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Measures and Reliefs announced by Finance Minister amid COVID-19 Outbreak

Amit Mundhra — Fri, 27 Mar 2020 05:21:45 +0000

After the lock down of the whole nation to fight COVID-19 pandemic, the government has decided to counter the outbreak by giving economic and GST reliefs to the common mass. Finance Minister Miss Nirmala Sitharaman announced certain measures and reliefs for the taxpayers.
Below are several relief measures relating to Statutory and Regulatory compliance matters across GST and Customs in view of COVID-19 outbreak. Let’s get started:

1. Those having an aggregate annual turnover of less than Rs. 5 crores can file GSTR-3B due in March, April and May 2020 by the last week of June 2020. There will be no interest, late fee, and penalty charged.

2. Those having an aggregate annual turnover of Rs. 5 crores or more can file GSTR-3B due in March, April and May 2020 by the last week of June 2020 but the same would attract a reduced rate of interest @9 % per annum from 15 days after the due date (current interest rate is 18 % per annum). There will be no late fee and penalty charged, if complied before till 30 June 2020.

3. The date for opting for composition scheme has been extended till the last week of June 2020.

4. The last date for making payments for the quarter ending 31st March 2020 and filing of return for the FY 2019-20 by the composition dealers has been extended till the last week of June 2020.

5. The date for filing GST annual returns of FY 2018-19, which is due on 31st March 2020 has been extended till the last week of June 2020.

6. The due date for issue of notice, notification, approval order, sanction order, filing of an appeal, furnishing of return, statements, applications, reports, any other documents, the time limit for any compliance under the GST laws where the time limit is expiring between 20th March 2020 to 29th June 2020 have been extended to 30th June 2020.

7. Necessary legal circulars and legislative amendments to give effect to the aforesaid GST relief would be followed with the approval of GST Council.

8. Payment date under ‘Sabka Vishwas Scheme’ has been extended up to 30th June 2020. No interest for this period would be charged if paid by 30th June 2020.

9. 24X7 Custom clearance will be allowed until the end of 30th June 2020.

10. The due date for issue of notice, notification, approval order, sanction order, filing of an appeal, furnishing applications, reports, any other documents etc., the time limit for any compliance under the Customs Act and other allied Laws where the time limit is expiring between 20th March 2020 to 29th June 2020 have been extended to 30th June 2020.

We hope the information provided turn out to be helpful for you. Use E-filing software to file GST to stay inside and safe. Use GRECS for smooth and easy GST filing. For more such articles on GST, stay tuned with Digitax Automation.

The post Measures and Reliefs announced by Finance Minister amid COVID-19 Outbreak first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Key Outcomes – 3rd National GST Conference

Amit Mundhra — Thu, 12 Mar 2020 10:41:22 +0000

On March 6, 2020, the 3rd National GST Conference of Commissioners of State Tax and Zonal Chief Commissioners of Central Tax was held at Vigyan Bhavan, New Delhi under the chairmanship of Union Finance Secretary, Dr Ajay Bhushan Pandey. Hon’ble Union Finance Minister, Smt. Nirmala Sitharaman also joined the Conference and intensively discussed the status of GST Portal to address grievances of taxpayers.

The conference deliberated various measures for streamlining the GST return filing process, enhancing revenue and focused compliance management as well as to create synergy among Central and State tax administrations.

States, namely Rajasthan, West Bengal, Odisha, Gujarat and Punjab made presentations on best practices followed by them in compliance management and revenue augmentation in their tax administration. Further, they informed the participants about various modus operandi detected by them in the State and various measures taken by them to curb tax evasion. Pr. DG, DGGI also presented a presentation in the conference on tax evasion and enforcement measures followed by them.

GST Policy Wing, CBIC presented different measures in the pipeline for increased compliance management and revenue augmentation as well as on Consumer Incentivization Scheme for promoting behaviour of seeking invoices.

Later, Infosys presented the status on business statistics, a trend of filing return, the preparedness of the system vis-à-vis the facilities required to be launched and measures need to be taken to address GST Portal’s capacity and to resolve difficulties being faced by taxpayers. It was constantly stressed in the conference that ownership for delivery and satisfactory performance of GST Portal lies specifically upon the Infosys and they should meet to the expectation. The grievances of taxpayers are the utmost priority and Infosys is liable to resolve them. CEO, GSTN also presented system issues and initiatives by GSTN for further strengthening and streamlining GST.

