Input credit implies that at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.
When you buy a product/service from a registered dealer you pay taxes on the purchase. On selling, you collect tax. You adjust the taxes paid at the time of purchase with the amount of output tax and the balance liability of tax has to be paid to the government. This mechanism is called utilization of input tax credit.
What is the time limit to avail GST ITC?
ITC can be availed by a registered taxable person in a specific manner and within a specified time frame. The following are the different situations wherein the inputs can be claimed for semi-finished goods or stock or finished goods.
1. If a person has applied for registration or is liable to register or is granted registration then – Day from when he is liable to pay taxes.
2. When a person takes voluntary registration – Registration day.
3. When a taxable registered person stops paying taxes in composition levy scheme then day from when he is liable to pay tax normally u/s 7.
Input tax credit for these situations can be claimed only if it doesn’t exceed one year from the tax invoice date of issue related to supply.
For other cases, ITC should be claimed:
Before you file a valid return for the September month u/s 27 days after the end of financial year to which the invoice is related, or
Before you file the annual return, as u/s 30 days, the due date to file the annual return is December 31 after the end of the financial year.
The pre-requisites for availing credit by registered person are:
a. He is in possession of tax invoice or any other specified tax paying document.
b. He has received the goods or services. “Bill to ship” scenarios also included.
c. Tax is actually paid by the supplier.
d. He has furnished the return.
e. If the inputs are received in lots, he will be eligible to avail the credit only when the last lot of the inputs is received.
f. He should pay the supplier, the value of the goods or services along with the tax within 180 days from the date of issue of invoice, failing which the amount of credit availed by the recipient would be added to his output tax liability, with interest [rule 2(1) & (2) of ITC Rules]. However, once the amount is paid, the recipient will be entitled to avail the credit again. In case part payment has been made, proportionate credit would be allowed.
Documents on the basis of which credit can be availed are:
a. Invoice issued by a supplier of goods or services or both
b. Invoice issued by recipient alongwith proof of payment of tax
c. A debit note issued by supplier
d. Bill of entry or similar document prescribed under Customs Act
e. Revised invoice
f. Document issued by Input Service Distributor
The protocol to avail and utilise the credit of these taxes is as follows:
Sl. No. Nature Of ITC First Utilized Against Remaining Utilized against
1. IGST IGST CGST
(in above order)
2. CGST CGST IGST
3. SGST SGST IGST
Conclusively, credit of CGST cannot be utilized for paying SGST/UTGST and credit of SGST/UTGST cannot be utilized for paying CGST.
There are certain Items prescribed in the GST Law on which ITC cannot be claimed:-
• Motor Vehicle (Except when supplied in the usual course of the business or used to provide services of transportation)
• Capital Goods as described under Chapter 82,84,85,90 of the GST Law.
• Following Goods/Services when used for personal consumption:-
Food & Beverages
Cosmetics & Plastic Surgery
Membership Of a Club
Health &Fitness Centre
• Goods/Services on which Tax Levy has been paid by the supplier
There are certain most important Income tax changes which will affect you in the coming month.
Here is a quick read through them!
Tax rebate for taxpayers with income up to Rs 3.5 lakh (earlier Rs 5 lakh) is reduced to Rs 2,500 from Rs 5,000 per year. Because of the combined effect of change in tax rate and rebate, an individual with taxable income of Rs 3.5 lakh will now pay tax of 2,575 instead of 5,150 earlier.
Holding period for immovable property is now reduced to 2 years from 3 and is to be considered “long term”.This change will ensure that any immovable property which is held beyond 2 years is taxed at a reduced rate of 20 per cent and eligible for various exemptions on reinvestment.
Tax exemption on reinvestment of capital gains, this will be in notified redeemable bonds in addition to investment in NHAI and REC bonds.
Tax saving for taxpayers with income above Rs 1 croreof up to Rs 12,500 per year and Rs 14,806 (including surcharge and cess) and a decrease in tax rate from 10 per cent to 5 per cent fortaxpayers with total income between Rs 2.5 lakh and Rs 5 lakh.
Surcharge at 10 per cent of tax levied on rich taxpayers– people with income between Rs 50 lakh and Rs 1 crore. The rate of surcharge for the super rich, with income above Rs 1 crore, will remain the same i.e.15 per cent.
One-page tax return formfor individuals with taxable income up to Rs 5 lakh (excluding business income) is to be introduced. Those filing returns for the first time in this category will generally not be subject to scrutiny.
Time period for revision of tax return cut to one year (which was previously 2 years) from the end of the relevant FY or before completion of assessment, whichever is earlier.
