GST India

Government ignored several warnings from private companies that the complex technology required for a nationwide goods and services tax ( GST ) to work smoothly was not ready for launch, several people who worked on the project said. Weeks before the July 1 start of India's biggest tax overhaul in decades, the government declared itself ready and chided industry experts who said more time was needed to prepare for the changes. "It's not a complicated process," Finance Minister  Arun Jaitley  had said on June 20. However, more than 10 tax and IT consultants who worked on the project said that behind the scenes the government was ignoring warnings for more testing of the complex system even as it was pushing through late changes. While the sources said  Infosys , which built the GST technological network, made "basic errors", they said government officials have not accepted any responsibility for the glitches in the GST roll out. The government is still makin...

Reverse charge is a mechanism where the recipient of the goods and/or services is liable to pay GST instead of the supplier. In this article, we discuss the following topics: 1. What is Reverse Charge? 2. When is Reverse Charge Applicable? 3. Time of Supply under Reverse Charge 4. What is Self-Invoicing? 5. Frequently Asked Questions(FAQ) 1. What is Reverse Charge? Normally, the supplier of goods or services pays the tax on supply. In the case of Reverse Charge, the receiver becomes liable to pay the tax, i.e., the chargeability gets reversed. 2. When is Reverse Charge Applicable? A. Supply from an Unregistered dealer to a Registered dealer If a vendor who is not registered under GST, supplies goods to a person who is  registered under GST , then Reverse Charge would apply. This means that the GST will have to be paid directly by the receiver to the Government instead of the supplier. The registered dealer who has to pay GST unde...

The GST has made a revolutionary in the indirect tax system of the country and the second chapter of it was added on 15th November. GST council revised the GST rates on 15th November as well which expects that the companies will reduce the prices on some of the commodities so that the consumers get benefitted out of it. To give a relief to the consumers and businesses, the tax rates on 200 items such as shampoo, detergent, chocolates, beauty products etc were reduced. According to the companies, they are very soon going to pass the benefits to the consumers as the tax rates on some of the products were decreased from 28% to 18%.  The main sector which is getting benefitted out of the reduction of GST rate is the FMCG sector. So, the companies decided that after decreasing the prices of the commodities, they will let the consumers aware of the decrease in prices by their ads. They have a close eye on the distributors and channel partners to check whether the customers are really ...

All powerful  GST Council  will consider bringing electricity, petroleum products and some other items under the ambit of  GST  in future, Bihar Finance Minister  Sushil Modi said on Thursday. "Electricity, real estate, stamp duty and petroleum products should become part of GST (Goods and Services Tax). This would be our (GST Council) endeavour," he said at the annual meet of industry chamber Ficci. He, however, said it would be difficult to specify any timeline for this to happen. Inclusion of these can happen without amending the Constitution, he said. If petroleum products are brought under the GST regime, he said, it will attract the highest tax slab prevalent at that time and states would be at liberty to levy cess on it in order to protect their revenues. Both states and the Centre earn 40 per cent of their revenue from petroleum products at present. Modi also hinted at the reduction of tax slabs going forward after tax collection stabilises. The current...

The shortfall in the revenue estimated for all states for first four months of the Goods and Services Tax is about Rs 39,111 crore, West Bengal Finance Minister Amit Mitra said today. For all states, revenue of Rs 43,013 crore a month is protected, according to Mitra. For four months, it should have been Rs 1.72 lakh crore and “we got Rs 1.33 lakh crore”, Mitra said during a panel discussion at FICCI’s 90th annual general meeting. The protected revenue from all sources under the GST is estimated assuming a 14 percent growth. Any shortfall has to made up from the compensation fund. States collected Rs 87,238 crore through State GST for July to October, according to a government press release. For inter-state trade, Rs 31,821 crore was released to states. An additional Rs 13,882 crore was released for settlement, the release said. Going by the numbers for the first four months, Mitra said he was worried that the amount due from the central government to the state could rise ...

The government raises revenue from two different types of taxation. One of these sources is the direct tax which is imposed on the wealth or earnings of the citizens. Some examples of direct taxes include the income tax and national insurance. It is not related with the amount that has been spent by the person who is being taxed. On the other hand, indirect taxes are the taxes that are imposed on the transactions taking place between two people. The examples of indirect taxes include Goods and service tax (GST) and the custom charges that are imposed on imported goods. There is a debate going on if the direct taxes should be abolished. Various arguments have been given again and in favor of the abortion of direct taxes. Arguments in favor of the abortion of direct taxes: 1. There are many people who believe that direct taxes are an intrusion in the lives of the citizens by an overbearing state. Therefore the image of direct taxes is that of a crude appropriation of a sizable port...

India's most ambitious indirect-tax reform is came in to effect from 1 July 2017. The major objective of the Goods and Service Tax will be to eliminate cascading effect of indirect taxes.  GST could be the biggest tax reform in India replacing existing Indirect taxes such as Excise, Value Added Tax (VAT), Service tax, etc., into one taxation system GST.  Most of companies in India adopted ERP system in one or the other form for day-to-day activities. The biggest challenge to adopt new taxation system in the form of GST in the existing ERP system. Companies took many years to develop their business and adopt ERP system to the current state. The statutory needs of GST has to be done within this short period. GST could have a major impact on ERP systems, which has been listed below:  1. Supply  Supply, includes all forms of supply of goods and/or services such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed ...