The 33rd GST Council meet was adjourned by finance minister Arun Jaitley till Sunday, saying that the members wanted the meeting to be held in person. Jaitley said that the members were looking to have more discussions on the GST rate proposals for the real estate sector and added that a decision might be taken on the same in the next meeting. The council also decided to extend the deadline for filing GSTR-3B by two days.
The Director General of GST Intelligence (DGGI) has issued notices to SBI, ICICI Bank and HDFC Bank for “short payment of service tax” on payments made to multinationals such as MasterCard, Visa and American Express in respect of credit card, debit card, charge card or other payment card-related services received by them in India. Banks typically make payments after deducting tax at source (TDS) which are then reimbursed to them. While banks have reportedly paid service tax on the net amount, authorities said the banks are liable to pay service tax on the gross payments, inclusive of the TDS.
The GST Council, in its 33rd meeting tomorrow, may cut GST rates on under-construction residential properties. At present, under-construction property and ready-to-move-in flats where completion certificate has not been issued at the time of sale attract 12% GST while allowing input tax credit (ITC) to builders. The GST rate on such properties may be reduced to 5% without extending ITC while in the affordable housing segment the GST rate can be slashed to 3%, from 8%. There have been complaints that builders are not passing on the ITC benefit to consumers by way of reduction in price of the property.
An eight-member Group of Ministers under Maharashtra Finance Minister Sudhir Mungantiwar, set up to review tax rate on lottery, favoured a uniform GST rate of either 18% or 28%. A final call would be taken by the GST Council at its February 20 meeting. Currently, a state-organised lottery attracts 12% GST while a state-authorised lottery attracts 28% tax. The GoM favoured a uniform GST rate for both state-organised and state-authorised lotteries. The other members of the committee are finance ministers from West Bengal, Kerela, Assam, Punjab, Goa, and Karnataka. Arunachal Tax and Excise Minister Jarkar Gamlin is the eighth member.
Industry trade bodies at a meeting chaired by commerce minister Suresh Prabhu on Friday raised concerns regarding the challenges facedby them. The concerns varied from the flow of credit to export sector, exports to countries reeling under US sanctions like Iran, delay in uploading of electronic Bank Realization Certificate (eBRC) by banks and the likely withdrawal of benefits to Indian exporters by the US. Delayed input tax credit refund, denial of GST on availing higher duty drawback, higher price of steel in domestic market, and lack of availability of incentives for exports to neighbouring countries were the other issues highlighted.
FM Piyush Goyal on Thursday asked banks to meet real estate sector representatives within the next fortnight to discuss the challenges being faced by them. The minister also assured that GST rates would be brought down soon to boost the realty sector, which has been reeling under the pressure of sluggish demand. He said the group of ministers (GoM) under GST Council has worked out a mechanism for taxing real estate sector under GST. A state ministerial panel last week favoured lowering GST on under-construction residential properties to 5% from 12% currently and on affordable housing from 8% to 3%.
Qatar Gas CEO Khalid Bin Khalifa Al-Thani urged the Indian government to include the natural gas under the GST framework to help create demand for the environment friendly fuel in India. Qatar currently supplies 8.5 million tonnes a year of liquefied natural gas to India. It is the country's single largest source of imported gas, supplying about 40% of all overseas shipments reaching India. In October last year, Russian oil firm Rosneft, which had acquired Essar Oil in 2017 for $12.9 billion, also demanded levy of GST on petroleum products.
A panel of state ministers on Friday favoured lowering GST on under-construction residential properties to 5% from 12% currently. No GST is levied on ready-to-move-in properties for which completion certificate has been issued. The Group of Ministers, under Gujarat Deputy CM Nitin Patel, was formed last month to analyse tax rates and challenges faced by the real estate sector under GST regime. The GoM also favoured slashing GST rate on affordable housing from 8% to 3%. The GoM would finalised their report within a week and place before the GST Council in its next meeting.
Principal Commissioner of Hyderabad GST Commissionerate ruled that interest will be levied on both cash and input tax credit (ITC) component where GST is paid after the prescribed due date. It has asked the officials to conduct due verification of all the belated GST returns filed involving payment of self-assessed tax after the prescribed due date and ensure that the interest liability is paid not only on the cash component, but also on the input credit component. The order also empowers concerned officer(s) to initiate prompt action for recovery in case the interest was not discharged by any taxpayer.
The Maharashtra Authority of Advance Ruling (AAR) held that the company applicant is not eligible to claim input tax credit (ITC) for GST paid on the hotel stay provided to its executive in lieu of rent-free accommodation as it doesn’t amount to furtherance of business. The ruling held that the hotel accommodation was being used by the applicant to provide residential accommodation to its executives for their personal comfort. Further, the AAR also ruled that the company isn’t eligible to claim ITC of GST paid on health insurance provided to employees since there is no supply of services.
The Gujarat High Court, through its landmark decision on Monday, has allowed exporters to claim tax exemption on imported raw material even if the finished products have already been exported. The high court struck down the ‘pre-import’ condition on imports made under Advance Authorisation licence under the GST regime. The CBIC had issued a notification dated October 13, 2017, which denied benefits to exporters who imported input goods after their finished products are exported. Exporters were issued notices to deposit IGST where the exporters shipped the finished products before the import of raw materials and claimed exemptions.
GST collection in January crossed Rs 1 lakh crore up from Rs 94,725 crore mopped up in December 2018. The collection collection was Rs 89,825 crore during the same month last year, Ministry of Finance said. The GST collection was higher despite measures to lower tax burden on consumers. The collection for December 2017 stood at Rs 86,703 crore. The overall GST revenue shortfall is nearly Rs 15,000 crore per month in the April-December period compared with the budget estimate for the current fiscal.
According to the National Sample Survey, India’s unemployment rate rose to a 45-year high during 2017-2018, the Business Standard reported. The assessment, conducted between July 2017-June 2018, showed the unemployment rate stood at 6.1%, the highest since 1972-73. The survey has become a political issue after the acting chairman and another member of the National Statistical Commission resigned saying they were unhappy at the delayed of jobs data that had been due for release in December. The report showed that unemployment stood at 7.8% in urban areas compared with 5.3% in the countryside.
India's textiles sector may see higher growth driven by robust domestic demand and depreciating rupee value. India Ratings has maintained a stable outlook for the textile sector for 2019-20. The textile companies are likely to improve cash-flow from operations for FY20, as their working capital would stabilize following strong domestic demand, waning impact of the disruptions due to GST and demonetization and rising exports supported by a weak rupee. India's apparel exports also showed signs of recovery in the third quarter of FY19 and are likely to rise in FY20.
Businesses will have option to include details of e-way bills generated while filing the final monthly sales return under GSTR-1. Matching of invoices of e-way bills with the sales data shown in GSTR-1 will help curb tax evasion and ascertain actual GST liability. The taxpayer can import data in his GSTR-1 form or import the same and use it with GSTR-1 offline tool to create his GSTR-1 Return Form," GST Network said. Officials have noticed that some transporters are doing multiple trips by generating a single e-way bill or not reflecting e-way bill invoices while filing GSTR-1.