The base year for indexation of cost (adjustment of inflation) has been shifted to April 1, 2001 ( which was previously April 1, 1981).Long term capital gains tax will result in a lower payout owing to beneficial amendments. This means lower profits on sale.
Fine for delay in filing tax return for 2017-18 is Rs 5,000 if filed by Dec 31, 2018 and Rs 10,000 if filed later. Such fee will be restricted to Rs 1,000 for small taxpayers with income up to Rs 5 lakh.
As the Finance Minister of India , Mr. Arun Jaitley, got up to deliver the Union Budget for the Financial Year 2017-2018, every Business Man in the country was waiting for the Tax Reforms. The Direct Tax Reforms given in the budget dated 1st Feb’2017 will be applicable in the F.Y. 2017-18 or A.Y 2018-19. Some crucial and evident changes have been made by the Government for the Small and Medium Scale Business in the budget.
As per the Narendra Modi Government, the Tax Revenue of the central Government from Direct Tax Collection has gone up by 17% in F.Y. 2015-16 as compared to F.Y. 2014-15, and the rate of growth in advance tax in personal income tax domains for the F.Y. 2016-17 has increased by 34.81% till 20th Jan’2017 as compared to F.Y 2015-16.
We have decoded the key changes proposed in the Union Budget announced by the Finance Minister on February 1, 2017.
It has been proposed to reduce the tax rate for taxable income less than Rs 500,000 from current 10% to 5% benefiting Individuals (resident/ non-resident) below the age of 60 years and Individuals (resident/ non-resident) above the age of 60 years and below the age of 80 years.
Rebate under section 87A
Rebate under section 87A of the Income-tax Act, 1961 (“the Act”) is proposed to be reduced from Rs 5,000 to Rs 2,500. It has also been proposed to restrict such rebate to resident individuals whose total income does not exceed Rs 350,000 (earlier Rs 500,000). Considering the above amendments, the net benefit arising to an individual with taxable income of Rs 350,000 and Rs 500,000 is Rs 2,575 and Rs 7,725 respectively.
Partial exemption for pension
The existing provision of section 10(12A) of the Act provides that payment from National Pension System (“NPS”) trust to an employee on closure of his account or opting out shall be exempt up to 40% of total amount payable to him. In order to provide relief to an employee who is a subscriber of NPS, it is proposed to provide exemption for partial withdrawal not exceeding 25% of the contribution made by an employee in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act, 2013 and regulations made thereunder.
Rationalization of deduction under section 80CCD for self-employed individual
In order to bring about parity between an individual who is an employee and an individual who is self-employed, it is proposed to amend section 80CCD of the Act so as to increase the upper limit of 10% of Gross Total Income (“GTI”) to 20% in case of individual who is self-employed. Accordingly, for a self-employed individual, contributions to NPS to the extent of 20 percent of his/ her GTI will now be allowed.
Withholding tax obligation for individual not liable to tax audit
As per the existing provision of the Act, withholding tax obligation on rent payments arises only in case of individuals or HUF who are liable to tax audit. It is proposed that individual or HUF not liable for tax audit will now be required to withhold tax at the rate of 5%, if the rent exceeds Rs 50,000 per month or part of month on payment of rent.
Also Tax deduction and collection Account Number (“TAN”) will not be required to be obtained.
Further, tax would be required to be withheld only once during the previous year in the last installment payable for the year.
In addition to the above, it is proposed that under section 206AA of the Act, maximum deduction shall not exceed the rent payable for the last month of the previous year/ last month of tenancy.
Shifting base year from 1981 to 2001 for computation of capital gains:
Existing provisions gave the assesse an option to consider Fair Market Value (“FMV”) as on April 1, 1981 for capital assets acquired before the said date. It has been proposed to shift the base to April 1, 2001. Accordingly assesses have an option to consider cost or FMV as on April 1, 2001 as their cost in respect of assets acquired on or before April 1, 2001.
Further, for the purpose of computing indexed cost of acquisition, 2001 shall be considered as the base year.
Reduction of holding period for computation of capital gains for immovable property:
It is proposed to amend section 2(42A) of the Act to reduce the holding period from existing 36 months to 24 months in case of immovable property being land and building or both to quality as long term capital asset.
Expansion of scope of long term bonds under section 54EC
It is proposed to provide exemption under section 54EC of the Act on investment of long term capital gains in any bond redeemable after three years that shall be notified by the central government. This will be in addition to investments in NHAI bonds and RECL bonds where exemption was allowed on investment up to Rs 5,000,000.
Measures for promoting digital payments in case of presumptive business income cases
In order to promote digital transactions and to encourage small unorganized business to accept digital payments, it is proposed to amend section 44AD of the Act to reduce the existing rate of deemed total income of 8% to 6% in respect of turnover or gross receipts received by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account during the previous year or before the due date specified in sub-section (1) of section 139 in respect of that previous year. However, the existing rate of deemed profit of 8% referred to in section 44AD of the Act, shall continue to apply in respect of total turnover or gross receipts received in any other mode.
