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Budget 2019 – Highlights Simplified

Financial Crux of Budget 2019

 

  2017-18

(Actuals)

 2018-19

(Revised Estimates)

 2019-20

(Budget Estimates)
Revenue Receipts

(Like Income Tax, GST,  Dividends from PSU’s & Banks ,Interest on Government Lending Etc.)

 14,35,233 Cr. 17,29,682 Cr. 19,77,693 Cr.
Capital Receipts

(Recovery of Loans, Funds Raised from PPF, small saving deposits etc.)

   7,06,742 Cr.  7,27,553 Cr.  8,06,507 Cr.
Total Receipts

(Revenue + Capital)

 

 21,41,975 Cr. 24,57,235 Cr. 27,84,200 Cr.
Revenue Expenditure

(Like Salaries to Government Employees, Pension, Subsidies, Grants, interest payments on loans taken by the Government of India)

 18,78,835 Cr. 21,40,612 Cr. 24,47,907 Cr.
Capital Expenditure

(Like Expenditure on building Roads, Flyovers, Hospitals, factories Etc.)

   2,63,140 Cr.   3,16,623 Cr.   3,36,293 Cr.
Total Expenditures

(Revenue + Capital)

 

 21,41,975 Cr. 24,57,235 Cr. 27,84,200 Cr.
Revenue Deficit   4,43,602 Cr.   4,10,930 Cr.   4,70,214 Cr.
Fiscal Deficit   5,91,064 Cr.   6,34,398 Cr.   7,03,999 Cr.
Primary Deficit      62,112 Cr       46,828 Cr.       38,938 Cr.

 

Revenue Deficit – A revenue deficit occurs when realized net income is less than the projected net income. This happens when the actual amount of revenues and / or the actual amount of expenditures do not correspond with budgeted revenues and expenditures.

Fiscal Deficit – Fiscal deficit is defined as excess of total budget expenditure over total budget receipts excluding borrowings during a fiscal year. In simple words, it is amount of borrowing the government has to resort to meet its expenses. A large deficit means a  large amount of borrowing.

Primary Deficit – Primary deficit refers to difference between fiscal deficit of the current year and interest payments on the previous borrowings. Primary Deficit = Fiscal Deficit – Interest Payments.

 

Source of Funds – Rupees Comes From

Application of Funds – Rupee Goes to

 

Proposed Amendment in Income Tax

  1. No change in Rates of Income Tax and Income Tax Slabs –

 

Sr. No. Slab wise Income (in Rupees) Tax + Income Tax Rate
1. 0 – 2,50,000 NIL
2. 2,50,000 – 5,00,000 5%
3. 5,00,000 – 10,00,000 12,500 +20%
4. Above 10,00,000 1,12,500 + 30%

 

For Senior Citizens (who is of the age of Sixty years or more but less than eighty years at any time during the previous year)

 

Sr. No. Slab wise Income (in Rupees) Tax + Income Tax Rate
1. 0 – 3,00,000 NIL
2. 3,00,000 – 5,00,000 5%
3. 5,00,000 – 10,00,000 10,000 +20%
4. Above 10,00,000 1,10,000 + 30%

 

For Super Senior Citizens (who is of the age of Eighty years or more at any time during the previous year)

 

Sr. No. Slab wise Income (in Rupees) Tax + Income Tax Rate
1. 0 – 5,00,000 NIL
2. 5,00,000 – 10,00,000 20%
4. Above 10,00,000 1,00,000 + 30%

 

Surcharge on Income Tax

 

