Hightlights of Union Budget 2018

Hightlights of Union Budget 2018

  1. Huge benefit to SMEs as Income tax rate reduced to 25% for corporates having annual turnover up to Rs. 250 Crores.
  2. Exemption for Interest received on deposits raised to Rs. 50000 for senior Citizens
  3. Mobile phones getting expensive as government increased 20% custom duties on them.
  4. Cess has been raised to 4% (previously 3%)
  5. There will be no change in slab rates for the individual tax payers in this budget.
  6. Standard deduction of Rs. 40000 to salaried people against conveyance and medical reimbursements
  7. Cryptocurrencies under threat as government will take all steps to eliminate which are being used for illegal fundings.
  8. Government to launch health scheme by giving health benefits of Rs. 500000 every year to 10 crore families.
  9. 10% Tax on Long term capital gains exceeding Rs. 1 lakh without indexation.
  10. Now under Ujjwala scheme 8 crore rural women shall get benefits of free LPG connections.

Download Finance Bill 2018

 

No Integrated tax on Exports (Letter of Undertaking LUT)

No Integrated tax on Exports (Letter of Undertaking LUT)

Notification No. 37/2017- Central Tax

 

In exercise of power conferred by section 54 of the Central Goods and Services Tax Act 2017 and section 20 of Integrated Goods and Services Tax Act 2017, The Central Board of Excise and Customs specifies certain conditions and safeguards for furnishing a Letter of Undertaking(LUT) in place of Bond by a registered person who is intending to supply goods or services for export without payment of Integrated tax.

 

 

Who is eligible to furnish LUT?

All registered persons who intend to supply goods or services for export without payment of integrated tax (IGST) shall be eligible to furnish a Letter of Undertaking in place of a bond.

 

Who is not eligible to furnish LUT?

A registered person who has been prosecuted for any offence under Central Goods and Services Tax Act 2017 or the Integrated Goods and Services Tax Act 2017 or any of the existing laws in force in a case where the amount of tax evaded exceeds Two Hundred and Fifty Lakh Rupees.

 

Procedure to furnish LUT?

The Letter of Undertaking is required to be furnished on the letter head of the registered person in duplicate for a particular financial year in the annexure to FORM GST RFD-11

 

Who can execute the LUT?

The Letter of Undertaking shall be executed by the working partner of a partnership firm, a Managing Director or a Company Secretary of a Company, the proprietor in case of proprietorship or any other person duly authorized by such working partner or Board of Directors of such company or proprietor.

 

Does LUT has an expiration date?

Yes, The LUT is valid for the whole financial year in which it is tendered. However, if the goods are not exported within the time specified in sub-rule (1) or Rule 96A of CGST Rules and registered person fails to pay the amount mentioned in the said sub rule, the facility of export under LUT will be deemed to have been withdrawn. If the amount subsequently paid, the facility of export under LUT shall be restored.

 

What is the specified time to pay tax?

Once the FORM GST RFD-11 is submitted to jurisdictional commissioner, register person is bind to pay the tax due along with interest specified under sub-section (1) of section 50 of the Act within a period of

  1. Fifteen days after the expiry of three months from the date of issue of invoice for export, if the goods are not exported out of India; or
  2. Fifteen days after the expiry of one year, or such further period as may be allowed by the commissioner, from the date of issue of the invoice for export, if the payment of such services is not received by the exporter in convertible foreign exchange.

 

The provisions of this notification shall mutatis mutandis apply in respect of zero-rated supply of goods or services or both made by a registered person (including Special Economic Zone developer or Special Economic Zone unit) to a Special Economic Zone developer or Special Economic Zone unit without payment of integrated tax.

 

Download the Letter of Undertaking here, Click below

Letter of Undertaking Format for GST

 

 

 

No Extension of Last date for Filing GSTR-1 for July 2017

No Extension of Last date for Filing GSTR-1 for July 2017

Extension was already provided for 2 months due to busy schedule of tax practitioners and technical glitches faced by the user of GST portal. Government has clearly stated no further extension shall be provided to the tax payers. Hence, tax payers who have not yet filed their GSTR-1 for July 2017 are advised to file it at earliest.

 

Once GSTR-1 is filed by 10th October, the corresponding entries in GSTR-2A of buyer shall be auto populated on the portal. The buyer then has to file GSTR-2A after making necessary modifications (additions, deletions or any correction). If tax payers fails to file GSTR-1 by said date then his buyer may have to face problem while availing Input Tax Credit(ITC)

 

Hence all the suppliers, especially B2B suppliers is advised to file their GSTR-1 on time to avoid any unwanted problem while availing ITC by their buyers

                                                          File your GST Returns with us

All about Form 15CA & Form 15CB

All about Form 15CA & Form 15CB

What is Form 15CA and why do we have to file it?

Form 15CA is basically a declaration form to be filed by the person who is responsible to remit or send a certain amount to a specific person outside India.

Why Form 15CA is required to be filed?

 Income Tax Department has imposed this compliance on all the remitters in order to keep track on all the foreign remittances & their respective taxability.

As per Rule 37BB, every authorized bank is bound to ensure that all such forms are received by them prior making any foreign transfers.

 

Is it necessary to submit Form 15CA on all the foreign remittances?

 Form 15CA is required to be filled only where the amount payable is subject to income tax in India. If any amount which is not subject to tax than no Form 15CA shall be required. To make it more clear, Form 15CA is required when liability of income tax arises.

What is Form 15CB and Why is it necessary to file?

A person making payments to a Non Resident or a Foreign company has to submit Form 15CA. This certificate can be submitted through Income tax department online portal. However, in a few cases a Certificate from a practicing Chartered Accountant in Form 15CB is required before uploading Form 15CA online.

The Chartered Accountant is required to certify details such as nature and purpose of the remittance or transfer, TDS Rate applicability on it, TDS must have been deducted under section 195 of Income Tax Act 1961, If any Double Taxation Avoidance Agreement(DTAA) is applicable or not.

Cases where 15CA and 15CB is not required to be filed?

List of 33 Items has been prescribed in Rule 37BB in which the remittances are not required to be filed with Form 15CA and Form 15CB.

Here’s the list of those 33 Items

S.No Purpose code as prescribed by RBI Nature of Payment
1 S0001 Indian investment abroad – in equity capital (shares)
2 S0002 Indian investment abroad – in debt securities
3 S0003 Indian investment abroad – in branches and wholly owned subsidiaries
4 S0004 Indian investment abroad – in subsidiaries and associates
5 S0005 Indian investment abroad – in real estate
6 S0011 Loans extended to Non-Residents
7 S0101 Advance payment against imports
8 S0102 Payment towards imports – settlement of invoice
9 S0103 Imports by diplomatic missions
10 S0104 Intermediary trade
11 S0190 Imports below Rs.5,00,000 – (For use by ECD offices)
12 SO202 Payment for operating expenses of Indian shipping companies operating abroad
13 SO208 Operating expenses of Indian Airlines companies operating abroad
14 S0212 Booking of passages abroad – Airlines companies
15 S0301 Remittance towards business travel
16 S0302 Travel under basic travel quota (BTQ)
17 S0303 Travel for pilgrimage
18 S0304 Travel for medical treatment
19 S0305 Travel for education (including fees, hostel expenses etc.)
20 S0401 Postal services
21 S0501 Construction of projects abroad by Indian companies including import of goods at project site
22 S0602 Freight insurance – relating to import and export of goods
23 S1011 Payments for maintenance of offices abroad
24 S1201 Maintenance of Indian embassies abroad
25 S1202 Remittances by foreign embassies in India
26 S1301 Remittance by non-residents towards family maintenance and savings
27 S1302 Remittance towards personal gifts and donations
28 S1303 Remittance towards donations to religious and charitable institutions abroad
29 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments
30 S1305 Contributions or donations by the Government to international institutions
31 S1306 Remittance towards payment or refund of taxes
32 S1501 Refunds or rebates or reduction in invoice value on account of exports
33 S1503 Payments by residents for international bidding.

If you need Form 15CA or a Form 15CB, Experts will assist you.

Summary Decisions of 22nd GST Council Meeting

Summary Decisions of 22nd GST Council Meeting

Detailed and easily understandable Summary Decisions of 22nd GST Council Meeting

Hello everyone this blog is about detailed understanding of what discussed in the 22nd GST council meeting held at New Delhi on 6th Oct 2017

 

Ever since Government has rolled out GST on 1st Jul 2017. It has given so much headaches to the Businessmen and to the several Tax practitioners. Tidy schedules for other regulatory compliances and lack of understanding led to so many complexities and increase in cost of compliances for several small business owners. In the view of controlling this complexities GST council has facilitated few major changes that will bring a huge relief to small businessmen before Diwali.