What were the main points in the GST Council’s 8th meeting?
The main points of discussion in the 8th GST council meeting were as follows:
1. ISSUE OF DUAL CONTROL
In the 8th GST council meeting, the group of members didn’t have any common agreements on the issue of dual control. This issue made people think differently as many had different views on this topic. The State does not want the Centre to have the authority over all the small tax paying entities whereas The State does not have any problem in having Dual Control with the Centre for the authority of all the bigger tax payers. The Council also cannot decide the turnover to defy a small taxpayer from a bigger one, for some a company having a turnover below 5 crores will be a small tax payer whereas as per the Centre a company having a turnover of 1.5 crores will also be a small tax payer. The centre is not ready to accept the demands of state for access over 1.5 crores in case of small tax payers. The council wants to consider a high cut off rate and wants the Central Goods and Services Tax to be administered by the Centre and the tax payers below that cut off should be administered by the State.
CESS will be charged on many more goods such as luxury goods, aerated drinks, tobacco products and on high-end cars. The ultra-luxury goods and sin goods will have a GST cess for a period of 5 years. The major part of CESS will depend upon the current incidence of tax, if the clause of GST cess for 5 years raises any profit, then the council will decide on how to use these profits to compensate any other losses incurred by the State or Centre. Only the Clean Environment Cess will be retained and all the funds will be used to compensations.
3. INDUSTRY REPRESENTATION
The Government is deliberating all representation from Trade and Industry in the implementation of the GST bill. The Commerce and Industry sectors has given representation from officials to the GST council. The banking and insurance sector also has given representation to understand the impact of GST on products.
STATE WISE SCHEDULE FOR GST REGISTRATION
Daman and Diu
Dadra and Nagar Haveli
Jammu & Kashmir
Enrolment of Taxpayers who are registered under Central Excise Act but not registered under State VAT
Enrolment of Taxpayers who are registered under Service Tax Act but not registered under State VAT
New registration under VAT/Service Tax/Central Excise after August 2016
For more information on GST or for Registration under GST, feel free to reach us on, email@example.com or call +91-9599444639/+91-9599444630
Employee’s Provident Fund is a scheme which helps in providing financial assistance to the workers by saving their own money for future use after retirement. This scheme of Employee Provident Fund has been carried forward by the government for the welfare of its retired citizens and also for those who are disabled to work. The employees and their employers have to contribute a fixed amount of money from their salaries at a constant rate within a particular time interval in the Provident Fund to get interests after retirement. When the Provident Fund matures, it provides a good return and interest of the invested money as the money received will be Tax-free. The Employees Provident Fund can also be used before retirement in case of an emergency such as when a person is unfit for employment, this provides a type of monetary security to the employee. This scheme is growing at an increasing speed and is backed by many intellectual people in the business and finance industry.
APPLICABILITY AND ELIGIBLITY IN IMPLEMENTATIONOF PROVIDENT FUND
• A company or any other Business entity having 20 or more employees working for the business must register for the Employee’s Provident Fund.
• The employers and the employees have to issue an amount of Rs.1800 per month into their Employees Provident Fund.
• When the amount has been transferred into the Employees Provident Fund, a small contribution is also made to the Pension, Insurance and Administrative Cost account.
• In case of a company which has more losses than its entire net worth can contribute 10% of their compensations in their Employees Provident Fund.
• An employee working under any company is qualified to participate in the scheme of Employees Provident Fund.
• Any company having 20 or more employees is eligible of participating in this scheme.
• Whenever an employee exceeds the amount of Rs.6500 in their salaries, then they have the eligibility to join the scheme with the permission of its employer.
• When a person becomes the member of this scheme, they have to contribute 12% of their rewards in the Employees Provident Fund.
In most of the organisations employee’s insurance schemes are not available to the employees of the company, Employees Provident Fund provides that scheme for the security and stability of the employee in the future. For getting insured, the business entity just need to provide a sum of Rs.6500 on a monthly basis to ensure an insurance premium benefit. Insurance helps an employee in case of an emergency, also provides a good amount of money after maturity for the survival of their family.
When an employee has retired, and does not have any source of monetary income, pension provides that source for the employee. A part of the employees pay also goes into the Employee’s Pension Fund, which provides an employee a sense of security after retirement.
Upon maturity of the Employees Provident Fund, the interest received by the employee’s will be tax free. This results in proper stability and security of employees as they get vast interest on their invested amount.
