Joseph Associates Welcomes You

* * * GSTR 3-B, Due dt.20th Every Month * * *

* * * GSTR-1, Due dt.11th Every Month * * *

Saturday 30 August 2014

CBDT To AOs: Respect Taxpayer’s Time And Don’t Make Them Wait



August 30th, 2014 

The CBDT has issued an Office Memorandum dated 22.08.2014 in which it has pointed out that some AO’s issue notices to taxpayers/ witnesses/ representatives etc. indicating a standard time of appointment. Thus, many persons called for hearing etc on a day by an officer are given the same time for appearance and the persons are made to wait for their turn. It is pointed out that such actions, apart from causing avoidable inconvenience to the taxpayers/ witnesses/ representatives etc cause great embarrassment to the Government. All officers have been advised to strictly maintain the appointment schedule in spirit with the Citizen’s Charter, 2014 of the Department which specifically provides that the Department shall endeavour “to adhere to the schedule of appointments with taxpayers”. All Supervisory officers, i.e. the CCsIT, CsIT and the Addl. CsIT have been requested to ensure that officers reporting to them strictly comply with this instruction and avoid fixing multiple appointments at the same time. Instances of disregard to these instructions may be viewed seriously, it is added

Thursday 28 August 2014

What is GST?



What is GST?
Goods and Services Tax -- GST -- is a comprehensive tax levy on manufacture, sale and consumption of goods and services at a national level.

Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain.

The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.

Experts say that GST is likely to improve tax collections and boost India's economic development by breaking tax barriers between States and integrating India through a uniform tax rate.

What are the benefits of GST?
Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions.

It is expected to help build a transparent and corruption-free tax administration. GST will be is levied only at the destination point, and not at various points (from manufacturing to retail outlets).

Currently, a manufacturer needs to pay tax when a finished product moves out from a factory, and it is again taxed at the retail outlet when sold.

How will it benefit the Centre and the States?
It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth. It will divide the tax burden equitably between manufacturing and services.

What are the benefits of GST for individuals and companies?
In the GST system, both Central and State taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost. This will benefit individuals as prices are likely to come down. Lower prices will lead to more consumption, thereby helping companies. 

What type of GST is proposed for India?
India is planning to implement a dual GST system. Under dual GST, a Central Goods and Services Tax (CGST) and a State Goods and Services Tax (SGST) will be levied on the taxable value of a transaction.

All goods and services, barring a few exceptions, will be brought into the GST base. There will be no distinction between goods and services.

Which other nations have a similar tax structure?
Almost 140 countries have already implemented the GST. Most of the countries have a unified GST system. Brazil and Canada follow a dual system where GST is levied by both the Union and the State governments. 

France was the first country to introduce GST system in 1954.

Will this be an extra tax?
It will not be an additional tax. CGST will include central excise duty (Cenvat), service tax, and additional duties of customs at the central level; and value-added tax, central sales tax, entertainment tax, luxury tax, octroi, lottery taxes, electricity duty, state surcharges related to supply of goods and services and purchase tax at the State level.

What will be the rate of GST?
The combined GST rate is being discussed by government. The rate is expected around 14-16 per cent. After the total GST rate is arrived at, the States and the Centre will decide on the CGST and SGST rates.

Currently, services are taxed at 10 per cent and the combined charge indirect taxes on most goods is around 20 per cent.

Will goods and services cost more after this tax comes into force?
The prices are expected to fall in the long term as dealers might pass on the benefits of the reduced tax to consumers.

Why are some States against GST; will they lose money?
The governments of Madhya Pradesh, Chhattisgarh and Tamil Nadu say that the information technology systems and the administrative infrastructure will not be ready by April 2010 to implement GST. States have sought assurances that their existing revenues will be protected.

The central government has offered to compensate States in case of a loss in revenues.
Some States fear that if the uniform tax rate is lower than their existing rates, it will hit their tax kitty. The government believes that dual GST will lead to better revenue collection for States.

However, backward and less-developed States could see a fall in tax collections. GST could see better revenue collection for some States as the consumption of goods and services will rise.

How will GST be implemented?
The empowered committee is likely to finalize the details of GST by August. But States have to sort out several issues like agreement on GST rates, constitutional amendments and holding talks with industry associations. Experts feel the drafting of legislation and the implementation of law will take time.

What are the items on which GST may not be applied?
Alcohol, tobacco, petroleum products are likely to be out of the GST regime


Sunday 24 August 2014

India Makes Progress on GST Implementation



DELHI – India moved closer towards implementing a Goods and Services Tax (GST) with the conclusion of the latest meeting by the Empowered Committee of State Finance Ministers this Wednesday.