Sr. No. Slab wise Income (in Rupees) Rate of Surcharge
1. 50 Lakhs – 1 Crore 10%
2. Above 1 Crore 15%
  1. Individual taxpayers having taxable annual income up to Rs.5 lakhs will get full tax rebate and therefore will not be required to pay any income tax. As a result, even persons having gross taxable income up to Rs. 6.50 lakhs may not be required to pay any income tax if they make investments in provident funds, specified savings, insurance etc. In fact, with additional deductions such as interest on home loan up to Rs. 2 lakhs, interest on education loans, National Pension Scheme contributions, medical insurance, medical expenditure on senior citizens etc, persons having even higher income will not have to pay any tax. This will provide tax benefit of Rs. 18,500 crore to an estimated 3 crore middle class taxpayers comprising self employed, small business, small traders, salary earners, pensioners and senior citizens.
  2. Standard Deduction U/s 16 of the Income Tax Act, for salaried individual has been increased from Rs.40,000 to Rs.50,000.
  3. Bill seeks to amend section 23 of the Income-tax Act so as to provide relief to the taxpayer by allowing him an option to claim nil annual value in respect of any two houses, declared as self-occupied, instead of one such house as currently provided. It further seeks to provide relief to the taxpayers that notional rent in respect of unsold inventory shall not be charged to tax up to two years, instead of existing one year, from the end of the financial year in which the certificate of completion is obtained from the competent authority.
  4. Bill seeks to amend section 24 of the Income-tax Act to provide that the monetary limit of deduction on account of interest payable on borrowed capital shall continue to apply to the aggregate of the amounts of deduction in case of more than 1 (one) self-occupied houses.
  5. Currently, income tax on notional rent is payable if one has more than 1 (one) self-occupied house. Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents etc. Bill seeks to exempt levy of income tax on notional rent on a second self-occupied house.
  6. Bill seeks to amend section 54 of the Income-tax Act so as to provide relief to the taxpayers having long-term capital gains up to Rs. 2 Cr. (two crore rupees), arising from transfer of a residential house, by affording the assessee a one time opportunity, at his option, to utilise the said amount for the purchase or construction of 2 residential houses in India instead of 1 (one) residential house as currently provided.
  7. Bill seeks to amend section 80-IBA of the Income-tax Act so as to augment   the supply of affordable houses by extending the time  limit from 31st March, 2019 to 31st March, 2020 for obtaining  approval of the housing project for availing deduction.
  8. Bill seeks to amend section 194A of the Income-tax Act so as to ease the burden of compliance by way of increasing the threshold limit from Rs. 10,000 (ten thousand rupees) to Rs. 40,000 (forty thousand rupees), for deduction of tax at source on interest income, other than interest on securities, paid by a banking company, co-operative society or a post office.
  9. Bill seeks to amend section 194-I of the Income-tax Act to rationalize the threshold limit from Rs. 1,80,000 (one hundred and eighty thousand rupees) to Rs. 2,40,000 (two hundred and forty thousand rupees, for deduction of tax at source on rental income).

Indirect Taxes

  1. Group of Ministers to suggest ways to reduce GST for house buyers.
  2. Businesses with less than Rs 5 crore annual turnover, comprising over 90% of GST payers, will be allowed to file quarterly GST returns – GST aims to benefit small traders, manufacturers and service providers. Exemptions from GST for small businesses has been doubled from Rs. 20 lakh to Rs. 40 lakh. Further, small businesses having turnover up to Rs.1.5 crore have been given an attractive composition scheme wherein they pay only 1% flat rate and have to file one annual return only. Similarly, small service providers with turnover upto Rs. 50 lakhs can now opt for composition scheme and pay GST at 6% instead of 18%. More than 35 lakh small traders, manufacturers and service providers will benefit from these trader friendly measures. Soon, businesses comprising over 90% of GST payers will be allowed to file quarterly return. 

Company

  • Companies, too, require Aadhar card. Government of India will soon formulate a policy to offer Unique ID for companies across the nation.
  • The target for disinvestment for FY 2019 is ₹80,000
  • United Assurance, National Insurance and Oriental Insurance will now be merged into a single entity and would also be listed.
  • The target for disinvestment for FY 18 has been revised to ₹1 lakh crore.

Custom

  • With a view to promote ‘Make in India’ campaign, the Government has made imported products costlier. Here are the key highlights:
  1. Custom Duty on electronics, such as, television and smartphones has been increased.
  2. 10% surcharge is applicable on imported goods on account of social welfare charge.
  3. Central Board of Excise and Customs (CBEC) has been renamed as Central Board of Indirect Taxes and Customs (CBITC).
  4. Solar tempered glass has exempted from custom duty, if the same is being used to manufacture solar cells.
  5. Importing crude vegetable oil will now attract a custom duty of 30% (earlier it was 12.5%). On the other hand, importing refined vegetable oil will attract a custom duty of 35% (earlier it was 20%).
  6. Products such as bus and truck tyres, sunglasses, furniture, etc., will attract a higher custom duty.
  7. Jewellery will attract a custom duty of 20% (earlier it was 15%) and watches will attract a custom duty of 20% (earlier it was 10%).
  8. Imported TV parts (LCD, LED, etc.) will now be taxed at 15%. Footwear, wearable electronics gadgets will be taxed at 20%.

Stock Market and others

  • Government seeks to safeguard the interest of angel investors and venture capitalists.
  • SEBI to implement a new rule that requires corporations to reserve 1/4th of their debt needs.
  • SEBI to instruct companies to meet 25% of their debt from bond market.

