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Friday, March 22, 2019

New GST actual estate rate to be applicable from April, supply 80% materials from registered dealer


The GST Council  approved a transition plan for the implementation of new tax structure for the real property sector with applicable guidelines for housing gadgets being applicable from April 1, 2019.

The Council additionally determined that under creation projects can have an option to shift to new price. The GST Council in its 33rd meeting on February 24, 2019 had provide you with new fees for housing devices. GST can be levied at effective fee of 5% with out ITC on residential residences outside low priced segment, while GST shall be levied at powerful GST of 1% with out ITC on low cost housing houses.

A residential residence/flat of carpet region of as much as 90 sq. in non-metropolitan cities/cities and 60 sq. in metropolitan cities having price up to Rs. forty five lakh (both for metropolitan and non-metropolitan towns) has been labeled as inexpensive housing. Metropolitan towns are Bengaluru, Chennai, Delhi NCR (restrained to Delhi, Noida, more Noida, Ghaziabad, Gurgaon, Faridabad), Hyderabad, Kolkata and Mumbai (whole of MMR).

The Council in it meeting these days also held that 80% procurement of materials should be from registered provider. It additionally introduced that up to 15% of industrial space to be dealt with as residential belongings for GST motive. however, the exact contour of this point mooted via the Council isn't very clean.

With a number of the key inputs for production along with bricks, stone, hardware and so on. coming from sectors that are in large part unorganised, assembly the circumstance of 80% procurement from registered sellers for concessional GST charge could be hard, particularly in Tier-2 and smaller towns” stated Harpreet Singh, partner, oblique Tax, KPMG India.

Time will inform whether or not the reduced GST prices for beneath-production residences will provide the necessary fillip to the actual property sector which is presently witnessing adversities. “the concern concerning the reduced rate of five% and 1% is that it's far offered with out the capability for developers to take enter tax credit, that could without a doubt cause an escalation of charges. The GST council assembly these days mentioned modalities on transition and made the brand new fee mandatory for brand new production 1 April 2019 onwards,”

The Council additionally determined that reversal of enter tax credit score to be executed on propotionate basis and the time restrict for transition to new rates could be discussed with the states.

“The pragmatic move to segregate under construction tasks from new projects might provide alleviation to builders who were worried about the loss of input tax credit. this will also allow them to charge the lack of enter tax credits within the new projects. Reversal of enter tax credit score on a proportionate foundation would  entail massive computational troubles for developers as each project might be in diverse stages of construction and have differing pre and publish of entirety sale styles. shielding current enter tax credit and mandating the new charges best in appreciate of latest tasks could advantage each developers and consumers. The specific announcement on invocation of anti-profiteering provisions if the benefits of lower rates are not handed to clients seems to indicate that the government is eager to guard purchasers from a GST-led price growth”.

Wednesday, March 20, 2019

GST Council approves transition plan for brand spanking new tax prices for real estate


The all-effective GST Council approved a transition plan for the implementation of recent tax shape for housing units.

An inexpensive time for transition may be given to developers in session with states.

The meeting deliberated at the transition provision and associated troubles for the implementation of decrease GST quotes for the actual estate quarter.

The Council had in its last assembly on February 24, slashed tax quotes for underneath-construction residences in the low-cost class to 1 per cent. GST price on other categories changed into decreased to 5 in line with cent, powerful April 1.

GST charges for brand new projects might be obligatory from April 1.

Monday, March 18, 2019

GST Composition Scheme

Composition Scheme is a simple and easy scheme under GST for taxpayers. Small taxpayers can get rid of tedious GST formalities and pay GST at a fixed rate of turnover. This scheme can be opted by any taxpayer whose turnover is less than Rs. 1.0 crore.
CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.

1. Who can opt for Composition Scheme
A taxpayer whose turnover is below Rs 1.0 crore* can opt for Composition Scheme. In case of North-Eastern states and Himachal Pradesh, the limit is now Rs 75* lakh.
As per the CGST (Amendment) Act, 2018, a composition dealer can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019. Further, GST Council in its 32nd meeting proposed an increase to this limit for service providers on 10th Jan 2019*.
Turnover of all businesses registered with the same PAN should be taken into consideration to calculate turnover.
CBIC has notified the increase to the threshold limit from Rs 1.0 Crore to Rs. 1.5 Crores.

