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Deep dives and practical guides written by the WFYI team.
Comprehensive explanations, FAQs, and updates about GST regulations, returns, and compliance.
The Kerala jewellers' association is pushing for a fixed 1.25% GST rate on gold, urging the state minister to consider their pre-budget proposals which also include abolishing the local 'purchase tax'. This move comes as gold and jewellery taxation currently falls outside the standard GST tiers, with significant variations across states. While industry bodies propose differing rates, a final decision from the GST Council is awaited. Businesses are advised to prepare for GST implementation by ensuring compliance before the deadline.
In business operations, errors in GST invoices are common, necessitating corrections reported in monthly returns. This process, known as invoice rectification, can result in either a revised or supplementary invoice, depending on the nature of the change. A revised invoice addresses transactions occurring before a business secures permanent GST registration, while a supplementary invoice corrects deficiencies like understated taxable values in existing invoices. Both types require specific mandatory details to ensure compliance with GST regulations.
Under GST, exchange offers will become less attractive due to a change in tax calculation, as GST will apply to the total value of the goods rather than just the cash amount paid. This new valuation approach, outlined in draft rules, primarily impacts the consumer electronics and durables industries, which previously paid VAT only on the cash portion of transactions. Businesses might need to adjust their strategies.
The GST Council's fitment committee is set to convene this week to establish the framework for categorizing various services within the four-tier GST tax structure. The committee's objective is to minimize inflationary impacts and ensure minimal price changes. Expectations are that services currently under both VAT and service tax will fall into the 18% slab, while some services may shift to the 12% slab, potentially affecting costs marginally.
Nomura, a Japanese financial research firm, projected that India's Goods and Services Tax (GST) implementation would lead to a minimal increase in inflation, specifically less than 20 basis points. While expecting a slight negative impact on economic growth in the short term, the company believes GST will be fiscally neutral initially. Ultimately, Nomura echoed the government's view that GST will boost productivity, reduce costs, aid economic formalization, and generate significant government revenue by eliminating cascading taxes.
GSTR-8 is a critical monthly GST return for e-commerce operators responsible for Tax Collected at Source (TCS). This return details platform supplies and collected TCS, which then reflects in suppliers' GSTR-2A for input credit claims. Filing GSTR-8 by the 10th of the following month is mandatory, with penalties and interest for delays. Though uneditable once filed, corrections can be made in subsequent returns, ensuring accurate compliance for e-commerce businesses.
GSTR-7 is a crucial monthly return for entities deducting Tax Deducted at Source (TDS) under GST, due by the 10th of the following month. This comprehensive guide explains who is eligible to deduct TDS, the importance of filing GSTR-7 for both deductors and deductees, and the specific details required for submission. It also covers the penalties for delayed filing and the process for correcting errors in subsequent returns, ensuring compliance within the GST framework.
The Finance Ministry has initiated a public consultation process by releasing eight draft GST rules for feedback from industries and consumers. Four of these rules, covering valuation, composition, transition, and Input Tax Credit, were previously approved by the GST Council and are undergoing industry review. The Central Board of Excise and Customs also unveiled four additional rules on payment, invoicing, refunds, and registration, which have already received Council approval. The final regulations for GST filing are yet to be announced.
This article explores various GST assessment procedures beyond the initial self-assessment, provisional, and scrutiny types. It details best judgment assessments for non-filers and unregistered persons, including an amnesty scheme for non-filers. Additionally, it covers summary assessments, which are expedited evaluations to protect revenue interests, and explains the conditions for their withdrawal.
India is advancing towards the implementation of the Goods and Services Tax (GST) by July, with the model law projected for finalization by the end of this month. The finance ministry is currently reviewing the drafts for both the model GST and State GST (SGST), anticipating a crucial decision from the GST Council on February 18. This could lead to its presentation in Parliament during the Budget Session starting March 9. The new tax structure, incorporating SGST, CGST, and IGST, aims to streamline business operations by centralizing tax interactions with the Union government. States will be required to pass their own SGST laws and will be supported by a compensation act to mitigate initial revenue losses.
The State Bank of India (SBI) was the first Indian bank to raise concerns about GST compliance for services. SBI identified three main challenges: the extensive registration process requiring 36 registrations, an increase in tax return filings leading to higher compliance costs, and a need for clearer tax rules on financial instruments. The bank is working with the GST Council to address these issues.
GSTR 6 is a monthly GST return that Input Service Distributors must file to detail input service invoices and distribute Input Tax Credit (ITC). It is crucial for recording credit distribution and is mandatory even for nil returns, with a filing deadline of the 13th of the following month. While revisions are not permitted directly, corrections can be made in subsequent filings. The return auto-populates from GSTR 6A, a read-only form, and requires specific details across eleven sections, including ITC distribution, amendments, and late fees.