GST on mobile phones hiked to 18% from 12%

Source: Business Standard, Mar 14, 2020

New Delhi: In a move that is likely to make mobile phones more expensive, GST Council today proposed a high in the Goods and Services Tax (GST) rates on mobile phones and allied parts.

Addressing a press conference following the GST Council meet, Finance Minister Nirmala Sitharaman said the Council also brought the manufacture of matches to a common rate of 12 per cent across the board. Earlier, hand-made matches attracted 5 per cent, while machine-made ones attracted 18 per cent.

She also said interest for delayed GST payment will be charged on net tax liability, not gross tax liability, and would be effective July.

Sitharaman said all decisions taken at today’s GST Council meeting would come into effect on April 1.

Stating that a there were a host of technical glitches in GST administration, the minister said she was engaging with Infosys to implement reforms and had asked the firm to come up with a sustainable solution. She added that Nandan Nilekani had made a presentation to this effect today and that she had asked Infosys to be present for the next three GST council meetings.

Sitharaman also called for better coordination between Tech Mahindra and Infosys without the Ministry’s intervention. She said that tasks that were earlier to be completed by January 2021 will now be accomplished by Jun 2020.

GST on MRO services with respect of aircraft has been brought down from 18 per cent to 5 per cent, with full input tax credit (ITC) The due date for filing the annual return for FY 2018-19 has been extended to June 30. Sitharaman said late fees would not be levied for delayed filing and reconciliation statement for 2 years, for taxpayers with turnover less than Rs 2 crore.

GST on cellphones, footwear, textiles to be rationalised on March 14

Source: The Economic Times, Mar 11, 2020

NEW DELHI: The Goods and Services Tax (GST) Council is likely to consider a proposal to increase GST on mobile phones to 18% in its next meeting on March 14 to correct the inverted duty structure being faced by the industry, said officials in the know.

At present, mobile phones attract a 12% GST rate, even as several parts that go into making mobile phones fall under the 18% GST rate bracket, creating a case where the duty on inputs is higher than that on finished goods, leading to an inverted duty structure.

“The inverted duty issue on mobile phones has been brought up several times… it can be taken up this time,” said a senior official, who did not wish to be identified.

If the council were to accept the proposal, the rate increase would lead to a rise in prices of mobiles across categories, a move that would be detrimental to the industry which has been asking for a rate reduction to 12% on components so as to bring in parity with fully made mobile phones.

“Parts of printed circuit board assembly (PCBA) and other sub-assemblies or components are not being considered as parts of mobile phones and are therefore being charged GST at 18%, which needs a correction,” said Pankaj Mohindroo, chairman of the Indian Cellular Electronics Association.

He said that after the implementation of the phased manufacturing programme, PCBA began to scale up and now covers more than 90% of the PCBAs used in mobile phones in the country. Any move to increase the rate on fully made phones can worsen the impact on the industry, which is reeling under the difficulty in importing components from China amid the coronavirus spread.
The proposal is likely to be taken in the upcoming meeting this Saturday, when the council is likely to take up deferment of e-invoicing and QR code benefits, along with exemption on certain sections of the industry from undertaking einvoicing.

The council is also likely to take up several procedural relaxations, besides deferring the new return form which was to come into effect from April 1, said another official. EThad reported it earlier this week.

A third official said proposals to correct the inverted duty structure in fabrics, readymade garments and even fertilisers could also be taken up, as even in these cases the tax rate on raw materials is higher at around 12% while the finished goods are taxed at 5% rate.

February GST mop-up at ₹1.05-lakh cr

Source: The Hindu Business Line, Mar 01, 2020

New Delhi: Goods and Services Tax (GST) collections crossed the ₹1-lakh crore mark for the fourth month in a row in February.

However, the February 2020 collection of ₹1,05,366 crore were lower than the January 2020 figure of ₹1,10,828 crore.

It was higher than December 2019’s ₹1,03,184 crore mop-up.

