Pharma sector is seeking clarification on various provisions of GST. Treatment of expired medicines at the time of return from retailer to whole seller and from whole seller to manufacturer needs clarification. Let us go into detail to understand the implication of various provisions.

Mechanism to book return of goods and time limit in GST:

Section 34 (1) of CGST Act provides for the mechanism for the return of goods by recipient. The section requires the supplier to issue a credit note. Let us have a look on the provisions of the in its own language.

“Section 34(1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.”

Further section 34(2) put a limit on declaration of details of credit note on the return.

(2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may be prescribed”

In GST law the way to claim reduction in outward tax liability corresponding to the amount of credit note pass through the route of matching. The data entered in GSTR 1 by the supplier is accepted by the recipient and then matched data is finalise and rest of data remains unmatched and is added to the output tax liability of the recipient till the final matching.

But due to this provision the supplier will not be able to show this credit note data in his GSTR 1 after September of the concerned financial year. In case of medicine their expiry date may vary from month to years. It may extend to 5-6 years. Sometimes government also instruct companies to pause the sale of any medicine if it is unfit for consumption. In this case how the benefit of sales return will be available. Also the supplier will not be able to go with credit note mechanism then whether the dealer will have to show it as fresh sales in place of purchase return. Then do they need to reverse the ITC they have taken on the purchase of those medicines? We will seek the answers of all these questions in the last part of this article. Let us elaborate more with the other relevant provisions.

Reversal of ITC for the goods destroyed as given in section 17(5)(h) of CGST Act

Apart from the provisions discussed above section 17 also require the reversal of credit in case of goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples. In the care of expired medicines the manufacturer is required to take them back from the market and then destroy them. Let us say if it is after five years do they need to reverse the credit on inputs used for those medicines. Also do they also need to pay interest on that ITC amount?

Practical issues with pharma companies

Pharma companies have various natures of products. There are different reasons for buy back of those products from the market. Let us understand some terms first.

Expired medicines: Every medicine has an expiry date aftr which it is not fit for consumption. Pharma companies are mandatorily required to mention their expiry date.

This expiry date is known already but it may be after the time limit allowed to make the sales return in GST. Now Pharma Company will have to get those medicines back and also they need to destroy it. It will be a hardship on them First they don’t get any benefit of tax on the sales return. They also need to incur some cost in destroying the medicines. Also they need to reverse the credit taken by them on the goods so destroyed. They will no doubt pass on this burden to the consumer and it will make the medicines even expensive. In a developing country like India medicines shall be given special exemption but then we have such a harsh provision for pharma industry.

Resolution provided by cbec and its analysis

All these issues were raised by the Pharma association before the CBEC and they also get reply via letter 349/57/2017-GST dated 26/12/2017. Many issues of pharma industry are resolved via that letter.

Main points cleared in the letter are:

  1. Return on expired/damaged goods from distributor to manufacturer will be treated as return of goods and not as a fresh supply.
  2. A credit note may be issued at the time of return of expired medicines.
  • If the goods are return within the prescribed limit (Sept of FY) tax can also be reversed but if they are returned after that limit no tax reversal will be available. But credit note can still be issued.
  • The company will although be required to reverse their ITC which belongs to those expired goods

Conclusion and solution:

Based on the above provision we can say that most of issues are answered by this letter. Let us have a detail understanding of both issue and its solution now.

  • Whether the distributor is required to show his return as fresh supply?

Ans: No, because he can show it as a purchase return as he can issue a credit note.

  • Whether the manufacturer will get the tax reduction?

Ans: If goods are returned under the time limit given in section 34(2) then yes. But if the goods were returned after that limit then no, although credit note can be issued because this time limit is only for declaration of that credit note in return and not for issuance of credit note. That credit note will be accounted in books but will not be a part of GST return

  • Whether the distributor is required to reverse his ITC on the goods returned?

Ans: If goods were returned under the time limit then Yes. If goods were returned after the time limits then No, because the reversal of ITC is corresponding to the reduction in tax liability of seller. In case the tax liability is not reduced by the seller no need for reversal of ITC by buyer making the purchase return.

  • Whether the manufacturer is required to reverse the ITC on the goods destroyed?

Ans:  Yes the manufacturer (Pharma company) will be required to reverse the ITC under the provisions of section 17(5)(h).

  • Whether the manufacturer is also required to pay the interest on the amount of reversal of ITC?

Ans: No, The interest on undue claim of ITC is twenty four percent. But in this case the ITC become reversible only when the goods were destroyed and is reversed at that time. No liability of interest payment will arise due to that reversal if made at the time of destroying the goods.

Authored By:

CA Pankaj Kumar Mishra

 

1. Services by Government or a local authority excluding the following services—

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and

agency services provided to a person other than Government;

(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii) transport of goods or passengers; or

(iv) any service, other than services covered under clauses (i) to (iii) above, provided to business entities.

2. Services by the Reserve Bank of India

3. Services by a foreign diplomatic mission located in India

4. Services relating to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce by way of—

(i) agricultural operations directly related to production of any agricultural produce including

cultivation, harvesting, threshing, plant protection or testing or

(ii) supply of farm labour;

(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting,

drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk

packaging and such like operations which do not alter the essential characteristics of agricultural

produce but make it only marketable for the primary market;

(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;

(v) loading, unloading, packing, storage or warehousing of agricultural produce;

(vi) agricultural extension services;

(vii) services by any Agricultural Produce Marketing Committee or Board or services provided by a

commission agent for sale or purchase of agricultural produce.

5. Service by way of access to a road or a bridge on payment of toll charges

6. Transmission or distribution of electricity by an electricity transmission or distribution utility

Service Tax Exemptions to be continued in GST as decided by GST Council

7. Services by way of renting of residential dwelling for use as residence

8. Services by way of—

(i) extending deposits, loans or advances in so far as the consideration is represented by way of interest

or discount (other than interest involved in credit card services);

(ii) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign

exchange or amongst banks and such dealers;

9. Services by way of transportation of goods

(i) by road except the services of—

(A) a goods transportation agency; or

(B) a courier agency;

(ii) by inland waterways;

10. Services provided to the United Nations or a specified international organization.

Exemption may be notified by way of issuing notification under section 55 of CGST/SGST Act.

11. Services provided by operators of the Common Bio-medical Waste Treatment Facility to a clinical

establishment by way of treatment or disposal of bio-medical waste or the processes incidental thereto;

12. Services by a veterinary clinic in relation to health care of animals or birds;

13. Services by an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) by way of charitable activities;[Charitable activities may be defined as presently in notification No 25/2012-ST.

14. Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement;

15. Services provided by

(a) an arbitral tribunal to –

(i) any person other than a business entity; or

(ii) a business entity with a turnover up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year;

(b) a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way of legal services to-

(i) an advocate or partnership firm of advocates providing legal services;

(ii) any person other than a business entity; or

(iii) a business entity with a turnover up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year; or

(c) a senior advocate by way of legal services to-

(i) any person other than a business entity; or

(ii) a business entity up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year;


16. Services provided,-

(a) by an educational institution to its students, faculty and staff;

(b) to an educational institution, by way of,-

(i) transportation of students, faculty and staff;

(ii) catering, including any mid-day meals scheme sponsored by the Government;

(iii) security or cleaning or house-keeping services performed in such educational institution;

(iv)services relating to admission to, or conduct of examination by, such institution;

upto higher secondary.

Provided that nothing contained in clause (b) of this entry shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher

secondary school or equivalent

17. Services provided by the Indian Institutes of Management, as per the guidelines of the Central

Government, to their students, by way of the following educational programmes, except Executive

Development Programme, –

(a) two year full time residential Post Graduate Programmes in Management for the Post Graduate

Diploma in Management, to which admissions are made on the basis of Common Admission Test

(CAT), conducted by Indian Institute of Management;

(b) fellow programme in Management;

(c) five year integrated programme in Management.


