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3 Years of GST: How GST transformed compliance in India?

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The Goods and Services Tax (GST), implemented on July 1st, 2017, completed its three years of operation. Considered to be the biggest reform in indirect taxes, GST combined (subsumed) almost 17 prevalent taxes into a single umbrella. Although introduced under the “One Nation, One Tax” slogan, the transition period was stressful for both the taxpayers and the government. But, the government has taken various measures overtime to stabilize the compliance process and resolve ongoing issues. GST is still an ongoing process, as evident from the 40th GST Council meeting, which has made various amendments to the system. In India, the dual GST model has been adopted wherein the tax is levied concurrently by both the Central and State/UT governments on the supply of goods and/or service...

3 Years of GST in India: The Journey So Far

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On July 1, 2020, India completed 3 years since the launch of GST. We’ve created an infographic to show you the major events in the journey of GST over the last 3 years.

Paratha is not roti – AAR ruling sparks debates across the country

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The Authority of Advance Ruling in Karnataka has ruled that ready-to-eat paratha needs to be heated or further processed for human consumption and hence is liable for 18% GST sparking quite the debate on social media last week. Bengaluru based ID Fresh Foods had sought an advance ruling to understand whether the supply of whole wheat parathas and Malabar parathas would be classified under Chapter 1905 and attract a GST rate of 5%. ID foods are in the business of manufacturing and supplying ready to cook products like idli and dosa batter and heat and eat products like parathas and chapatis. The Authority for Advance Ruling in Karnataka held that ‘heat and eat’ parathas were not covered by any other heading under the HSN code system. Additionally, since the parathas needed to be...

Changes under the new GST returns system

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The New Return System under the Goods and Services Tax is due to be rolled out in October 2020, and it promises to make the filing of GST returns (that have been extremely cumbersome so far) a breeze. What are the changes that make this new system simple, convenient and efficient? Let’s find out. HSN Code to replace HSN summary HSN code stands for Harmonized System of Nomenclature and has been a globally accepted system for over 30 years. It is a 6 digit uniform code that classifies over 5000 products. Under the current returns system, taxpayers are required to use an HSN summary viz. a summary of all the products and services that they have sold under that filing period. Under the New Returns System, this summary will be replaced by the HSN code. This HSN code will help classify the...

Features of the new GST returns system

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Unlike the Government’s previous attempt, where the Goods and Services Tax was introduced in 2017 and didn’t allow taxpayers any time for transition or understanding the filing of returns, the New Return System under GST has been designed to address taxpayer concerns while filing their GST returns and help them file their returns conveniently. Here are some of the features of the New Return System under the Goods and Services Tax. Monthly and Quarterly filing of GST returns The return filing dates and frequency will be based on the turnover of the taxpayer and shall be calculated based on the reported turnover in the preceding financial year. So if a taxpayer has a turnover below Rs. 5 crore in the previous financial year, they will be required to file their returns every quarter, while ot...

What to file under new GST returns system?

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The introduction of the New Returns System under the Goods and Services Tax is less than a month away and taxpayers will be happy to know that the new returns system does away with a majority of the N number of forms that taxpayers are currently required to submit while filing their GST returns. Under the current GST filing system, taxpayers are required to file a number of forms that can be cumbersome and has proven to lead to erroneous filing. Depending on the taxpayer category, taxpayers are expected to file GSTR-1, GSTR-4, GSTR-5, GSTR-6, GSTR-7 etc. But this will not be the case under the GST New Returns System. Under the simplified new system, taxpayers will be required to file a simplified main return form viz.GST RET-1 containing 2 annexures GST ANX-1 and GST ANX-2. Let us deep div...

GST 2.0 – Introduction to New GST Returns

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India’s most significant indirect tax reform, the Goods and Services Tax is on the path to a total revamp with the New GST Returns System. For those who aren’t familiar with the New Returns, these 101 series will help you understand everything you need to know about this new phase of the GST revamp that is scheduled for October 2020. Let us start at the beginning. The Goods and Services Tax was implemented in India in 2017, and it did not really have the smooth sailing reception that most people hoped it would. Other countries who have levied GST as a tax reform seemed to have faced issues of inflation, initial confusion over tax slabs, etc. and the situation was no different for India. But two years into the introduction of GST and the uncertainty around forms and filing of re...

Taxpayers denied pre-GST tax credits

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The Centre has imposed a restriction on the time limit to claim transitional credit. On May 5, in a landmark judgement that brought much relief to taxpayers, the Delhi High Court allowed all taxpayers to claim transitional credit accumulated before the implementation of GST by June 30, 2020. This judgement extended the period for claiming input credit from 90 days to 3 years and also allowed all taxpayers to take benefits of the order. The HC verdict, if also upheld by the Supreme Court, could have meant a huge revenue loss to the Central government. But the Centre will be amending Section 140 of the CGST Act and nullify the order issued by the Delhi High Court. Under this amendment, taxpayers will be required to litigate separately to avail any credit disallowed due to technical glitches ...

Highlights of 40th GST Council Meeting

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Recommendations of GST council related to Law & Procedure The 40th Goods and Services Tax Council meeting was held on June 12, 2020, and was chaired by the Union Finance & Corporate Affairs Minister, Nirmala Sitharaman. The Council made recommendations regarding relief measures for MSMEs, extensions to revoke GST registration cancellation and reduction in late fees for late filing of GSTR3B among other announcements. These decisions were aimed at easing the burden of businesses facing challenges because of the Covid-19 crisis. Here are the highlights from the 40th GST Council Meet. Reduction in late fee for past returns The Council announced a reduction in the late fee for delayed filing and payment of GSTR3B for the tax period of July 2017 to January 2020. This measure has been an...

Why are GST taxation reforms critical this year?

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Experts believe that the economy tends to take a back seat when political and religious issues take precedence over everything else. Amidst all the protests and rallies around the CAA bill, India seems to be forgetting that the new financial year is just around the corner and we, as an economy, can’t afford to continue with our rather slow and painful pace of growth. India seems to be struggling to meet its Goods and Services Tax Revenue Targets, and with collections wilting every month, it is important to focus on improving the GST system starting FY 2020-21. This article outlines some of the measures that will be undertaken by the Government explicitly around the Goods and Services Tax. Electronic invoicing rolled out Electronic invoice (e-Invoice) is a system under which Business ...