Highlights of 29th GST Council Meeting

The 29th GST Council meeting was held on August 04, 2018 at New Delhi. The GST Council meeting has been held to address the concerns of Micro, Small and Medium Enterprises (MSME’s) and to affirm the proposal of cashback on digital transactions. The key recommendations of meeting are as follows:

1. Cashback on Digital Transactions
The GST Council has recommended cashback of 20% of GST paid on B2C transactions subject to the maximum amount of Rs. 100 per transaction. The payment of GST shall be made through BHIM Application and RuPay cards. This decision will boost digital transactions and cashless economy.

2. Sub-Committee for MSME’s issues
The GST Council has decided to constitute a sub-committee to review the concerns of MSMEs on various tax and compliance related issues. The West Bengal Finance Minister said that the group of ministers will look into all proposals to give relief to MSMEs with turnover of upto Rs. 1.5 crores from the central GST (CGST). This would restore the excise duty exemption available to small businesses in the pre-GST regime.

An insight into the GST Amendments as passed by the Lok Sabha
On August 9, 2018 the Lok Sabha has passed the GST Amendment Bill, 2018. The Bill provides for more than 40 amendments to the GST Act. These amendments aim to simplify the GST law and to ensure administrative convenience for the Small and Medium Enterprises. These amendments shall come into force form such date as the Central Govt. may announce those through notification in the Official Gazette. Here is an insight into all significant amendments as passed by the Lok Sabha.

1. RCM shall be applicable only on notified registered persons for supplies made by unregistered persons
2. Threshold limit for Composition Scheme increased to Rs. 1.50 crores
3. Composition Scheme is available if small portion of service is also provided by trader or manufacturer
4. No ITC of GST paid on repair and maintenance of motor vehicles
5. Scope of ITC in respect of motor vehicles expanded
6. ITC allowed for food and beverages provided to employees under any law
7. Changes made in the GST Act for new returns approved by GST Council
8. Registration limit increased to Rs. 20 lakhs for 6 specified States
9. Exemption from compulsory GST registration for e-commerce operators who are not required to collect TCS
10. No GST on processes done on goods temporarily imported into India which are exported
11. Payment for export of services can be received in Indian rupees if permitted by RBI
12. Concept of business vertical has been removed from GST

Govt. permits use of stickers for revising price of pre-packaged commodities due to reduction of GST rate
Government has granted permission to affix an additional sticker for declaring the reduced MRP on the pre-packaged commodities. However, the earlier labeling/ sticker of MRP will continue to be visible. This relaxation will be applicable  in the case of unsold stocks manufactured/ packed/ imported where the MRP would reduce due to reduction in the rate of GST w.e.f. 27th July, 2018.
This order shall be applicable upto 31st December, 2018.

Due date for filing GSTR-3B and GSTR-1 for each month from July to Mar., 2019
The return in FORM GSTR-3B of the said rules for each of the months from July, 2018 to March, 2019 shall be furnished electronically through the common portal, on or before the twentieth day of the month succeeding such month.Payment of taxes for discharge of tax liability as per FORM GSTR-3B.– Every registered person furnishing the return in FORM GSTR-3B of the said rules shall, subject to the provisions of section 49 of the said Act, discharge his liability towards tax, interest, penalty, fees or any other amount payable under the said Act by debiting the electronic cash ledger or electronic credit ledger, as the case may be, not later than the last date, as specified in the first paragraph, on which he is required to furnish the said return.Further, the Govt. has extended the due date of filing GSTR-1 for the months of July, 2018 to March, 2019 to 11th day of the next month for taxpayers having turnover above Rs. 1.5 crore.

Foreign Funds Reluctant to Disclose Ultimate Beneficial Owners
Foreign funds are reluctant to disclose their ultimate beneficial owners (UBOs) to the Indian regulator.
A large number of foreign portfolio investors (FPIs) have voiced reservations to capital market regulator Sebi about naming the UBOs — a new disclosure rule for offshore investors — as it may be onerous, unnecessary, and in many cases amount to a breach of privacy.
While Sebi probably believes that persons handling drug or terror money, indulging in sharp practices and violating anti-money laundering rules cannot be allowed to hide behind institutions, the offshore funds think that identifying the ‘last natural person’ or pinpointing ‘control’ can be virtually impossible in many funds.

FPIs raise red flag on KYC rules over privacy woes
Custodians of foreign portfolio investors (FPIs) as well as industry lobby groups have written to the Securities and Exchange Board of India (Sebi), raising privacy concerns arising out of the regulator’s April 10 circular mandating disclosure of additional information to identify the beneficial owners (BOs).
As part of Sebi’s know-your-client (KYC) requirement, FPIs have to disclose BOs’ details such as address, date of birth, tax residency number, social security number and passport number, and they have six months to comply with the directive.
“India’s new KYC norms may clash with global data privacy laws. Investment firms globally, too, are not comfortable with sharing personal information of their employees,” said a source. “Data security is another area of concern. No one is quite sure if India has the right infrastructure in place to ensure adequate security.”

Auto components industry seeks uniform 18% GST on all products
Auto component industry today sought uniform 18 per cent GST across the sector stating that low taxation would lead to better compliance and and larger tax base.
The industry, which reported a growth of 18.3 per cent to Rs 3.45 lakh crore in 2017-18, said the lower tax levy would also help in curtailing flourishing of grey operations in the aftermarket.
“One of the key demands of the industry has been a uniform 18 per cent GST rate across the auto component sector. Currently 60 per cent of the components attract 18 per cent GST rate, while the rest 40 per cent, majority of which are two-wheelers, and tractor components attract 28 per cent,” ACMA President Nirmal Minda told reporters here.

Online Taxation & VAT registration

 After having registered their business to sell their products online or offline the next big step is how to register for VAT so you can then charge your customers.

VAT registration is required when you are in business of any goods or products that can be felt or touched and exceeds specified amount of annual turnover By rules of The Department of Customs and Excise the turnover from a business after which you must register is currently Rs 10 00 000 per annum. Under this and it's optional for registration. Specified amount of turnover depends on the state regulations which are INR 5 to 10 lakhs.

There are several reasons in favour of registering for VAT regardless of what your turnover may be:
1. When purchasing goods for your business lots of companies will only deal with you when you have registered for VAT and can provide with your VAT number.
2. Being VAT registered also emits an impression that your company is of some extent and may help to bring in business.
3. Being VAT registered allows you to offset the amount of VAT you paid on any purchases you may make for the business and therefore lower the amount of tax you pay.

The procedure of VAT registration is simple. First you need to need to fill VAT registration form online/offline, after submission the place of business is inspected by authorities, the forms are processed after payment of VAT deposit and then VAT Certificate is generated.

The documents required for VAT registration

1. Company Incorporation certificate.
2. MoA, AoA
3. PAN card of directors
4. Address proof of directors
5. Address proof of place of business
6. 4 photographs of proprietor/ partners/ directors



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Online Taxation & VAT registration

After having registered their business to sell their products online or offline the next big step is how to register for VAT so you can then charge your customers.
VAT registration is required when you are in business of any goods or products that can be felt or touched and exceeds specified amount of annual turnover By rules of The Department of Customs and Excise the turnover from a business after which you must register is currently Rs 10 00 000 per annum. Under this and it's optional for registration. Specified amount of turnover depends on the state regulations which are INR 5 to 10 lakhs.
There are several reasons in favour of registering for VAT regardless of what your turnover may be:
1. When purchasing goods for your business lots of companies will only deal with you when you have registered for VAT and can provide with your VAT number.
2. Being VAT registered also emits an impression that your company is of some extent and may help to bring in business.
3. Being VAT registered allows you to offset the amount of VAT you paid on any purchases you may make for the business and therefore lower the amount of tax you pay.
The procedure of VAT registration is simple. First you need to need to fill VAT registration form online/offline, after submission the place of business is inspected by authorities, the forms are processed after payment of VAT deposit and then VAT Certificate is generated.
The documents required for VAT registration

1. Company Incorporation certificate.
2. MoA, AoA
3. PAN card of directors
4. Address proof of directors
5. Address proof of place of business
6. 4 photographs of proprietor/ partners/ directors
If you have any Query regarding this Click Here

Why its Important to outsource Finance and Accounting Services?

 Accounting outsourcing is about a contract signed by an organization with third party consultant to outsource partially or fully their accounting services. Finance and accounting outsourcing activities are trending in various organizations, as outsourcing accounting and book keeping services helps to work on main functions of business and to work more efficiently with the business core area and improve decision making and other tactics. It can bring considerable increase in company’s level of productivity and efficiency.

When a company does finance and accounting outsourcing, it expects several benefits out of it as follows-

Expertise having Up-to-Date Knowledge and Robust Processes :
The market keeps changing continuously due to frequent amendments in applicable laws and procedures. Companies do not have knowledge about or access to these latest amendments So, Updated knowledge of their team and time-tested processes enable us to provide quality accounting and bookkeeping services that are accurate.