18. Services provided to a recognized sports body by

(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organized by a recognized sports body;

(b) another recognised sports body;

19. Services by an artist by way of a performance in folk or classical art forms of (i) music, or (ii)dance, or

(iii)theatre, if the consideration charged for such performance is not more than one lakh and fifty

thousand rupees:

Provided that the exemption shall not apply to service provided by such artist as a brand ambassador;

20. Services by way of collecting or providing news by an independent journalist, Press Trust of India or United News of India;

21. Services by way of giving on hire –

(a) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or

(b) to a goods transport agency, a means of transportation of goods;


22. Transport of passengers, with or without accompanied belongings, by
 –

(a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh, Assam,

Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in West Bengal;

(b) non-airconditioned contract carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, charter or hire; or

(c) stage carriage other than air-conditioned stage carriage

 

23. Services of life insurance business provided by way of annuity under the National Pension System

regulated by Pension Fund Regulatory and Development Authority of India (PFRDA) under the Pension

Fund Regulatory And Development Authority Act, 2013 (23 of 2013)


24. Services of life insurance business provided or agreed to be provided by the Army,
 Naval and Air Force Group Insurance Funds to members of the Army, Navy and Air Force, respectively, under the Group Insurance Schemes of the Central Government


25. Services provided by an incubatee
 up to a total turnover of fifty lakh rupees in a financial year subject to the following conditions, namely:-

(a) the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and

(b) a period of three years has not been elapsed from the date of entering into an agreement as

an incubatee;


26. Service by an unincorporated body
 or a non- profit entity registered under any law for the time being in

force, to its own members by way of reimbursement of charges or share of contribution –

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of GST; or

(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services

from a third person for the common use of its members in a housing society or a residential complex;


27. Services by an organiser to any person in respect of a business exhibition held outside India
;


28. Services by way of slaughtering of animals;


29. Services received from a provider of service located in a non- taxable territory by –

(a) Government, a local authority, a governmental authority or an individual in relation to any purpose

other than commerce, industry or any other business or profession;

(b) an entity registered under section 12AA of the Income tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities; or

(c) a person located in a non-taxable territory;

Provided that the exemption shall not apply to –

(i) online information and database access or retrieval services received by persons specified in clause (a)or

clause (b); or

(ii) services by way of transportation of goods by a vessel from a place outside India up to the customs

station of clearance in India received by persons specified in clause (c);


30. Services of public libraries by way of lending of books, publications
 or any other knowledge-enhancing

content or material;


31. Services by Employees’ State Insurance Corporation to persons governed under the Employees’

Insurance Act, 1948 (34 of 1948);


32. Services by way of transfer of a going concern, as a whole or an independent part thereof;


33. Services by way of public conveniences
 such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets;


34. Services by government
, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under Article 243 W of the Constitution.


35. Services received by the Reserve Bank of India
, from outside India in relation to management of foreign exchange reserves;


36. Services provided by a tour operator to a foreign tourist
 in relation to a tour conducted wholly outside India.


37. Services by way of pre-conditioning
, pre-cooling, ripening, waxing, retail packing, labelling of fruits and vegetables which do not change or alter the essential characteristics of the said fruits or vegetables;


38. Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo
;


39. Services provided by Government or a local authority to a business entity
 with a turnover up to rupees twenty lakh (ten lakh rupees in a special category state) in the preceding financial year.

Explanation.- For the purposes of this entry, it is hereby clarified that the provisions of this entry shall not

be applicable to (a) services at S. No. 1 (i), (ii)and (iii); and

(b) services by way of renting of immovable property;


40. Services provided by Employees Provident Fund Organisation
 (EPFO) to persons governed under the Service Tax Exemptions to be continued in GST as decided by GST Council

Employees Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952);


41. Services provided by Insurance Regulatory and Development Authority of India
 (IRDA) to insurers under the Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999);

42. Services provided by Securities and Exchange Board of India (SEBI) set up under the Securities and Exchange Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to promote the development of, and to regulate, the securities market;


43. Services provided by National Centre for Cold Chain Development 
under Ministry of Agriculture,

Cooperation and Farmer’s Welfare by way of cold chain knowledge dissemination;


44. Services by way of transportation of goods by an aircraft
 from a place outside India upto the customs station of clearance in India.


45. Services provided by Government or a local authority to another Government or local authority
:

Provided that nothing contained in this entry shall apply to services at S. No. 1 (i), (ii)and (iii) above


46. Services provided by Government or a local authority by way of issuance of passport
, visa, driving licence, birth certificate or death certificate.


47. Services provided by Government or a local authority by way of tolerating non-performance of a contract
 for which consideration in the form of fines or liquidated damages is payable to the Government or the local authority under such contract;


48. Services provided by Government or a local authority by way of
– (a) registration required under any law for the time being in force; (b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, including fire license, required under any law for the time being in force;


49. Services provided by Government or a local authority by way of assignment of right to use natural resources
 to an individual farmer for cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products;


50. Services by Government, a local authority or a governmental authority by way of any activity
 in relation to any function entrusted to a Panchayat under article 243G of the Constitution:

this shall be continued by way of notification undersection 7(2)(b) of CGST/SGST Acts.

51. Services provided by Government or a local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Government or the local authority before the 1st
April, 2016: Provided that the exemption shall apply only to service tax payable on one time charge payable, in full upfront or in installments, for assignment of right to use such natural resource;


52. Services provided by Government or a local authority by way of allowing a business entity
 to operate as a telecom service provider or use radiofrequency spectrum during the period prior to 1st April, 2016, on payment of licence fee or spectrum user charges, as the case may be;


53. Services provided by Government by way of deputing officers after office hours or on holidays
for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges (MOT).

 

54. Services by an acquiring bank, to any person in relation to settlement of an amount upto two thousand rupees in a single transaction transacted through credit card, debit card, charge card or other payment card service.

Explanation. — For the purposes of this entry, “acquiring bank” means any banking company, financial

institution including non-banking financial company or any other person, who makes the payment to any person who accepts such card


55. Services of leasing of assets
 (rolling stock assets including wagons, coaches, locos) by Indian Railways Finance Corporation to Indian Railways


56. Services provided by any person for official use of a foreign diplomatic mission
 or consular post in India or for personal use or for the use of the family members of diplomatic agents or career consular officers posed therein. This exemption is available on reciprocal basis based on a certificate issued by MEA (Protocol Division): this shall be continued by way of notification under section 55 of CGST/SGST Acts.

 

57. Taxable services, provided or to be provided, by a Technology Business Incubator (TBI) or a Science and Technology Entrepreneurship Park (STEP) recognized by the National Science and Technology Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology, Government of India or bio-incubators recognized by the Biotechnology Industry Research Assistance Council, under Department of Biotechnology, Government of India;


58. Taxable service provided by State Government Industrial Development Corporations
/ Undertakings to industrial units by way of granting long term (thirty years, or more) lease of industrial plots from so much of tax leviable thereon, as is leviable on the one time upfront amount (called as premium, salami, cost, price, development charges or by any other name) payable for such lease.

 

59. Services provided to the government by way of transport of passengers with or without accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme airport, against consideration in the form of viability gap funding (VGF).

Provided that nothing contained in this entry shall apply on or after the expiry of a period of 1 year from the date of commencement of operations of the regional connectivity scheme airport as notified by the Ministry of Civil Aviation


60. Services provided by cord blood banks by way of preservation of stem cells or any other service in relation to such preservation
;


61. Services by way of training or coaching in recreational activities relating to
,-

(i) arts or culture. or

(ii) sports by charitable entities registered under section 12AA of Income tax Act, 1961;


62. Any services provided by,
 _

(i) the National Skill Development Corporation set up by the Government of India;

(ii) a Sector Skill Council approved by the National Skill Development Corporation;

(iii) an assessment agency approved by the Sector Skill Council or the National Skill Development

Corporation;

(iv) a training partner approved by the National Skill Development Corporation or the Sector Skill

Council

in relation to

(a) the National Skill Development Programme implemented by the National Skill Development

Corporation; or

(b) a vocational skill development course under the National Skill Certification and Monetary Reward

Scheme; or

(c) any other Scheme implemented by the National Skill Development Corporation.


63. Services of assessing bodies
 empanelled centrally by Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under Skill Development Initiative (SDI)

Scheme


64. Services provided by training providers
 (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana under the Ministry of Rural Development by way of offering skill or vocational training courses certified by National Council For Vocational Training.