The Employees Provident Fund provides financial security for the employees at the time of retirement, emergencies and at loss of income. Employees Provident Fund provides a source of financial assistance to the retired personnel as well as gives funds to the employee to meet their requirements in case of an emergency, early drawings are allowed only in case of an emergency. When an employee cannot work, or has any disability to work, provident fund helps them to overcome their loss of income and provides means to survive. Also, if the employee has passed away then the funds are passed on to their applicant to provide them with financial assistance.
The Employees Provident Fund allows the employees to have some kind of monetary security in the long run, it also ensures that the employee can have certain investment or any other goal after retirement. Resources can also be borrowed in the Long Run for marriage, education, medical reasons and also for housing purposes.
Employees Provident Fund also provides the benefit of withdrawal to the employee. An employee can withdraw their money only when they are unemployed, self-employed or have left the current job to work in another company. In case of any emergency, an employee can withdraw the amount in its provident fund before the time of maturity. Pre-mature withdrawal can also be treated as a loan as an employee can use the money for education, marriage, medical expenses. These withdrawals must not be more than 50% of the amount in the provident fund.
An employee can also transfer its provident fund account rather than closing it whenever they are leaving their current job and joining a new employer. Transferring of the funds from an old account to a new one is a better option because if an account is closed before 5 years then the money contributed in that account will then become tax deductible whereas by transferring of funds, an employee will get the money in full at maturity.
REGISTRATION PROCEDURE FOR EMPLOYEES PROVIDENT FUND
The Employees Provident Fund registration is now mainly done Online as it is more convenient and accessible for an organisation. A business entity having less than 20 employees can apply for the scheme voluntarily, but an organisation having more than 20 have to register their company for this scheme to avoid penalties in delaying the registration. The procedure for registering for the Employees Provident Fund is as follows:
• The company must provide the name, address, branch details, head office details and the Date on which the company was established.
• The organisation must also provide the total strength of employees working as well as the services provided by the company.
• They must also provide the legal proof that if the company is a partnership, private limited company or a public limited.
• The total salary distribution to the employees of the company must be provided with the details of the bank in which the company has its account.
• The Directors or the owners of the company have to provide legal documents to prove that the documents are verified. The address of all the owners must be given with the details of all the employees including date of joining, salary.
• A copy of the partnership deed must be given to prove that the company is registered with the Registrar of Companies.
• PAN details of the Business entity must also be provided.
For more information on EMPLOYEES PROVIDENT FUND, feel free to reach us on, firstname.lastname@example.org or call +91-9599444639/+91-9599444630
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The Goods and Services Tax is destination based indirect tax, levied at the time of consumption of goods and services by the ultimate consumer. It also aims at simplifying the present tax structure in India. It subsumes taxes like Central indirect taxes – Service Tax, Additional Customs Duty, Special Additional Customs Duty, Central Excise Duty, and Countervailing Duty, and Sale indirect taxes – Sales Tax, Central Sales Tax, Entertainment Tax, Luxury Tax, and Octroi/ Entry Tax.GST is just like a duty just on value addition at every stage. The end consumer subsequently bears the GST charged by the last merchant in the Sales Network, with set-off advantages at all the past stages. With the GST all set to be rolled out, we look at the registration procedure.
Any person carrying on any business who has a taxable supply of over Rs.10 lacs in case of Northeastern States Of India and Rs. 20 lacs in the rest of India would be required for registration of GST in India. A mechanism is available for voluntary GST registration to help claim ITC(Input Tax Credit). It must be obtained under 30 days of exceeding the Rs.25 lacs turnover limit. A procedure would be announced for migrating the VAT or service tax registration as a GST registration.
According to Schedule III of the Model GST Law, the following shall be registered compulsorily, disregarding the total turnover of their respective businesses:
• Every person/entity who is registered or holds license under any earlier law, is liable to get migrated under this Act;
• Every person shall be liable to be registered under this Act if his turnover in a financial year exceeds the taxable threshold limit.
• Every person making any inter-state Supply, irrespective of taxable threshold limit;
• persons who are casually taxable i.e. any person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business;
• Every person who are required to pay tax under reverse charge;
GST REGISTRATION NUMBER
It is expected to be provided based on PAN. One of the major advantage of implementation is that the same GST registration number can be used across all states of India against the VAT regimen in which a dealer needs to obtain VAT registration in each of the states (with additional cost and compliance formalities).