Agriculture

This year’s budget has been focused upon providing higher income opportunities for the farmers. For achieving this objective, Government plans to help farmers producing more at a lesser price. Currently, the agricultural output for India is at a record high with 275 million tonnes of food grains. Fruits and vegetables have been produced at a scale of 300 million tonnes. Government plans to keep a profit of 1.5 times for the farmers. Here are the key highlights:

  • Setting up of ₹2000 crore fund to improve the connection between market and agricultural fields.
  • Operation Green, an initiative to promote agricultural products, to be launched at a cost of ₹500 crore.
  • Kisan credit now available to animal husbandry and fishery sector.
  • 10,000 crore allocated to Fisheries and Aquaculture Development.
  • 10,000 crore allocated to animal husbandry infrastructure development fund.
  • 1,200 crore allocated towards restricting of bamboo forests.
  • Target for Agricultural Credit extended to ₹11 lakh crore (earlier it as ₹8.5 crore)
  • Special scheme introduced to manage crop reduce in high pollution areas like Delhi, Haryana and Punjab.

Technology

  • 3073 crore allotted to Digital India campaign. The amount has doubled from last year.
  • 10000 crore has been allocated towards offering 5 lakh WiFi hotspots. This will serve 5 crore people in the rural India.
  • Crypto currency such as Bitcoin is illegal. The Government will take measure to curb its trading in India.
  • Block chain Technology to be one of the areas of focus for technology development in India.

Banking Sector

  • Public banks, with the aid of recapitalization, will now be able to lend an additional amount of ₹5 lakh crore.

 Industry

  • The textile industry has been allocated ₹7148 crore for its development.

Rural Development

With a view to develop the rural economy, this year’s budget covered the following:

  • New LPG connection to 8 crore women who are below the poverty line.
  • New power connection to 4 crore people under PM Saubhagya Yojana.
  • The allocated budget for PM Saubhagya Yojana is ₹16,000 crore.
  • Construction of 2 crore toilets across India by 2019 under Swachh Bharat Abhiyan
  • By 2022, everyone in India will have a home. Currently 51 lakh affordable

Home in rural areas have been constructed along with 50 lakh homes in Urban areas.

  • Rural areas to get 1 crore homes under Pradhan Mantri Awas Yojana.
  • 5,750 crore to be allocated to National livelihood scheme.
  • 9,975 crore allocated to Social Security Scheme for next year.

 

Education sector

This year’s budget has laid special importance to the education sector. With emphasis being on digital technology, Finance Minister, Arun Jaitley, said that technology is the biggest driver in improving quality of education that children get these days. Here are the key highlights:

  • 1 lakh crore allocated towards upgrading education sector.
  • Eklavya Schools to be setup in every block where more than 50% of the population belongs to ST by 2022.
  • Black board to be replaced by digital boards in all schools by 2022.
  • PM Research fellows introduced. 1000 Btech candidates to be identified each year by the Government. The selected candidates will get a chance to pursue PHD from IIT and IISc. The candidates would also teach undergraduates once a week.

Health sector

Covering the health sector, here are the key highlights:

  • Around 1200 crore homes would be offered healthcare facility through Aayushman Bharat programme. With 1.5 lakh centres spread across India, this facility would reach to a wide section of people.
  • World’s largest Government funded healthcare programme has been launched. Flagship National Healthcare Protection Scheme aims at offering ₹5 lakh per family in respect of secondary and tertiary care in hospitals. There are around 50 crore beneficiaries in this program.
  • 600 crore has been allocated to patients suffering from tuberculosis. They are subject to receive ₹500 per month during the treatment period.
  • One medical college to be set up for every three parliamentary constituencies. In total there will be 24 new Government Medical Colleges along with improving the existing ones.

Social Security

Social Security has always been a key aspect of the Budget. The existing PM Jivan Bima Yojana has been benefiting more than 5.22 crore families in India. Additionally, there are few more hey highlights that were mentioned in the budget.

  • Sukanya Samriddhi Yojana now has 1.26 crore accounts.
  • 52,719 has been offered under Social Inclusion Scheme for Schedule Castes
  • 39,139 has been offered under Social Inclusion Scheme for Schedule Tribes

MSME Sector

  • 4.6 lakh crore allotted to MUDRA scheme
  • 3 lakh crore is the target for Mudra Yojana

Fuel

  • Unbranded diesel gets cheaper by ₹2 as excise has been reduced. The effective rate now stands at ₹6.33/ltr.
  • Unbranded petrol gets cheaper by ₹2 as excise has been reduced. The effective rate now stands at ₹4.48/ltr.

Employee Schemes

  • Government to sponsor 12% of the wages towards EPF for all sector. The scheme is available for new employees and the funding will take place only for the first three years.
  • EPF contribution for women has been reduced to 8%; valid only for the first 3 years.

Infrastructure Development

  • New tunnel to be constructed in Sera Pass for boosting the tourism industry.
  • 99 cities have already been selected out of 100 smart cities. The cities will avail facilities worth ₹2.04 lakh crore.
  • Private funding along with branding and marketing will help the Government to promote 10 prominent tourist destinations in the country.
  • Pay-as-you-use system introduced by the Government for dealing with toll payments.
  • Bharatmala project is introduced. The project includes developing 35,000 Kms with a budget of ₹5.35 lakh crore. This section is only Phase 1 of the total project.

