Government extends FY21 GST annual return filing deadline till February 28

Source: Financial Express, 30 December 2021

The government has extended by two months till February 28 the deadline for businesses to file GST annual returns for 2020-21 fiscal ended March 2021.

“The due date for furnishing annual return in FORM GSTR-9 & self-certified reconciliation statement in FORM GSTR-9C for the financial year 2020-21 has been extended from 31.12.2021 to 28.02.2022,” the Central Board of Indirect Taxes & Customs (CBIC) said in a late-night tweet on Wednesday.

GSTR 9 is an annual return to be filed yearly by taxpayers registered under the Goods and Services Tax (GST). It consists of details regarding the outward and inward supplies made or received under different tax heads. GSTR-9C is a statement of reconciliation between GSTR-9 and the audited annual financial statement.

Furnishing of the annual return is mandatory only for taxpayers with aggregate annual turnover above Rs 2 crore while a reconciliation statement is to be furnished only by the registered persons having aggregate turnover above Rs 5 crore.

A host of changes in GST law will come into effect from January 1

Source: Economic Times, 27 December 2021

The GST regime will see a host of tax rate and procedural changes coming into effect from January 1, including liability on e-commerce operators to pay tax on services provided through them by way of passenger transport or restaurant services. Also, the correction in inverted duty structure in footwear and textile sectors would come into effect from Saturday wherein all footwear, irrespective of prices will attract GST at 12 per cent while all textile products, except cotton, including readymade garments will have 12 per cent GST.

While the passenger transport services provided by auto rickshaw drivers through offline/ manual mode would continue to be exempt, such services when provided through any e-commerce platform would become taxable effective January 1, 2022, at 5 per cent rate.

The procedural changes that would come into effect include e-commerce operators, such as Swiggy and Zomato, being made liable to collect and deposit GST with the government on restaurant services supplied through them from January 1. They would also be required to issue invoices in respect of such services.

There would be no extra tax burden on the end consumer as currently restaurants are collecting and depositing GST. Only, the compliance of deposit and invoice raising has now been shifted to food delivery platforms.

The move comes after government estimates showed that tax loss to exchequer due to alleged underreporting by food delivery aggregators is Rs 2,000 over the past two years.

Making these platforms liable for GST deposits would curb tax evasion.

The other anti-evasion measures which would come into effect from the new year include mandatory Aadhaar authentication for claiming GST refund, blocking of the facility of GSTR-1 filing in cases where the business has not paid taxes and filed GSTR-3B in the immediate previous month.

Currently, the law restricts the filing of returns for outward supplies or GSTR-1 in case a business fails to file GSTR-3B of the preceding two months.

While businesses file GSTR-1 of a particular month by the 11th day of the subsequent month, GSTR-3B, through which businesses pay taxes, is filed in a staggered manner between the 20th-24th day of the succeeding month.

Also the GST law has been amended to allow GST officers to visit premises to recover tax dues without any prior show-cause notice, in cases where taxes paid in GSTR-3B is lower based on suppressed sales volume, as compared to supply details given in GSTR-1.

The move would help curb the menace of fake billing whereby sellers would show higher sales in GSTR-1 to enable purchasers to claim input tax credit (ITC), but report suppressed sales in GSTR-3B to lower GST liability.

E-way bill generation shows steady rise

Source: Financial Express, 21 December 2021

Daily e-way bill generation under the Goods and Services Tax (GST) system came in at 22.85 lakh for the week-ended December 19, 2.6% higher than the daily average for the previous week, showing a steady increase in goods transportation.

The daily e-way generation was 20.38 lakh in November, down 14% on month compared with 23.71 lakh in October. The daily e-way bill generation at 22.08 lakh in the first 19 days of December indicates demand pick up and stocking by traders ahead of year-end vacations. E-way bill generations stood at 4.2 crore in the first 19 days of December.

