The Centre and states are likely to each impose a 0.5 per cent tax collected at source on sellers of products on e-commerce websites such as Flipkart and Amazon under the goods and services tax (GST) regime. This proposal would be taken up at the two-day meeting of the GST Council, starting Thursday in Srinagar. The tax will be collected by the e-commerce marketplaces: They will deduct 1 per cent while paying the sellers. E-commerce players had earlier opposed a provision in the GST law to impose a 2 per cent tax — 1 per cent by the Centre and states ..
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The Income Tax department has launched a new e-facility to link a person’s Aadhaar with the Permanent Account Number (PAN), a mandatory procedure for filing IT returns now.
The department’s e-filing website – https://incometaxindiaefiling.gov.in/ – has created a new link on its homepage making it “easy” to link the two unique identities of an individual.
The link requires a person to punch in his PAN number, Aadhaar number and the “exact name as given in the Aadhaar card”.
“After verification from the UIDAI (Unique Identification Authority of India), the linking will be confirmed. In case of any minor mismatch in Aadhaar name provided, Aadhaar OTP (one time password) will be required,” the department said in its advisory to taxpayers and individuals.
The OTP will be sent on the registered mobile number and email of the individual.
It urged them to ensure that the date of birth and gender in PAN and Aadhaar are exactly the same, to ensure linking without failure.
“There is no need to login or be registered on e-filing website (of the I-T department). This facility can be used by anyone to link their Aadhaar with PAN,” it said.
The government, under the Finance Act 2017, has made it mandatory for taxpayers to quote Aadhaar or enrollment ID of Aadhaar application form for filing of income tax returns (ITR).
Also, Aadhaar has been made mandatory for applying for permanent account number with effect from July 1, 2017.
While Aadhaar is issued by the UIDAI to a resident of India, PAN is a ten-digit alphanumeric number issued in the form of a laminated card by the IT department to any person, firm or entity.
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Excise collections may take a hit as dealers are refraining from purchasing goods from manufacturers as they are not sure about tax credits and rates under GST, which is slated for July 1 launch.
The GST Council will meet on May 18-19 to decide on the rates, and sources said tax rates of as many as 6,000 products have to be decided.
In view of this uncertainty and also the transitory mechanism for availing of credit on tax paid prior to the GST kick-off, dealers are choosing to wait and watch rather than buy and holding on to inventories.
This state of flux will have a tax bearing on excise collections during April-June, said experts.
PwC National Leader (indirect tax) Pratik Jain said that given the apprehension about the loss of credit in the case of transition stocks, there is an attempt to reduce the inventory level, which is impacting the sales of most consumer products in the current quarter.
“Therefore, excise duty collection this quarter may fall unless the government provides higher percentage of deemed credit (currently proposed at 40 per cent of CGST),” Jain said.
GST will subsume 10 different levies, including excise, service tax and VAT, and will create a unified market for seamless transfer of goods and services.
The GST Council, comprising Union and state finance ministers, has decided on a four-tier tax structure of 5, 12, 18 and 28 per cent. Besides, for demerit and luxury goods, a cess will be levied on top of the peak rate. The cess will be used to compensate the states for revenue loss arising out of GST implementation.
The fitment committee comprising central and state officials has worked out tax rates on various goods and services and the report will be placed before the GST Council at its May 18-19 meeting.
Tax rate closest to the present incidence on a goods or service will be chosen with a view to keeping the shift from the present regime neutral for consumers. The tax rates will be decided in a fashion to keep their impact on inflation as well as revenues to the government near neutral.
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India being a federal nation, the Central Government is empowered by the Constitution to levy duties and taxes on the manufacturing and rendering of services. The government in the states are empowered to levy tax on intrastate sale of goods, in which movement of goods happen within state jurisdictions. When the sale of goods involves movement of goods between different states, the Centre is empowered to levy tax on such sales, and the revenue so collected, will be shared by the Centre and the State.
While the constitution clearly stipulates the powers to the governments at the Centre and the states, the biggest challenge especially for the states is to monitor the movement of goods – within the state and outside the state.
There was rampant evasion of taxes and leakage of revenue to the states. Thus, in order to tackle the tax evasion and misuse of the system, most of the states have multiple check-post along their national highways and borders. These check-posts mainly monitor the movement of goods and ensure that the relevant duties/ taxes have been paid on goods.
A person causing movement of goods has to be equipped with various documents like invoice, challan, road permits, way bill, and so on which need to be produced at the check-post for inspection.
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The Goods and Services Tax (GST) will be levied at several rates ranging from 0 to 28 percent. GST Council has finalised a four-tier GST tax structure of 5 percent, 12 percent, 18 percent and 28 percent, with lower rates for essential items and the highest for luxury and ‘demerit’ goods that would also attract an additional cess.
Service tax will go up from 15 percent to 18 percent.
While details have not been announced, essential items including food, which presently constitute roughly half of the consumer inflation basket, will be taxed at zero rate.
The lowest rate of 5 percent would be for common-use items – usually items of mass consumption.
There would be two standard rates of 12 percent and 18 percent into which the bulk of goods and services would fall. Most commonly used items as well as household items would fall under these two categories.
The highest tax slab will be applicable to ultra-luxuries, demerit and sin goods (like tobacco and aerated drinks). The demerit goods will attract a cess for a period of five years on top of the 28 per cent GST.
The GST will subsume the multitude of cesses currently in place, including the Swachh Bharat Cess and Krishi Kalyan Cess and the Education Cess. Only the Clean Environment Cess is being retained.
The collection from the GST cess as well as that of the clean energy cess would create a revenue pool which would be used for compensating states for any loss of revenue during the first five years of implementation of GST.
The principle for determining the rate on each item will be to levy and collect the GST at the rate slab closest to the current tax incidence on it.
Indicative Tax Slab under GST
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Permanent account numbers (PAN) not linked to Aadhaar cards will likely become invalid after December 31, a government source said on Thursday, as the Centre pushes to widen the use of the 12-digit biometric identity project.
Currently, all taxpayers need to have a PAN number to file income tax return but others, such as students outside the tax bracket, also use the card as a proof of identity.
The government says many of these PAN cards are fraudulently obtained, a practice that can be checked by a unique identification number.
The official – who refused to be quoted as he isn’t authorised to talk to media – said the government had arrived at the tentative cutoff date of December 31 as it believed the Aadhaar enrollment process will be complete by the end of the year.
“Considering that 98% of the adult population is Aadhaar card holders, a time frame till the end of the year is more than adequate for linking PAN with Aadhaar,” said State Bank of India group’s chief economic adviser Soumya Kanti Ghosh.
Here’s a quick guide to how you can link your Aadhaar with PAN
1 Log in to e-filling portalhttps://incometaxindiaefiling.gov.in
2 A window will show up to facilitate linking of the two unique identity numbers
3 Punch in your Aadhaar number at the space provided
4 Check that your personal details (name, date of birth, gender) match with those stated in PAN
5 Data will be corroborated to ensure authenticity of your identity
6 Click on ‘link now’. PAN and Aadhaar will be linked only when the details of both match
More than 1.08 billion Indians have the unique identification number that was aimed at plugging leaks in the distribution of government entitlements and benefits.
Over the past few years, the Centre has linked Aadhaar to a growing list of subsidies and schemes, such as the mid-day meal.
On Wednesday, the Lok Sabha passed a controversial bill that made Aadhaar mandatory for filing income tax returns or applying for a PAN card.
According to the amendments in the finance bill, taxpayers can’t file income tax returns from July 1 if they fail to quote the Aadhaar number or show proof of having applied for the document.
At present, there are 250 million PAN cards that are mandatory for cash transactions of hotel or travel bills exceeding Rs 50,000. It is also mandatory to quote the number for purchase of jewellery above Rs 2 lakh either in cash or by plastic money, and while making large deposits in banks.
But the government says many of those PAN cards are duplicates or obtained through fraud.
“The government has proposed quoting the Aadhaar number mandatory for filing (IT) returns to eliminate discrepancies …many individuals hold multiple PANs and filing returns multiple times; once quoting of Aadhaar becomes binding, this problem will not be there,” revenue secretary Hasmukh Adhia told HT.
People with existing PAN cards will either have to link them to Aadhaar or show proof of having applied for the 12-digit ID by December 31, the source added.
The recent push to expand the usage of Aadhaar has triggered a torrent of criticism but the government has remained undaunted.
Finance minister Arun Jaitley indicated on Wednesday that Aadhaar would be made mandatory for all income-tax related issues to weed out fraud and duplicates.
“Aadhaar is a more foolproof identity of a citizen as it cannot be duplicated and this will help in addressing graft and though the move will ensure transparency in filing of income tax returns but at the same time, this can also help in tracing money launderers,” said a senior government official.
“The next thing on our agenda will be to decide on the time frame that will be given to people to link their PAN with Aadhaar,” Adhia added.
The finance minister had said that making Aadhaar mandatory for filing IT returns would help in checking tax evasion. “Why shouldn’t we make use of this technology if it helps us catch tax evaders,” Jaitley had said in Parliament.
Several banks and insurance companies started linking Aadhaar accounts with savings accounts and insurance policies to address graft but they are not allowed by law to seek mandatory quoting of Aadhaar.
There are several bank account holders who have quoted PAN but do not have Adhaar. “We are yet to figure out what will be the course of action for them as legally, quoting Aadhaar has not yet been made mandatory,” a senior bank executive said.
In 2013, the Supreme Court said Aadhaar couldn’t be made mandatory and people without the document shouldn’t be denied from genuine entitlements and subsidies.