DOCUMENTS REQUIRED FOR GST REGISTRATION
For Private limited company
• Certificate of Incorporation
• PAN of the company
• List of Directors along with their personal details
• PAN Card of Directors
• Adhaar Card of Directors
• Passport size Photo of Directors
• Board Resolution
• Address proof of company
• PAN of the proprietor
• Address proof of the proprietor
• Photo of Proprietor
• Address proof of Entity
For Limited Liability Partnership
• Certificate of Incorporation
• LLP Dead
• PAN of LLP
• PAN of partners
• Adhaar Card of partners
• Letter Of Authorisation
• Address proof of Entity
For Partnership Firm
• Certificate of Registration
• Partnership Dead
• PAN of Partnership
• PAN of partners
• Adhaar Card of partners
• Letter Of Authorisation
• Address proof of Entity
ONLINE GST REGISTRATION PROCEDURE
GSTN maintains a portal for the online GST registration procedure. The applicant is required to submit an online application for GST registration along with the entire and specific details of the goods and services to be dealt. A temporary GST registration number would be provided post the submission of application and the online payment of registration fee.
A copy of the application must respectively be printed, attached with the other mentioned documents and then couriered to the GST department. A final GST certificate would be issued by the concerned officer post the verification of the application along with the documents.
ADVANTAGES OF GST REGISTRATION FOR BUSINESSES
On the registration of a business it will get various advantages of the implementation of GST. Business will legally be approved to gather charge from buyers and pass the tax credit on to the buyers or beneficiaries and will be legally perceived as a provider of goods and services. The business shall thus be having a proper bookkeeping of expenses paid on the input goods or services which can be used for payment of GST due on supply of products or services by the business.
For more information on GST Registration Procedure, feel free to reach us on, email@example.com or call +91-9599444639/+91-9599444630
GST is Goods and services tax which will substitute the old tax regime, where the ultimate tax burden and its cascading results will be lessened, with a concept of ONE INDIA ONE TAX.
Under this model there will be a single indirect tax, i.e GST which will substitute various indirect taxes levied on goods and services from manufacture till consumption.
Under this tax regime the concept of origin based taxation has changed to consumption based taxation (or destination principle).
Federal structure of GST
Taxes will be subsumed as:
CGST – Central excise duty, Additional excise duty, service tax, CVD, Spl. Add. Duty @ 4%, surcharges and cess levied by central govt. Rates will be same across India.
SGST – Sales tax/VAT, Entertainment tax, luxury tax, taxes on lottery, betting & gambling, octori& entry tax, purchase tax, Surcharges &cess levied by state govt. Rates may vary for different states.
IGST – Taxes will be levied on interstate trade and taxes levied in the case of import. It will be sum total of CGST & SGST.
The government of India is committed to replace all the indirect taxes levied in India with one tax GST, other than alcohol for human consumption.
Provisions will be made for removal of 650 check posts and 11 local taxes across India.
GST will be levied on sale of newspapers and advertisements.
Stamp duties imposed on legal documents by states will continue to be levied.
Petroleum and petroleum products may be subject to GST.
The list of exempted goods and services would be kept to minimum, it would be harmonised for the centre and state as far as possible.
GST is value addition at each level in the supply chain which will be applicable to both goods and services.
Where credit will be allowed for tax paid on input used in manufacture or for using any input service.
The Centre GST and State GST will be levied would be levied simultaneously on every transaction of supply of goods and services except on exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits.
Input or input services for personal consumption will continue to be GST regime.
An additional 1% tax will be levied by the centre which will be redirected to origin states for a period of 2 yrs or more as may be proposed by the central govt.
GST Impact on Sectors/Companies in a Nutshell
Banks – Current Tax Rate is 15%. After GST it is 18%. Negative
Consumer Staples – Current Tax Rate is 22%. After GST it is 18%. Positive for Asian Paints, Dabur, HUL, Emami; Negative for ITC, UBL
Consumer Discretionary – Current Tax Rate is 15%. After GST it is 18%. Negative for Jubilant Foods, Cafe Coffee Day, Restaurant businesses
Media & Entertainment – Current Tax Rate 15% + 7% State Entertainment tax. After GST it is 18%. Positive for Dish TV, Videocon D2H, BIG TV
Telecom – Current Tax Rate is 15%. After GST it is 18%. May see marginal dip in consumption
Auto & Auto Ancillary – Current Tax Rate is 27%. After GST it is 18%. Positive for M&M, Maruti, Bajaj Auto, Eicher Motors, Ashok Leyland
Metals – Current Tax Rate is 18%. After GST it is 18%. No significant impact.
Cement – Current Tax Rate is 27%. After GST it is 18%. Positive for UltraTech, Shree Cement, Ambuja Cement
Pharma – Current Tax Rate is 15%. After GST it is 18%. Negative for Pharmaceutical co.s
Real Estate – Current Stamp Duty is 15%. After GST it is 16%. No significant impact.
Logistics – No change in Tax Rate after GST. Positive for Container Corp, GATI, etc.
