Billing Software In Kerala

100 days of GST, and still counting

Later this week, the goods and services tax (GST), rolled out on 1 July, will clock 100 days. This is no small milestone, especially given that not only is it one of the boldest efforts of a complex tax reform but also seeks to achieve something incredible: economically unifying India.

The good news is that GST has taken off and all credit to both the Union, state governments and three Union territories. But the bad news is that there are evident glitches—especially at the back end manned by the GST Network (GSTN); so evident in the problems faced by exporters. Suffice to say, for several reasons, that GST so far is a work in progress and that the only way is forward (not backward as is being suggested in some quarters).

First, the GST Council, the apex decision making body, is probably India’s first genuinely federal institution. Not only did the Union and state governments cede some of their own taxation powers, Parliament too has limited its own powers and chosen instead to vest it with the GST Council.

This pooling of sovereignty as it were, the first of its kind, is a harbinger of a stronger future federal polity. So far, despite some anxious moments, no decision has been put to vote in the GST Council, underlining the strong consensus within.

Second, we should keep in mind that the formation of the GST Council was preceded by the game-changing recommendations of the 14th Finance Commission. Among other things, it bumped up the share of states in national tax revenues from the existing 32% to 42%. It reset the fiscal equation between the centre and states, setting the stage in many ways for the GST kind of experiment.

What GST has done, especially with the creation of the council, is to further transform this federal relationship. For too long, there has been the all-powerful Union government dictating terms to states. What we have now is a recalibration with the states emerging as equal partners to the Union government. While some may see this as the basis for confrontation, the more optimistic view is that this is the perfect recipe for ensuring the federal health of India.

Third, what GST has done is to further the rather disruptive process of formalizing the informal economy. The demonetization of high value currencies undertaken last year (regardless of what the critics have to say) put the spotlight on the shortcomings of operating within the cash economy.

In its own clumsy way, it started nudging people towards the formal economy by putting greater emphasis on digital transactions instead.

The rollout of GST has accelerated this process. In the existing economic structure, the formal and the informal economy are linked in myriad ways and have one thing in common: cash. GST has started the process of merging the informal and formal with clear audit trails. It is effectively raising the cost of operating in the informal economy.

Fourthly, flowing from the previous point, what GST has done is to nudge India towards a rules-based regime. For long, the country has dwelled on an exception-based regime with disastrous consequences—crony capitalism being one such example. In the last few years, several measures have been undertaken (like linking Aadhaar and the bank account to identify the recipient of government subsidies) to take this process forward. India’s tryst with its most path-breaking indirect tax reform ever, will among other things, accelerate this process.

Finally, with the benefit of hindsight, it is apparent that the GSTN has been the weak link in the chain. Good news is that the GST Council has been quick to recognize it, installing a group under Bihar finance minister Sushil Modi to speedily address the problem. Insiders reveal that solutions will be forthcoming, probably even at the next meeting of the council scheduled for 6 October.

In the final analysis, it is clear that the idea of GST is still very much alive. The onus is on the GST Council to ensure that the rollout realizes the underlying potential of this piece of tax reform.

GST Billing Software Kerala

NEW DELHI: India could review the application of the highest 28% slab under the goods and services tax (GST) and consider imposing a lower rate on items of frequent use, with policymakers supporting a move along these lines.

Such a move will reduce prices of many goods, thus helping to boost demand. The Department of Industrial Policy and Promotion (DIPP) has pitched for such a shift to revive industry, especially small businesses that are regarded as engines of employment generation.

“There is a need to relook at the 28% slab,” said a senior government official. “Some of the goods placed in that bracket are manufactured by MSMEs (micro, small and medium enterprises) and they are feeling some pressure.”

Items in the 28% slab include washing machines, refrigerators, electrical fittings, cement, ceiling fans, watches, automobiles, tobacco products, nutritional drinks, auto parts, plastic furniture and plywood.

The move will have to be approved by the GST Council, the apex decision-making body for the new tax, which is scheduled to meet in Guwahati on November 9-10, when the matter could come up for discussion.

Top government officials have hinted at such a move over time. The feeling in the finance ministry is that non-luxury items in the 28% slab should gradually be moved to lower rates. Trade and industry bodies have lobbied the government for moving items out of the top tax rate, which was meant to be imposed on luxury and so-called sin goods such as tobacco items.

“The arbitrary creation of 28% tax slab has greatly distorted the scope and spirit of true GST,” said the Confederation of All India Traders (CAIT). It should be restricted to luxury and demerit goods, it said.

Some states, especially those ruled by the Congress party are likely to raise the matter at the upcoming council meeting.

The GST Council had at its last meeting in October adopted a concept paper that laid down guidelines for changes in rates. According to this, no manufactured goods should be given outright exemption as this would hinder the Make in India initiative. States should opt for direct subsidy transfers if they wanted to reduce tax incidence on any item.