Railway Sector

  • 1.48 lakh crore for Railways sector. Previously, it was ₹1.31 lakh crore.
  • Escalators to be mandatory in stations where footfall is greater than 25,000 per day.
  • Number of station with Wi-fi and CCTVs to increase.
  • Elimination of 4267 unmanned rail crossing by 2020.
  • 11000 crore allocated to Mumbai rail network and ₹17,000 crore allocated for Bengaluru metro network.
  • 17,000 crore allocated towards development of railway network in suburban regions of Bengaluru.

 Aviation Sector

  • Number of airports under AAI to increase by 5 times with 1 billion trips every year. Currently, there are 124 airports under AAI. The allocated budget is Rs. 60 crore.
  • Unconnected airports to be linked with all other airports through UDAN Scheme.

Others

  • Defence has been allocated with ₹2.82 lakh crore. In the previous year, this segment was allotted ₹2.67 lakh crore.
  • Food subsidy increases to ₹1.69 lakh crore for the year 2018-19. Earlier, food subsidy was ₹1.4 lakh crore
  • Increase in Emoluments: Governors – ₹3.5 lakh, Vice President – ₹4 lakh, President – ₹5 lakh.
  • Emoluments for Parliamentarians have also increased based on index to inflation.
  • Rs. 150 crore for honouring 150th birth anniversary of the Father of the Nation, Mahatma Gandhi.

 

 

 

 

Thank You  Jai Hind…

 

 

 

 

                              

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Gurugram Zonal Unit of the Directorate General of GST Intelligence (DGGI) arrests two businessmenin a case of fraudulent issuance of Input Tax Credit (ITC) invoices without actual supply of goods

 

Gurugram Zonal Unit of the Directorate General of GST Intelligence (DGGI) have arrested two businessmen, namely, Sh. Vikas Goel, Director of M/s Mica Industries Ltd, Delhi and Bhiwadi& M/s. Satellite Cables Pvt Ltd., Bhiwadi and Sh. Raju Singh Proprietor of M/s Galaxy Metal Products on 14.09.2018 in a case of fraudulent issuance of Input Tax Credit invoices without actual supply of goods, involving evasionof approximately Rs. 79.21 crores on the taxable value of concocted supplies of Rs. 450 crores.This quantum of evasion and the gravity of the offence is cognizable and non bailable under the CGST Act, 2017 under the provisions of sub section (5) of Section 132 (1). Thus, both of them were arrested under Section 69 (1) of the CGST Act,2017 and produced before the Hon’ble  Judicial Magistrate 1st Class (JMIC), Gurugram.

Searches were conducted at several places during which various incriminating documents and evidence were found. During investigation it was revealed that these businessmen heading M/s Mica Industries Ltd. had floated two entities namely M/s. Galaxy Metal Products, Delhi and M/s. Sri Ram Industries, Delhi for issuing such fake invoices. They are involved in issuing fake bills/invoices to each other in a Circular manner without any concomitant movement of goods or payments for such transactions thereby wrongfulavailing and utilizing fake ITC. On verification of corroborated documentary evidences and statements of various persons it was established that there was no movement of goods against the invoices raised. Both the Directors of companies and both the proprietor of firms have admitted that all payments for the transactions were made by third party adjustments and which were done at the end of the year. There was no actual payment invoice wise.

Further investigations are underway and the quantum of evasion is likely to go up. Officers are not ruling out the possibility of existence of several other fake firms as the investigation moves ahead. Sh. Vinay Gupta, the other Director of M/s Mica Industries Ltd. and Sh. Vinod Kumar Aggarwal, Proprietor of M/s Sri Ram Industries, Delhi are absconding. Efforts are being made to trace them. (Source – PIB)

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IRCON IPO subscribed over 9.5 times; IPO to bring Rs 466 crore revenue to the Government

The Initial Public Offering (IPO) of CPSE IRCON has been subscribed 9.5 times. In the IRCON IPO, the Government is selling 10.5 percent stake or about 99.05 lakh equity shares, including 5 lakh shares to employees. The Government is expected to raise Rs 466 crore from the issue. The issue received bids for 9.4 crore shares against the issue size of 99.05 lakh shares worth Rs 466 Crore.  The segment meant for Qualified Institutional Buyers (QIBs) was subscribed 12 times, Non-Institutional Investors 4.9 times, while the Retail Investors Segment was subscribed over 9 times. Price band for the issue has been fixed at Rs 470-475 per share, with a discount of Rs 10 for Retails Investors and Employees.