For February 2020, CGST stood at ₹20,569 crore, SGST at ₹27,348 crore, IGST at ₹48,503 crore (including ₹20,745 crore collected on imports) and cess at ₹8,947 crore (including ₹1,040 crore collected on imports).

The total number of GSTR 3B Returns filed for January up to February 29, 2020 is 83 lakh, an official release said.

The government has settled ₹22,586 crore to CGST and ₹16,553 crore to SGST from IGST as regular settlement.

The total revenue earned by the Centre and the State governments after regular settlement in February is ₹43,155 crore for CGST and ₹43,901 crore for SGST.

Domestic transactions

The GST revenues during February from domestic transactions grew 12 per cent year-on-year.

Taking into account the GST collected from import of goods, the total revenue was up 8 per cent year-on-year in February. During the month, the GST on import of goods contracted by 2 per cent as compared to February 2019.

States’ profile

The major States of Maharashtra, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh and Haryana recorded robust growth in GST revenues in February.

Maharashtra’s GST revenues in February grew 12 per cent to ₹15,735 crore (₹14,092 crore) and Gujarat’s GST revenue grew 11 per cent to ₹7,216 crore (₹6,507 crore).

Karnataka’s GST revenues grew 15 per cent to ₹7,414 crore (₹6,453 crore) and Tamil Nadu’s by 8 per cent to ₹6,427 crore (₹5,974 crore). Uttar Pradesh posted 13 per cent growth in GST revenues in February ₹5,776 crore (₹5,112 crore) and Haryana’s revenues grew by 8 per cent at ₹5,266 crore (₹4,873 crore) in the same period.

Over 91% of large biz file FY18 GSTR

Source: The Economic Times, Feb 17, 2019

NEW DELHI: About 91.3% of eligible taxpayers with over Rs 2-crore turnover or about 9.11 lakh, had filed their annual goods and services tax (GST) returns for 2017-18 by February 12, while 92.3% or 8.42 lakh of the eligible base had filed their reconciliation statements. The numbers for annual returns under GSTR-9 and conciliatory statements under GSTR 9C, were issued by the GST Network (GSTN) Sunday.

The data reveals 12.42 lakh taxpayers with a turnover of over Rs 2 crore, which is 13.4% of the total 92.58 lakh regular taxpayers. Filing of returns is mandatory for taxpayers with over Rs 2-crore turnover, while for those below the threshold, the filing is optional. However, 32.92 lakh such taxpayers, of the total base of 42.03 lakh filed their returns, while 1.04 lakh filed their reconciliatory statements.

Importers, exporters to mandatorily declare GSTIN in documents from Feb 15

Source: The Economic Times, Feb 09, 2019

Importers and exporters will have to mandatorily declare GSTIN in documents from February 15 as the revenue department moves to crackdown on evaders and plug Goods and Services Tax revenue leakage. In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said certain cases have come to notice where the importer or exporter did not declare their GSTIN in the Bill of Entry/Shipping Bill despite being registered with GSTN.

GSTIN is a 15-digit PAN-based unique identification number allotted to every registered person under GST. While importers have to fill Bill of Entry with Customs department while importing goods, exporters have to file Shipping Bill.

“With effect from February 15, 2020, the declaration of GSTIN shall also be mandatory in import/export documents for the importers and exporters registered as GST taxpayers,” the circular said.

Data analytics by the revenue authorities have detected rampant tax evasion through black market and under-valuing of imports. It has come to light that although importers are paying GST, they are supplying the goods without bill.

Importers typically pay integrated goods and services tax or IGST on goods they bring into the country. This tax is supposed to be set-off against the actual GST paid by the final consumer, or claimed as refund.

While importers are paying IGST on imports but not claiming credit for the same. This essentially means that the supply of imported goods to domestic channels is being done without a bill.
A similar situation has been witnessed on cess charged on luxury and sin goods with companies paying it at the time of imports but not claiming credit or setting it off from final GST paid by consumers.