For the 28% bracket, the paper said goods of mass consumption or public interest, intermediate goods and those predominantly manufactured in the unorganized MSME sector and export-related items could be considered for review, subject to revenue implications.

This would mean GST rates stabilizing over a period of time with more need-based items first in line for tax cuts.

Tax experts said the highest bracket shouldn’t have too many items.

“The 28% category should ideally be limited to very few products, which qualify as luxury or sin goods, in line with recommendations in chief economic adviser Arvind Subramanian’s report on the GST rate structure,” said Pratik Jain, indirect tax leader, PwC India.

“Any successful GST regime is based on a wider tax base and moderate tax rates. Therefore, most of these products should be gradually brought down to 18%. Also, there is a case for reduction of tax on services from 28% to 18%.”

Jain said this will also help in simplification of the tax structure by reducing the multiple slabs to two or three over the next few years.

Source: https://economictimes.indiatimes.com/news/economy/policy/good-days-may-follow-goods-in-highest-tax-slab-next-big-gst-move-could-reduce-prices-of-many-items/articleshow/61376853.cms

Direct Taxes- Aster Billing

BREAKING DOWN 'Direct Tax '

Direct taxes are based on the ability-to-pay principle. This principle is an economic term that states that those who have more resources or earn higher income should pay more taxes. The ability to pay taxes is a way to redistribute the wealth of a nation. Direct taxes cannot be passed onto a different person or entity; the individual or organization upon which the tax is levied is responsible for the fulfillment of the full tax payment.

Direct taxes, especially in a tax bracket system, can become a disincentive to work hard and earn more money, because the more money a person earns, the more taxes he pays.

A direct tax is the opposite of an indirect tax, where the tax is levied on one entity, such as a seller, and paid by another, such as a sales tax paid by the buyer in a retail setting. Both taxes are equally important to the revenue generated by a government and therefore, to the economy. 

The History of Direct Taxes

The modern distinction between direct taxes and indirect taxes came about with the passing of the 16th Amendment in 1913. Prior to the 16th Amendment, tax law in the United States was written so that any direct taxes were required to be directly apportioned to the population. For example, a state with 75 percent of the population in relation to another state would only be required to pay direct taxes equal to 75 percent of the larger state.

This antiquated verbiage made it so many direct taxes, such as personal income tax, could not be imposed by the federal government due to apportionment requirements. However, the passing of the 16th Amendment changed the tax code and allowed for the levying of numerous direct and indirect taxes.

An Example of Direct Taxes

Corporate taxes are a good example of direct taxes. If, for example, a manufacturing company operates with $1 million in revenue, $500,000 in cost of goods sold (COGS) and $100,000 in total operating costs, its earnings before interest, taxes, depreciation, and amortization (EBITDA) would be $400,000. If the company had no debt, depreciation or amortization, and had a corporate tax rate of 35 percent, its direct tax would be $140,000, derived as: ($400,000 x 0.35) = $140,000.

Additionally, a person's income tax is an example of a direct tax. If a person makes $100,000 in a year and owes $40,000 in taxes, the $40,000 would be a direct tax.

Other Types of Direct Taxes

The corporate tax is another form of a direct tax. This is the tax corporations and other businesses must pay to the government on the profits they earn. However, partnerships and sole proprietorships do not pay corporate taxes. The corporate tax in the U.S. is separate from income tax.

Another type of direct tax is the property tax, paid by the owner of a property. These are typically collected by local governments and are based on the assessed value of a property. 

Read more: Direct Tax https://www.investopedia.com/terms/d/directtax.asp#ixzz5ULmGDD9J Follow us: Investopedia on Facebook

Government extends deadline for sale of MRP labelled pre-GST stock GST Billing Software

Government extends deadline for sale of MRP labelled pre-GST stock

NEW DELHI: Government on Friday extended the last date for selling MRP(Maximum Retail Price) labelled pre-GST stock by three months. Companies now have a new deadline of December 31, in place of September 30, PTI reported.Earlier in the day, news agency ANI had quoted Finance Ministry sources to report that the government may extend the last date for selling pre-GST stock.

Most businessmen may be allowed to file GST returns quarterly Best Biiling software trivandrum

Most businessmen may be allowed to file GST returns quarterly

NEW DELHI: The government is looking to allow quarterly filing of goods and services tax (GST) returns by a vast majority of businesses, instead of monthly, as it seeks to ease the compliance burden on them and also unclog the system that has been facing glitches due to overload.

Sources told TOI that the move is being deliberated in the finance ministry but may take some time to implement as it has to be cleared by the law committee before it goes to the GST Council, comprising finance minister Arun Jaitley and state FMs. Traders have repeatedly complained about the compliance burden — which is a three-stage process — taking a toll on them as it has increased the compliance cost as well as resulted in massive work load.

The government believes that by easing the rules it does not stand to lose much. During a book release event on Thursday, Jaitley had said that less than four lakh registered entities paid 95% of the taxes, while payment by 60 lakh accounted for just 5%.