65. Services by way of sponsorship of sporting events organised,

(a) by a national sports federation, or its affiliated federations, where the participating teams or

individuals represent any district, State, zone or Country;

(b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India,

All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat;

(c) by Central Civil Services Cultural and Sports Board;

(d) as part of national games, by Indian Olympic Association; or

(e) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme;


66. Services provided by way of pure labour contracts of construction
, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the Beneficiary-led individual house construction / enhancement under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana (PMAY);


67. Services by way of pure labour contracts of construction
, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex;


68. Services of general insurance business provided under following schemes
 –

(a) Hut Insurance Scheme;

(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural

Development Programme);

(c) Scheme for Insurance of Tribals;

(d) Janata Personal Accident Policy and Gramin Accident Policy;

(e) Group Personal Accident Policy for Self-Employed Women;

(f) Agricultural Pumpset and Failed Well Insurance;

(g) Premia collected on export credit insurance;

(h) Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme,

approved by the Government of India and implemented by the Ministry of Agriculture;

(i) Jan Arogya Bima Policy;

(j) National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana);

(k) Pilot Scheme on Seed Crop Insurance;

(l) Central Sector Scheme on Cattle Insurance;

(m) Universal Health Insurance Scheme;

(n) Rashtriya Swasthya Bima Yojana; or

(o) Coconut Palm Insurance Scheme;

(p) Pradhan Mantri Suraksha BimaYojna;

(q) Niramaya Health Insurance Scheme implemented by Trust constituted under the provisions of the

National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); or

(r) Any other insurance scheme of the State Government as may be notified by Government of India on the recommendation of GSTC.


69. Services of life insurance business provided under following schemes
 –

(a) Janashree Bima Yojana (JBY); or

(b) Aam Aadmi Bima Yojana (AABY);

(c) Life micro-insurance product as approved by the Insurance Regulatory and Development Authority,

having maximum amount of cover of fifty thousand rupees;

(d) Varishtha Pension BimaYojana;

(e) Pradhan Mantri Jeevan JyotiBimaYojana;

(f) Pradhan Mantri Jan DhanYogana;

(g) Pradhan Mantri Vaya Vandan Yojana; and

(h) Any other insurance scheme of the State Government as may be notified by Government of India on the recommendation of GSTC.


70. Services by way of collection of contribution under Atal Pension Yojana (APY)
.

 

71. Services by way of collection of contribution under any pension scheme of the State Governments.


72. Service of transportation of passengers, with or without accompanied belongings, by—

(i) railways in a class other than—

(A) first class; or

(B) an air-conditioned coach;

(ii) metro, monorail or tramway;

(iii) inland waterways;

(iv) public transport, other than predominantly for tourism purpose, in a vessel between places located in India; and

(v) metered cabs or auto rickshaws (including E-rickshaws);


73. Services by a person by way of-

(a) conduct of any religious ceremony;

(b) renting of precincts of a religious place meant for general public, owned or managed by an entity

registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961

(hereinafter referred to as the Income-tax Act), or a trust or an institution registered under sub

clause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered

under clause (23BBA) of section 10 of the Income-tax Act:

Provided that nothing contained in (b) of this exemption shall apply to,-

(i) renting of rooms where charges are Rs 1000/- or more per day;

(ii) renting of premises, community halls, kalyanmandapam or open area, etc where charges are Rs

10,000/- or more per day;

(iii) renting of shops or other spaces for business or commerce where charges are Rs 10,000/-or

more per month.


74. Services by a hotel, inn, guest house, club
 or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation less than one thousand rupees per day or equivalent;


75. Services by way of transportation by rail or a vessel from one place in India
 to another of the following goods –

(a) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;

(b) defence or military equipments;

(c) newspaper or magazines registered with the Registrar of Newspapers;

(d) railway equipments or materials;

(e) agricultural produce;

(f) milk, salt and food grain including flours, pulses and rice; and

(g) organic manure


76. Services provided by a goods transport agency, by way of transport in a goods carriage
 of,-

(a) agricultural produce;

(b) goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;

(c) goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred fifty;

(d) milk, salt and food grain including flour, pulses and rice;

(e) organic manure;

(f) newspaper or magazines registered with the Registrar of Newspapers;

(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or

(h) defence or military equipment’s;


77. Services by the following persons in respective capacities
 –

(a) business facilitator or a business correspondent to a banking company with respect to accounts in its rural area branch;

(b) any person as an intermediary to a business facilitator or a business correspondent with respect to services mentioned in clause (g); or

(c) business facilitator or a business correspondent to an insurance company in a rural area;


78. Carrying out an intermediate production process as job work
 in relation to cultivation of plants and rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other similar products or agricultural produce;


79. Services by way of loading, unloading, packing, storage or warehousing of rice
;

80. Services by way of right to admission to, –

(i) circus, dance, or theatrical performance including drama or ballet;

(ii) award function, concert, pageant, musical performance or any sporting event other than a recognized sporting event;

(iii) recognised sporting event;

where the consideration for admission is not more than Rs 250 per person in (i), (ii) and (iii) above.


81. Services provided by Government or a local authority where the gross amount charged 
for such services does not exceed Rs.5000/.

Provided that nothing contained in this entry shall apply to services S. No. 1 (i), (ii)and (iii) above:

Provided further that in case where continuous supply of service, as defined in sub-section (33) of

section2 of the CGST Act, 2017, is provided by the Government or a local authority, the exemption shall apply only where the gross amount charged for such service does not exceed Rs. 5000/- in a financial

year; [This may be continued by way of an omnibus threshold exemption from payment of GST under

section 9 (4) of CGST/SGST Act in respect of supplies upto Rs 10,000/-].


82. (i) Health care services by a clinical establishment, an authorised medical practitioner or para-medics
;

(ii) Services provided by way of transportation of a patient in an ambulance, other than those specified in

(i) above;


83. New Exemption:

Services provided by the Goods and Services Tax Network (GSTN) to the Central Government or State

Governments/Union Territories for implementation of Goods and Services Tax (GST)

List of GST service exemption inserted on 11th June 2017

84.  Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to Government, a local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or to any function entrusted to a Municipality under Article 243W of the Constitution

85. Services provided to the Government under any insurance scheme for which total premium is paid by Government

86. Services provided to the Government under any training programme for which total expenditure is borne by the Government

Amendment on 05th August 2017

New crop insurance schemes  Pradhan Mantri Fasal Bima Yojana (PMFBY)  introduced from Kharif  2016- 17 in place of National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS), and Restructured Weather Based Crop Insurance Scheme (RWCIS) introduced in place of Weather Based Crop Insurance Schemes , shall be extended exemption from GST.

Authored by: CA Pankaj Kumar Mishra

ACA, MCOM, B-COM(CS) ISC ( Mathematics)

GSTR-1 filing Due Dates

For turnover of more than Rs 1.5 cr

Period Dates
July to Oct 31st Dec 2017
Nov 10th Jan 2018
Dec 10th Feb 2018
Jan 10th Mar 2018
Feb 10th Apr 2018
March 10th May 2018

For turnover upto Rs 1.5 cr

Period (Quarterly) Due dates
July- Sept 31st Dec 2017
Oct- Dec 15th Feb 2018
Jan- Mar 30th April 2018

 

Others GSTR filing extensions

Return Revised Due Date Old Due Date
GSTR-5 (for Non Resident) 11th Dec 2017 Earlier of 20th August 2017 or 7 days from date of registration
GSTR-5A(By person supplying OIDAR) 15th Dec 2017 20th November 2017
GSTR-4 (for Composition Dealers) 24th Dec 2017 18th October 2017
GSTR-6 (for Input Service Distributor) 31st Dec 2017 13th August 2017

E-Commerce GST Applicability

E-commerce Operator:

1)Section 2(45):- An e-commerce operator : is a person who owns, operates or manages digital or electronic facility or platform for electronic commerce. 

2) Section 2(44) Electronic Commerce: “electronic commerce” means the supply of goods or services or both, including digital products over digital or electronic network;

Levy & Collections of Tax:-section 9(5) of CGST ACT 2017

(5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:

Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax.

Have To Insert any notificatioin Issued by govt in this regard

Notification 14/2017-Central Tax (Rate) dated 28 June, 2017 specifies that ‘ecommerce operator’ is liable to pay tax ‘as if he is the supplier liable to pay tax’ and lists the following:

“services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle;”

  1. services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes, except where the person supplying such service through electronic commerce operator is liable for registration under clause (v) of section 20 of the Integrated Goods and Services Tax Act, 2017 read with sub-section (1) of section 22 of the said Central Goods and Services Tax Act.