Less Consumption on Training :
Organizations does not want their time and energy in training, mentoring and retention of their accounts team as it is the responsibility of accounting outsourcing partner. With finance and accounting outsourcing, company can spend more time and focus more on their main functions of the business which are beneficial for the growth of their company. And, by accounting outsourcing, every employee gets a chance to work efficiently on his field of work where he feels he can contribute more.
Faster Processing Time: With the help of accounting outsourcing services, there is faster and timely processing of services as experts are having full knowledge of accounting and finance handles the processes.The company can gain from the expertise of these professionals who have great knowledge and experience in this field.

Cost Effectiveness: By outsourcing accounting and bookkeeping services, One can get access to skilled professionals like CAs, CS’s, tax consultants and accounts executives at much lower expenses without compromising on quality. Companies can save cost of salary, new software applications, infrastructure, employment taxes and other overhead costs. One can perform accounting services relatively cheaply and efficiently than companies working with in-house team.

Scalability: As the business undergoes change; it may need to have a go at the accounting and book keeping activities. It is easy to increase or decrease these services by simply telling us about the changes required rather than In-house team.


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Corporate Tax Filing & Returns

More than only standard accounting and tax filling services, We helps in corporate tax filings and annual returns for the companies. We work closely with all our clients as we firmly believe that clear understanding of their business goal is crucial to impart the best online payroll services.

Which system and procedures should be used to effectively deal with your company’s tax commitments? Where do you start? Tax management is daunting and risky undertaking at the best of times but these days businesses also need to combat with economic uncertainty and ever-changing regulatory oversight. Making sure that you have the right workforce in place and are employing the latest technologies to effectively manage your tax obligations, is not an easy task, especially if tax management is not the core job of your company. What’s more, tax deduction is different to different companies, depending on their divergent responsibilities within a company but one thing is certain it can relief even distressing financial burdens that can impede a company’s development. Also, if you are doing business in Europe, you need to make adjustments in compliance with European law. we can help you answer these tax-related questions.

Our eminent tax planning professionals work with auditors, economists, actuaries and other specialists to offer tax solutions to companies like yours. But, wherever you do your business, we can help you enhance your cash flows; augment your gross tax margins, boost net profits, manage debt, and curtail tax rates. Whether you are looking for better tax management across a wide range of territories or with multiple entities in one territory, we have a team of skilled tax teams who can easily coordinate with your multi-country compliance requirements, help you with your tax accounting and reporting obligations. We also offer you tax compliance, tax payment advice and outsourcing services in payroll processing services. Our corporate tax filling services include-

1. Advising on different financial subjects which are of your interest and keeping you updated on the latest circulars, notifications & judgments
2. Liaison with government authorities and properly responding to any query generated from the government authorities or department, if any
3. Formulation and deposit of monthly challans on or before the due date
4. Reviewing of all important tax withholding responsibilities
5. Income tax planning for corporate
6. Filing annual income tax return
7. Calculation of monthly TDS

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GST anti-profiteering body set up

 The government has set up the National Anti-Profiteering Authority amid reports that some companies, particularly restaurants, are not passing on the benefit of the goods and services tax (GST) rate cuts to consumers. B N Sharma, additional secretary in the department of revenue, was on Tuesday appointed chairman of the authority.
Now, guidelines on what exactly constitutes profiteering are awaited. The authority will exist for a period of two years from the date Sharma takes charge.
The authority is mandated to ensure that the benefits of input credit and the reduction in GST rates on specified goods or services are passed on to the consumers by way of a commensurate reduction in prices. The government also named four senior officials as technical members of the authority.
“With the chairman and technical members now having been appointed, the authority becomes functional thereby reassuring consumers of the government’s commitment that GST would result in lower prices of goods and services,” a statement from the finance ministry said.
Govt eases transfer pricing dispute settlement
In a move to reduce litigation and boost investor confidence, the central government has decided to allow access to a bilateral forum for transfer pricing (TP) disputes, for all tax partner countries. The move to accept applications for bilateral advance pricing agreements (APAs) and mutual agreement procedures (MAPs) is expected to benefit a number of multinational companies that are based in important trade partners.
The government has said that even if a tax treaty with another country does not contain the provision of corresponding adjustment in matters of TP, it would still entertain bilateral MAPs &APAs with such a country. This does away with the requirement to amend tax treaties to remove such a deficiency.
ARCs can Now Control Sick Cos
In a move that would allow asset reconstruction companies (ARCs) take management control of sick companies, the Reserve Bank of India has removed the 26% cap on shareholding after conversion of the debt of the borrowing firm under reconstruction into equity.
In a note to ARCs sent late Thursday, the central bank said ARCs that maintain Rs. 100 crore net owned fund consistently and follow good corporate governance would be exempted from the 26% shareholding limit prescribed in 2014.
“This is a brilliant move,” said Vishal Kampani, managing director of JM Financial Group. “Debt resolution will get more traction and we expect banks to be more willing to sell their bad debts,” he said. ARCs are permitted to convert a portion of debt into shares of the borrower company as a measure of asset reconstruction.
Shipping, Airline Cos Add to GST Woes: Exporters Exporters have informed the finance ministry that goods and services tax refunds are getting delayed due to airline and shipping companies not submitting proof of export to customs and mismatches of invoice numbers in shipping bills and GST return forms.
India’s exports dipped for the first time in 15 months in October, falling 1.1% to $23.1billion and are expected to fall further in November as exporters turn away clients and new orders while they get to grips with the new tax regime, which was rolled out on July 1. Last month’s trade deficit widened the most in three years to $14 billion.
The Federation of Indian Export Organisations (FIEO) also said that despite the customs department allowing manual filing of input tax credit refund claims more than 10 days ago, the required application form (RFD-01A) is not available on the GST portal. “Only a fraction of the IGST (integrated GST) claims of July has been paid. The process has not even started for input tax credit,” FIEO director general Ajay Sahai said.
Divestments, GST mopup to lower fiscal deficit pains The success in divestments and encouraging goods and services tax (GST) collections will help the government reduce pressure on the fiscal math, says are port. “Disinvestment drive and GST rollout will reduce pressure on fiscal arithmetic,” domestic rating agency India Ratings said in a report on Monday.
It can be noted that government has reiterated its commitment to narrow down the fiscal deficit to 3.2 per cent for FY18. Frontloading of expenditure, where the Centre has exhausted 96 per cent of the deficit by August, and also a slowdown in growth had put question marks over whether the Centre will be able to meet the fiscal deficit target or not.