IRCON is the second CPSE to launch an IPO in the Current Fiscal besides being the second Railway CPSE to be listed on the stock markets after RITES in June this year. (Source – PIB)

 

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Justice Ranjan Gogoi appointed as next Chief Justice Of India

Justice Ranjan Gogoi appointed as next Chief Justice of India

The President of India has appointed Justice Ranjan Gogoi as the next Chief Justice of India. He will assume the office of Chief Justice on 3rd October, 2018 after the retirement of the current Chief Justice, Justice Dipak Misra.

Born on 18th November, 1954, Justice Gogoi was enrolled as an advocate in 1978. He practised in the Gauhati High Court on constitutional, taxation and company matters. He was appointed as a Permanent Judge of the Gauhati High Court on 28th February, 2001. On 9th September, 2010, he was transferred to the Punjab & Haryana High Court. He was appointed as Chief Justice of Punjab & Haryana High Court on 12th February, 2011. He was appointed as a Judge of the Supreme Court of India on 23rd April, 2012. (Source -PIB)

#justice #supremecourt #highcourt #constitutional #presidency #alphabenchmark #abventures #wealth4india

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Charitable trust liable to pay GST in Maharashtra- AAR (Authority of Advance ruling)

Advance Ruling Mechanism in GST

An advance ruling helps the applicant in planning his activities, which are liable for payment of GST, well in advance. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities. Further, it helps in avoiding long drawn and expensive litigation at a later date. Seeking an advance ruling is inexpensive and the procedure is simple and expeditious. It thus provides certainty and transparency to a taxpayer with respect to an issue which may potentially cause a dispute with the tax administration. A legally constituted body called Authority for Advance Ruling (AAR) can give a binding ruling to an applicant who is a registered person or is desirous of obtaining registration. The advance ruling given by the Authority can be appealed before an Appellate authority for Advance Ruling (AAAR).There are time lines prescribed for passing an order by AAR and by AAAR.

Objectives of Advance Ruling

The broad objectives for setting up a mechanism of Advance Ruling include:

  1. Provide certainty in tax liability in advance, in rela- tion to an activity proposed to be undertaken by the applicant;
  2. Attract Foreign Direct Investment (FDI);
  3. Reduce litigation;
  4. Pronounce ruling expeditiously in transparent and inexpensive manner;

What is an Advance Ruling?

“Advance ruling”means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the CGST Act, 2017, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

The definition of Advance ruling given under the Act is a broad one and an improvement over the existing systems of advance rulings under Customs and Central Excise Laws. Under the present dispensation, advance rulings can be given only for a proposed transaction, whereas under GST, Advance ruling can be obtained for a proposed transaction as well as a transaction already undertaken by the appellant.

Charitable trust liable to pay GST in Maharashtra- AAR (Authority of Advance ruling)

Goods and services provided by charitable trusts for a consideration would classify as supply, making it liable for GST, the authority of advanced ruling (AAR) for GST in Maharashtra has ruled. 

The ruling further states that trusts would need to register under GST if its annual turnover was above the threshold of Rs 20 lakh. The trust in its application argued that since its main activity was that of a charitable trust engaged in spreading religious knowledge by organising camps (satsang, shibirs), its ancillary activity of selling religious material in the forms of books, CDs, DVDs, pamphlets and statues shouldn’t be considered as business. #GSTonNGO#AAR#Wealth4India.

(Information compiled from the source available at PIB)

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GST Day – 1st July 2018 to be celebrated as “GST day” – #GST “ONE NATION, ONE TAX, ONE MARKET”

1st July 2018 to be celebrated as ‘GST day’, to commemorate the first year of the unprecedented reform of Indian taxation

Government of India is celebrating the 1st Anniversary of the Goods and Services Tax (GST) coming into force, here tomorrow. GST was launched on the 1st July, 2017 in a majestic ceremony held in the Central Hall of Parliament on the midnight of 30th June, 2017. The first year has been remarkable both for the sheer variety of challenges that its implementation has thrown up and for the willingness and ability of policy makers and tax administrators to rise up to these challenges and respond befittingly.

But more importantly, the first year of GST has been an example to the world of the readiness of the Indian taxpayer to be a partner in this unprecedented reform of Indian taxation. Accordingly, it has been decided that Sunday, the 1st of July, 2018 shall be commemorated as ‘GST Day’. Union Minister for Railways, Coal , Finance & Corporate Affairs  Shri Piyush Goyal will preside over as the Chief Guest of the event and Minister of State for Finance, Shri Shiv Pratap Shukla will be the Guest of Honour.

Before implementation of GST, Indian taxation system was a farrago of central, state and local area levies. In the constitutional scheme, taxation power on goods was with Central Government but it was limited up to the stage of manufacture and production while States had power to tax sale and purchase of goods. Centre had the exclusive power to tax services. This sort of division of taxing powers created a grey zone which led to legal disputes since determination of what constitutes a goods or service became increasingly difficult.