E-way bill generation was registering a steady rise since June 2021 after falling to below 4 crore in May when the second wave of the Covid pandemic was at its peak. October e-way bills were at a record 7.35 crore, the highest monthly data since the indirect tax regime was rolled out in July 2017, reflecting an upswing in economic activities in the festival season and improved compliance.

E-way bill generation came in at 6.12 crore for November, the lowest in five months, reflecting moderation in goods dispatches post-festivities. E-way bill generation by businesses rose to 6.79 crore for September from 6.59 crore in August, 6.42 crore in July and 5.47 crore in June.

Higher e-way bills generation is reflected in higher GST revenues. Gross goods and services tax (GST) collections came in at Rs 1,31,526 crore in November (October sales) 2021, the second-highest mop-up in the history of the comprehensive indirect tax that was launched in July 2017.

E-way bill generation drops to lowest in 5 months in November

Source: Financial Express, 07 December 2021

The daily e-way generation was 20.38 lakh in November, down 14% on month compared with 23.71 lakh in October. However, the daily e-way bill generation at 21.1 lakh in the first five days of December indicate possibility of demand pick up ahead of year-end vacations.

Number of e-way bills for inter-state commerce under the goods and services tax (GST) system came in at 6.12 crore for November, the lowest in five months, reflecting moderation in goods dispatches post-festivities.

E-way bill generation has been registering a steady rise since June 2021 after falling to below 4 crore in May when the second wave of the Covid pandemic was at its peak. October e-way bills were at a record 7.35 crore, highest monthly data since the indirect tax regime was rolled out in July 2017, reflecting an upswing in economic activities in the festival season and improved compliance.

The daily e-way generation was 20.38 lakh in November, down 14% on month compared with 23.71 lakh in October. However, the daily e-way bill generation at 21.1 lakh in the first five days of December indicate possibility of demand pick up ahead of year-end vacations.

E-way bill generation by businesses rose to 6.79 crore for September from 6.59 crore in August, 6.42 crore in July and 5.47 crore in June.

Higher e-way bills generation is reflected in higher GST revenues. Gross goods and services tax (GST) collections came in at Rs 1,31,526 crore in November (October sales) 2021, the second highest mop-up in the history of the comprehensive indirect tax that was launched in July 2017.

Finance ministry notifies 12 per cent GST rate on MMF, yarn, fabrics from January 1; corrects duty anomaly

Source: Financial Express, 19 November 2021

The finance ministry has notified uniform 12 per cent GST rate on manmade fibre (MMF), yarn, fabrics and apparel, thereby addressing the inverted tax structure in the MMF textile value chain.

Currently, tax rate on MMF, MMF yarn and MMF fabrics is 18 per cent, 12 per cent and 5 per cent, respectively.

The taxation of inputs at higher rates than finished products created build up of credits and cascading costs. It further led to accumulation of taxes at various stages of the MMF value chain and blockage of crucial working capital for the industry.

The GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state finance ministers, had in its previous meeting on September 17 decided that the inverted duty anomalies in the textile sector would be corrected from January 1, 2022.

Giving effect to this decision, the Central Board of Indirect Taxes and Customs (CBIC) on November 18 notified 12 per cent GST rate for MMF, MMF yarn and MMF fabrics.

Experts said though there is a provision in GST law to claim the unutilised Input Tax Credit (ITC) as a refund, there were other complications and resulted in more compliance burden. The inverted tax structure caused an effective increase in the rate of taxation of the sector.

The world textiles trade has been moving towards MMF but India was not able to take advantage of the trend as its MMF segment was throttled by the inverted tax regime, they said, adding the correction in duty anomaly will help the segment grow and emerge as a big job provider.

EY Tax Partner Bipin Sapra said the rate changes in the textile industry is the first of the changes promised by the GST Council with an aim to rectify inverted duty structure and bring an efficient tax structure for a given sector.

