Goods and GST Bill passed, Goods and Services Tax - GST

[Ganeshan Kalyani]

Dear All,

GST Bill is passed in Rajya Sabha on 03. 08.2016.

A panel under chief economic adviser Arvind Subramanian has recommended a revenue-neutral rate of 15-15.5%, with a standard rate of 17-18% be levied on most goods and all services.

But, there has been no agreement yet on rates of various goods and services, which remains a tricky issue. According to the Bill, passed in the Lok Sabha in May 2015, the rates were to be decided by a GST council headed by the central finance minister with state finance ministers as members.

Let us wait.

Thanks.

Posts / Replies

[Ganeshan Kalyani]

Banks are one of the few sectors which have to make humongous changes in their system infrastructure and thus, getting ready for GST is not an average ask by any stretch of imagination.

[Ganeshan Kalyani]

The speculation of government postponing GST roll out to Sept 1, 2017 will find some fuel with this update. There have been concerns over readiness of GSTN (GST’s IT backbone). It remains to be seen if GST will get implemented from July 1 or not.

GST is expected to boost the GDP growth by about 2 percentage points and impose a critical watch on tax evasion.

[Ganeshan Kalyani]

GST is expected to boost the GDP growth by about 2 percentage points and impose a critical watch on tax evasion.

[Ganeshan Kalyani]

The all powerful GST Council after its meeting yesterday cleared revised rules for GST returns. It also released formats of returns to be filed under GST. (Download GST Return formats)

[Ganeshan Kalyani]

Under GST, primarily a tax payer is required to file following:
1. GSTR 1- Details of outwards supplies of goods or services
2. GSTR 2- Details of inward supplies of goods or services
3. GSTR 3- Monthly return

Tax payers under composition scheme is required to file quarterly return under GSTR 4.

[Ganeshan Kalyani]

What remains a huge concern for the industry is release of return formats such late in the hour and expecting industry to get system/ ERP ready before July 1.

Share your thoughts on the return formats in the comments section.Thanks

[Ganeshan Kalyani]

The Goods and Services Tax council met on Friday for its 15th meeting in New Delhi.

The agenda for the 15th meeting of the GST Council was to clear two important rules related to transition provisions and returns to be filed under the new indirect tax regime.

The council had to also fix rates for commodities like biscuits, cigarettes, beedis, agricultural equipment, precious metals and textiles. The rate on lottery tickets was also taken up for consideration.

[Ganeshan Kalyani]

Key takeaways from today’s meeting are:

1. GST Rules cleared including transition and return filing.

2. GST Council will set up committee to look into complaints regarding anti-profiteering clause.

GST Rates
1. Solar Panels – 5%
2. Packaged Food Items – 5%
3. Bidi – 28% (no cess)
4. Tendu Leaves – 18%
5. Gold, Silver and Processed Diamonds – 3%
6. Jute – 0%
7. Footwear below INR 500 – 5% and footwear above INR 500 – 18%
9. Readymade garments – 12 %, with apparel costing below ₹ 1,000 – 5%
10. Biscuits – 18%
11. Rough Diamonds – 0.25%

[Ganeshan Kalyani]

Next meeting of GST Council is scheduled to take place on June 11. Arun Jaitley again stressed on July 1 as the GST Roll out date.

We are quite confident of sticking to the target date of July 1: FM Arun Jaitley

With government putting all the requisite law in public domain, it is now upon industry to get ready for GST before July 1.

[Ganeshan Kalyani]

A waybill is a document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods. Typically it will show the names of the consignor and consignee, the point of origin of the consignment, its destination, and route. A provison of e-way bill has been placed in GST.

[Ganeshan Kalyani]

Key highlights of e-WayBill Rules under GST are:

1. Moving goods worth more than ₹ 50,000 under GST will require prior online registration of the consignment and securing an ‘e-way bill’ that tax officials can inspect anytime during the transit to check tax evasion.

2. Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made available to the supplier, the recipient and the transporter on the common portal

3. The person in-charge of conveyance will be required to carry the invoice or bill of supply or delivery challan, and a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency Identification Device (RFID) embedded on to the conveyance.

4. Where multiple consignments are intended to be transported in one conveyance, consolidated e-way bill shall be generated carrying serial number of e-way bills generated in respect of each such consignment electronically on the common portal.

5. Validity of eWayBill:

A. Less than 100 km – One day
B. 100 km or more but less than 300km – Three days
C. 300 km or more but less than 500km – Five days
D. 500 km or more but less than 1000km – Ten days
E. 1000 km or more – Fifteen days

Verification of documents

6. The Commissioner shall get RFID readers installed at places where verification of movement of goods is required to be carried out and verification of movement of vehicles shall be done through such RFID readers where the e-way bill has been mapped with RFID.