In the discussions that preceded amendment in the Constitution for GST, there were a number of thorny issues that required resolution and agreement between Central Government and State Governments. Implementing a tax reform as vast as GST in a diverse country like India required the reconciliation of interests of various States with that of the Centre. Some of these issues included origin-based versus destination-based taxation, rate structure and compensation, Dispute Settlement, inclusion of Alcohol and Petroleum products under GST. Resolution of these issues took some time and finally, the Constitution (122nd Amendment) Bill, 2014 was introduced in the Parliament on 19th December, 2014 and has been enacted as Constitution (101st Amendment) Act, 2016 w.e.f. 16th September, 2016.

As provided for in Article 279A of the Constitution, the Goods and Services Tax Council (the Council) was notified with effect from 12th September, 2016. The Council is comprised of the Union Finance Minister (who is the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers as members and is empowered to make recommendations to the Union and the States on all GST related issues. The Council has met for 27 times and no occasion has arisen so far that required voting to decide any matter. All the decisions have been taken by consensus. This is a fitting tribute to the spirit of cooperative federalism which has prevailed throughout all Centre-State interactions in relation to all aspects of GST.

Four Laws namely CGST Act, UTGST Act, IGST Act and GST (Compensation to States) Act were passed by the Parliament and since been notified on 12th April, 2017. All the other States (except Jammu & Kashmir) and Union territories with legislature have passed their respective SGST Acts. The economic integration of India was completed on 8th July, 2017 when the State of J&K also passed the SGST Act and the Central Government also subsequently extended the CGST Act to J&K. On 22nd June, 2017, the first notification was issued for GST and notified certain sections under CGST Act. Since then, one hundred and three notifications under CGST Act have been issued notifying sections, notifying rules, amendment to rules and for waiver of penalty, etc. Thirteen, twenty eight and one notifications have also been issued under IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Further 59, 63, 59 and 8 rate related notifications each have been issued under the CGST Act, IGST Act, UTGST Act and GST (Compensation to States) Act respectively. Similar notifications have been issued by all the States under the respective SGST Act. Apart from the notifications, 53 circulars and 14 orders have also been issued by CBIC on various subjects like proper officers, ease of exports, and extension of last dates for filling up various forms, etc.

India has adopted dual GST model because of its unique federal nature. Under this model, tax is levied concurrently by the Centre as well as the States on a common base, i.e. supply of goods or services or both. GST to be levied by the Centre would be called Central GST (Central tax / CGST) and that to be levied by the States would be called State GST (State Tax / SGST). State GST (State Tax / SGST) would be called UTGST (Union territory tax) in Union Territories without legislature. CGST & SGST / UTGST shall be levied on all taxable intra-State supplies. Inter-State supply of goods or services shall be subjected to Integrated GST (Integrated tax / IGST). The IGST model is a unique contribution of India in the field of VAT. The IGST Model envisages that Centre would levy IGST (Integrated Goods and Service Tax) which would be CGST plus SGST on all inter-State supply of goods or services or both.

The introduction of e-way (electronic way) bill is a monumental shift from the earlier ‘Departmental Policing Model’ to a ‘Self-Declaration Model’. It envisages one e-way bill for movement of the goods throughout the country, thereby ensuring a hassle free movement of goods throughout the country. The e-way bill system has been introduced nation-wide for all inter-State movement of goods with effect from 1st April, 2018. As regards intra-State movement of gods, all States have notified e-way bill rules for intra-State supplies last being NCT of Delhi where it was introduced w.e.f. 16th June, 2018.

GST will have a multiplier effect on the economy with benefits accruing to various sectors such as exporters, small traders and entrepreneurs, agriculture and industry, common consumers. GST has already promoted ‘Make in India’ and has improved the ‘Ease of Doing Business’ in India. By subsuming more than a score of taxes under GST, the road to a harmonized system of indirect tax has been paved making India an economic union.

Any new change is accompanied by difficulties and problems at the outset. A change as comprehensive as GST is bound to pose certain challenges not only for the government but also for business community, tax administration and even common citizens of the country. Some of these challenges relate to the unfamiliarity with the new regime and IT systems, legal challenges, return filing and reconciliations, passing on transition credit. Many of the processes in the GST are new for small and medium enterprises in particular, who were not used to regular and online filing of returns and other formalities.

Based on the feedback received from businesses, consumers and taxpayers from across the country, attempt has been made to incorporate suggestions and reduce problems through short-term as well as long-term solutions. National Anti-Profiteering Authority has initiated investigation into various complaints of anti-profiteering and has passed orders in some cases to protect consumer interest. To expedite sanction of refund, manual filing and processing of refunds has been enabled. Clarificatory Circulars and notifications have been issued to guide field formations of CBIC and States in this regard. The government has put in place an IT grievance redressal mechanism to address the difficulties faced by taxpayers owing to technical glitches on the GST portal.

