Tag Archives: gst

IRCTC not issuing invoice, causing huge loss to exchequer: Tax consultant

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Chandigarh, Sep 16 (IANS) The Indian Railway Catering and Tourism Corporation (IRCTC), a public sector undertaking under the Ministry of Railways, is causing loss to the exchequer by not issuing invoice to the consumers for eatables sold within trains, a tax consultant said on Friday.

In a letter to Union Finance Minister Nirmala Sitharaman, Chandigarh-based tax consultant Ajay Jagga said the Supreme Court recently issued notices to the Central government on a plea seeking to plug existing loopholes in the GST system.

The IRCTC, which is selling food in the trains, appears to be a similar entity causing huge loss to the exchequer, he said.

He said he travelled in Shatabdi Express to New Delhi from Chandigarh on Thursday. While travelling, he ordered a cup of tea and paid Rs 20 for this.

Later he asked for an invoice. On his insistence, an invoice of Satyam Caterers Private Ltd was issued.

One cup of tea sold without invoice results in a GST loss of Re 1, he said. “Imagine other items like cold drinks, chocolates and food booked within the train without issuing invoices,” Jagga, a former member of the Tax Intelligence Unit, told IANS.

Also, he said, the waiters were charging food amount in the bill but not issuing the invoice to the consumers.
IRCTC causing loss to exchequer by not issuing invoice: Tax consultant
“The working of IRCTC waiters and other staff is causing huge losses to the exchequers. On one hand, we are penalizing shopkeepers for not issuing bills and on the other the IRCTC is not issuing bills and the number of such transactions, pan-India, would be in lakhs everyday,” said his letter.

Earlier, in a letter to the Union Finance Minister, he had said the Centre should issue necessary advisory to all states that restaurants should stop charging unjustified extra cost, which was being imposed on consumers for items such as pastry, cake, etc.

Impact of Demonetisation on Black Money, Widening of Tax Base and Direct Tax Collections

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The Government of India launched a concerted drive against black money with Demonetisation being an important step in that direction. Among the main objectives of Demonetisation was the flushing out of black money and also conversion of the non-formal economy into a formal economy to expand the tax base. The impact of Demonetisation on black money, widening of tax base and Direct Tax Collections is summed up hereunder:

A. Impact on black money:

Quantum jump in Enforcement actions based on Demonetisation data:

Searches

· 158% increase in number of searches (from 447 to 1152 groups)

· 106% increase in seizures (from Rs. 712 crore to Rs.1469 crore)

· 38% increase in admission of undisclosed income (from Rs.11,226 crore to Rs. 1,54,96 crore)

Surveys

· 183% increase in surveys (from 4422 to 12520)

· 44% increase in undisclosed income detected (from Rs. 9654 crore to Rs. 13920 crore)

Operation Clean Money:

The Income Tax Department launched ‘Operation Clean Money’(OCM) on 31st January, 2017 to analyse the data of the persons who deposited large sums of cash and whose returns of income were not in sync with such deposits.

Phase 1:

· In the first phase of OCM, 18 lakh suspect cases were identified through use of data analytics where cash transactions did not appear to be in line with the tax profile of depositors.

· Online verification in these cases was enabled and done in a record time of 4 weeks.

· The success of the first phase was also attributable to the massive taxpayers’ awareness and media campaigns on Operation Clean Money launched by the Department.

· The scale of the Operation may be gauged from the fact that response of 9.72 lakh persons in respect of 13.33 lakh accounts involving cash deposits of around Rs.2.89 lakh crore, as per pre-defined parameters on sources of the cash deposits was captured by the Income Tax Department within a short span of 3-4 weeks. Online queries were raised in more than 35000 cases and online verification was completed in more than 7800 cases.

Phase 2:

· The Operation Clean money has since moved into the next phase that includes enforcement actions in high risk cases, taxpayer engagement through a dedicated website in medium risk cases and close monitoring in low risk cases.

· The high, medium and low risk cases have been identified through use of advanced data analytics, including integration of data sources, relationship clustering and fund tracking.

· The exercise has also unearthed large number of persons and clusters having suspect transactions. These include about 14,000 properties of more than Rs.1 crore each where persons have not even filed Income Tax Returns. The investigations are in progress.

B. Impact on Widening of Tax-base:

· The number of e-returns of Individual taxpayers filed till 5th August, 2017 (due date of filing) increased to 2.79 crore from 2.22 crore returns filed during the corresponding period of last year, registering an increase of about 57 lakh returns (25.3%). This shows marked improvement in the level of voluntary compliance as a result of action taken by the Income Tax Department on the basis of data of cash deposits in the wake of demonetization.

· The total number of all returns (electronic + paper) filed during the entire Financial Year 2016-17 was 5.43 crore which is 17.3% more than the returns filed during FY 2015-16.