The conference was attended by the Chief Commissioners of Central Tax Zones, Commissioners of State Taxes, Directors General of Revenue Intelligence, GST Intelligence, Analytics and Risk Management, Audit, System and Data Management, Taxpayer Services, NACIN, Chairman & Members of CBIC, Senior officers of the CBIC, Senior officers of Department of Revenue, a team of GSTN, the technical team of Infosys and officers from the GST Council Secretariat.

As an outcome of in-depth deliberation, below mentioned measures were proposed for further examination –

i. Immediate steps to curb passing on Input Tax Credit (ITC) by new taxpayers

ii. Measures to check export valuation including capping of value for calculating export benefits/incentives

iii. Standard Operating Procedure (SoP) for physical spot verification of risky taxpayers

iv. Standard Operating Procedure (SoP) for blocking and unblocking of ITC

For further info about the meeting and conference, check out:

Download Press Release

Stay tuned to Digitax Automation to read about the latest GST updates.

The post Key Outcomes – 3rd National GST Conference first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

How GST department is monitoring your Tax Credit Claim?

Amit Mundhra — Thu, 05 Mar 2020 13:42:30 +0000

In this GST era, the input tax credit mechanism is such a powerful tool which is utilized by the government to keep watch on all kinds of transactions among the business concerns.

You must be thinking, how is this even possible because the money passes through so many direct-indirect channels so its quite tedious task to do but in the advancing technological world everything is easy and can be done on a click. Just like using GRECS for ITC reconciliation to save time and money with a perk of doing it from home!

So, here we are to help you out with your doubt of how the government keeps a check on your tax credit claim. Let’s get started with the following pointers telling the exact method and process followed by the government.

Government is sitting on voluminous data in the GST regime.
Earlier, the power of access to such huge data was unavailable.
Government engages in the heavy use of Data Analytics with industry and sector benchmarking regarding ITC claim.
Next comes the smart monitoring systems available with assessing officers configured with various kinds of analytical, graphical and ratio analysis.
The advancing technology helps in keeping a close eye on unscrupulous refund claims.
Availability of data trail enables the identification of circular trading transactions.
Identification of fake entities and registrations using locational mapping techniques helps in tracking down the defaulters.
All India e-way bill system tracks the transportation of goods which is now linked with www.vahan.nic.in which provides transparency. Moreover, a proposed system of e-invoicing will further strengthen the control of the government.

With the increasing use of technology, there is less and less requirement of any human intervention in finding out the red flags among such big data. Hence, technology is being used in pinpointing the exact event of fraud and has increased the accuracy of anti-evasion measures undertaken by the department.

Do let us know in the comment section how do you like this piece of information.

The post How GST department is monitoring your Tax Credit Claim? first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Detailed Concept Paper on Faceless E-Assessment issued by CBIC requesting suggestions from stakeholders

Amit Mundhra — Thu, 20 Feb 2020 13:20:18 +0000

With the ever-advancing technologies and the need to make the complex outdated procedures simple, the Central Board of Indirect Taxes and Customs (CBIC) is taking new measures.

A detailed concept paper on Faceless E-Assessment has been issued by CBIC and it has even asked for suggestions from the stakeholders which need to be submitted by 3rd March 2020.

CBIC released a notice to the general public and the trade in regard to the launch of Faceless E-Assessment for imported goods. All the members of the trade or stakeholders have been requested to confer their opinions/ views/ comments on the Concept Paper latest by 3rd March 2020. The site on which you can submit your suggestions is dircus@nic.in or uscus4.dor@gov.in which in turn can facilitate finalization of the matter.

We have mentioned the pointers covered in the concept paper note for the stakeholders –

Background.
A journey towards Faceless Assessment.
Existing Structure of Commissionerates.
Future Structure of Commissionerates.
Functions of National Assessment Commissionerates [NACs] and Jurisdictional Port Commissionerates [JPCs].
Proposed National Assessment Commissionerates [NACs].
Procedure for Assessment of Bill of Entry by FAGs.
Speaking Order.
Appellate proceedings.
Review proceedings.
Exchange of communication exclusively by electronic mode and Authentication of electronic records.
Board to specify the format, mode, procedure, and processes.

To read the detailed concept paper on Faceless E-Assessment go to: http://www.cbic.gov.in/resources/htdocs-cbec/draft-circ/e-assessment_1802.pdf

The post Detailed Concept Paper on Faceless E-Assessment issued by CBIC requesting suggestions from stakeholders first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Difference between auto-populated data of GSTR-2A shown in GST Login: A Case Study

Amit Mundhra — Tue, 04 Feb 2020 12:42:18 +0000

GST is changing every day and to make it more simple new changes are being introduced to make it more viable and feasible. Let’s have a look at why there is a difference between auto-populated data of GSTR-2A shown in GST login through a case study to make it more easy to understand.