Scheme of levy
The Levy in the common parlance means charge or imposition or collection of tax by authority. For the purpose of collection of tax, the authority should have the power of collection of tax.
Section 7 of Model GST Act 2016, sets out that CGST/SGST and IGST shall be levied on all intra-state sales and interstate supplies of goods and/or services.
The Assessee who has an aggregate income of Rs. 50 lakh are eligible for composition levy, where amount of tax payable is 1% of the turnover during the year where the assesse shall not be entitled to claim any input tax credit.
Under the GST regime the threshold limit for SME’s is proposed to be around Rs. 25 Lakh. The lowering of the threshold would bring many SME’s under the Tax bracket.
GST Model law has also brought supply of goods or services without consideration, under the tax bracket, by imposing tax on value derived under Rule 4 of valuation rules.
Under section 43C(4) of Model GST Law, states that every e-commerce operator shall furnish a statement
electronically, providing the details of the amount collected on behalf of each supplier in respect of all supplies of goods and/or services effected through the operator.
Imported goods would be liable to custom duty along with IGST (equivalent to IGST on similar goods in India).
Utilisation of Input credit
Chapter-V states that Every taxable person shall, subject to such conditions and restrictions as may be prescribed in this behalf, be entitled to take credit of input tax and may deduct the amount of admissible credit in respect of a tax period from the output tax for the same period and pay the remaining amount, if any, to the credit of the appropriate Government (i.e. Central Government in case of the IGST and the CGST, and the State Government in case of the SGST) within such time and in such manner, as may be prescribed.
Manner of taking credit of IGST/CGST/SGST:
IGST paid on interstate purchase shall first be utilised towards payment of IGST then (if amount remaining) towards payment of CGST and SGST, respectively.
CGST paid on purchase shall first be utilised towards payment of CGST then (if amount remaining) towards payment of IGST.
SGST paid on purchase shall first be utilised towards payment of SGST then (if amount remaining) towards payment of IGST.
ITC of CGST cannot be utilised towards payment of SGST.
ITC of SGST cannot be utilised towards payment of CGST.
There shall be two type of electronic ledgers for every registered taxable person:-
Electronic Cash Ledger
Electronic Credit Ledger
Every deposit made towards tax, interest, penalty, fee or any other amount shall be credited to his Electronic Cash Ledger.
Input Tax Credit as self-assessed in the return shall be credited to his Electronic Credit Ledger. The amount available in this ledger may be used for making any payment towards tax payable under GST Law.
New Applicant can apply for Registration:
At the GST Common Portal directly ; or
At the GST Common Portal through the Facilitation Center (FC)
As per the following process:
Constitution of Business –
Partnership Deed in case of Partnership Firm ;
Registration Certificate in case of other businesses like Society, Trust etc. which are not captured in PAN.
In case of Companies, GSTN would strive for online verification of Company Identification Number (CIN) from MCA21. Constitution of business / applicant as per PAN would be taken except for businesses such as Society, Trust etc. which are not captured in PAN. Partnership Deed would be required to be submitted in case of Partnership Firms.
Details of the Principal Place of business –
In case of Own premises – any document in support of the ownership of the premises like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy.
In case of Rented or Leased premises – a copy of the valid Rent / Lease Agreement with any document in support of the ownership of the premises of the Lessor like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy
In case of premises obtained from others, other than by way of Lease or Rent – a copy of the Consent Letter with any document in support of the ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy
Customer ID or account ID of the owner of the property in the record of electricity providing company, wherever available should be sought for address verification
This is required as an evidence to show possession of business premises. If the documentary evidence in Rent Agreement or Consent letter shows that the Lessor is different from that shown in the document produced in support of the ownership of the property, then the case must be flagged as a “RiskCase”, warranting a post registration visit for verification. GST Law Drafting Committee may add penalty provision for providing wrong lease details.
Details of Bank Account(S) Opening page of the Bank Passbook held in the name of the Proprietor / Business Concern – containing the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details This is required for all the bank accounts through which the taxpayer would be conducting business.
Details of Authorised Signatory For each Authorized Signatory:
Letter of Authorisation or copy of Resolution of the Managing Committee or Board of Directors to that effect This is required to verify whether the person signing as Authorised Signatory is duly empowered to do so.
Benefits of GST
This structure would overall reduce the combined rate of taxation and the cascading burden on the economy.
This would increase the productivity and performance in the economy.
Indian truck system will work effectively with removal of 650 check posts and 11 local taxes.
Reduction of cost to the company for extra working capital.
Reduction in typicality of existing tax structure in India.
A transparent and simple tax regime of ONE TAX ONE INDIA.