3. What are the conditions for availing Composition Scheme?
The following conditions must be satisfied in order to opt for composition scheme:
  1. No Input Tax Credit can be claimed by a dealer opting for composition scheme
  2. The dealer cannot supply GST exempted goods
  3. The taxpayer has to pay tax at normal rates for transactions under the Reverse Charge Mechanism
  4. If a taxable person has different segments of businesses (such as textile, electronic accessories, groceries, etc.) under the same PAN, they must register all such businesses under the scheme collectively or opt out of the scheme.
  5. The taxpayer has to mention the words ‘composition taxable person’ on every notice or signboard displayed prominently at their place of business.
  6. The taxpayer has to mention the words ‘composition taxable person’ on every bill of supply issued by him.
  7. As per the CGST (Amendment) Act, 2018, a manufacturer or trader can also supply services to an extent of ten percent of turnover, or Rs.5 lakhs, whichever is higher. This amendment will be applicable from the 1st of Feb, 2019. Earlier the limit was up to Rs 5 lakhs.
4. How can a taxpayer opt for composition scheme?
To opt for composition scheme a taxpayer has to file GST CMP-02 with the government. This can be done online by logging into the GST Portal.
This intimation should be given at the beginning of every Financial Year by a dealer wanting to opt for Composition Scheme.

5. How Should a Composition Dealer raise bill?
A composition dealer cannot issue a tax invoice. This is because a composition dealer cannot charge tax from their customers. They need to pay tax out of their own pocket.
Hence, the dealer has to issue a Bill of Supply.
The dealer should also mention “composition taxable person, not eligible to collect tax on supplies”  at the top of the Bill of Supply.

6. How should GST payment be made by a composition dealer?
GST Payment has to be made out of pocket for the supplies made.
The GST payment to be made by a composition dealer comprises of the following:
GST on supplies made.
Tax on reverse charge
Tax on purchase from an unregistered dealer
Only on the specified categories of goods and services and well as the notified class of registered persons with effect from 1st Feb 2019 but is yet to be notified. Hence, not applicable until then.

7. What are the returns to be filed by a composition dealer?
A dealer is required to file a quarterly return GSTR-4 by 18th of the month after the end of the quarter. Also, an annual return GSTR-9A has to be filed by 31st December of next financial year.

8. What are the advantages of Composition Scheme?
The following are the advantages of registering under composition scheme:
Lesser compliance (returns, maintaining books of record, issuance of invoices)
Limited tax liability
High liquidity as taxes are at a lower rate

9. What are the disadvantages of Composition Scheme?
Let us now see the disadvantages of registering under GST composition scheme:
A limited territory of business. The dealer is barred from carrying out inter-state transactions
No Input Tax Credit available to composition dealers
The taxpayer will not be eligible to supply exempt goods or  goods through an e-commerce portal.

Thursday, March 14, 2019

Biz can evaluate tax liability declared in final, summary GST returns forms


The GSTN, which handles the generation backbone for the brand new indirect tax, has provided a facility to the taxpayers to view and download a record on tax legal responsibility as declared in their form GSTR- 1 (final sales return) and as declared and paid in their return filed in form GSTR-3B (summary sales return).

Even as GSTR-1 for a month is filed via the eleventh day of the succeeding month, GSTR-3B is filed and taxes paid by means of the 20 th day of the succeeding month.

GSTN, in a assertion stated, on the grounds that GSTR-1 and GSTR-3B are filed unbiased of every different, a need became felt to provide facility to view liability declared in both the forms at one location.

The new facility permits the taxpayers to view those two liabilities in one table for each go back duration at one region, which may be compared. this could allow taxpayers to make top of any variations between the 2 forms filed via them on GST portal, GSTN said.

In addition, the GSTN has additionally supplied taxpayers data regarding information of input tax credit (ITC) as claimed of their form GSTR 3B and as collected in form GST network Tuesday said corporations registered underneath GST can now examine the tax legal responsibility declared in addition to input tax credit score claimed of their very last and summary income returns bureaucracy.

This capability has been supplied in Returns dashboard on the GST Portal to taxpayers below the 
headings "evaluation of legal responsibility declared and ITC claimed".

"This facility will help taxpayers in reconciling their legal responsibility and ITC info speedy. they can view the monthly assessment in addition to cumulative comparison as much as the month, at the GST Portal in the tables furnished. this will help them in taking corrective steps," GSTN CEO Prakash Kumar said

Monday, March 11, 2019

Accounting and Taxation : Understanding how section 80C of the Income Tax Ac...

Accounting and Taxation : Understanding how section 80C of the Income Tax Ac...: Eligible bills include life insurance top rate, most important repayment of the home mortgage and children's lessons. Understand al...