· For FY 2016-17, 1.26 crore new taxpayers (return filers + non-filers making tax payments) were added to the tax base (till 30.06.2017).
C. Impact on Direct Tax Collections:

The effect of Demonetization is also clearly visible in the growth in Direct Tax Collections. Collection of Advance Tax under Personal Income Tax (i.e. other than Corporate Tax) as on 05.08.2017 showed a growth of about 41.79% over the corresponding period in F.Y. 2016-2017. Collection of Self-Assessment Tax under Personal Income Tax showed a growth of 34.25% over the corresponding period in F.Y. 2016-2017.

GST Revenue Figures – July 2017

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The Goods and Services Tax (GST) tax was introduced on 1st of July, 2017. The last date for payment of GST for the month of July 2017 was 25th August, 2017. The last date for filing returns in cases, where the taxpayer wanted to avail transitional credit was 28th August, 2017 and, in all other cases, it was 25th August, 2017.

If we exclude the taxpayers who have registered with the GSTN in August 2017 and the composition dealers, total number of tax payers who were required to file the returns for July 2017 is 59.57 lakhs, of which, as on 29th August, 2017 (10 a.m.), 38.38 lakh returns have been filed, which is 64.42% of the total number of returns, which are to be filed for the month of July 2017.

The total revenue of GST paid under different heads upto 29th August, 2017 (10 a.m) is Rs.92,283 crore. The total CGST revenue is Rs.14,894 crore, SGST revenue is Rs.22,722 crore, IGST revenue is Rs.47,469 crore (of which IGST from imports is Rs.20,964 crore) and Cess is Rs.7,198 crore (of which Rs.599 crore is Compensation Cess from imports).

It may be mentioned that IGST will be allocated between the CGST and the SGST to the extent that the same is used for payment of CGST/SGST. This exercise will be done based on the cross-utilisation report to be received from the GSTN. Exact revenue figures of the Central and the State Governments respectively will be known after this exercise is complete before the end of this month.

Out of total 72.33 lakh taxpayers, 58.53 lakh taxpayers have completely migrated to the GSTN and 13.80 lakh taxpayers are yet to complete their procedural formalities to migrate to the GSTN. The number of new taxpayers who have registered with the GSTN upto 29th August, 2017 (10 a.m.) is 18.83 lakhs.

Clarification regarding availability of Transitional Credit for GST

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As per the rules, the Goods and Services Tax (GST) for the month of July 2017 has to be paid by 20th August, 2017. Only after the payment of full GST, return in summary Form 3B can be filed.

Concerns have been raised about the form for claiming transitional input tax credit not being available on the GSTN website. This form will be available on the GSTN website from 21st August, 2017. In view of this, a small window of opportunity is being given to all the taxpayers. For those taxpayers who do not want to claim any transitional input tax credit have to necessarily pay the tax and file return in Form 3Bbefore the due date of 20th August, 2017. The taxpayers who want to avail the transitional input tax credit should also calculate their tax liability after estimating the amount of transitional credit as per Form TRANS I. They have to make full settlement of the liability after adjusting the transitional input tax credit before 20th August, 2017. However, in such cases, they will get time upto 28th August, 2017 to submit Form TRANS I and Form 3B. In case of shortfall in the amount already paid vis-à-vis the amount payable on submission of Form 3B, the same will have to be paid with interest @ 18% for the period between 21stAugust,2017 till the payment of such differential amount.

Reduction/exemption of tax rates under GST for small businesses

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The Government has received representations from small businesses relating to exemption from GST, reduction in applicable rates of GST, and product and area wise exemptions. The GST rates on supply of goods and services have been notified based on the recommendations of the GST Council. The tax rates on goods have been fixed taking into consideration, inter alia, the total indirect tax incidence on goods prior to GST, which included the central excise duty rates / embedded central excise duty incidence, VAT rates or weighted average VAT rates, embedded VAT incidence, cascading of VAT over excise duty, incidence on account of CST, Octroi, entry tax, etc.

Keeping in view the interests of small business, any supplier in the State or Union territory, other than special category States, whose aggregate turnover in a financial year does not exceed Rs.20 lakh [Rs.10 lakh in the case of Special Category States] is not liable to be registered under the Central Goods and Services Tax Act, 2017.

Further, a composition scheme has been provided for the benefit of small business. An eligible registered person in the State or Union territory, other than Special Category States [other than Uttarakhand], can avail benefit of this scheme (Except those manufacturing ice-cream, pan masala and tobacco products) by paying an amount equal to 2% of turnover in the State in case of manufacturers and 1% equal to the turnover in the State in the case of trader dealers. The turnover limit for availing of composition levy initially was Rs. 50 lakhs in the preceding financial year. However, keeping in view the interests of small businesses, the same was increased to 75 lakhs [except in case of Special Category States]. The raised limit in case of Uttarakhand, however, is Rs. 75 lakhs. Thus, the interests of traders are not likely to be adversely affected in general.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today.

