Author Archives: CA Amit Shah


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.

Read More

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.


Read More

GST Course for 3rd Batch – ADMISSIONS OPEN (Limited Seats)


GST Training Course –

Considering upcoming implementation of GST, business working model will change to a great extent. And updated practical knowledge is required by owners & accountants on all the changes taking place in GST for hassle free GST implementation.

To empower business to understand GST, transitional provisions (Opening Stock), accounting filing of returns etc, we have started GST training course from June-2017 (Batch wise).


Highlights of Course –

  • Practical Approach
  • Conceptual understanding of various GST concepts.
  • Query solving
  • Accounting treatment
  • Information on Return Filing, E-way bills


Course Pattern –

  • Practical Training
  • Accounts – Master, Data Entry
  • Return Filing
  • E-Way Bills
  • Query Solving- Tally & software’s related GST questions 


About Seminar Details-

  • We will take a free seminar for Associations, if you want some other training, like CORPORATION TRAINING AND PARTICULAR REQUIREMENT (depends upon days) then it will be chargeable.
  • In that case we will provide you a particular notes related to GST or queries get solved according your staff need.

We assure best quality services look forward for a long term professional relationship.


Contact : 8624892442 ; 0231-2656520


Read More

Want us to carry your goods? Show GST number first: Transporters to traders

Transport companies are now insisting traders furnish their GST numbers before accepting goods for transportation anywhere. Traders who have not acquired GST numbers will not be entertained

Chairman of V- Trans, a large Mumbai-headquartered logistics company and past chairman of Bombay Goods Transport Association confirmed the development.”Octroi being subsumed in GST is a big relief and will save both, time in transit and fuel. However, for transporting goods, the sender’s GST number is required, because given the way tax provisions for transporters have been structured, that becomes necessary”.

Under the old tax regime, transport services suffered 5 per cent service tax. That rate has been retained under GST. However in their business, transporters did not have to be registered, collect taxes from the sender on rent or transport charges and deposit them with the government. This responsibility vested with the sender who paid transport charges. He was responsible for depositing the tax with the service tax department.

Under GST, if transporter doesn’t take the GST number, then he will have to register with the department and collect and deposit tax, which is an arduous task for players in this segment, many of whom are unorganised or run very small businesses. This is the reason they insist on GST number from traders. “If you have yet not taken GST number, don’t send your goods to us,” said another small transporter.

Even an aggregating agency running a cargo service said that it is asking the sender for his GST number. Narrating his experience, a senior official this agency said, “We were rotating some of the cargo to another company who was insisting on the GST number from receiver of goods also, if the document mentioned valuation of goods.”


Read More

Soft launch to fewer rates: 5 things govt should focus on post GST

Now that the goods and services tax (GST) is a reality, it is necessary to look at some key areas that the government should focus on to unleash the true potential of the indirect tax regime.

Fewer rates and classifications

The GST has four base rates (5 per cent, 12 per cent, 18 per cent and 28 per cent), two special rates (0.3 per cent and 3 per cent) and three rates of cess (1 per cent, 2 per cent and 15 per cent). While services were earlier taxed at a uniform 15 per cent, the four base rates are now applicable to services as well. The classification of goods and services across these rates is going to lead to disputes. The rates have also been changed a couple of times even before the launch, giving credence to the fact that the multi-tier rate structure and the rate equalisation exercise has created certain anomalies. Some of these issues have been addressed, while some would hopefully get resolved soon.

Hence, it is necessary that the government now focus on reducing the rate slabs to possibly two base rates of 18 per cent (standard rate) and either of 5 per cent or 12 per cent as the merit rate. This would reduce the potential for disputes.

Inclusion of petroleum products, realty and electricity

The GST leaves out three important sectors, making the coverage sub-optimal. Petroleum, real estate and electricity generation would continue to have the older indirect taxes. The problem is exacerbated by the fact that these sectors would pay input taxes in the form of GST, which cannot be offset against the existing taxes. It is essential that the government work on a time-bound plan to get these sectors into the GST framework. This will not only expand the GST basket but also make it a more comprehensive tax, besides ensuring that all suppliers to these sectors become part of the ecosystem.

Soft launch to build acceptability

The ability to handle the changes that GST entails would depend on the size and nature of a business. While large businesses have the resources and knowledge to prepare for a change of this magnitude, smaller businesses would find it difficult. Businesses used to filing monthly returns and dealing with state tax authorities will find it easier to deal with GST, compared with service providers accustomed to a centralised registration with two returns a year. There is also now a need to ensure invoice matching to get input tax credits and reduce tax payment liability.