Limitations under GST Model
When the aviation industry was witnessing the much awaited growth with increasing domestic traffic, the GST implementation might slower the rate at which the industry is expecting growth as flying will become expensive.
India, on one hand, has the lowest insurance penetration in the world (less than 5% of Indian population & half of the global average) and on the other GST will further make the insurance products dearer.
The Banking & Financial Sector (including Insurance as statedabove) might take a hit as currently the effective tax rate in the sector is 14 per cent, which is levied only on fee component (and not interest) of the transaction. Under GST, effective tax rate on fee-based transactions is expected to increase to 18-20%.
Petroleum products form a majority import value in the Indian ecosystem. However, key petroleum products like crude, natural gas, high-speed diesel and ATF have been kept out of GST.
A seamless implementation of GST may boost growth of the overall economy to a level that the above stated pitfalls might be merely seem as part and parcel of the India growth story. When most of the sectors grow simultaneously, it might increase jobs and disposable income of individuals to an extent that the dearness brought by GST gets offset. Analysts are already predicting 10% GDP growth for the Indian Economy with GST coming into effect.
TDS is deducted by the client at the time of payments and is deposited with the Income Tax Department as tax deducted on behalf of the person/entity to whom the payment is being made.
Most of the service providers do not object to TDS deductions, as it is allowed to be claimed as a credit after filing the Income Tax return. The only condition to this is that the balance amount after filing the income tax return is required be to taxable and TDS refundable.
Let us now understand the Procedure for applying for TDS Refund
TDS Refund is not a preformat based application. A taxpayer becomes eligible for TDS refund once s/he files his income tax return and in that, they should be able to detail out the calculation of his payable income tax and also the total TDS which is been deducted over the period for which income tax return is filed.
Once the books are updated and the above details are refurbished, any accounting software will automatically reflect the refundable amount of TDS and the same will be refunded in a certain period of time.
On filing the income tax return, when a tax payer mentions about any dues in the form of TDS refund, the income tax officer takes time to sanction the refund. However, the refund comes with an additional interest of 6% per annum in the cases where payable refund is more than 10% of the total tax payable in the same financial year.
An intimation is sent to the tax payer under section 143(1) with the refund with the details of the computation of interest. The tax payer can connect with the income tax officer in case of dissatisfaction with the interest paid.
Previously some cases were noticed where some agencies asked the taxpayers for their bank details on approval of income tax refunds. Such cases were reported as scam and the Income Tax department alarmed the tax payers to not indulge into such emails or phone calls. The Income Tax department maintains that once a refund is approved, it is automatically credited to the provided bank details.
Some of the discrepancies occur due to the mistakes in return filing, the bank account closure, a wrong branch or may be typo error in your IFSC details etc., are the only reasons for delay.
Learn how to check the TDS Refund Status?
One can easily check the TDS refund status online with the help of the PAN number and the year for which the return is sought. Banks like SBI also provide status of TDS refund thru email and a toll free number.
Other significant points regarding TDS Refund include:
1. You need to file income tax return to assess the refund.
2. You can expect a TDS refund as soon as you file your ITR.
3. Deductions made as TDS reflect in Form 16 and 16A.
4. Consolidated TDS deductions reflect in Form 26AS.
5. Incase, you fear that deducted TDS amount can surpass the taxable amount that year, s/he can file Form 13 in advance for Nil/Lower Deduction of TDS.
Further more, you can get in touch with us to understand the TDS Refund status and also for other Taxation related and Accounting related services. Feel free to connect to us at, firstname.lastname@example.org or call +91-9599444630
Did you know that it is possible to save your income tax out flow by far a large amount?
Do you want to know about Tax Planning through Tax Exemptions?
Did you know that we can help you with this year’s Tax Filing? Are you wondering about redeeming some of the previous year’s tax which you filed and weren’t aware of exemptions.
Then this is the post for you. Read further to understand how you can save tax through following tax exemptions. All this is possible legally under the Indian Income Tax Act which allows certain deductions which can be claimed to save tax at the time of filing of Income Tax Return by all classes of taxpayers . All you need to do is a proper tax planning which would allow certain deductions from your gross total income and income tax would be levied on the balance income as per the income tax slabs. Here are certain year-end tax tips to get smarter with tax management.
House Rent Allowance (HRA): It is the best tax saving tool which a taxpayer can use. Under this you can save upto 50% of your salary if you are staying in a metropolitan city like Mumbai, Delhi, Chennai or Kolkata else 40% if you reside in non-metro. Apart from this if actual rent paid is lower than 10% of your basic salary received then there is no exemption. Be aware that you cannot claim any exemption under this section if you love in your own home or of you are not paying rent to anyone.