Registration:-

Section 24 of CGST Act 2017:-

  1. Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––( Compulsory registration):-

(i) persons making any inter-State taxable supply;

(iv) person who are required to pay tax under sub-section (5) of section 9;

  1. ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
  2. x) every electronic commerce operator;:-

Section 52:- Collection of Tax at source:

  1. (1) Notwithstanding anything to the contrary contained in this Act, every electronic commerce operator (hereafter in this section referred to as the “operator”), not being an agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be notified by the Government on the recommendations of the Council, of the net value of taxable supplies made through it by other suppliers where the consideration with respect to such supplies is to be collected by the operator.Explanation.––For the purposes of this sub-section, the expression “net value of taxable supplies” shall mean the aggregate value of taxable supplies of goods or services or both, other than services notified under sub-section (5) of section 9, made during any month by all registered persons through the operator reduced by the aggregate value of taxable supplies returned to the suppliers during the said month

 

Press information bureau Regarding the postponement of provision relating to TDS section 51 and TCS section 52 of CGST/SGST Act 2017:-

With the objective of ensuring smooth rollout of GST and taking into account the feedback received from the trade and industry regarding the provisions of deduction of tax at Source under Section 51 of the CGST / SGST Act 2017 and collection of tax at source under Section 52 of the CGST / SGST Act 2017, the following has been decided :-

The provisions of Tax Deduction at Source (Section 51 of the CGST / SGST Act 2017) and Tax Collection at Source (Section 52 of the CGST/SGST Act, 2017) will be brought into force from a date which will be communicated later.

Persons who will be liable to deduct or collect tax at source will be required to take registration, but the liability to deduct or collect tax will arise from the date the respective sections are brought in force.

The persons who were liable to be registered under clause (ix) of Section 24 of the CGST / SGST Act, 2017 (as they were supplying goods or services through electronic commerce operator who is required to collect tax at source under Section 52) will not be liable to register till the provision of Tax Collection at Source is brought under force.

Section 31(1) :

A registered person supplying taxable goods shall, before or at the time of,—

  • a) removal of goods for supply to the recipient, where the supply involves movement of goods; or
  • b) delivery of goods or making available thereof to the recipient, in any other case,
  • issue a tax invoice
  • showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed:

Provided that the Government may, on the recommendations of the Council, by notification, specify the categories of goods or supplies in respect of which a tax invoice shall be issued, within such time and in such manner as may be prescribed.

  • 2) A registered person supplying taxable services shall, before or after the provision of service but within a prescribed period, issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed:

Provided that the Government may, on the recommendations of the Council, by notification and subject to such conditions as may be mentioned therein, specify the categories of services in respect of which––

  • any other document issued in relation to the supply shall be deemed to be a tax invoice; or
  • tax invoice may not be issued:
    • 3) Notwithstanding anything contained in sub-sections (1) and (2)––
      • a) a registered person may, within one month from the date of issuance of certificate of registration and in such manner as may be prescribed, issue a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him;
      • b) a registered person may not issue a tax invoice if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;
      • c) a registered person supplying exempted goods or services or both or paying tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such particulars and in such manner as may be prescribed:

    Provided that the registered person may not issue a bill of supply if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed;

    • d) a registered person shall, on receipt of advance payment with respect to any supply of goods or services or both, issue a receipt voucher or any other document,  containing such particulars as may be prescribed, evidencing receipt of such payment;
      • e) where, on receipt of advance payment with respect to any supply of goods or services or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursuance thereof, the said registered person may issue to the person who had made the payment, a refund voucher against such payment;
      • f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;
      • g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.
      • 4) In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is
      • Subject to the provisions of clause (d) of sub-section (3),  in case of continuous supply of services,––
        • where the due date of payment is ascertainable from the contract, the invoice shall be issued on or before the due date of payment;
        • where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or at the time when the supplier of service receives the payment;
        • where the payment is linked to the completion of an event, the invoice shall be issued on or before the date of completion of that
      • In a case where the supply of services ceases under a contract before the completion of the supply, the invoice shall be issued at the time when the supply ceases and such invoice shall be issued to the extent of the supply made before such
      • Notwithstanding anything contained in sub-section (1), where the goods being sent or taken on approval for sale or return are removed before the supply takes place,  the invoice shall be issued before or at the time of supply or six months from the date of removal, whichever is

      Explanation.––For the purposes of this section,

ANNUAL COMPLIANCE

FILING BASED COMPLIANCE

  • Section 92 (Annual Return)- Every Company shall prepare its Annual Return in Form MGT-7 within 60 days of holding Annual General Meeting.

Signing Provision- Annual Return shall be digitally signed by a Director and the Company Secretary; or where there is no Company Secretary by a Company secretary in Practice.

If paid up capital is more than Rs. 10 crore or turnover is more than Rs. 50 crore a copy of Form MGT-8 (Certificate by Practicing Professional) is required to be annexed in Form MGT-7.

An Extract of Annual Return (Form MGT-9) shall form part of board’s Report.

  • Section 137( Copy of financial Statements to be filed with Registrar)- A copy of financial statements, including CFS, if any along with all the necessary annexures such as-

-Auditor’s Report;

-Director’s Report along with Form MGT-9 (Extract of Annual Return),

-CSR Policy, if any

-Form AOC-1, Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures, if any

shall be filed with the Registrar in Form AOC-4 or Form AOC-4 XBRL as the case may be, within 30 days of the AGM.

Holding company is also required to file consolidated financial statements in Form AOC-4 CFS

  • Section 139 (Appointment of Auditor) – Every company shall appoint statutory auditor for a period of 5 years and intimate the registrar in Form ADT-1.
  • In the subsequent AGM shareholders will ratify the appointment of Auditor, hence no need to file Form ADT-1
  • Section 170 (Registers of directors and Key Managerial Personnel and their shareholding)- A Return containing particulars of appointment or any change in director and Key Managerial Personnel shall be filed with Registrar within thirty (30) days of appointment or change in Form DIR-12.
  • Section 148 (Central Government to specify audit of items of cost in respect of certain Companies) Cost audit is applicable on class of companies (http://www.mca.gov.in/Ministry/pdf/rules_2_30062014.pdf) as specified by the central Government. T Shirt Versace Pas Cher The Audit shall be conducted by a Cost Accountant in Practice who shall be appointed by Board on such remuneration as may be decided by board and ratified by shareholders subsequently.

Intimation of appointment of cost auditor by the company to Central Government be made in Form CRA-2

NON-FILING BASED COMPLIANCE

Following compliances are required to be done and kept as the records with the Company for future reference.

  • Sec 184 (1), Rule 9 Chapter XII (Disclosure of Interest by Directors) Every Director shall disclose his interest in any company, body corporate, firms or other association of individuals by giving a notice in writing in Form MBP-1 in First meeting of BOD in each financial year and whenever there is any change in his interest or at the time of getting inducted as director on the Board.
  • Section 88 (Registers to be maintained)- Following registers are to be maintained by a private company-
  1. MGT-1-Register of members including details of shareholding and share transfer details;
  2. MGT-2- Register of Debenture holders/ other than security holders;
  3. Register of directors and Key Managerial Personnel ;
  4. MBP-2-Register of loans, guarantee, security and acquisition made by the company;
  5. MBP-3- Register of investments not held in its own name by the company;
  6. MBP-4-Contracts or agreements with any related party under section 188 or in which any director is concerned or interested under sub- section (2) of section 184;
  7. MBP-4(2)- Register of contracts with related party and contracts and Bodies etc.  in which directors are interested;
  8. Register of details of securities held by Directors and Key Management Personnel;
  9. CHG-7- Register of Charges
  • Section 139 (Appointment of Auditor) – Every company need to correspond with Auditor at the time of his appointment or ratification of his continuation. Usually the correspondence between the company and auditors is as under:

(a) At the time of appointment:

  • Letter by the company seeking consent, qualification and eligibility of the auditor;
  • Receipt of Consent to act as Auditor and Eligibility certificate from auditor;
  • Intimation to auditor after conclusion of AGM about his appointment and remuneration

(b) At the time of ratification:

  • Letter by the company seeking consent, qualification and eligibility of the auditor about his continuation as Statutory Auditor;
  • Receipt of Consent to act as Auditor and Eligibility certificate from auditor;
  • Intimation to auditor after conclusion of AGM about his ratification and remuneration
  • Section 134 (Director’s Report) – Private company is required to prepare its Director’s Report as per the provisions of section 134 of the Act.