Features of GST

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Goods and Services Tax (GST) is intended to bring transparency and accountability in business transactions along with the ease of doing business and rationalization in tax rates and will not pave the way for financialization of the country.

The foremost benefit of GST is to remove hurdles in inter-State transactions resulting in the setting up of a common market. This make ‘one nation, one tax and one market’ true in the country.Further, in case of inter-State supply, only integrated tax is to be levied while in intra-State supplies, central tax and State tax or Union territory tax is to be levied. Thus, the plethora of taxes being levied by the Centre and the States in the erstwhile regime has been replaced by simpler and more efficient taxation system.

GST will promote business and development by making the taxation structure easy and by eliminating the numerous taxes. The GST laws have been framed in such a manner that a multitude of taxes have been replaced by one tax. The details of the taxes subsumed under GST are as under.

(A) Taxes related to Centre:

i. Central Excise duty
ii. Duties of Excise (Medicinal and Toilet Preparations)
iii. Additional Duties of Excise (Goods of Special Importance)
iv. Additional Duties of Excise (Textiles and Textile Products)
v. Additional Duties of Customs (commonly known as CVD)
vi. Special Additional Duty of Customs (SAD)
vii. Service Tax
viii. Central Surcharges and Cesses so far as they relate to supply of goods or services.
(B) Taxes related to State

i. State VAT
ii. Central Sales Tax
iii. Luxury Tax
iv. Octroi and Entry Tax (all forms)
v. Entertainment and Amusement Tax (except when levied by the local bodies)
vi. Taxes on advertisements
vii. Purchase Tax
viii. Taxes on lotteries, betting and gambling
ix. State Surcharges and Cesses so far as they relate to supply of goods or services.
GST will improve productivity and easiness of business as the entire nation has been converted into a single market by removal of hurdles to inter-State trade. Further, uniform tax rates along with reduction in the cascading effect of taxation and increased input tax credit utilization in GST would immensely benefit the nation. There is automation of all major business processes viz., registration, payment of tax, return filing, etc.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Lok Sabha today.

Why is GST Anti-Middle Class but Pro-Rich, Pro-Farmer?

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When Indian Prime Minister Narendra Modi visited the White House, the pat came from the President for undertaking the daunting taks of bringing the entire 1.3 billion consumers of the country under one tax regime, making it easy for market access by sellers.

The huge transition to GST-managed tax regime may benefit those who buy white goods as discounts are visibly pushing the demand but not for the middle class, which is still reeling under demonetisation effect of last year.

Many working and salaried class families have woken up on Saturday to a high taxation as they started buying daily consumables. With one stroke, the entire unholy ‘service tax’ has gone up from 15% to 18% and immediately all banks and service providers have sent urgent SMS messages passing on the burden to consumers.

Ironic but all luxury items have seen dramatic reduction in tax structure as cars are on huge discount sale from Maruti Suzuki to Tata Motors, while mobile makers are advertising equally effective price reductions over night. Not far behind, homes will be cheaper now though an elusive dream for many.

Those in rural areas are still not affected by the GST regime. Moreover, fertilizers getting GST discount from 12% to 5%, the direct beneficiaries will feel lesser impact from the concurrent hike in prices of daily consumable items until GST spreads over the remote areas too.

But those who entered restaurants on their way to office on Saturday had to pay extra in the name of central GST tax and State GST tax. It is still not clear for them why there should be two GST taxes in the bill when the GST is being rolled out as one unified structure.

Essentially, the salaried middle class will begin to feel the impact. Since elections are far away, the government is not in a mood to revise these tax slabs on daily consumables for some time.

To offset the hike in consumable goods, commodities such as packaged cement, medicaments, smart phones, and medical devices have been showcased as products where the tax is reduced.

For instance, packaged cement worked out to more than 31% earlier but now it is 28% and if the government is expecting the builders to pass on benefits to buyers, then it’s a dream for many.

In case of medicaments, including Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic systemsalso and other medicaments in general, the rate was down from 13% to 12% now and the impact will be hardly noticeable.

Smart phones attracted a tax of 13.5% earlier and now it is 12%. Similarly, medical devices, including surgical instruments, were under 13% tax will be under 12% GST, which is not a great reduction.

Only benefit for religious-minded people is that Puja Samagri has been placed under Nil category, to woo the women who would feel the impact of GST immediately.

Otherwise, India is no longer a poor country but a rich country for the rich and for those who marvel in rich lifestyle while those who believe in Mahatma Gandhi’s simplicity would be extinct soon.