Nowadays, the GST portal has started showing monthly summary reports of Liability declared and credit claimed by the registered persons in a financial year. Following reports can be viewed in the GST site –

1. Liability statement other than export and reverse charge

2. Liability due to reverse charge

3. Liability due to export and SEZ supplies

4. ITC credit claimed and due.

Out of these 4 reports, the ITC credit claimed and due report is one of the most important reports which is useful in the preparation of ITC related information in GSTR-9.

This report shows a monthly summary of ITC claimed in 3B and appearing in GSTR-2A auto-populated for that month.

Case Study

The following is a sample view of ITC credit claimed and due report of a particular case.

ITC Credit Claimed and Due Report

However, when we see the auto-populated figure in point no. 8 of GSTR-9 of the same GSTIN, that figures are slightly different from the above report. The following is what appears on the screen.

Auto populated figures in point no. 8 of GSTR-9

As you can see that the auto-populated figures of 2A as showing in point number 8 of GSTR-9 and figures as showing in the ITC Credit claimed and due report, there is a difference in IGST figure. Total of IGST in ITC claimed and due report is 63,43,276.76 whereas in point no. 8 of GSTR-9 it is shown as 61,91,525.11. There is a difference of Rs. 1,51,751.65 in these 2 figures.

One may think, how this can be possible, where one report on the GST site shows one figure and the same GST site is showing another figure in another report.

How Digitax helps in finding this difference?

In Digitax G-Recs ITC reconciliation software you can see the consolidated 2A report for the whole financial year in various formats.

1. Invoice Wise 2A report classified into Regular Invoices, Amended Invoices, Credit Note Debit Notes and Reverse Charge Invoices

2. GSTIN Wise 2A report

3. GSTIN wise 2A summary

4. Month wise 2A Summary

Now, let’s see in the above case, how the difference can be easily seen.

When we see the invoice wise 2A report for the financial year in Digitax, the software classifies the Regular Invoices, Credit Notes, Debit Notes, Amended Invoices and Reverse Charge Invoices appearing in 2A for the whole financial year.

In the above case, when we see the 2A report for the FY 2017-18, the following classification comes.

Nature of Invoices	IGST	CGST	SGST	CESS
Regular Invoices	6191525.11	317814.82	317814.82	22219.68
CDNR Invoices	0.00	0.00	0.00	0.00
RCMR Invoices	151751.65	0.00	0.00	0.00
Total	6343276.76	317814.82	317814.82	22219.68

From above it becomes clear that in the point no. 8 of GSTR-9, the auto-populated figures of ITC does not include Reverse Charge Invoices on which tax is liable to be paid on reverse charge basis. However, the credit claimed and due report, the credit of reverse charge invoices is included.

Sorting out the above difference without the help of any tool is quite challenging, whereas, with the right tool, you can save your valuable time and energy while preparing for GSTR-9.

For more information on Digitax G-Recs ITC reconciliation software, you can write to support@digitaxindia.com.

Stay tuned for more such information about GST and G-RECS.

The post Difference between auto-populated data of GSTR-2A shown in GST Login: A Case Study first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

Union Budget 2020 Expectations: GST

Amit Mundhra — Mon, 27 Jan 2020 06:15:54 +0000

Everyone is busy with financial planning for the year 2020 and the Finance Ministry is busy with the planning of the upcoming Budget 2020. The union budget for the fiscal year 2020-21 is scheduled on 1st February 2020 and Sitharaman is all set to present her second budget as a Finance Minister. There are many things on the plate of the finance minister such as low industrial output, slowing demand and the overall GDP growth fixed at 5% which is at an 11-year low.

Since the last budget presented on 5th July 2019, the finance minister has announced a lot of incentives for the economy. These incentives include a cut down in tax rates for corporates and new manufacturing companies, new reforms in Goods and Service Tax law, capital infusion for PSU banks and setting up a separate fund for real estate and infrastructure. However, all these are going in vain as the economic indicators haven’t shown any signs of growth revival. Moreover, the government’s tax collections have been low too for a long time.

The call of the hour for the benefits of economists and industrialists as well as the general public is to revive the demand in the economy. This demand revival is more likely to steer the economy back into progress.