Signing Provision- Board’s report and any annexures thereto shall be signed by the ‘Chairperson’ authorized by the board, and at lease by two directors where he is not authorized.

  • Section 101 & SS-II (Notice of General Meeting)- At least twenty-one(21) days notice of every general meeting shall be given to –
  1. Every member of the company, legal representative of any deceased member or the assignee of an insolvent member;
  2. The auditor of the company;
  3. Every director of the company

specifying the place, date, date and hour of the meeting and shall contain a statement of the business to be transacted at the meeting.

  • Section 136 (Right of the member to have copies of audited financial statement)- Company shall send to every member of the company copy of financial statement, including CFS, if any, auditor’s report, director’s report, not less than 21 days before the date of its Annual General Meeting.
  • Section 173 & SS-1 (Board Meetings)- Every Company shall hold at least four meetings of BOD every year in such a manner that not more than 120 days shall intervene between two consecutive meetings.
  1. Company shall hold at least one meeting in every calendar quarter.
  2. Notice in writing of every Meeting shall be given to every Director by hand or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means.
  • Section 118 & Rule 25 of Chapter VII and SS-3 (Minutes of Proceedings of General Meeting, meeting of Board of Board of Directors and other meeting and resolution passed by postal ballot)- A distinct minute book shall be maintained for each type of meeting namely:-
  1. General meetings of the members;
  2. Meetings of creditors;
  3. Meetings of the board; and
  4. Meetings of each of the committees of the board
  • Minutes should begin with the number and type of the Meeting, name of the company, day, date, venue, time of commencement and conclusion.
  • Each item of business taken up at the Meeting should be appropriately numbered.
  • Minutes, once entered in the Minutes Book, should not be altered.
  • Minutes of all Meetings should be preserved permanently.
  • Section 148 (Central Government to specify audit of items of cost in respect of certain Companies) – Company need to correspond with cost auditor at the time of his appointment or ratification of his remuneration.  Usually the correspondence between the company and cost auditor is as under:

(a) At the time of appointment:

  • Letter by the company seeking consent, qualification and eligibility of the cost auditor;
  • Receipt of Consent to act as Auditor and Eligibility certificate from auditor;
  • Intimation to auditor after conclusion of board meeting about his appointment and remuneration

(b) At the time of ratification of remuneration by members:

  • Intimation to auditor after conclusion of meeting of members about ratification of his remuneration
  • ANNUAL COMPLIANCE NOT REQUIRED BY PRIVATE COMPANY
  • Section 121 (Report on AGM) – This section is not applicable on Private Companies and applicable only on Listed companies.
  • Section 204 (Secretarial Audit)- Private companies are not required to comply with the requirements of secretarial audit as Secretarial Audit is applicable on listed companies and public companies having paid up share capital of Rs.50 crore or more or turnover Rs. 250 crore or more.
  • Approval of Accounts by Board- Private Companies are not required to file Form MGT-14 in respect of Approval of accounts by board vide Notification dated 05 June, 2015.

SECTION 8 COMPANIES REGISTERD AS PRIVATE LIMITED COMPANY All the compliances are same in case of Section 8 Company except the followings:

  • Section 8 Companies should prepare Income and Expenditure Account instead of Profit and Loss Account as per clause (ii) of sub-section 40 of Section 2 of Companies Act, 2013
  • Section 8 company can call its Annual General Meeting by giving a fourteen days notice.

MASTER ALERTS-

While completing annual compliances, one should carefully go through the followings facts as each one of them may have serious repercussions in terms of penalties and lapses:

  • Subsidiary, Joint Venture and Associate Companies: While preparing Annual Filing Document Company should judiciously analyze its investment/ shareholding in other companies so as to determine the relationship as subsidiary, joint venture and associate companies.

Details of financial position of Subsidiary Company is required to be given in Form AOC-1 (Part-A)

Details of financial position of Joint Venture and Associate Companies is required to be given in Form AOC-1 (Part-B)

  • Holding Company: While preparing Annual documents care should be taken and details of Holding company is required to be mentioned wherever applicable.

Holding company is required to file consolidated financial statements in Form AOC-4 CFS

  • Related Party Transactions and their limits for next year: Disclosure regarding related party transaction undertaken during the year is required to be made in Form AOC-2.

For taking approval from shareholders for related party transaction to be undertaken in next year a resolution alongwith explanatory statement is required to be included in Notice of Annual General Meeting indicating name of related party, nature of relationship and amount of transaction.

  • Directors appointed during the year as Additional Directors: Directors who were appointed as additional directors during previous financial year deemed to have vacated their office at the Annual general Meeting held after their appointment, so their appointment need to be regularized by including the resolution of Regularization of Director in Notice of Annual General Meeting alongwith explanatory statement and approve the same by shareholders.

Form DIR-12 is required to be filed with registrar for Regularization of Additional Director.

Some Important definitions-

  • Associate- In relation to another company, means a company in which that other company has a significant influence, but which is not s subsidiary company of the company having such influence and includes a joint venture company
  • Subsidiary- Subsidiary company or subsidiary in relation to any other company (that is to say the holding company), means a company in which the holding company-
  1. Controls the composition of the Board of directors; or
  2. Exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies.

FORSEEABLE FUTURE: Government of India is taking steps for ‘Ease of Doing Business’.This is very easy to predict that annual compliances will also reduce in the span of next two / three years. Entrepreneurs having private limited companies shall neither hurry to convert their existing companies into LLP nor to close down the entity using Simplified Exit Scheme.

Invoicing under GST

GST defines a transaction as ‘Supply’ when there is a transfer, exchange, rental, lease, barter, disposal or license of goods or services. Whenever a transaction takes place, a tax invoice has to be issued depending on the occurrence of any such event or within a prescribed time limit. Hence, every taxpayer registered under the GST network shall be required to issue a tax invoice for the supply of goods or services.

Tax invoices have to be raised under certain circumstances. In the case of supply of goods, the invoices shall be raised within the prescribed time as enumerated below.

  • When there is actual movement of goods, then before or at the time of removal of such goods.
  • If there is no movement involved, then earlier of delivery or making available of such goods.
  • In case of successive issuance of goods, then earlier of each such issuance.
  • On the receipt of goods when on GST is applicable on a reverse charge basis
  • When goods are sold on an approval basis, then earlier of 6 months from the removal date or before or at the time of such removal.
  • Similarly, in the case of supply of services, the invoice has to be issued as follows, within the mentioned time.
    • Within 30 days from the actual supply
    • In case of continuous supply where due date can be ascertained, then 30 days from such due date
    • In case of continuous supply where due date cannot be ascertained, then 30 days from actual payment date
    • In case of cessation of supply before the contract ends, then at the time of such cessation.

    The due date of 30 days is 45 days in case of banks and other financial institutions.

    These invoices have to be issued in TRIPLICATE in the case of supply of goods, original for the recipient, duplicate for the transporter and triplicate copy for the supplier. Likewise, in case of supply of services, the invoices have to be issued in DUPLICATE, where the original will be meant for the recipient and the duplicate copy will be for the supplier.

    How to Create GST Invoice

    The Government of India has come out with a sample GST Invoice format. Slip Calvin Klein Outlet A sample format is shown below. It is better to issue invoices on the same lines as the example since your Input Tax Credit largely depends on the Invoice Number and its proper reporting. Calzoncillos Calvin Klein Hombre Tangas de Calvin Klein The serial number of the invoice forms the basis of mismatch or matching the invoices between the supplier and the receiver, giving a seamless, hassle-free credit flow.

  • There is certain crucial information that needs to be mentioned mandatorily in the GST invoice. Ropa Interior Calvin Klein Barata These are:
    • Name, address and the GSTIN of the supplier
    • The nature of invoice (tax invoice, supplementary invoice or revised invoice)
    • Invoice number (this shall be a consecutive alpha-numeric or numeric series, specific for a financial year)
    • Date of Invoice
    • Name, address and the GSTIN of the recipient
    • Where the value of the goods exceeds Rupees Fifty Thousand and the recipient is an unregistered person, then name and address of such recipient and the delivery address of the consignment.
    • Description of the goods or services
    • HSN code of the goods or the Accounting Code of the Services
    • Quantity of the goods or services
    • Total value of the goods or services
    • Rate of Tax on each item
    • Tax amount charged, on account of CGST, IGST, and SGST to be shown separately under different columns
    • Name of the supplying State and the place of supply
    • Place of delivery
    • A statement mentioning whether reverse charge is applicable or not
    • Trade Discounts not forming part of value of the goods, if any
    • Signature in physical form or Digital Signature of the supplier or an authorized person, duly certifying the invoice

    In addition to the above particulars, an export invoice shall include the following.

    • A mandatory statement mentioning these specific words – “SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY MEANT FOR EXPORT UNDER BOND WITHOUT PAYMENT OF IGST.”
    • Country of destination
    • Delivery address
    • The Number and date of application of form for removal, i.e. Form ARE-1
    • Likewise, when an Input Service Distributor issues the invoice, then “Amount of credit distributed” shall also be added to the invoice instead of the rate and value of the goods or services.

      If you are a Goods Transport Agency, you are a critical link in the supply chain and has to include the following in your invoice.

      • Name and address of the consignor and the consignee
      • Registered Vehicle number
      • Gross weight of the consignment
      • Place of Origin
      • Destination
      • GSTIN of the person liable to pay tax

      The transporter does not require to the Duplicate copy of the Invoice. Instead, they can opt for Invoice Reference Number, which can be generated by the supplier by uploading the tax invoice onto the GST Portal. The portal shall generate a number that is valid for 30 days from such date.

      Apart from the tax invoice, other important documents include Supplementary Invoice, Revised Invoice, Debit or Credit Notes, and Bill of Supply. Let us discuss each one in details.

      Bill of Supply

      When a registered supplier makes a supply of exempted goods or services, or the supplier is registered under the composition scheme, then he has to issue a Bill of Supply instead of a tax invoice.

    • Supplementary Invoice / Debit Note

      Whenever there is an upward revision in prices of a good or service supplied earlier and the same was chargeable to GST, then the supplier is liable to issue a supplementary invoice to the recipient. The said supplementary invoice should be raised within 30 days from the date of such price revision.

    • Credit Note

      Just like the debit note where there is an upward revision in price, credit note has to be issued when there is a downward revision of price. Culottes Calvin Klein Baratos GST should have been charged in the previous transaction. Bragas Calvin Klein Baratas The credit note has to be issued on or before 30th September of the next financial year or before filing the annual return of GST, whichever is earlier.

      The contents of these documents are the same as that of tax invoice. The only major difference is that the nature of the invoice must be mentioned in Bold specifically on top of the invoice. For e.g. Boxer Mujer Calvin Klein “SUPPLEMENTARY INVOICE,” “DEBIT NOTE” etc.

      All the above documents, including the tax invoice, has to be maintained for 6 years (currently prescribed by the GST council). Bikini Calvin Klein 2016 Thus, it requires a very strong IT system that records and maintains such a database for the prescribed time.

    • Cross – Referencing of Invoices

      Since the invoice forms a crucial part in claiming credit for the GST paid therein, it is obligatory to upload returns on time so that the credit flows to the end customer seamlessly.

Input Tax Credit

a) Input Tax Credit (ITC) is the backbone of the GST regime.

b) GST is nothing but a value added tax on goods & services combined.

c) It is these provisions of Input Tax Credit that make GST a value added tax i.e.,  collection of tax at all points after allowing credit for the inputs.

d) The procedures and restrictions laid down in these provisions are important to make sure that there is seamless flow of credit in the whole scheme of transition without any misuse.

e) Thus, the clarity of rules of availment and utilization will have significant impact on making GST a taxpayer-friendly tax.

f) One of the biggest advantages expected from the implementation of GST Act is that it would remove cascading effect by facilitating seamless flow of credit.

g) This would be given effect by providing for the availment of ITC to the purchasing dealer in respect of the GST paid by the supplying dealer and thus by removing the restrictions placed in the present Cenvat credit rules on availment of credit which lead to break in the credit chain and consequent cascading effect which
further leads to increase in cost of goods and services.

h) Thus linking of invoice to invoice would eliminate any ambit for revenue leakage.Chapter V of the model law deals with ITC mechanism provisions.

i) ITC has been defined as credit of IGST/CGST/SGST charged on any supply of goods and or services used or intended to be used in the course or furtherance of business and includes the tax payable under revserse charge .

j) Registered taxable person shall be eligible to avail ITC credited to the e-credit ledger subject to condition prescribed without restrictions of availment (such as 50% of capital goods).

Conditions for availing of ITC:

– Taxpaying documents such as tax invoice, debit note etc.,
– Goods / service should have been received/deemed to be received by the taxable person
– Tax charged on the invoice and should have been paid to the credit of government.
– Return should have been furnished by the tax payer.
– Credit for goods against an invoice received in lots / installments can be availed only on last lot in
installment.
– The timelines for entitlement of credit against a particular invoice shall lapse on the expiry of one
year from date of issue of invoice.

Ways / Manner for availing/payment of ITCby a registered person:
– Tax credit entitlement on stock held and contained in semi-finished and finished goods
o On the day immediately preceding the date of registration in case person obtaining voluntarily registration
o On the day immediately preceding the date from which the person becomes liable to pay tax,  in case person applied for registration within 30 days from the date of liability to pay tax or in case person ceases to pay composition tax and becomes liable to pay tax. under normal provision.

Proportionate credit in case of goods/services used partially for business use and partially for non-business
– Proportionate credit in case goods/services are used partly for effecting taxable supplies and
zero rated supplies and partly for effecting nontaxable supplies and exempt supplies

Transfer of unutilized credit allowed in case of change in constitution of person due to sale,merger,  amalgamation or transfer of business with provision for transfer of liabilities.
– Switch over from regular scheme to composite scheme by debiting cash ledger of amount equivalent to ITC on stock.

Taxable Event – Supply

The taxable event for levy of GST shall be ‘supply’ of goods and/ or services. Ropa Interior Calvin Klein Mujer The term ‘supply’ is defined inclusively to cover general supply and deemed supply.
General supply includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made for a consideration.
Deemed supply includes specified transactions made without consideration.Impact
Supply of services by CA, CS and CMA for a consideration shall be leviable to GST.
Nature of Supply – Inter-state vs. Intra-state supplies

Central GST (CGST) and State GST (SGST) will be leviable on intra-State supplies and Integrated GST (IGST) will be leviable on inter-State supplies. IGST will be summation of CGST and SGST.
Supply of goods and/or services shall be Inter-state if ‘location of supplier’ and ‘place of supply’ are in different States. Otherwise the supply will be Intra-state. ‘Location of supplier’ is generally the registered place of business. ‘Place of Supply’ of services generally is the location of service receiver.Impact
Accordingly, if service provider and service receiver are located within a state, the same will be Intra-state supply liable to CGST/SGST. Boxer Calvin Klein However, if service receiver is located in a different state, the transaction will be Inter-state supply liable to IGST.

Time of Supply and Valuation

The provisions relating to time of supply and valuation are more or less on the same lines as existing in the current service tax regime.

Impact

Accordingly, time of supply of services shall be date of invoice or date of receipt of payment, whichever is earlier. In case invoice is not issued within prescribed time, time of supply will shift to the date of completion of service.
The value of service shall be the price actually paid or payable for supply.
Place Where Tax to be Deposited

Taxable person is one who carries on business at any place in India and who is liable to be registered. Person is liable to be registered in the State from where supplies are made.
Impact

Tax is to be deposited in the State from where supply is made by the supplier. There are no clear provisions to determine the place from where supplied are made.

Registration

Every office of chartered in different state has to take separate registration. There is no concept of centralized registration as of now. Calzoncillos Calvin Klein Baratos Existing taxpayers will be granted registration on provisional basis valid for 6 months.
Input Tax Credit
Input Tax Credit (ITC) is available in respect of inputs, capital goods and input services. There is a negative list of items on which no ITC is available.
ITC is available only on provisional basis until the supplier makes the tax payment and files a valid return. There will be matching of supplier and receiver data and credit will be confirmed only after such matching. Where the data is not matched and where the supplier has not made the tax payment, the ITC shall be reversed with interest.
Interest is from the date of wrong availment or utilization.
Returns
Professionals like CA, CS and CMA are liable to file GSTR 1 (Statement of outward supplies), GSTR 2 (Statement of inward supplies), GSTR 3 (Statement of final tax and GSTR 8 (Annual return). Further, they may also be required to file GSTR 7 (Statement of TDS).
Payment of Taxes
Prioritization rule has been inserted for payment of taxes whereby taxes for the current period cannot be paid until the taxes/interest/late-fee/penalty in relation to returns of previous tax periods have not been deposited.

Transitional Provisions

Amount of CENVAT credit carried forward in a service tax return will be allowed as ITC under GST.

Highlights of the UNION Budget 2016

The thrust of tax proposals this year falls in nine categories:-

Relief to small tax payers.

Measures to boost growth and employment generation.

Incentivizing domestic value addition to help Make in India.

Measures for moving towards a pensioned society.

Measures for promoting affordable housing.

Additional resource mobilization for agriculture, rural economy and clean environment.

Reducing litigation and providing certainty in taxation.

Simplification and rationalization of taxation.

Use of Technology for creating accountability.

Relief to small tax payers.

Section87A

  • In order to lessen tax burden on individuals with income not exceeding `5 lakhs, it has been proposed to raise the ceiling of tax rebate under section87A from `2,000 to `5,000. There are 2 crore tax payers in this category who will get a relief of `3,000 in their tax liability.

Section 80GG

  • The people who do not have any house of their own and also do not get any house rent allowance from any employer today get a deduction of `24,000 per annum from their income to compensate them for the rent they pay. It has been proposed to increase the limit of deduction in respect of rent paid under section 80GG from `24,000 per annum to `60,000 per annum, which should provide relief to those who live in rented houses.

Section 44AD

  • Presumptive taxation scheme under section 44AD of the Income Tax Act is available for small and medium enterprises i.e non corporate businesses with turnover or gross receipts not exceeding one crore rupees. At present about 33 lakh small business people avail of this benefit, which frees them from the burden of maintaining detailed books of account and getting audit done.  It has been proposed to increase the turnover limit under this scheme to Rupees two crores which will bring big relief to a large number of assesses in the MSME category.

Section 44AD

  • It has also been propsed to extend the presumptive taxation scheme to professionals with gross receipts up to `50 lakh with the presumption of profit being 50% of the gross receipts.

Measures to boost growth and employment generation

The highlights on phasing out exemptions are as follows:-

The accelerated depreciation provided under IT Act will be limited to maximum 40% from 1.4.2017.

The benefit of deductions for Research would be limited to 150% from 1.4.2017 and 100% from 1.4.2020.

The benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.3.2020.

The weighted deduction under section 35CCD for skill development will continue up to 1.4.2020.

 

2.  The reduction in corporate tax rate has to be calibrated with
additional revenue expected from the incentives being phased out. The

 

benefits from phasing out of exemptions are available to Government only gradually. In the first phase, therefore, It has been proposed the following two changes in corporate income-tax rates:-

 

  • The new manufacturing companies which are incorporated on or after 1.3.2016 are proposed to be given an option to be taxed at 25% + surcharge and cess provided they do not claim profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation.

 

  • It has also been propses to lower the corporate income tax rate for the next financial year of relatively small enterprises i.e companies with turnover not exceeding 5 crore (in the financial year ending March 2015), to 29% plus surcharge and cess.

Startups generate employment, bring innovation and are expected to be key partners in Make in India programme. It has been proposed to assist their propagation through 100% deduction of profits for 3 out of 5 years for startups set up during April 2016 to March 2019. MAT will apply in such cases. Capital gains will not be taxed if invested in regulated/notified Fund of Funds and by individuals in notified startups, in which they hold majority shares.

  1. Research is the driver of innovation and innovation provides a thrust to economic growth. It has been proposed a special patent regime with 10% rate of tax on income from worldwide exploitation of patents developed and registered in India.
  1. In order to get more investment in Asset Reconstruction Companies (ARCs) which play a very important role in resolution of bad debts, It has been proposed to provide complete pass through of income-tax to securitization trusts including trusts of ARCs. The income will be taxed in the hands of the investors instead of the trust. However, the trust will be liable to deduct tax at source.
  1. The period for getting benefit of long term capital gain regime in case of unlisted companies is proposed to be reduced from three to two years.
  1. Non-banking financial companies shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.
  1. The determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.
  1. It has been to reiterated with commitment to implement General Anti Avoidance Rules (GAAR) from 1.4.2017.
  1. n order to meet with our commitment to BEPS initiative of OECD and G-20, the Finance Bill, 2016 includes provision for requirement of country by country reporting for companies with a consolidated revenue of more than Euro 750 million.
  1. It has been proposed to exempt service tax on services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana and services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.

It has been proposed to exempt service tax on general insurance services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.

  1. To promote use of refrigerated containers, It has been proposed to reduce the basic custom and excise duty on them to 5% and 6% respectively.
  1. A number of assistive devices, rehabilitation aids and other goods for differently abled (Divyang) persons attract Nil basic customs duty. It has been proposed to extend this exemption to Braille paper.

Incentivising domestic value addition to help Make in India.

Customs and excise duty structure plays an important role in incentivizing domestic value addition towards Make in India campaign of our Government. In line with that, It has been proposed to make suitable changes in customs and excise duty rates on certain inputs, raw materials, intermediaries and components

and certain other goods and simplify procedures, so as to reduce costs and improve competitiveness of domestic industry in sectors like Information technology hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, Maintenance repair and overhauling [MRO] of aircrafts and ship repair etc.

Measures for moving towards a pensioned society

Pension schemes offer financial protection to senior citizens.  It has been proposed to make withdrawal up to 40% of the corpus at the time of retirement tax exempt in the case of National Pension Scheme.

  1. In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made after 1.4.2016.
  1. Further, the annuity fund which goes to the legal heir after the death of pensioner will not be taxable in all three cases.  Also, It has been proposed a monetary limit for contribution of employer in recognized Provident and Superannuation Fund of 1.5 lakh per annum for taking tax benefit.

It has been proposed to exempt from service tax the Annuity services provided by the National Pension System (NPS) and Services provided by EPFO to employees.

It has also been proposed to reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.

Measures for promoting affordable housing

Pradhan Mantri Awas Yojna embodies the assurance of the Government to address the housing needs of all and more specifically the poor, in a time bound manner. Construction of houses creates considerable employment opportunities as well. In order to fuel activity in the housing sector, It has been proposed to give 100% deduction for profits to an undertaking from a housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019, and is completed within three years of the approval. Minimum Alternate Tax will, however, apply to these undertakings.

  1. For the ‘first – home buyers’, It has been proposed to give deduction for additional interest of 50,000 per annum for loans up to 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed 50 lakh.
  1. Another proposal to stimulate housing activity is to facilitate investments in Real Estate Investment Trusts. Ii has been proposed that any distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax.
  1. It is proposed to exempt service tax on construction of affordable houses up to 60 square metres under any scheme of the Central or State Government  including PPP Schemes.
  1. It has also been proposed to extend excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work at such site to Ready Mix Concrete.

Additional resource mobilization for agriculture, rural economy and clean environment

Dividend Distribution Tax (DDT) uniformly applies to all investors irrespective of their income slabs. This is perceived to distort the fairness and progressive nature of taxes. Persons with relatively higher income can bear a higher tax cost. It,is therefore, proposed that in addition to DDT paid by the companies, tax at the rate of 10% of gross amount of dividend will be payable by the recipients, that is, individuals, HUFs and firms receiving dividend in excess of 10 lakh per annum.

It has also been proposed to raise the surcharge from 12% to 15% on persons, other than companies, firms and cooperative societies having income above 1 crore.

  1. It has also been proposed to collect tax at source at the rate of 1% on purchase of luxury cars exceeding value of Rs.ten lakh and purchase of goods and services in cash exceeding Rs.two lakh. For compliant tax payers with resources, this levy not only advances collection of tax when the expenditure is incurred, but it provides data to the tax authorities to identify the persons who incur such expenditure, but may be missing from the tax base. Farmers and notified class of persons will have an option of giving a form by which TCS will not be charged.
  1. Rate of Securities Transaction tax in case of ‘Options’ is proposed to be increased from .017% to .05%.
  1. In order to tap tax on income accruing to foreign e-commerce companies from India, it is proposed that a person making payment to a non-resident, who does not have a permanent establishment, exceeding in aggregate 1 lakh in a year, as consideration for online advertisement, will withhold tax at 6% of gross amount paid, as Equalization levy. The levy will only apply to B2B transactions.
  1. It has also been proposed to impose a Cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services, proceeds of which would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with effect from 1st June 2016. Input Tax credit of this cess will be available for payment of this cess.
  1. The pollution and traffic situation in Indian cities is a matter of concern. I propose to levy an infrastructure cess, of 1% on small petrol, LPG, CNG cars, 2.5% on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs.
  1. It has also been proposed to impose an excise duty of ‘1% without input tax credit or 12.5% with input tax credit’ on articles of jewellery [excluding silver jewellery, other than studded with diamonds and some other preciousstones], with a higher exemption and eligibility limits of 6 crores and 12 crores respectively. Necessary steps will also be taken to enable the new taxpayers to comply with this levy without any difficulty.

