Tuesday, 3 October 2017
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.
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.
Most businessmen may be allowed to file GST returns quarterly
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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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.
https://www.asterbilling.com/
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.
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 to hit Bhutanese economy, too: says ADB best Billing Software trivandrum
India's GST to hit Bhutanese economy, too: says ADB
Scope for reducing GST slabs, hints Arun Jaitley billing software-ASTER
FARIDABAD: Finance minister Arun Jaitley on Sunday hinted that there is scope for lesser slabs under the Goods and Services Tax (GST)+ once there is revenue buoyancy.
"We are in first 2-3 months (of GST implementation). We have almost by the day, space and scope for improvement. We have space for improvement and need for improvement to reduce compliance burden as far as small taxpayers are concerned," he said.
"We have space for improvement, eventually once we become revenue neutral, to think in terms of bigger reforms such as lesser slabs, but for that we have to become revenue neutral ... ," he said at an event organised here by the National Academy of Customs, Indirect Taxes and Narcotics (NACIN).
Currently, the GST regime slots items under rates of 5, 12, 18 and 28 per cent+ . An additional GST compensation cess is also levied on certain products.
Emphasising that indirect tax burden is borne by all sections of the society, the minister said it is always the endeavour of the government to bring down tax rates on mass consumption commodities.
"Direct tax is paid by more by the more affluent, somewhat by the others and certainly not by the weaker section but the impact of indirect tax places burden on all.
"Therefore, an effort is always as part of the fiscal policy ... to ensure that the commodities which are consumed more by the common people are least taxed compared to others," he said.
Noting that India has conventionally been a tax non-compliant society, he said when people have the right to demand development, they also have the responsibility to pay what is required for the development.
Addressing the 67th batch of Indian Revenue Service (IRS) officers, the finance minister said revenue is the lifeline of governance and all the developmental activities.
"We are in first 2-3 months (of GST implementation). We have almost by the day, space and scope for improvement. We have space for improvement and need for improvement to reduce compliance burden as far as small taxpayers are concerned," he said.
"We have space for improvement, eventually once we become revenue neutral, to think in terms of bigger reforms such as lesser slabs, but for that we have to become revenue neutral ... ," he said at an event organised here by the National Academy of Customs, Indirect Taxes and Narcotics (NACIN).
Currently, the GST regime slots items under rates of 5, 12, 18 and 28 per cent+ . An additional GST compensation cess is also levied on certain products.
Emphasising that indirect tax burden is borne by all sections of the society, the minister said it is always the endeavour of the government to bring down tax rates on mass consumption commodities.
"Direct tax is paid by more by the more affluent, somewhat by the others and certainly not by the weaker section but the impact of indirect tax places burden on all.
"Therefore, an effort is always as part of the fiscal policy ... to ensure that the commodities which are consumed more by the common people are least taxed compared to others," he said.
Noting that India has conventionally been a tax non-compliant society, he said when people have the right to demand development, they also have the responsibility to pay what is required for the development.
Addressing the 67th batch of Indian Revenue Service (IRS) officers, the finance minister said revenue is the lifeline of governance and all the developmental activities.
"You don't have to extort taxes from those who are not liable to pay...as tax people, you are not entitled to invite fear, you have to invite a respect that you are somebody who (wants) people to comply with national duty," he said.
He also said there are never grey areas in taxation law and it is duty of tax officer to be firm and fair.
He also said there are never grey areas in taxation law and it is duty of tax officer to be firm and fair.
View: Why govt should reduce GST tax slabs to 4 per cent, 16 per cent & 24 per cent
View: Why govt should reduce GST tax slabs to 4 per cent, 16 per cent & 24 per cent
Finance minister Arun Jaitley says there's scope to reduce slabs for Goods and Services Tax (GST). Reducing the tax slabs does make perfect sense. It would simplify the tax system: make it transparent, efficient and tax payer-friendly.
We currently have four slabs fixed for GST, a low rate of 5 per cent, two standard rates of 12 per cent and 18 per cent, and a high rate of 28 per cent. It would make sense to drop middling 12 per cent and 18 per cent rates and opt for 16 per cent
It would make sense to drop middling 12 per cent and 18 per cent rates and opt for 16 per cent as the standard rate to be levied on most items. It would also be desirable to reduce the peak rate.
Note that apart from the four-rate slab structure in the GST regime, we also have 0 per cent on certain items of mass consumption, 3 per cent on gold and jewellery, and additional cess on high-end consumption items like automobiles.
The government needs to put out a discussion paper on how it proposes to go about reducing the GST slabs and lowering the rates. The way forward is to have three slabs in the GST structure, and prune the rates at either end. We need to boost tax buoyancy, but also make sure that there is revenue neutrality.
Tax revenue must of course not be adversely affected in the changeover to the new indirect tax regime.
The way ahead is to have 16 per cent as the standard GST rate, by fusing the two rates of 12 per cent and 18 per cent. It would reduce classification disputes and put paid to lobbying for reduced tax rates. It would also be as per international norms.
A couple of years ago, an expert committee report on the revenue neutral GST rate noted that the standard rate in the high-income economies was estimated at 16.8 per cent. A standard rate of 16 per cent would also be in line with the rates of taxation in ancient India.
As per Kautilya's Arthashastra, the median tax rate mentioned in the treatise was 16.33 per cent. So a standard rate of 16 per cent would be in line with current history and also reflect the going rates from over two thousand years ago!
The low GST rate of 5 per cent may also need to be pruned to 4 per cent. That on gold can well be nudged to 4 per cent (instead of 3 per cent at present), so that most products are covered under the two rates of 4 per cent and 16 per cent. In tandem, there's the need to have somewhat lower tax on luxury goods and high-end consumption items.
The peak GST rate of 28 per cent needs to be purposefully reduced. Given that the peak direct tax is proposed to be reduced to 25 per cent,it would make sense to likewise reduce the highest indirect tax slab from 28 per cent to 24 per cent. So the three tax GST slabs can be structured as follows, 4 per cent, 16 per cent and 24 per cent.
In parallel, we need to modernise the indirect tax structure for petroleum products. Such products provide bountiful tax revenue of about Rs 5 lakh crore to the exchequer, and for the most part, remain outside the GST regime. Instead of taxing petro-products to the hilt, the tax base clearly needs to be widened. We must not depend heavily and disproportionately on just one revenue item: oil.
Finance minister Arun Jaitley says there's scope to reduce slabs for Goods and Services Tax (GST). Reducing the tax slabs does make perfect sense. It would simplify the tax system: make it transparent, efficient and tax payer-friendly.
We currently have four slabs fixed for GST, a low rate of 5 per cent, two standard rates of 12 per cent and 18 per cent, and a high rate of 28 per cent. It would make sense to drop middling 12 per cent and 18 per cent rates and opt for 16 per cent
It would make sense to drop middling 12 per cent and 18 per cent rates and opt for 16 per cent as the standard rate to be levied on most items. It would also be desirable to reduce the peak rate.
Note that apart from the four-rate slab structure in the GST regime, we also have 0 per cent on certain items of mass consumption, 3 per cent on gold and jewellery, and additional cess on high-end consumption items like automobiles.
The government needs to put out a discussion paper on how it proposes to go about reducing the GST slabs and lowering the rates. The way forward is to have three slabs in the GST structure, and prune the rates at either end. We need to boost tax buoyancy, but also make sure that there is revenue neutrality.
Tax revenue must of course not be adversely affected in the changeover to the new indirect tax regime.
The way ahead is to have 16 per cent as the standard GST rate, by fusing the two rates of 12 per cent and 18 per cent. It would reduce classification disputes and put paid to lobbying for reduced tax rates. It would also be as per international norms.
A couple of years ago, an expert committee report on the revenue neutral GST rate noted that the standard rate in the high-income economies was estimated at 16.8 per cent. A standard rate of 16 per cent would also be in line with the rates of taxation in ancient India.
As per Kautilya's Arthashastra, the median tax rate mentioned in the treatise was 16.33 per cent. So a standard rate of 16 per cent would be in line with current history and also reflect the going rates from over two thousand years ago!
The low GST rate of 5 per cent may also need to be pruned to 4 per cent. That on gold can well be nudged to 4 per cent (instead of 3 per cent at present), so that most products are covered under the two rates of 4 per cent and 16 per cent. In tandem, there's the need to have somewhat lower tax on luxury goods and high-end consumption items.
The peak GST rate of 28 per cent needs to be purposefully reduced. Given that the peak direct tax is proposed to be reduced to 25 per cent,it would make sense to likewise reduce the highest indirect tax slab from 28 per cent to 24 per cent. So the three tax GST slabs can be structured as follows, 4 per cent, 16 per cent and 24 per cent.
In parallel, we need to modernise the indirect tax structure for petroleum products. Such products provide bountiful tax revenue of about Rs 5 lakh crore to the exchequer, and for the most part, remain outside the GST regime. Instead of taxing petro-products to the hilt, the tax base clearly needs to be widened. We must not depend heavily and disproportionately on just one revenue item: oil.
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