The introduction of GST is truly a game changer for Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology–driven tax regime. It will integrate India into a single, common market by breaking barriers to inter-State trade and commerce. By eliminating cascading of taxes and reducing transaction costs, it will enhance ease of doing business in the country and provide an impetus to ‘Make in India’ campaign. GST will result in ‘ONE NATION, ONE TAX, ONE MARKET’. (Information compiled from the source PIB)

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Rs. 7.19 lakh crore collected under GST in the period between August 2017 and March 2018

GST Revenue Collections for the Financial Year 2017-18

Total Revenue of Rs. 7.19 lakh crore collected under GST in the period between August 2017 and March 2018 . During 2017-18, total revenue collected under GST in the period between August 2017 and March 2018 has been Rs. 7.19 lakh crore. This includes Rs. 1.19 lakh crore of CGST, Rs. 1.72 lakh crore of SGST, Rs. 3.66 lakh crore of IGST (including Rs. 1.73 lakh crore on imports) and Rs. 62,021 crore of cess (including Rs. 5702 crore on imports). For this eight months, the average monthly collection has been Rs. 89,885 crore.

While the tax on domestic supplies in a month is collected through the process of returns and gets collected in the next month, IGST and cess on imports gets collected in the same month. Therefore, during the current year, GST on domestic supplies has been collected only in eight months from August 2017 to March 2018, IGST and cess on imports has been collected for nine months, from July 2017 to March 2018. Including the collection of July 2017, the total GST collection during the financial year 2017-18 stands provisionally at Rs. 7.41 lakh crore.

Revenue of the States

The SGST collection during the year, including the settlement of IGST has been Rs. 2.91 lakh crore and the total compensation released to the States for a period of eight months during the last financial year was Rs. 41,147 crore to ensure that the revenue of the States is protected at the level of 14% over the base year tax collection in 2015-16. The revenue gap of each State is coming down over last eight months. The average revenue gap of all states for last year is around 17%.

Return Filing During the year

There has been a progressive improvement in the compliance level observed during the course of the year. Following table shows the percentage of returns filed as on due date and the cumulative level of compliance.

As may be seen, the compliance level as on the due date has steadily increased and, by the end of the financial year, has reached to an average of 65% from around 55-57% observed during initial months. The cumulative compliance levels (percentage of returns filed till date) for initial months has crossed 90% and for July, 2018, has reached 96%.

There are State-wise variations in the compliance level observed till due date. However, including delayed filings, the State-wise compliance levels converge over a period of time. (Data compiled from PIB)

Goods and Service Tax (GST) is an indirect tax (or consumption tax} levied in India on the sale of goods and services. GST is levied at every step in the production process, but is refunded to all parties in the chain of production other than the final consumer.

Goods and services are divided into five tax slabs for collection of tax – 0%, 5%, 12%,18% and 28%. Petroleum products and alcoholic drinks are taxed separately by the individual state governments. There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold.[1] In addition a cess of 22% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products.[2] Pre-GST, the statutory tax rate for most goods was about 26.5%, Post-GST, most goods are expected to be in the 18% tax range.

The tax came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Modi government. The tax replaced existing multiple cascading taxes levied by the central and state governments.

The tax rates, rules and regulations are governed by the GST Council which comprises finance ministers of centre and all the states. GST simplified a slew of indirect taxes with a unified tax and is therefore expected to dramatically reshape the country’s 2.4 trillion dollar economy.[3] Trucks travel time in interstate movement dropped by 20%, because of no interstate check posts.[4]

 

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E-Way Bill System for Inter State movement of goods across the country introduced from today 1st April 2018

E-way bill operations are available for inter-state movement of goods. Presently, e-way bill operations are not available for intra-state (within the state) movement of goods, except for Karnataka State. E-way bill operations for intra-state (within the state) will be made available in a phased manner, as and when instructed by GST Council.

The e-way Bill System for Inter-State movement of goods across the country is being introduced from 01st April 2018. Department has issued few clarifications regarding the new e-way bill system are as follows:

  1. Situation: -Consider a situation where a consignor is required to move goods from City X to City Z. He appoints Transporter A for movement of his goods. Transporter A moves the goods from City X to City Y. For completing the movement of goods i.e. from City Y to City Z, Transporter A now hands over the goods to Transporter B. Thereafter, the goods are moved to the destination i.e. from City Y to City Z by Transporter B. How would the e-way bill be generated in such situations?

Clarification : -It is clarified that in such a scenario, only one e-way bill would be required. PART A of FORMGST EWB-01 can be filled by the consignor and then the e-way bill will be assigned by the consignor to Transporter A. Transporter A will fill the vehicle details, etc. in PART B of FORMGST EWB-01and will move the goods from City X to City Y.

