GST may see its biggest review since launch, rates and slabs likely to be tweaked

Source:, Oct 14, 2019

Two years after its launch, the Centre has begun the biggest review of goods and services tax (GST) — including a possible resetting of rates along with a scrutiny of the slabs — to tone up collections and plug leakages.

The task has been assigned to a 12-member committee of state and central government officials to “augment GST collection and administration”.

The panel was set up a day before the PMO leads consultations with state chief secretaries on Friday, where states would be urged to push for improved collections. Read the rest of this entry »

Slowdown in three sectors, dip in imports hit GST collection

Source: The Economic Times, Oct 12, 2019

NEW DELHI: The slowdown in three sectors – automobiles, cement and iron & steel – 20191014-1along with falling imports have taken a toll on GST collections, even as the services sector has managed to hold firm.

Collections in September fell 2.7% to a little under Rs 92,000 crore, the lowest since March 2018, and was way below the psychological comfort level of Rs 1 lakh crore. The three key sectors saw lower collections of Rs 6,200 crore, while several sectors such as electronics, consumer goods and tobacco have seen a healthy rise in GST payouts, officials told TOI. While goods contribute around 70% of the GST revenue, services account for the rest. Read the rest of this entry »

GST refunds denied to MNC back offices

Source: The Economic Times, Oct 09, 2019

New Delhi: A host of back offices of multinational companies in the financial sector face a tax whammy, with Goods and Services Tax authorities denying them refunds of amounts paid on inputs, saying the work done for parent companies can’t be considered as exports and will be counted as a service for the same entity.

GST authorities have rejected refunds on these grounds across states, including Haryana, Maharashtra, Tamil Nadu and Karnataka. The denial of refunds running into hundreds of crores of rupees to these outfits can derail their business model and may impact India’s attractiveness as the world’s back-office hub, especially with the emergence of low-cost sites in the Philippines and East Europe.

“Rejection orders are based on the premise that the services are provided by the local entity to its overseas affiliate company, which is the ‘same entity’ and therefore, the said services do not qualify as exports,” said an industry official privy to the development. Industry has approached the government for expeditious resolution of the issue. Individual companies will approach appellate bodies to seek relief.

Read the rest of this entry »

GST cheer for rail equipment makers

Source: The Hindu Business Line, Sep 21, 2019

New Delhi: Manufacturers of rail equipment, including wagons, coaches and rolling stock, will be able to get more input tax credit (ITC) with the GST Council approving their proposal to increase GST to 12 per cent from 5 per cent. The move will increase the competitiveness of the products made in the country.

This has been a long pending demand of railway wagon, coach and engine manufacturers, and had been raised by the Confederation of Indian Industry (CII) and supported by the Railway Ministry.

Recently, Wabtec, the company that acquired GE Tranportation, had explained that input components that go into locomotives, attract a tax of 12-18-28 per cent. This created a situation where the tax on inputs was more than that on ouput products. This led to an increase in cost, which was borne by the manufacturers to the extent of the gap between the taxes.

“The announcement of increase in GST rate from 5 to 12 per cent on rail goods, reinstates the Government’s intention to bring the (Indian rail) industry back on track, ” said Anand Chidambaram, Chairman, rail transportation and equipment division, Confederation of Indian Industry. Finance Minister Nirmala Sitharaman also announced a cut in GST on marine fuel from 18 per cent to five per cent. She said 0.5 per cent FO had been added, a move which seemed to indicate low sulphur fuel oil would also be charged at five per cent GST.

GST on electric vehicles set to be slashed from 12 per cent to 5 per cent

Source:, Jul 22, 2019

The government is set to cut Goods and Services Tax (GST) on electric vehicles to 5 per cent this week. A specially assembled GST Council meeting by means of video conferencing will take up the proposition on July 25, a senior government official privy of the development said. The committee of authorities looking at fitment of GST rates “has overall concurred that rate on EV should be cut to 5 per cent from 12 per cent.

Those purchasing electric vehicles will get an extra income tax deduction of Rs 1.5 lakh (US$ 0.002 million) on the interest paid on loans taken to purchase EVs. “This adds up to an advantage of around 2.5 lakh (US$ 0.003 million) over the loan period to the citizens who take loans to buy electric, said by finance minister Nirmala Sitharaman. The government is presently quick to push tax changes on the indirect tax side to complement the measures taken in the budget. Read the rest of this entry »

Breather for exporters as Centre to pay ITC refund for State GST

Source: The Economic Times, Jul 09, 2019

New Delhi: In a major relief to exporters, the Centre will now pay the input tax credit (ITC) refunds of state taxes, thereby reducing transaction time and costs, and manual interface in claim processing.

As per industry, there is a huge difference in the amount claimed, state goods and services tax (SGST) sanction amount received from central tax authority and the amount actually disbursed.

“The central government has been authorised to pay the amount of refund towards state taxes to the taxpayers,” according to the 2019-20 budget. At present, the taxpayers file refund claims with the central tax officer, who clears half the claims, and the rest are cleared by the state tax authorities, leading to higher time taken in claim processing and refund sanctioning. Read the rest of this entry »

GST evasion: Govt plans big move to stop large-scale dodging

Source: Financial Express, Jun 11, 2019

With a foolproof system to match all transaction invoices being delayed inordinately, the Goods and Services Tax (GST) Council will soon have a facility to capture transactions of large B2B businesses on a real-time basis. The move will enable tax officials to close most routes of large-scale tax evasion, even as they fear the wait for nationwide invoice-matching system, that missed several deadlines, may get longer.

Once real-time reporting of transactions to a central portal starts, it will be practically difficult for the businesses concerned to reduce their tax liability by inflating the claims for input tax credits. According to official sources, the system would be implemented in phases and could finally cover most of the taxpayer base. Initially, it would be made mandatory only for relatively large companies involved in business-to-business (B2B) transactions, they added. Read the rest of this entry »