 

  1. It has been proposed to change the excise duty on branded readymade garments and made up articles of textiles with a retail sale price of 1,000 and above from ‘Nil without input tax credit or 6%/12.5% with input tax credit’ to ‘2% without input tax credit or 12.5% with input tax credit’.

It has been proposed to rename the ‘Clean Energy Cess’ levied on coal, lignite and peat as ‘Clean Environment Cess’ and simultaneously increase its rate from 200 per tonne to 400 per tonne.

  1. To discourage consumption of tobacco and tobacco products, It has been proposed to increase the excise duties on various tobacco products other than beedi by about 10 to 15%.
  1. It has been proposed to amend the Finance Act, 1994 so as to declare assignment by the Government of the right to use the radio-frequency spectrum and its subsequent transfers a service, to make it clear that assignment of right to use the spectrum is a service leviable to service tax and not sale of intangible goods.

Reducing litigation and providing certainty in taxation

Moving towards a lower tax regime with non-litigious approach. Thus, while compliant taxpayers can expect a supportive interface with the department, tax evasion will be countered strongly. Capability of the tax department to detect tax evasion has improved because of enhanced access to information and availability of technology driven analytical tools to process such information. I want to give an opportunity to the earlier non-compliant to move to the category of compliant.

It has been proposed a limited period Compliance Window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income. There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions. The surcharge levied at 7.5% of undisclosed income will be called Krishi Kalyan surcharge to be used for agriculture and rural economy. We plan to open the window under this Income Disclosure Scheme from 1st June to 30th September, 2016 with an option to pay amount due within two months of declaration.

Litigation is a scourge for a tax friendly regime and creates an environment of distrust in addition to increasing the compliance cost of the

tax payers and administrative cost for the Government. There are about 3 lakh tax cases pending with the 1st Appellate Authority with disputed amount being 5.5 lakh crores. In order to reduce this number, It has been proposed a new Dispute Resolution Scheme (DRS).

 

  1. A taxpayer who has an appeal pending as of today before the

Commissioner (Appeals) can settle his case by paying the disputed tax and interest up to the date of assessment. No penalty in respect of Income-tax cases with disputed tax up to 10 lakh will be levied. Cases with disputed tax exceeding 10 lakh will be subjected to only 25% of the minimum of the imposable penalty for both direct and indirect taxes. Any pending appeal against a penalty order can also be settled by paying 25% of the minimum of the imposable penalty. Certain categories of persons including those who are charged with criminal offences under specific Acts are proposed to be barred from availing this scheme.

In order to give an opportunity to the past cases which are ongoing under the retrospective amendment, It has been proposed a one-time scheme of Dispute Resolution for them, in which, subject to their agreeing to withdraw any pending case lying in any Court or Tribunal or any proceeding for arbitration, mediation etc. under BIPA, they can settle the case by paying only the tax arrears in which case liability of the interest and penalty shall be waived.

Levy of heavy penalty for concealment of income has over the years resulted in large number of disputes despite a number of decisions of the Apex court on interpretation of statutory provisions and principles guiding imposition of penalty. At present the Income-tax Officer has discretion to levy penalty at the rate of 100% to 300% of tax sought to be evaded. It has been proposed to modify the entire scheme of penalty by providing different categories of misdemeanor with graded penalty and thereby substantially reducing the discretionary power of the tax officers. The penalty rates will now be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts. Remission of penalty is also proposed in certain circumstances where taxes are paid and appeal is not filed.

Another issue which has led to considerable number of disputes is quantification of disallowance of expenditure relatable to exempt income in terms of Section 14A of the Income Tax Act. It has been proposed to rationalize the formula in Rule 8D governing such quantification. The said Rule is being amended to provide that disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed.

As another tax payer friendly measure, It has been proposed to provide a time limit of one year for disposing petitions of the tax payers seeking waiver of interest and penalty.

The Income-tax Department is also issuing instruction making it mandatory for the assessing officer to grant stay of demand once the assesse pays 15% of the disputed demand, while the appeal is pending before Commissioner of Income-tax (Appeals). In case of deviation, assessing officer has to get orders of his superiors. The tax payer also has an option to go to superior officer in case he does not agree with conditions of stay order passed by the subordinate officer.

In order to remove backlog of cases it has been proposed to creat 11 new benches of Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The monetary limit for deciding an appeal by a single member Bench of ITAT is proposed to be enhanced from 15 lakhs to 50 lakhs.

It has also been proposed to amend the CENVAT Credit Rules, 2004, so as to improve credit flow, reduce the compliance burden and associated litigation, particularly those relating to apportionment of credit between exempted and non exempted final products/services. The amendments in these rules will also enable manufacturers with multiple manufacturing units to maintain a common warehouse for inputs and distribute inputs with credits to the individual manufacturing units.

Simplification and rationalization of taxation

The Government has already accepted many recommendations of Tax Administration Reform Committee and It has been proposed to accept a number of recommendations of Justice Easwar Committee in this Budget.

To reduce multiplicity of taxes, associated cascading and to reduce cost of collection, It is proposed to abolish 13 cesses, levied by various Ministries in which revenue collection is less than 50 crore in a year.

To improve the cash flow position of small tax payers who get their funds blocked due to current TDS provision, It has been proposed to rationalize TDS provisions for Income Tax as Given hereunder.

Measures for TDS / TCS Rationalisation

Present Heads Existing Proposed
Section Threshold Threshold
Limit (`) Limit (`)
192A Paymentof accumulated 30,000 50,000
balance due to an employee
in EPF
194BB Winnings from Horse 5,000 10,000
Race
194C Payments to Contractors Aggregate Aggregate
annual limit annual limit
of 75,000 of 1,00,000
194LA Payment of Compensation on 2,00,000 2,50,000
acquisition of certain
Immovable Property
194D Insurance commission 20,000 15,000
194G Commission on sale of lottery 1,000 15,000
tickets
194H Commission or brokerage 5,000 15,000
Present Heads Existing Proposed
Section Rate of Rate of
TDS (%) TDS (%)
194DA Payment in respect of Life 2% 1%
Insurance
Policy
194EE Payments in respect of NSS 20% 10%
Deposits
194D Insurance commission 10% 5%
194G Commission on sale of lottery 10% 5%
tickets
194H Commission or brokerage 10% 5%
194K Income in respect of Units To be
omitted w.e.f
01.06.2016
194L Payment of Compensation on To be
acquisition of Capital Asset omitted w.e.f
01.06.2016

 

 

  1. Non-residents without PAN are currently subjected to a higher rate of TDS. It is proposed to amend the relevant provision to provide that on furnishing of alternative documents, the higher rate will not apply.

 

  1. The facility for revision of return, hitherto available to a service tax assessee only, is being extended to Central Excise assessees also.

 

  1. It has been proposed to provide additional options to banking companies and financial institutions, including non-banking financial companies, for reversal of input tax credits with respect to non-taxable services provided by them by way of extending deposits, loans and advances.

 

  1. It has been proposed to amend the Customs Act to provide for deferred payment of customs duties for importers and exporters with proven track record.

The customs Baggage Rules for international passengers are being simplified so as to increase the free baggage allowance. The filing of baggage declaration will be required only for those passengers who carry dutiable goods.

Use of Technology for creating accountability

Technology is a boon for mankind.  We plan to use technology in taxation Department in a big way to make life simpler for a law abiding citizen, and also for data mining to track tax evaders.

A pilot was run in 2015-16 for e-assessment to obviate the requirement for tax payers to visit the Income-tax offices. It has been proposed to expand the scope of e-assessments to all assesses in 7 mega cities in the coming years.