So, here are some expectations from the Budget 2020 concerning GST and taxation. Let’s get started –

1. A boost in the cash flows of the middle-class taxpayers

The finance ministry is considering to relax the personal income tax rates in the upcoming budget for the fiscal year 2020-21. The present rates comprise of 5% for income slab from Rs 2.5 to 5 lakh, 20% for income slab from Rs 5 to 10 lakh and 30% for income slab from Rs 10 lakh and above. Hence, one can easily detect the significant tax outgo for the particular section falling in the category of earning income between Rs 5 to 10 lakh. A decrease in the tax rate from 20% to 10% would definitely increase the disposable surplus in the hands of the middle class who are the growth drivers for the economy.

2. New GST Returns

New GST Returns in form RET-1 or RET-2 or RET-3 along with annexures in ANX-1 and ANX-2 might tweak the GST laws to enable new GST Return filing system, w.e.t., April 1st, 2020. To accommodate all these altercations, the Union Finance Minister may tweak the GST laws.

3. Savings-booster for individuals

Most of the tax savings of individuals are accounted to Section 80C. These savings include investment in LIC, government securities, mutual fund ELSS along with payments for housing loan repayment and children’s tuition fee with a condition that all these must be under the overall limit of Rs 1.5 lakh. This limit of Rs 1.5 lakh under section 80C was last upgraded in the Budget 2014.

For an individual, education costs and housing loan repayments form an important part of the financial commitments. Hence, leaving a very little room for savings. This budget could experience an enhancement of the limit under section 80C by the government to provide with a much-needed boost for public savings.

4. Incentives as per the Sector

To have a better outlook for the upcoming budget 2020, the Union Ministry of Finance has been holding meetings with the representatives of various sectors and industries. Sectors like real estate, non-banking financial companies (NBFCs), infrastructure and power Discoms have been suffering from the lack of demand and finances. The government has outlined a plan for real estate and infrastructure but the actions are yet to be carried out. Furthermore, there are assumptions that the infrastructure plan could be aided through the issuance of long term tax-deductible infrastructure bonds by the government.

5. Lower tax-rate for Partnerships and LLPs

Some MSMEs are paying tax at 30%, excluding surcharge and education cess, which consist of partnership firms and Limited Liability Partnerships (LLPs). While the government has handed out a tax cut on corporates and manufacturing companies, the other forms of business enterprises are still paying high taxes at 30%. In this budget, the government could have a tax rate cut down for these business enterprises to balance out a fair play among MSMEs.

Moreover, the government could also aid capital intensive MSMEs for their investments in plant and machinery. The investments could be boosted through a deduction under section 32AC. Section 32AC was introduced in the union budget of 2013 to encourage investments in new plant and machinery by various companies. Hence, the companies were allowed the deduction in addition to depreciation allowance. The minimum investment threshold was set at Rs 25 crore. The Finance Minister could also revamp this section to grant deduction benefits to MSMEs which have a lower investment threshold with a time horizon of 1-2 years.

6. Goods and Services Tax rate cut down

GST rate cuts for over the last two years are the reason behind the dwindling revenue collections. Many economists have been favouring a phased increase in the GST rates. But, the automobiles sector is all set for and is looking forward to a rate cut 28 % to 18 %. Furthermore, there is a chance of exemption from customs duty of 5 % for lithium-ion batteries. With all this, the health care segment in the upcoming budget also expects to have ‘health care services zero-rated product’ under GST. There are speculations that this budget, various items which fall in between 18% and 28 % may be scrutinised for a single rate.

As we all are aware that the government, itself, is running on a tight fiscal situation due to the lesser than expected tax collections and disinvestment collections. So, if there is a possible increase in the disposable surplus in the hands of individuals that can help in reviving consumer demand. Apart from this, the government is also taking into consideration to mobilising public savings via section 80C along with the issue of corporate bonds by way of top-rated PSUs.

So, these were some speculations from our side. if you have some more, do let us know!

Stay tuned for more blogs on GST.

The post Union Budget 2020 Expectations: GST first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.

ITC: Conditions To Claim Input Tax Credit under GST

Amit Mundhra — Sat, 18 Jan 2020 09:57:38 +0000

Input Tax for a taxable person is the Goods and Services Tax levied on him/her for the supply of goods or services to him/her, which are used or are intended to be used, for the development of his business. ITC under GST is the most critical activity as well as a matter of concern for every business to settle its tax liability.

In the last blog, we learnt about ITC, its importance and how to claim it. But to claim ITC, one must be aware of the conditions to fulfil before claiming ITC. So, this time we bring you the blog which will cover all the conditions to be fulfilled to claim ITC. and, to notch it up more we will also inform about the items on which credit can’t be availed.