E-way bill generation moderates; pick-up likely before Diwali

Source: Financial Express, 19 October 2021

Daily e-way bill generation for goods transportation under the Goods and Services Tax (GST) system came in at 21.14 lakh for the week ended October 17, 12.6% lower than the daily average for the previous week, reflecting a reduction in dispatches due to Dussehra holidays.

However, the daily average for the first 17 days of October at 21.74 lakh was still 2.4% higher than the same for the first 19 days of September.

“Dispatches were more for the week ended October 10 keeping in mind the Dussehra holidays in the week ended October 17. With dispatches set to pick up now ahead of Diwali on November 4, I expect October e-way bill generation will be the highest monthly generation in 2021,” All India Transporters Welfare Association (AITWA) joint secretary Abhishek Gupta told FE.

Daily e-way bill generation was at 24.2 lakh for the week ended October 10, 17.65% higher than the daily average for the week ended September 12. Between October 1 and 17, as many as 3.7 crore e-way bills were generated.

Thanks to the easing of lockdowns, e-way bill generation by businesses rose to 6.79 crore in September from 6.59 crore in August and from 6.42 crore in July. It was 7.12 crore for March, before the second wave of Covid-19 hit economic activities.

Higher e-way bills generation is reflected in higher GST revenues. GST collections came in at `1.17 lakh crore in September (largely August transactions), up 23% on-year and 4.5% on-month, signalling a sustained pick-up in trade and commerce.

Sustained pick-up: GST collections rise 23% to Rs 1.17 lakh crore in September

Source: Financial Express, 02 October 2021

Gross goods and services tax (GST) collections came in at Rs 1.17 lakh crore in September (largely August transactions), up 23% on year and 4.5% on month, signalling a sustained pick-up in trade and commerce.

Data released separately said the Nikkei manufacturing PMI rose to 53.7 in September from 52.3 in the previous month; also, average daily e-way bill generation in the first 26 days of September was 3% higher than the level in August.

The output of eight core infrastructure sectors grew 11.6% in August from a year before and exceeded even the pre-pandemic level (same month in FY20) for a second straight month (by 5.4%). Of course, the growth was aided by a favourable base effect (the index had contracted by 6.9% in August 2020 in the wake of the pandemic and 0.2% in August 2019). Still, the latest expansion – driven partly by increased output of cement, natural gas and coal – points at a nascent recovery in the industrial sector.

The average monthly gross GST collection for the second quarter of the current financial year has been Rs 1.15 lakh crore, which is 5% higher than the average monthly collection of Rs 1.1 lakh crore in the first quarter of the year. “This clearly indicates that the economy is recovering at a fast pace. Coupled with economic growth, anti-evasion activities, especially action against fake billers have also been contributing to the enhanced GST collections. It is expected that the positive trend in the revenues will continue and the second half of the year will post higher revenues,” the ministry of finance said in a statement.

The Centre released GST compensation of Rs 22,000 crore to states to meet their GST revenue gap, the ministry added.

The Centre’s net tax receipts rose 127% on year to Rs 6.45 lakh crore or 41.7% of FY22BE in the April-August period, compared with just 17.4% of the corresponding target reported in the year-ago period.

Even as the weighted average GST rate continues to be around 11% against the revenue-neutral rate computed of a little over 15% and major items like auto fuels are still outside the net, the collections have shown an upswing for several months till the pandemic’s second wave hit businesses, recovering quickly after taking a hit in June (Rs 92,849 crore).

During September, the revenues from domestic transaction (including import of services) are 20% higher than the revenues from these sources during the same month last year.

Of the gross GST revenue collected in September 2021, central GST was Rs 20,578 crore, state GST Rs 26,767 crore, integrated GST Rs 60,911 crore (including Rs 29,555 crore collected on import of goods) and cess Rs 8,754 crore (including Rs 623 crore collected on import of goods).

GST collections from key manufacturing states such as Maharashtra, Tamil Nadu, Gujarat and Karnataka showed year-on-year growth of 21-29% in September.