As reported by TOIon Monday, in a letter to Jaitley, West Bengal finance minister Amit Mitra had suggested that businesses with turnover under Rs 75 lakh should be allowed quarterly returns.

The sources, however, said that several gaps need to be filled, including how the tax credits will be dealt with. While a large company such as Maruti Suzuki or Hindustan Unilever will have to file returns on a monthly basis, the suppliers to their vendors will only have to upload their returns once a quarter, resulting in the system being unable to match the returns. But the government believes that staggering the filing of returns will also help address the concerns, especially politically.

Separately, the government is also toying with the idea of a Saral-type easier return for those with a turnover of under Rs 20 lakh, the threshold to be part of GST.

While the issue of returns may or may not make it to the GST Council meeting next week, sources indicated that the committee on exports is trying to finalise a new mechanism for refund of taxes paid by exporters on inputs, which was earlier duty-free. Under GST, these taxes are to be refunded and the commerce department has estimated that in July alone refunds of around Rs 2,300 crore are due.

On the other issues such as how to deal with the advance authorisation scheme as well as SEZs and export-oriented units, where no duty had to be paid for imports earlier, the committee is yet to take a final call, said sources.

They, however, added that the government leadership is clear about the need to work out a scheme for exporters so that they are not burdened with higher working capital requirement, which impacts their competitiveness in the global markets.

Most businessmen may be allowed to file GST returns quarterly

NEW DELHI: The government is looking to allow quarterly filing of goods and services tax (GST) returns by a vast majority of businesses, instead of monthly, as it seeks to ease the compliance burden on them and also unclog the system that has been facing glitches due to overload.

Sources told TOI that the move is being deliberated in the finance ministry but may take some time to implement as it has to be cleared by the law committee before it goes to the GST Council, comprising finance minister Arun Jaitley and state FMs. Traders have repeatedly complained about the compliance burden — which is a three-stage process — taking a toll on them as it has increased the compliance cost as well as resulted in massive work load.

The government believes that by easing the rules it does not stand to lose much. During a book release event on Thursday, Jaitley had said that less than four lakh registered entities paid 95% of the taxes, while payment by 60 lakh accounted for just 5%.

As reported by TOIon Monday, in a letter to Jaitley, West Bengal finance minister Amit Mitra had suggested that businesses with turnover under Rs 75 lakh should be allowed quarterly returns.

The sources, however, said that several gaps need to be filled, including how the tax credits will be dealt with. While a large company such as Maruti Suzuki or Hindustan Unilever will have to file returns on a monthly basis, the suppliers to their vendors will only have to upload their returns once a quarter, resulting in the system being unable to match the returns. But the government believes that staggering the filing of returns will also help address the concerns, especially politically.

Separately, the government is also toying with the idea of a Saral-type easier return for those with a turnover of under Rs 20 lakh, the threshold to be part of GST.

While the issue of returns may or may not make it to the GST Council meeting next week, sources indicated that the committee on exports is trying to finalise a new mechanism for refund of taxes paid by exporters on inputs, which was earlier duty-free. Under GST, these taxes are to be refunded and the commerce department has estimated that in July alone refunds of around Rs 2,300 crore are due.

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On the other issues such as how to deal with the advance authorisation scheme as well as SEZs and export-oriented units, where no duty had to be paid for imports earlier, the committee is yet to take a final call, said sources.

They, however, added that the government leadership is clear about the need to work out a scheme for exporters so that they are not burdened with higher working capital requirement, which impacts their competitiveness in the global markets.

India's GST may have adverse impact on this country's economy

New Delhi: India's Goods and Services Tax (GST) may have an adverse impact on the Bhutanese economy through trade and revenue channels, the Asian Development Bank (ADB) said in its latest report.

The total trade between India and Bhutan was valued at USD 817 million in 2016-17, up from USD 750 million a year ago, as per Indian government data. India's exports to Bhutan totalled USD 509 million while imports came in at USD 308 million.

"India's Goods and Services Tax (GST), implemented in July 2017, may have an adverse impact on the Bhutanese economy... Through trade and revenue channels," stated the Asian Development Outlook 2017 Update report.

According to the report, Bhutan's imports will likely increase as Indian exports are zero rated under GST, making the imports cheaper.

"Exports to India will be subjected to GST, removing Bhutan's previous competitive edge over Indian producers," it stated.

Additionally, rebates of Indian excise duties to the Bhutanese government will end as these taxes have been subsumed within GST, implying a loss of budget revenue, it said.

The Government of Bhutan, the report said, has decided for the time being not to levy higher taxes on imports from India, but to use credit policy to restrain import demand, especially for automobiles.

Bhutan imports machines, medical equipment, processed food, iron and steel, fibre, pharma, hardware and electrical transformers, among others, from India, while exports include household articles, pepper, electric components and electricity.