While numerous hurdles remain, central and state Finance Ministers agreed on several important items that are expected to speed up the implementation process:
  • Two-part levy: Central GST and State GST;
  • Common threshold for the levy of GST: All businesses with annual turnover of more than Rs 10 lakh (US$16,480) for general states and Rs 5 lakh (US$8,240) for special-category and north-eastern states;
  • Harmonize GST exemption lists nationwide: 96 items exempted by States and 243 items by the Center.
The proposed GST will replace several existing taxes, including the central level excise tax and service tax, and state level VAT, entertainment tax, lottery tax and electricity duty, with one single tax, thus facilitating the consolidation of a single market across the country and allowing for greater supply chain efficiency and economies of scale.

The Central Sales Tax (CST), which is levied by the Center on inter-state movement of goods but collected by the states, has been a major obstacle towards moving the GST proposal forward, as some states are concerned about the loss of revenue they would face with the phasing out of the CST.

More industrialized states, such as Gujarat, Maharashtra and Tamil Nadu, which derive 70 to 80 percent of their revenue from state taxes, are most concerned about the potential change in tax base with the GST. By shifting taxation from production to consumption, industrialized states which currently export most of their products to other states around the nation will face significant losses in tax revenue, since the levies will instead go to states where the products are sold.

RELATED: Goods on India GST Exempted List May Qualify for Lower Tax Rate

Prior to Wednesday’s meeting, Finance Minister Arun Jaitley had assured states that the Center would compensate their loss in CST revenue of about Rs. 34,000 crore (about US$5.6 billion) over a three-year period, appeasing some of the concerns.

Full implementation of GST could raise India’s GDP growth by 0.9 to 1.7 percent, according to the National Council of Applied Economic Research (NCAER).

However, although Jaitley had committed to resolve all outstanding issues by the end of the year, challenges remain before the GST can be realized.
  • Differences remain over the degree of control between states and the Center over central GST. Below the Rs 1.5 crore limit, the Center wants to keep legal control and give states administrative control, but states are asking for both. Above the limit, dual-control is agreed upon.
  • States are also pushing for high-tax products such as petroleum, alcohol and tobacco out of the GST purview.
  • Some are also concerned that the proposed GST structure will infringe on states’ financial autonomy by removing a large portion of their own revenue source.
A new GST Constitutional Amendment Bill will be drafted for the winter session of Parliament, to replace the current one which was first introduced in 2011. To pass, the bill must secure votes from two-thirds of lawmakers in both houses of parliament and half of the 29 states.

Saturday 23 August 2014

CPC - TDS - Closure of Short Payment Online Correction facility

CPC (TDS) -Advisory for closure of Short Payment Defaults using Online Correction facility before allowing Conso Files

As you may be aware that at the time of filing TDS statements, it is mandatory to quote the challan particulars through which TDS payments have been made. The TDS forms prescribe quoting of such challans and the underlying deductee transactions corresponding to such challans.

However, it is observed that:
  • At times, data entry mistakes are committed, while reporting tax payments in the respective TDS statements.
  • Though CPC (TDS) makes best efforts to match such challans, however, they may remain unmatched leading to “Short Payment” demand.
  • The above results into issuance of notices by the field officers.
To make the resolution process non-intrusive, CPC (TDS) proposes a new change while submitting request for download of the Consolidated (Conso) file for a particular quarter. If there is a “Short Payment defaults” on account of unmatched challans for the relevant quarter, the deductor would be provided with online view of all available unconsumed challans, which can be tagged with deductees, to close the above default.
Following are key information to be noted in this regard:
  • CPC(TDS) mandates to close the above default by tagging unconsumed challans, if available in CPC(TDS) system, through online correction (without digital signature).
  • In case there is no available challan for consumption, the deductor is required to first deposit the due tax in the bank and then the same challan will be available for tagging in CPC(TDS) system after around 3-4 days of deposit.
  • The Online Correction facility of TRACES needs to be used for closure of the Short Payment default.
  • The user will not be able to download Conso file for the relevant TDS statement on closure of the above default.
  • Once the challan is suitably tagged, CPC(TDS) shall suo moto reprocess the cases thereby reducing the Short Payment default by equivalent amount.
What Actions to be taken:
  • During submission of request for Conso File, a message will be displayed, if there are Short Payment defaults in the TDS statement and instructions will be provided to submit Online Correction.
  • Details of defaults will be provided during Online Correction process.
  • In case of insufficient challans, please use Challan ITNS 281 to pay the demand or use any other Challan, which has adequate balance available.
  • Submit an Online Correction using the functionality on TRACES to tag the challans with deductee rows. Login to TRACES and navigate to “Defaults” tab to locate “Request for Correction” from the drop-down list.
Online Challan Corrections:
  • A list of all Matched and Unmatched challans can be viewed by clicking the appropriate tab.
  • Unmatched challans can be corrected and tagged to Deductee rows in the statement.
  • The corrections in TDS statements can be raised even without Digital Signature.
  • Correct KYC information needs to be submitted for the purpose of validation.
  • All previous corrections pertaining to the statement should have been processed and the processing status can be verified from the Dashboard.