The conditions prescribed for the eligibility to ITC or eligible ITC are more or less the same as the pre-GST regime. Also, the rules listed below are very particular and firm in its approach.

So, let’s start with the conditions a registered person has to fulfil to claim ITC.

Conditions To Claim Input Tax Credit under GST –

A registered person would have to fulfil the following conditions to be eligible to claim Input Tax Credit –

1. One must have a tax invoice or debit note or document evidencing the said payment.

2. One must have the receipt of goods or services.

3. One must have the document of transfer of title of goods if the goods are directed by the registered person to be delivered to the other person by the supplier.

4. One must have the furnishing of a return.

5. If the goods are to be received in lots or instalments then the ITC could be availed when the last lot or instalment is received.

6. If the supplier failed to supply the goods or services within 180 days from the date of invoice and the receiver has already claimed ITC, the amount will be added to output tax liability and interest will be paid on the same. As soon as the payment to the supplier is made, ITC will be allowed to be claimed again.

7. If depreciation has been claimed on a capital good’s tax component, then no ITC will be allowed in such cases.

8. One must claim ITC against an Invoice or Debit Note before the below-mentioned dates:

The due date of filing the GST Return for September of the next Financial year

the date of filing the Annual Returns for that Financial year.

For instance, ED Corp, a buyer has a Purchase Invoice dated back to 8th July 2018( FY 2018-19), wants to claim GST paid on that purchase. According to the criteria set down to reckon the time limit:

The due date of filing GST returns for September 2019( belonging to FY 2019-20) is 20th October 2019 and the Date of filing GST Annual Return for FY 2018-19 is 31st December 2019, whichever is earlier will be the time within which ED Corp will have to claim ITC. Therefore, the date is 20th October 2019 and ED Corp can claim this ITC in any of the months between July 2018 to September 2019.

GST Tip: Above condition must be considered concerning Original Invoice Date for Debit Notes.

9. One must have the common credit of ITC used most commonly for

Effecting exempted and taxable supplies
Business and non-business related activities

10. Since 9th October 2019, a regular taxpayer can only claim provisional ITC in GSTR-3B up to the extent of 20% of the ITC available in GSTR-2A. So, the amount of ITC reported in GSTR-3B from 9th October 2019 will be a total of Actual ITC in GSTR-2A and provisional ITC being 20% of actual ITC in GSTR-2A. But the matching of purchase register or expense ledger with GSTR-2A is very crucial to claim ITC.

So, these were the conditions, a registered taxpayer have to fulfil before claiming and availing ITC. But there are some items on which credit is not allowed. Let’s have a look at them –

Items on which Credit can not be availed –

1. Motor vehicles and conveyances.

2. Such motor vehicles and conveyances which are further supplied i.e. sold.

3. Transport of passengers.

4. Such motor vehicles and conveyances used for imparting training on driving, flying and navigating.

5. Such motor vehicles and conveyances used for the transportation of goods.

6. Such motor vehicles and conveyances used for food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery.

GST Tip: The credit will be available if the goods or services are used to deliver the same category of services or as a part of composite supply. For instance, Mr Amit purchases cosmetic creams to supply it to a customer, then the credit of ITC paid on the purchases can be availed.

7. Sale of membership in a club, health and fitness centre.

8. Rent-a-cab, health insurance and life insurances except those mentioned below:

It is made obligatory by the government for employers to provide such to the employees.
Goods or services are taken to deliver the same category of services or as a part of composite supply. For example, Mr Abid uses the service of rent-a-cab to supply to Mr Zakir, a client, then the credit of ITC paid on purchases will be allowed.

9. Leave or home travel concession or other benefits extended to employees on vacation.

10. Construction of an immovable property’s works contract service (except any plant & machinery or for providing further supply of works contract service).

11. Goods and services used for and in the construction of an immovable property irrespective of the usage for personal or business purpose.

12. Goods or services where tax have been paid under a composition scheme.

13. Goods or services used for personal use.

14. Goods or services received by a non-resident taxable person exempting the goods imported by him.

15. Goods that have been lost, stolen, destroyed, written off or disposed of as gifts or free samples.

16. In the case of any tax paid due to excessive refund, non-payment or short tax payment, or ITC availed or utilized by the reason of fraud or willful fabrication or suppression of facts or misappropriation and seizure of goods.

These were the conditions to be fulfilled and items which can and cannot claim or avail ITC respectively.

For more such pieces of information, stay tuned to Digitax Automation.

The post ITC: Conditions To Claim Input Tax Credit under GST first appeared on ITC Reconciliation, GSTR 2A Reconciliation - Digitax Automation.