“Compulsory capturing of GSTIN by importers and exporters would give an adrenaline rush to the data analytics especially in relation to cross-border transactions. This will push the tax authorities to arrest the massive tax evasion practices on the borders in the form of under-valuation, clandestine removal and under re-reporting,” AMRG & Associates Partner Rajat Mohan said.

EY Tax Partner Abhishek Jain said the requirement to provide GSTIN in bill of entry/shipping bill will help plug GST revenue leakage and ensure that imports/export data is reconciled with GST data.

Further, exporters have also been asked to provide details of the state and district of origin of goods and details of preferential agreements under which goods are being exported in the shipping bill.

Jain said the data on district/state of origin of goods will help the Government take measures to facilitate and promote exports.

“The requirement to provide details of preferential agreements under which goods are exported will help the Government track the effectiveness these agreements,” Jain said.

Over 65 lakh GSTR-3B filed till Jan 20

Source: The Economic Times, Jan 22, 2019

NEW DELHI: Over 65.65 lakh GSTR-3B returns were filed till January 20, for the tax month of December, of which 13.30 lakh GSTR-3B returns were filed on the last day, as per data from Goods and Services Tax Network (GSTN).

“This month’s return filing data till date shows that the GSTN return filing system was working within its expected limits… This was evident by the fact that till January 14, a total of 24.66 lakh GSTR-3B were filed,” an official said Tuesday.

GSTR 3B is a monthly return to be filed under GST in which every taxable person has to summarize the details of outward and inward supplies. On January 15, 2.66 lakh returns were filed, followed by 4.65 lakh on January 16, and 5.93 lakh returns were filed the next day.

In the last three days 8.32 lakh, 6.09 lakh and 13.30 lakh GSTR-3B returns were filed, respectively. “On 21st January, also, till 12 pm more than 2 lakh GSTR-3B were filed for the tax month of December, totalling the GSTR-3B returns filed to 67.70 lakh in this month,” the official added. Some issues about OTPs or onetime passwords being received with some time lag on account of delay by the email service provider or local internet issues, were raised, which were immediately addressed. “In order to ensure that no inconvenience is faced by the taxpayer, the OTPs are sent simultaneously on email as well as on registered mobile number,” the official added.

Central government, states to get tough on GST refund claims

Source:, Jan 07, 2019

NEW DELHI : Central and state government officials on Tuesday decided to scrutinize goods and services tax (GST) refund claims more diligently, compulsorily investigate all fake claims and step up coordination between income-tax and GST authorities.

The move to tighten enforcement measures comes amid the continued shortfall in GST revenue collections.

The decision to deal with fake tax refund claims by businesses and traders with no leniency was taken at a meeting of central and state officials in the capital.

At the meeting, led by revenue secretary Ajay Bhushan Pandey, it was decided to set up a panel of officers to recommend quick measures to curb “fraudulent refund claims, including the inverted tax structure refund claims and evasion of GST”, said an official statement. The panel will give its advice within a week, which may be implemented across the country by January-end, it added.

With lower-than-expected revenue collection leading to friction between Union and state governments, primarily over delays in compensation payments to states, the authorities have decided to become more strict in their approach to enforce provisions of the law. In the first two years since the indirect system was introduced, the government had taken a lenient view to help businesses make a smooth transition to the new tax regime.

On Tuesday, officials also explored ways of sharing data among the GST Council, Central Board of Indirect Taxes and Customs (CBIC), Central Board of Direct Taxes (CBDT), the revenue department and the various enforcement agencies under the government.

Considering that fraudulent claims for input tax refunds are made on raw material of products allegedly exported, officials explored the possibility of linking GST refund for risky and new exporters with the foreign exchange remittances they receive.

The other proposal was to insist on a single bank account for foreign remittance receipt and GST refund disbursements.Verification of tax credits availed by taxpayers that do not match with what their suppliers have disclosed was also discussed, the statement said.