The government has settled Rs 28,812 crore to CGST and Rs 24,140 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States after regular settlements in the month of September 2021 is Rs 49,390 crore for CGST and Rs 50,907 crore for the SGST.

For the second year in a row, the Centre will borrow under a special, relatively low-cost mechanism in 2021-22 to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans sans any big fiscal cost to states. The plan is to borrow under this window Rs 1.59 lakh crore in 2021-22.

While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore, the Centre recently acknowledged in Parliament that an amount of Rs 81,179 crore was yet to be released to the state governments towards fully compensating them for their GST revenue shortfall for the financial year 2020-21.

E-way GST bill generation picks up pace ahead of festive season

Source: Financial Express, 21 September 2021

Going by the recent weekly trends, the daily average is expected to rise further for September when data for the full month is captured. Between September 1 and 19, as many as 4.04 crore e-way bills were generated.

Daily e-way bill generation for goods transportation under the Goods and Services Tax (GST) system came in at 22.71 lakh for the week ended September 19, up 10.4% over the daily average for the previous week, reflecting a pick-up in economic activity ahead of the festival season.

The daily average for the first 19 days of September was 21.24 lakh, almost at par with the daily average (21.26 lakh) for August.

Going by the recent weekly trends, the daily average is expected to rise further for September when data for the full month is captured. Between September 1 and 19, as many as 4.04 crore e-way bills were generated.

Thanks to the easing of lockdowns, e-way bill generation by businesses rose to 6.59 crore in August from 6.42 crore in July and 5.5 crore in June.

The gross GST collections came in at Rs 1.12 lakh crore in August (largely July transactions), up 30% on the year but down 3.8% on the month, signalling an ongoing economic recovery but suggesting that activities aren’t picking up evenly across sectors. GST collections, after posting above the Rs 1-lakh-crore mark for eight months in a row, had dropped below Rs 1 lakh crore in June 2021 due to the second wave of Covid-19.

Finance ministry to issue appreciation certificates to 54,439 GST payers

Source: Business Standards, 01 July 2021

The finance ministry on Wednesday said it will issue certificates of appreciation to over 54,000 GST payers for timely filing of returns and cash payment of the tax, to mark the fourth anniversary of the historic tax reform Goods and Services Tax.

More than 66 crore GST returns have been filed so far and lower rates have helped increased tax compliance, the ministry said, adding GST revenues have steadily grown and have been above the Rs 1 lakh crore mark for eight consecutive months in a row.

The GST, which subsumed 17 local levies like excise duty, service tax and VAT and 13 cesses, was rolled out on July 1, 2017.

“On the eve of completion of 4 years of the GST, it has been decided to honour the tax payers who have been a part of the GST success story.

“A data analytics exercise was hence undertaken by the Central Board of Indirect Taxes and Customs to identify taxpayers who have made substantial contribution in payment of GST in cash along with timely filing of returns. As a result, 54,439 taxpayers have been identified,” the ministry said in a statement.

More than 88 per cent of these taxpayers are MSMEs, with micro (36 per cent), small (41 per cent) and medium enterprises (11 per cent) involved in the supply of goods and services spread across all states/union territories, it added.

The Central Board of Indirect Taxes and Customs (CBIC) will be issuing certificates of appreciation to these taxpayers.

The Goods and Services Tax Network (GSTN) will be sending out the certificates of appreciation to individual taxpayers by e-mail. The taxpayers will be able to print and display these certificates.

“…This step marks the first effort by the Government to directly communicate to the GST taxpayers for their contribution,” it added.

Notably, the income tax department too sends out ‘certificates of appreciation’ to individual taxpayers in various categories on the basis of the level of taxes paid by them.

Businesses with an annual turnover of up to Rs 40 lakh are exempt from GST. Additionally, those with a turnover up to Rs 1.5 crore can opt for the composition scheme and pay only 1 per cent tax.