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Reverse Charge Mechanism Under GST

Reverse charge is a mechanism under which the recipient of the goods or services is liable to pay the tax instead of the provider of the goods and services. Under the normal taxation regime, supplier collects the tax from the buyer and deposits the same after adjusting the output tax liability with the input tax credit available. But under reverse charge mechanism, liability to pay tax shifts from supplier to recipient.

Concept of reverse charge

The concept of charging tax on a reverse charge basis is not new. Reverse charge mechanism existed in the previous service tax regime. However, the concept of reverse charge on the supply of goods is new.

In the normal course of business, the supplier of goods or services is liable to pay tax on supply, but in the case of reverse charge, the receiver becomes liable to pay tax instead. Thus, if a supplier who is not registered under GST supplies goods to a person who is registered under GST, the receiver pays GST directly to the government.

By way of an earlier notice dated 13 Oct. 2017, the government suspended the applicability of reverse charges on purchases made by registered persons from unregistered persons until 31 March 2018. This implies that a registered person can avail intrastate supplies of goods and/or services from unregistered persons without any daily ceiling, which was previously capped at Rs. 5000.

It is mandatory to register under GST to those liable to pay tax under Reverse Charge Mechanism irrespective of the threshold limit of 20 lakhs and 10 lakhs (North eastern States).

Applicability of Reverse Charge

• In case of services provided by taxi driver or rent a cab operator through electronic commerce operator then GST has to be paid by E-commerce operator;
•  Services through an E-commerce operator for supply of services (Startups like Housejoy shall be liable to collect GST from customers and pay to Government);
•  Unregistered dealer providing supply to the Registered dealer (Here the Registered dealer is liable to pay GST on such supply);
•  Supply of Cashew nuts, Bidi leaves, tobacco leaves by an agriculturist to any registered person, the registered person is liable to pay GST;
• Service of Goods Transport Agency;
• Services provided or agreed to be provided by an individual advocate or firm of advocates by way of legal services, directly or indirectly (Clarified by the Delhi High Court);
• Sponsorship Service received from any person, the liability to pay tax vests with Body corporate or Partnership firm located in taxable territory;
• Services provided by a director of a company or body corporate in such authority of Directorship, the company or body corporate is liable to pay GST;
• In case of services provided by an Insurance Agent, The Person running insurance business is liable to pay GST;
• Nonresident service provider, i.e. in case of imports, the reciepient of services in India would be required to pay such taxes.

Exemptions

In the following circumstances, the reverse charge mechanism shall be exempt: 

• On those Goods & Services which are exempt from GST ;
• Reverse Charge GST doesn’t arise in the case of an interstate supply made by the unregistered supplier (As Interstate supply needs GST registration) ;
• If the total supply of goods and services received from an unregistered person doesn’t exceed Rs.5000 a day.

Thus Reverse Charge Mechanism would boost the indirect tax revenue as well as propel buyers to buy from registered vendors to avoid litigation, disputes, and working capital issues.

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