7. Provision of physical verification goods can be carried out by officer upon proper authorization from Commissioner.

[Ganeshan Kalyani]

Inspection of Goods

8. A summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part A of FORM GST INS – 03 within twenty four hours of inspection and the final report in Part B of FORM GST INS – 03 shall be recorded within three days of the inspection.

Detention of Vehicle
9. transporter whose vehicle has been intercepted and detained for a period exceeding 30 minutes, he may upload the said information on the GSTN portal.

Experts believe that through e-WayBill mechanism, black market or un-organised sector would take a big hit as the government would have details of every goods movement.

[Arunachalam siva]

Sir, Assessee is not register under Excise but register under Sale tax. Not availing CENVAT credit. Now registered under GST. Can assessee avail CENVAT credit on goods received(invoice issued before GST) after appointed date ?

[Ganeshan Kalyani]

In the transition stock the cenvat credit is allowed to those possessing duty paid document. If there is no such document then 60% of credit of central GST payable is eligible.

[Ganeshan Kalyani]

Principally, import of goods is governed by Customs Act followed by other indirect tax levies. The import of goods has been defined in the IGST Act, 2017 as bringing goods into India from a place outside India.

In pre-GST scenario, import of goods is subject to duties of customs (basic customs duty, in lieu of excise duty, in lieu of VAT and cesses). Under GST, Customs Act has not been subsumed while Excise and VAT Laws have subsumed.

[Ganeshan Kalyani]

Costly home appliances are now available at 20-40 per cent discounts, as electronic-goods retailers rush to clear their old inventories ahead of the July 1 rollout of the goods and services tax (GST) and minimize their losses.

Television-sets, refrigerators, air-conditioners and washing machines now have their price tags slashed. Discounts vary, depending on the life of the old stock and the cost price: Retailers say they would make a loss of about 6 per cent on unsold stock purchased before May, and about 14 per cent on one-yearold inventories, against which input credits cannot be availed.

[Ganeshan Kalyani]

The discounts are available even after the GST Council increased excise credit to 60 per cent from 40 per cent on the transitional stock during its last meeting on June 3.

The usual discount offered by the retailers is around 10-15 per cent on maximum retail price (MRP) and it will now significantly go up -about three-fold.

[Ganeshan Kalyani]

Even brands such as Samsung, Panasonic, Hitachi and Videocon have come up with consumer promotional offers - gifts and extended warranties - to boost sales since retailers and distributors have stopped picking up stock to clear the existing inventory, two senior industry executives said.

[Ganeshan Kalyani]

"It's almost a mid-year Diwali for consumers in June, as most retailers will be doling out huge discounts to clear inventory before GST is rolled out. Retailers want to liquidate their entire stock as they cannot bear the load of the remaining 40 per cent central GST which will not be credited to them on unsold inventory," said Pulkit Baid, director at Great Eastern, which is one of the largest white goods retailers in the East.

[Ganeshan Kalyani]

Vijay Sales managing director Nilesh Gupta said every retailer would want to have the minimum stock by July. "While we are clearing stock on discounts, we are also losing money to do so. It's a onetime pain and July sales will be hit badly due to an early discounting this year," he said.

[Ganeshan Kalyani]

According to industry executives, some of the large consumer electronic retail chains are sadd led with old inventory of more than ₹ 100 crore each. These would make a big dent on their margins, since the white-goods makers have come up with compensation schemes for unsold stock purchased only in May and June.

The old inventory would also include products that are on display on the shop floor, since several of them tend to be a year old and eventually sold to customers. A senior executive with a leading consumer electronics chain said the company is even sacrificing margins to clear out stock.
 

[Ganeshan Kalyani]

The GST Council, in its last meeting Saturday, agreed to increase deemed credit to 60 per cent for products in the GST slab of 18 per cent and more. White goods, televisions, kitchen appliances and small appliances fall under the 28 per cent GST slab.

[Ganeshan Kalyani]

The Council also proposed allowing 100 per cent credit in case of highvalue items priced above ₹ 25,000 based on the tracking of the product, even without documents detailing the actual payment of excise duty. However, the industry awaits clarification on the definition of tracking and whether it's on the MRP, base price, or market operating price.

[Ganeshan Kalyani]

Godrej Appliances business head Kamal Nandi said if the industry can avail benefit of 100 per cent credit, around 25 per cent of the stock will be covered, and the balance 75 per cent must be liquidated by trade. "Hence, the discount will continue at the retail end," he said.

[Ganeshan Kalyani]

Even though the new tax comes into effect barely three weeks from now, many businesses have not prepared themselves for GST.