached around Rs.1.2 lakh crore mark. This had been more than last month’s record collection of Rs.1.15 lakh crore. The consistent collections of more than Rs.1 lakh crore for the last couple of months and the increasing trend over January had been indicators of teh fast economic recovery after the pandemic.