On reaching City Y, Transporter A will assign the said e-way bill to the Transporter B. Thereafter, Transporter B will be able to update the details of PART B of FORMGST EWB-01. Transporter B will fill the details of his vehicle and move the goods from City Y to City Z.

  1. Situation : – Consider a situation where a Consignor hands over his goods for transportation on Friday to transporter. But, the assigned transporter starts the movement of goods on Monday. How would the validity of e-way bill be calculated in such situations?

Clarification: -It is clarified that the validity period of e-way bill starts only after the details in PART B of FORMGST EWB-01 are updated by the transporter for the first time.

In the given situation, Consignor can fill the details in PART A of FORMGST EWB-01 on Friday and handover his goods to the transporter. When the transporter is ready to move the goods, he can fill the PART B of FORMGST EWB-01 i.e. the assigned transporter can fill the details in PART B of FORMGST EWB-01 on Monday and the validity period of the e-way bill will start from Monday. (Data Compiled from PIB) 

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GST Fraud in Mumbai – Two Businessman arrested for creating fake Invoices

Enforcement Action for Fraud in GST Mumbai – Two Businessmen arrested by Officers of CGST, Mumbai for creating fictitious invoices and availing ineligible credit.

Officers of CGST Mumbai have arrested two businessmen for creating fictitious invoices and availing ineligible credit. The persons have been arrested for availing input tax credit on the basis of fraudulent invoices against which no actual goods were bought or sold.

The power to arrest is provided under Section 69 of the CGST Act, 2017 and is to be exercised by the Commissioner in cases of outright fraud where the amount of  tax evaded or the amount of input tax credit wrongly availed exceeds Rs. 2 crore.

The Government wants to assure taxpayers that compliant taxpayers do not run the risk of facing such punitive action in carrying-out their day to day operations. The power to arrest is to be exercised where there is deliberate fraud of sizeable magnitude with intent to evade tax. It is meant to serve as a deterrent to unscrupulous elements in trade who may try to defraud the system. There are sufficient checks built into the law to ensure that inadvertent or procedural lapses do not attract severe punitive measures. (Source-PIB)

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GST Revenue Collection of January 2018 is Rs.86,318 Crores from 1.03 Crore Dealers

GST Statistics of Jan 2018 – GST Revenue Collections stand at Rs.86,318 crores for the month of January 2018 (received in January/February upto 25th February 2018).
More than 10 Million Dealers registered till 25th February 2018 – As per data provided by PIB, 1.03 crore taxpayers have been registered under GST so far till 25th February, 2018. So far 17.65 lakh dealers got registered as composition dealers.

Total Revenue Collection under GST: The last date for filing of GSTR 3B return for the month of January 201​8​ was 20thFebruary 2018. The total Revenue received under GST for the month of January 2018 ​(received in January/February up to 25thFebruary,2018) has been Rs. 86,318 crores. 1.03 crore taxpayers have been registered under GST so far till 25th February, 2018. So far 17.65 lakh dealers got registered as Composition D​ealers. Out of these, 1.23 lakh Composition Dealers have opted-out of the Composition Scheme and have thus become regular taxpayers. Thus, till 25th February, 2018, there are 16.42 lakh Composition Dealers which are required to file returns every Quarter and the rest of 87.03 lakh taxpayers are required to file monthly returns.

57.78 lakh GSTR 3B returns have been filed for the month of January, 2018 till 25th February, 2018. This is 69 percent of total taxpayers which are required to file monthly returns. State-wise details of taxpayers registered and returns filed in February 2018 for the month of January 2018 is depicted below.

GST Revenue Statistics of States: Of the Rs. 86,318 crores collected under GST for the month of February, 2018 (up to 25th February), Rs. 14,233 crores have been collected as CGST, Rs.19,961 crores has been collected as SGST, Rs. 43,794 crore has been collected as IGST and Rs. 8,331 crores has been collected as Compensation Cess. Further, Rs. 11,327 crores is being transferred from IGST to CGST account and Rs. 13,479 crores is being transferred from IGST to SGST account by way of Settlement of Funds on account of cross utilization of IGST credit for payment of CGST and SGST respectively or due to inter State B2C transactions. Thus, a total amount of Rs. 24,806 crores is being transferred from IGST to CGST/SGST account by way of settlement. Thus, the total collection of CGST and SGST for the month of February, 2018 (up to 25th February) is Rs. 25,560 crores and Rs. 33,440 crores respectively, including transfers by way of settlement. State wise GST revenue collection is tabulated below.

 

State wige GST Statistics of January 2018
GST Statistics of January 2018
GST Statistics
State Wise GST Statistics of January 2018

Also Read – GST Council recommends relief in GST on Circus, Dance and Theatrical Performances