It is, therefore, necessary that the government ensure a soft approach for the first year or so, instead of focusing on strict observance of provisions. Similarly, there should be some leniency in allowing input tax credits for the first year, and the implementation could become progressively stricter. This will make the GST more acceptable to all businesses. It is necessary to ensure that several penal provisions are kept in abeyance during the introduction period.

Existing tax issues and assessments

There is significant pendency of assessments in various states and a large amount of appeals pending at various levels of adjudication. Many of these relate to periods for which even records would be difficult to trace. GST signifies the commencement of a new journey. While embarking on this journey, it is essential to discard old baggage and start afresh.

The government should fix timelines for disposal of cases and assessments so that businesses can focus on GST compliance and not worry about older cases and other such matters.

Seamless GSTN portal

Key GST processes would be entirely dependent on an information technology (IT)-enabled platform. The government has taken considerable pains to ensure the country gets a world-class IT-enabled system.

But the government should ensure that the GST portal is appropriately tested, even if this means initial processes are put on an extended timeline. It is better to have a tested system with some small delays instead of launching an imperfect system on time. Any difficulty in accessing the database or in uploading transactions could lead to credibility issues.


Read More

With official GST launch, India takes a step towards ‘One nation, One tax’

GST LIVE: The midnight launch of the Goods and Services Tax (GST), the country’s biggest tax reform since independence, has catapulted India into a select league of nations with a national sales tax.

Amid boycott of the launch ceremony by principal Opposition parties like the Congress, which termed it “tamasha” (gimmick), the new tax regime overnight replaces the messy mix of more than a dozen state and central levies built up over seven decades.

The one national GST unifies the country’s $2-trillion economy and 1.3 billion people into a common market, an exercise that took many long years.

The GST will eliminate the compounding effect of the current multi-layered tax system as well as the cross-state tax heterogeneity by fixing the final tax rate. It is expected to lower the average tax rate on manufactured goods and make them uniform across states by fixing the final tax rate.


Read More

Centre, states will pay GST Network costs

Filing a tax return on the Goods and Services Tax Network (GSTN) portal by an entity will cost Rs 55 a month but the state will bear this burden. The user charge for all eight million taxpayers will be borne by the Union and the state governments, to keep revenue flowing for GSTN, the company charged with providing the information technology (IT) backbone for the reform, without burdening the assessees.


GST is set to be rolled out from Friday and will absorb a slew of indirect taxes — including service tax, central excise, value added tax, central sales tax and octroi.


GSTN, officially a private body (it was formed at the government’s behest and support), has estimated the total cost of the project at Rs 3,000 crore. That covers salaries, interest cost, security operations for five years of operation and the ongoing development period of two years. It awarded a contract worth Rs 1,320 crore to Infosys for building and maintain the IT network, crucial for implementing the proposed system across the country, for five years.


GSTN’s job is to provide a common platform for registration, a filing of returns and e-payment. It will also integrate the common GST portal with the tax administration systems of Centre and states.


The Centre and states will pay Rs 550 crore to GSTN for the expenses incurred this financial year. The budget proposal was approved by the GST Council in its recent meeting. “We will get money on a per-taxpayer basis for all the cost we are incurring and other expenses that will come up. We have worked out the per-taxpayer cost,” said Navin Kumar, chairman, GSTN.


It had earlier proposed to charge a user fee for filing a return using the portal. The government rejected the proposal. ‘The government disagreed as taxpayers have never been charged anything for filing a return. It asked for the number of taxpayers and said they will pay,” said Kumar.


The cost of each taxpayer will be split between the Centre and states on a monthly basis. The cost per state will be calculated on the basis of the number of taxpayers in that state and will be shared with the Centre. With that, the Centre will pay the GSTN a little over Rs 23 crore a month.


The total cost was arrived by taking into account the slightly over eight million taxpayers. “Using the same formula, we will calculate the cost for next year as well,” said Kumar.


The Rs 550 crore revenue will go towards repaying a Rs 550 crore loan from IDFC and to pay, Infosys, besides salaries for the staff. The GSTN had taken the term loan earlier this year and will further take a working capital loan. The government has provided a guarantee for the loan, used for developing the service and hardware.


The loan is needed only till rollout of the portal. The revenue model of charging on a per-user basis will help it sustain afterwards.


GSTN was incorporated at end-March 2013, as a private limited company, with government shareholding of 49 per cent and private shareholding of 51 per cent. ICICI Bank, HDFC Bank, LIC Housing and NSE Strategic Investment Corporation hold at least 10 per cent stake each. The other 49 per cent is held by the central and state governments, each holding 24.5 per cent.


About 6.6 million taxpayers have already migrated to the GST portal and received provisional identification. The window for migrating was earlier closed for a while; it reopened for new taxpayers last week. It is compulsory for dealers with an annual turnover of more than Rs 20 lakh to register


Read More

Bad news for farmers: GST to increase cost of tractor production

Tractor prices may go up by around Rs 25,000 after the goods and services tax is imposed because the gap between input and output taxes is wide.