Medical Reimbursement: If your employers provide you medical reimbursement facility for your medical expenses you can get tax exemption. No income tax on medical reimbursement is levied up to Rs. 15000 provided all bills for the same are produced by the employee to the employee. This also includes premiums that your company might be paying for your health insurance schemes and on treatments of any critical diseases. It is to be noted that no income tax on medical reimbursement is levied upto Rs. 15000, the amount received as medical allowance would be fully taxable.
Deductions on Section 80C, 80CCC: Under Section 80C a deduction of Rs.1,50,000 can be claimed from the total income you earn. In simple terms you can save up to Rs. 1,50,000 from your total taxable income under this section. Please note this deduction is allowed to an individual or a HUF. Under Section 80CCC it provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred to in Section 10(23AAB).
Leave Travel Allowance (LTA): It is the most common element of compensation which the employers use to remunerate employees due to the tax benefits attached to it. An LTA is the remuneration paid by an employer for Employee’s travel in the country, when s/he is on leave with the family or alone. LTA amount is tax free. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt. Please note that The total cost of the holidays is not covered, only the travelling cost is covered.
Spend more: Increasing expenses, such as paying off bills or other debts or paying out bonuses to employees, it will help increase your deduction for the current year. If you’ve delayed major purchases for your business, you should go ahead and buy it. Not only can you find great deals as businesses try to clear out inventory, you’ll have more deductions. In general capital improvements and new equipment should be capitalized and depreciated over 5, 7 or 10 year period.To know more about tax planning, tax exemptions and to get smarter with tax management for this financial year, drop us a line here and we will be happy to provide you our Tax planning services . You can also write us at email@example.com or, call us for Tax Advice at, +91-9599444639.
Once you have set your business and are on the stages of expanding it many of the entrepreneurs wonder whether they should make foreign investments or operations or not. When it comes to an international market operation things get a bit complicated as it creates a variety of structures at the same time you need to select the right tax advisor that has competency in that particular commercial area. The boundaries of international taxation has been increasing this is where the international taxation consultancy is require who can tackle all the compliances related to international taxation.
We at Gapeseed Consulting provide all required services which give all the solutions related to International Taxation Consultancy, we can help you understand your tax situation; you must first work out whether you are an Indian resident for tax purposes. Indian residents are generally taxed on their worldwide income from all sources. Foreign residents are generally taxed only on their Indian-sourced income, such as money they earn working in India.
Some of the services we offer are:
Transfer pricing planning and documentation:
Tax authorities are everywhere and are always eager to get revenue, not only that but they are imposing new, stricter transfer-pricing documentation requirements on companies – and sharply escalating audits and inspections – with significant penalties for non-compliance.
Meanwhile, as you expand your operations to compete on an international scale, your cross-border transactions – sales of goods, provisions of services, licensing of intellectual property, lending of funds, etc. – will continue to grow in frequency and complexity.
At Gapeseed Consulting we understand the increasing globalisation, faced with increasingly burdensome compliance globally. In many businesses a new sense of urgency about maintaining effective and consistent transfer pricing documentation across all tax jurisdictions in which they do business.
Our international taxation consultancy tax dispute resolution network assists taxpayers in this emerging area. We can work with you to efficiently manage, and favourably resolve tax audits and disputes throughout the world. We have tax specialists to assist our clients in virtually every area of dispute. We combine deep technical understanding, local knowledge and strong relationships with government officials, tax litigation experience, and a global perspective to provide you with best of the services.
Advance pricing agreement:
We can help your company to obtain advance pricing agreement covering a broad range of intercompany transactions. We have our professionals who hail from industry, and with foreign governments—including senior-level positions in governmental agencies responsible for administering advance pricing agreement.
We can work with you to develop strategies at both the global and local level, and guide you through the process of requesting advance pricing agreement to help you ensure successful outcomes.
Intellectual property valuation:
Our experienced team of IP and intangible asset valuers apply commercial valuation principles and adopt a range of complex valuation methodologies to produce robust analysis to assist in negotiations, decision making, legal disputes and investment analysis.
We have in-depth sector experience across a broad range of industries and are therefore familiar with working alongside marketing, sales, technical and research staff to gain a deep insight into the subject IP.
Our services include:
Valuing a brand or other IP in relation to a potential sale or licensing agreement. Considering the value of brand, technology or other assets in the context of a contribution to a joint venture or alliance. Valuing IP / intangible assets for financial reporting purposes under international, US and UK accounting standards. Providing independent valuations of IP for commercial disputes or expert witness reports. Assessing the market value of IP/intangible assets for tax purposes.
If you would like to know more about our international taxation consultancy for your businesses you can drop us a line here or, call +91-9599444639/+91-9599444630