For services, businesses with turnover up to Rs 20 lakh in a year are GST exempt. A service provider having turnover up to Rs 50 lakh in a year can opt for composition scheme for services and pay only 6 per cent tax.

Prime Minister Narendra Modi too lauded GST on its completion of four years.

“GST has been a milestone in the economic landscape of India. It has decreased the number of taxes, compliance burden & overall tax burden on common man while significantly increasing transparency, compliance and overall collection,” he tweeted.

The finance ministry said it is now widely acknowledged that GST is both consumer- and taxpayer-friendly.

“While high tax rates of the pre-GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance. More than 66 crore GST returns have been filed so far,” it said in a series of tweets.

The multiple markets across India, with each state charging a different rate of tax, led to great inefficiencies and costs of compliance. Under GST, compliance has been improving steadily, with around 1.3 crore taxpayers registered, the ministry said.

“The Government is committed to continuous improvement of taxpayer services and seeks the cooperation of all taxpayers for their voluntary compliance and contributing to national development for a strong and resilient India,” it said.

The ministry added that the country meets its obligations towards spending in various social sectors and welfare schemes and infrastructure development out of revenues mobilised through tax payments by millions of honest taxpayers.

Tweeting with the hashtag ‘4yearsofGST’, the ministry said GST has reduced the rate at which people have to pay tax.

“The revenue neutral rate as recommended by the RNR (revenue neutral rate) Committee was 15.3 per cent. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6 per cent.”

GST has significantly eased one of the most complex indirect tax systems and a company looking to do business in every state had to make as many as 495 different submissions. Under GST, that number has reduced to just 12, it said.

“GST has replaced the complex indirect tax structure with a simple, transparent and technology-driven tax regime and has thus integrated India into a single common market.

“With the continuous simplification of procedures and rationalisation of rate structures so as to make GST compliance easy for common man as well as the trade, we have been able to achieve economic integration of the country with a humane touch,” the ministry added.

Under GST, a four-rate structure that exempts or imposes the lowest rate of 5 per cent tax on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer.

GST also represents an unprecedented exercise in fiscal federalism. The GST Council, that brings together the central and state governments, has met 44 times to thrash out how the tax will work.

EY Tax Partner Abhishek Jain said looking at the past four years since the introduction of GST, one can say it has been a challenging but exciting journey, with most stakeholders including the government leveraging the use of technology to ensure compliance and as a measure of fraud check.

“Various amendments have been brought in during the years to smoothly transit into the vision of ‘One Nation One Tax’, and it is expected that even the excluded sectors will find their way into the GST ambit sooner or later,” Jain added.

He said a lot of areas are still to be debated upon, especially topics such as continuation of compensation cess, inclusion of excluded sectors, divergent Advance Authority rulings, rate rationalisations, among others.

GST has reduced rate at which people have to pay tax, says Finance Minister Sitharaman

Source: Economic Times, 30 June 2021

Union Finance Minister Nirmala Sitharaman on Wednesday said that the Goods and Services Tax (GST) has reduced the rate at which people have to pay tax and the GST rate at present is only 11.6 per cent.

In a tweet, the Finanace Minister said “GST has reduced the rate at which people have to pay tax. The revenue neutral rate as recommended by the RNR Committee was 15.3 per cent. Compared to this, the weighted GST rate at present, according to the Reserve Bank of India (RBI), is only 11.6 per cent. #4yearsofGST.”

Ministry of Finance said that GST has replaced the complex indirect tax structure with a simple, transparent and technology-driven tax regime and has thus integrated India into a single common market.

“GST completes four years since implementation today. GST has replaced the complex indirect tax structure with a simple, transparent and technology-driven tax regime and has thus integrated India into a single common market,” tweeted Ministry of Finance.

It further said India has been able to achieve economic integration of the country with a humane touch.

“#4yearsofGST With the continuous simplification of procedures and rationalisation of rate structures so as to make GST compliance easy for common man as well as the trade, we have been able to achieve economic integration of the country with a humane touch,” the ministry added.