 

The GST Council, in its 22nd meeting held at New Delhi on 6th Oct 2017, has recommended following changes to ease the burden of small & medium businesses:

Composition Scheme

 

After exercising power given under Goods & Service Tax Act 2017, Government on recommendation made by GST Council has increased the limit of annual aggregate turnover from current threshold limit of Rs. 75 Lacs to Rs. 1 Crore

 

This threshold for turnover for special category states, Except Jammu & Kashmir and Uttrakhand has also been increased from Rs. 50 Lacs to Rs. 75 Lacs. The threshold for Jammu & Kashmir shall be Rs. 1 Crore.

 

States that comes under special Categories are:

  • Arunachal Pradesh
  • Assam
  • Manipur
  • Meghalaya
  • Mizoram
  • Nagaland
  • Sikkim
  • Tripura
  • Himanchal Pradesh

 

Government has also made sure that this increased limits shall become exercisable for migrated and New Registered Tax payers who are migrated or Newly registered up to 31st march 2018

 

Those registered Tax payers who has opted for composition scheme shall file their respective returns prior opting this scheme as normal tax payer.

GSTR 4 shall be filed by all the composition dealers by every quarter ending up to 18th of succeeding month

 

Due to increase in the turnover threshold greater number of tax payers shall avail the benefits of easier and cost effective compliance under Composition scheme and it’ll provide great benefits to the MSME sectors.

No need to get registered for Inter-state supply of Taxable services up to Rs. 20 Lacs

 

Prior GST, Supply of services was not considered as intra-state of inter-state because It was governed under CBEC, and one single rate was prescribed also the threshold was provided up to the limit of Rs. 10 lakh and Tax payers enjoyed benefits of being Small Service Provider(SSP) given under notification 33/2012 under finance act 1994.

 

Ever since GST came into existence it brought supply of services within the same definition of supply of Goods and hence, GST become applicable irrespective of turnover criteria. A lot of business got disturbed because of this, further there was no provision of reverse charge mechanism over inter-state supplies other than those provided by Lawyers. It became headaches to several business owners

 

In the view of said situation government has restored that threshold limits for supply of services. No Registration required under GST for providing taxable inter-state supplies up to Rs. 20 Lacs (Rs. 10 Lacs in special category states except Jammu & Kashmir). This measure is expected to significantly reduce the compliance cost for small service providers

 

Please Note: The exemption is provided to only service providers and not to traders

Reverse Charge Mechanism Suspended  

 

Government introduced Reverse Charge Mechanism (RCM) under GST for Inward supplies having value more than Rs. 5000 from an unregistered supplier that created fuss for several small businessmen.

 

GST council on its 22nd meeting has deferred the above provision up to 31st March 2018. This has given huge relief to Small & Medium Businesses.

Only 3 Returns per Quarter Ending for Business having turnover up to 1.5 Crores

 

In 22nd GST Council Meeting Government has given one huge gift prior Diwali to all the SMEs

 

In GST, GSTR 1, 2 & 3 was to be filed every month which increased stampede not only it gave anxiety to Businessmen but to Tax Practitioners across country.

 

Small/Medium business having turnover up to 1.5 Crores need not to file returns every month. In fact, they are given relaxation by filing returns every quarter ending. Hence reduced compliance cost and unwanted anxiety

Goods Transport Agency (GTA)

 

Most of the GTAs were not providing services to the Unregistered Persons due to this they were facing hardship doing business. In the meeting Government has clarify that GTA no need to take GSTIN for transportation services, hardship lifted SMEs isn’t it?

No TDS/TCS up to 31.08.2018. So Relax

Due date extended for GSTR 4 for Composition Scheme

 

Due to heavy fuss Council has extended the date for filing GSTR-4 return for composition scheme for Quarter ending (July to Sep 2017) to 15th Nov 2017.

 

Please note: Normal tax payers who opted for composition scheme shall have to file their returns as normal tax payers before opting for such scheme

 

 

Hello People if you have any doubts or query about Goods & Service Tax feel free comment below. We’d hope to resolve it as soon as possible.