Understanding how section 80C of the Income Tax Act works


Eligible bills include life insurance top rate, most important repayment of the home mortgage and children's lessons.
Understand all approximately: section 80C
There are numerous tax saving avenues however the maximum popular is the tax benefit Section 80C of the Income Tax Act below which an amount equal to the investment that you make in certain specified instruments or an expense that you incur up to a maximum of Rs 1.5 lakh in a financial year reduces your gross total income by the same amount.

1. An individual or an HUF can reduce as much as Rs 1,50,000 from their overall taxable earnings through section 80C for the financial year 2018-19.

2. Eligible investments consist of contributions to EPF, VPF, PPF, ELSS mutual budget, Sukanya Samriddhi Account, tax saving FDs and post workplace, NPS, NSC, SCSS, NABARD bonds, and a few different options.

3. Every of the eligible investment has its personal investment restrict, price of return, liquidity and tax remedy on its returns.

4. Eligible payments include life insurance premium, principal repayment of home loan and children's tuition.

5. In order to claim the deduction for this particular financial year, one needs to invest or spend the deductible amount in this financial year itself.

Saturday, March 9, 2019

All about Reverse Charge under GST


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 Un registered 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 under reverse charge has to do self-invoicing for the purchases made.

For Inter-state purchases the buyer has to pay IGST. For Intra-state purchased CGST and SGST has to be paid under RCM by the purchaser.

B. Services through an e-commerce operator
If an e-commerce operator supplies services then reverse charge will be applicable to the e-commerce operator. He will be liable to pay GST.

For example, Urban Clap provides services of plumbers, electricians, teachers, beauticians etc. Urban Clap is liable to pay GST and collect it from the customers instead of the registered service providers.
If the e-commerce operator does not have a physical presence in the taxable territory, then a person representing such electronic commerce operator for any purpose will be liable to pay tax. If there is no representative, the operator will appoint a representative who will be held liable to pay GST.

C. Supply of certain goods and services specified by CBEC
CBEC has issued a list of goods and a list of services on which reverse charge is applicable.

3. Time of Supply under Reverse Charge
A. Time Of Supply in case of Goods
In case of reverse charge, the time of supply shall be the earliest of the following dates:
  • the date of receipt of goods
  • the date of payment*
  • the date immediately after 30 days from the date of issue of an invoice by the supplier
If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.
This point is no more applicable based this Notification No. 66/2017 – Central Tax issued on 15.11.2017
Illustration:
  1. Date of receipt of goods 15th May 2018
  2. Date of invoice 1st June 2018
  3. Date of entry in books of receiver 18th May 2018
The Time of supply of service, in this case, will be 15th May 2018

B. Time Of Supply in case of Services
In case of reverse charge, the time of supply shall be the earliest of the following dates:
  1. The date of payment
  2. The date immediately after 60 days from the date of issue of invoice by the supplier
If it is not possible to determine the time of supply, the time of supply shall be the date of entry in the books of account of the recipient.
Illustration:
  1. Date of payment 15th July 2018
  2. Date of invoice 15st May 2018
  3. Date of entry in books of receiver 18th July 2018
The Time of supply of service, in this case, will be 15th May 2018

4. What is Self Invoicing?
Self-invoicing is to be done when you have purchased from an unregistered supplier AND such purchase of goods or services falls under reverse charge.

This is due to the fact that your supplier cannot issue a GST-compliant invoice to you, and thus you become liable to pay taxes on their behalf. Hence, self-invoicing, in this case, becomes necessary.
To create such an invoices on ClearTax GST software, follow the below steps:

Step 1 – Click on ‘+ New Purchase Invoice’ to create a new invoice
Step 2 – As you can see, you need to fill data in multiple fields. Let’s understand each field in detail:
1. Enter the serial number of the bill into the field marked ‘Invoice Serial Number’. Since your supplier has not issued an invoice and you are creating an invoice on their behalf, you need to add a serial number on your own. You can create and maintain a serial number series for reverse charge bills, for easier invoicing
2. Enter the ‘Invoice Date’. This date must be based on time of supply
3. Enter any detail such as the order number etc., into the field marked ‘Reference Number’
4. Under ‘Due Date’, you have to mention the date by when you have to make the payment to the supplier for the purchase you made (mentioning this date is not mandatory)
5. Under ‘Vendor Name’, enter the supplier’s name. Remember this name cannot be your own name, even if you are doing self-invoicing under reverse charge
6. In case the vendor’s name is not set already, you can add a new vendor
7. Enter details of goods/ services purchased
8. From the drop-down under ‘Advance Settings’, select ‘Reverse Charge’
9. Now, fill in all the details displayed on your screen.
Step 3 – After filling all the other details, click on Save.