Monthly Archives: Aug 2017

Goods & Service Tax (GST)

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Goods & Service Tax (GST)

Over 1.9 million file GST returns

As many as 19,42,354 taxpayers have till Wednesday filed returns for July under the new goods and services tax (GST) regime. Officers of the GST Network (GSTN), responsible for the information technology (IT) backbone of the GST, said they hoped 2.8 million more would do so by the deadline in the next two days.


Those who have filed returns constitute over 22 per cent of total assessees (8.7 million) under the GST regime. However, of the 8.7 million assessees, 2.2 million are yet to complete the migration process to the new indirect tax regime.


The GSTN, also managing the tax filing apparatus, has geared up the IT network to handle the rush, its Chairman Navin Kumar said. A last-minute rush caused the GSTN portal to crash last week, forcing the government to extend the deadline by five days to August 25.


Those who wish to claim transitional input tax credit can file returns by August 28.


Sudhir Singh, MD of Marg ERP, a solution provider for GST returns, said over 1.9 million filers was not really a big number, but the numbers would swell by the deadline. He added that his clients were finding it difficult to file returns.


Till August 21, Rs 42,000 crore had come in as taxes from 1 million assessees. The collection figure is expected go up substantially, with the number of filers touching nearly 2 million as of Wednesday.


These returns are not detailed ones. Those would be filed next month.


#CA Amit Shah & Co.

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Goods & Service Tax (GST)

Retail inflation hits cinema tickets, biscuits, chocolates, cigarettes

The pace of retail inflation quickened in personal computers, biscuits, laptops, cinema tickets and cigarettes in July, when the goods and service tax (GST) was introduced, compared with June and May. Gold prices continued to fall, in fact at a higher rate in July against June and May.


Internet expenses also saw a higher rate of price increase at 1.83 per cent in July compared with 1.39 per cent in June and 1.22 per cent in May, revealed official figures.


Data on the basis of the Consumer Price Index (CPI) for both May and June was taken for this analysis as the June numbers would not have been ideal for comparison. Companies were de-stocking their goods in June because GST was to be introduced from July. This argument could be substantiated from the inflation data on beverages such as those of cocoa and chocolate. While inflation in these was higher at 2.98 per cent in July, compared with 2.91 per cent in June. It was lower than 3.16 per cent in May. Also, inflation in mobile handsets was 1.95 per cent in June as well as July, but it was lower at 1.56 per cent in May.


Tax is one of the factors that explains inflation but is not the only reason for the price rise. For instance, tax on gold was a bit higher in the post-GST regime compared with the earlier system. But gold prices fell 7.44 per cent in July, higher than 5.36 per cent in June and 4.98 per cent in May.


Sumit Dahiya of Taxmann said the jewellery industry saw higher impact of GST than other goods as the rate of indirect tax on gold has increased by 50 per cent to 3 per cent from the earlier 2 per cent.


But then, why are gold prices falling?


It has to do with many other things. For example, the season of saavan, which started on July 16, is considered inauspicious for buying gold in many parts of the country, said M S Mani of Deloitte.


Refrigerators, washing machines, air conditioners and air coolers saw the same tax increase under the new taxation system. But inflation in air conditioners and air coolers came down in July, compared to June and May, while refrigerators and washing machines saw higher price rises in this period.


This may be due to the onset of monsoon, which led to less demand for at least air coolers, if not for air conditioners, an analyst explained.


Mani said the attempt was to ensure GST rates for products were similar to the rates under the earlier system. But due to rate slabs, the effective rates on some products have increased while those on some products have come down.


He said there were significant rate differences between the states in the past, hence a comparison at the product level was difficult.


For instance, he said, entertainment tax rates on movie tickets varied between 10 per cent and 45 per cent in the past. Hence a GST of 28 per cent on movie tickets would have reduced the rate in some states but increased prices in others.

There has been a mixed trend in revision of prices. For instance, several services were now being taxed at 18 per cent or 28 per cent, higher than the earlier 15 per cent (inclusive of various cesses). These have been passed on to consumers in cases such as mobile phone bills, etc. There was anecdotal evidence that final prices have been kept unchanged in some discretionary consumption sectors, with the higher tax liability being absorbed by the producers. This is likely to affect margins in Q2 FY18.

The GST Council had raised cesses on cigarettes after it was found that tax incidence under the regime was less. Also, companies were yet to figure out their input tax credit in July and benefits of area-based exemptions. For those who want to claim credit, the date for filing preliminary returns has been extended to August 28 from August 20. The sunset clause for area-based exemptions has also been extended till 2027 but companies have to pay tax and then claim reimbursement.


“In our view, some businesses may choose to observe the impact of changes related to area-based exemptions, input tax credit etc. on costs over the course of the ongoing quarter, before updating final prices to reflect higher GST rates,”


A small inflationary impact of GST for a temporary period couldn’t be ruled out. “However, with increased input tax credits to businesses, over the medium term, the inflationary impact of GST is bound to reduce.”


#CA Amit Shah & Co.

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Goods & Service Tax (GST)

Govt gets Rs 42k cr tax so far in first filing under GST, may swell further

As much as Rs 42,000 crore has come in as taxes so far in the first monthly filing under the new goods and services tax (GST) regime, and the revenues are expected to swell further as the filing cycle closes later this week.

A senior official said that about Rs 15,000 crore has come in as Integrated GST, which is levied on inter-state movement of goods, and another Rs 5,000 crore by way of cess on demerit goods like cars and tobacco.


The remaining Rs 22,000 crore has come in as Central GST and State GST, which would be split equally between the Union and state governments.


“Tax deposited till this morning was Rs 42,000 crore,” the official said. So far, one million taxpayers have filed returns and another two million have logged in and saved return forms. “We are seeing good compliance and our estimation is that 90-95 per cent of the assesses will file returns and pay taxes,” he said.


Under the GST regime, which was implemented from July 1, businesses are expected to file the monthly tax return. Tax for the first month is to be filed by an extended deadline of August 25. The deadline was extended as the tax return filing website snapped just a day before the due date ended on August 20. GST unifies more than a dozen central and state levies including excise duty, service tax and VAT, and the revenue generated is to be split equally between the Centre and states.


In July last year, Rs 31,782 crore of excise duty was collected and Rs 19,600 crore of service tax. Estimate for the combined sales tax or value added tax (VAT) collection by states was available.


While 7.2 million assessees of the old indirect tax regime have migrated to the GST Network portal, nearly 5 million have completed the migration process.

Besides, of the 1.5 million fresh registrations that have happened, as many as 1 million are expected to file returns for July.


A total of 6 million businesses are expected to file returns and pay taxes for July, the official added.


As per the GST law, any registered person who fails to furnish the details of outward or inward supplies or returns required by the due date will have to pay a late fee of Rs 100 for every day during which such failure continues subject to a maximum amount of Rs 5,000.


Besides, every person who fails to pay the tax within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, will be required to pay interest at 18 per cent from the day succeeding the day on which such tax was due to be paid.


The collections from customs duty and IGST from imports post-implementation of GST have almost doubled to Rs 30,000 crore in July.


#CA Amit Shah & Co.


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