In a recent meeting, the GST Council addressed the issue of the inverted duty structure in various industries, including the tractor industry. Subject to a 28 per cent duty on components against 12 per cent on tractors, manufacturers would have faced an accumulation of credit. The council reduced the GST rate on clearly identifiable tractor components from 28 per cent to 12 per cent.


However, Chairman of the technical committee and immediate past president of the Tractor Manufacturers’ Association (TMA), said the relief was marginal and input costs per tractor would rise by Rs 25,000 The industry’s working capital would also be squeezed by Rs 1,600 crore, he added.


The revision of the GST rate was limited to token components while engines, transmission and other parts would continue to face the 28 per cent duty, chairperson said. The TMA has sought a change in component duties from 28 per cent to 18 per cent.


Chairperson and chief executive officer of Tractors and Farm Equipment Limited (TAFE), said, “Unfortunately this (the GST) has only been partially rolled out and the increase in input cost stands at Rs 25,000.”


Chairman urged the government to reduce the duty on all components that go into the manufacture of tractors. “This would be needed to ensure that the farming community does not suffer,”


Chief executive officer of Escorts, said tractor makers might not be able to pass on the higher costs to customers because of the anti-profiteering clause. Tractor makers typically hike prices by Rs 3,000-4,000 every year. Transitional provisions for stocks held at dealerships have also not been extended to the tractor industry because tractors were in the exempted category till now. The industry holds over 150,000 tractors in depots and dealerships, and denial of this relief will affect the farming community



  • 28% duty on components
  • 12% duty on tractors
  • Industry says tractor prices would rise by Rs 25,000
  • The council reduced rate only on clearly identifiable tractor components from 28% to 12%
  • The industry’s working capital would also be squeezed by Rs 1,600 cr, industry body says
  • Tractor makers typically hike prices by Rs 3,000-4,000 every year
  • Rise in price to effect the farmers


Read More

GST: Imported garments to become 5-6% cheaper

Imports are likely to remain 5-6 per cent cheaper than locally made apparel, despite the goods and services tax providing input credits to the textile industry.


Apparel imports are subject to a countervailing duty (CVD) of 6 per cent on cotton and 12.5 per cent on polyester, which importers receive as a central value-added tax credit. The CVD is optional at a flat 2 per cent if the importer does not claim a set-off against input costs. The government has provided a 40 per cent abatement on this optional flat duty, which works out to 0.8 per cent. Thus, the total applicable tax is 1.2 per cent for importers who do not claim the set-off. This apart, importers pay a 4 per cent special additional duty (SAD) without any duty protection, which after considering cesses, works out to over 5 per cent.


“The government had levied this duty as protection for domestic players. With the GST, this duty protection will be removed and imported garments will be 5-6 per cent cheaper. The government has fixed 5 per cent as the GST rate on all textile products and apparel,” said by president of  Clothing Manufacturers Association of India.


The textile industry fears an increase in imports from Bangladesh and China, where the cost of manufacturing is lower due to cheaper labour. “The GST subsumes all taxes, including protections. Garment imports will become cheaper due to removal of the SAD,” said an official from the Cotton Textiles Export Promotion Council. The textiles ministry has set an export target of $45 billion for FY18, marginally lower than the $48 billion set for FY17.


The government plans to present a new textiles policy by September. It is also organising Textiles India 2017, a seminar to bring global buyers under one roof, between June 30 and July 2 in Gandhinagar. While 61 countries have booked pavilions, 1,900 stalls are expected to be booked by state governments and industry players.


“Our aim is to increase textiles exports and create a competitive environment. We would like states to take such initiatives to help the industry showcase its products directly,” said by secretary of textiles ministry. Ministry had done some work on the new textiles policy, which would focus on India’s competitiveness in the world market.


Effective levies on imported garments


Before GST 
* Countervailing duty include excise duty on cotton 6% and polyester 12.5% with Cenvat credit

* Optional duty of 2% with abatement of 40% on it (i.e. 0.80%) means effective duty of 1.2% without Cenvat credit

* 4% of special additional duty, which along with cess, educational cess and others wok out to Rs 5.5%.

* Thus, duty protection of 5.5% from cheap import


After GST  


* All duties subsumed in 5% of the GST for both domestic manufacturers and importers

* No protection, as both domestic manufacturers and importers would require to pay same duty


#CA Amit Shah & Co.

Read More

VISION KNOWLEDGE CENTER – Now learn what is GST & how to implement it in your business…

For GST Course -3rd Batch (LIMITED SEATS)
For More Information / Registration Call Us On:
Read More
1 2 3 4 5 6