GST - Discussion on all Aspects

A_Gupta · Post by **A_Gupta** » 01 Jul 2017 08:18

Don't let the perfect be the enemy of the good. GST required a huge democratic consensus, and various compromises were inevitable.

The key thing, I think to watch for over the next six months is - how responsive are the central and state governments to the inevitable glitches that are going to hit?

Over the longer term, does the system stabilize and satisfy the states enough that they agree to include petroleum and alcohol in GST?

rahulm · Post by **rahulm** » 01 Jul 2017 09:27

12% & 18% slabs can converge in future: Jaitley

A grounded interview by JetLi. Well done.

rahulm · Post by **rahulm** » 01 Jul 2017 09:27

12% & 18% slabs can converge in future: Jaitley

A grounded interview by JetLi. Explains the reasons for multiple Slabs, JK GST status, oil and petro, inc,union of real estate and the tax evasion prevalent and merging tax slabs after the tax base widens. Well done.

Midnight launch was a great idea. Congoons thought they had a monopoly on that time.

A_Gupta · Post by **A_Gupta** » 01 Jul 2017 09:29

A suggested timeline on how GST will play out over the next 9 months, in Swarajya magazine:
https://swarajyamag.com/economy/reading ... e-quarters

e.g.,

January-March 2018:

1. This will the quarter where we will finally have visibility on how the multi-tier rate structure (3, 5, 12, 18, 28 per cent, and special luxury goods rates) is working, what its flaws are, and how the GST finally needs to be rejigged.

2. This is when we will know for sure if the early expectations of a revenue surge will materialise quickly, or only after a lag.

3. With the Karnataka elections due in mid-2018, and with the Bharatiya Janata Party seeking to wrest the state away from the Congress, the BJP will be particularly vulnerable if GST is seen to be under-delivering on its promise, and issues remain unsettled.

4. This is the quarter when the broader approach to GST and course corrections will have to be finalised.

srin · Post by **srin** » 01 Jul 2017 10:48

Very interesting .... Jet Airways email to register GST number with them for business travel to claim benefits

It is now mandatory for guests travelling for business to add their company’s GST details at the time of booking. To ensure a seamless experience, we request that you inform your guests travelling for business to register on our portal and claim up to 12% back on flights!

Karthik S · Post by **Karthik S** » 01 Jul 2017 11:55

Zynda · Post by **Zynda** » 01 Jul 2017 12:31

Noob question, what are S & C GST? Also based on your experience, what would be the total amount incl. taxes prior to GST for a similar purchase?

JohnTitor · Post by **JohnTitor** » 01 Jul 2017 12:42

State and central GST. Together they become IGST , I=integrated

srin · Post by **srin** » 01 Jul 2017 13:21

Zynda wrote:Noob question, what are S & C GST? Also based on your experience, what would be the total amount incl. taxes prior to GST for a similar purchase?

Don't quote me on this, but my understanding is that:
- if the supplier and consumer are in same state, then you pay SGST (to the state) and CGST (to centre).
- if the supplier and consumer are in different states, then you pay IGST (=SGST+CGST) to the centre. Also applies to imported items.

JohnTitor · Post by **JohnTitor** » 01 Jul 2017 14:09

The toilet paper has an info graphic of items in various bands. I cant post the image here as its not an image file.

http://m.timesofindia.com/business/indi ... 396877.cms

Anyway, for the 18% band they have among other things, ATM. What is that? Are you going to be charged 18% for withdrawing your own money? If so, ack thoo on this government.

IndraD · Post by **IndraD** » 01 Jul 2017 14:35

JohnTitor wrote:The toilet paper has an info graphic of items in various bands. I cant post the image here as its not an image file.

http://m.timesofindia.com/business/indi ... 396877.cms

Anyway, for the 18% band they have among other things, ATM. What is that? Are you going to be charged 18% for withdrawing your own money? If so, ack thoo on this government.

After the historic launch of GST or good and services tax, ATM transactions (including withdrawals) beyond free limits and other banking services where service tax was levied will get costlier. Under GST, banking and financial services have been placed in the 18 per cent rate slab, as compared to 15 per cent service tax earlier. Banks are expected to pass on the tax rate hike and it could mean a nominal increase in cost for customers. Similarly, credit card charges/fees where service tax is levied will go up. Insurance premiums will also go up.

However, over time, it is expected that due to reduced cost because of availability of GST credit on items hitherto not available, the price of services will also come down which will benefit the consumers, says Sandeep Sehgal, director-tax and regulatory at Ashok Maheshwary & Associates LLP.

http://www.ndtv.com/india-news/atm-with ... ow-1719145

srinebula · Post by **srinebula** » 01 Jul 2017 14:54

It seems electorally a risky thing.
I received messages from following providers saying the service tax has gone up from 15% to 18% due to GST:
1. My ISP
2. My telephone network
3. My bank/credit card issuer

The usual suspects are running protests/psyops against GST saying it is a burden on common person. Most common folks will not have enough understanding of what GST is, and how it will be beneficial in the long term.
They see their regular expenses going up, there is a good chance they will fall for the psyops of the opposition+media. JohnTitor ji's comment is exhibit no.1.
If that is the reaction of BRFite, Imagine how common people are going to be mislead.

AFAIK, banking, financial, and telephony services were already under central tax regime. It would have been better if Govt. somehow managed to keep taxes on these at the old rate or lower.

My ISP also sent messages to register my GSTIN to claim input tax credit. I guess, businesses can claim input tax credit on even internet and telephony costs also.

IndraD wrote:
JohnTitor wrote:The toilet paper has an info graphic of items in various bands. I cant post the image here as its not an image file.

http://m.timesofindia.com/business/indi ... 396877.cms

Anyway, for the 18% band they have among other things, ATM. What is that? Are you going to be charged 18% for withdrawing your own money? If so, ack thoo on this government.
After the historic launch of GST or good and services tax, ATM transactions (including withdrawals) beyond free limits and other banking services where service tax was levied will get costlier. Under GST, banking and financial services have been placed in the 18 per cent rate slab, as compared to 15 per cent service tax earlier. Banks are expected to pass on the tax rate hike and it could mean a nominal increase in cost for customers. Similarly, credit card charges/fees where service tax is levied will go up. Insurance premiums will also go up.

However, over time, it is expected that due to reduced cost because of availability of GST credit on items hitherto not available, the price of services will also come down which will benefit the consumers, says Sandeep Sehgal, director-tax and regulatory at Ashok Maheshwary & Associates LLP.

http://www.ndtv.com/india-news/atm-with ... ow-1719145

IndraD · Post by **IndraD** » 01 Jul 2017 15:21

Tax applied on food in a small restaurent (annual turnover less than 75 lakhs per annum is 5% only, those above this will be applied 18% as shown in the bill by John Titor saar..
similarly 18% money to be taxed on service charge not on ATM withdrawl...

Zynda · Post by **Zynda** » 01 Jul 2017 17:37

GST Effect: iPhone, iPad, Mac, Apple Watch Prices in India Slashed

HIGHLIGHTS
> iPhone 7 price in India now starts at Rs. 56,200 instead of Rs. 60,000
> iPhone 7 Plus MRP 32GB will now retail at Rs. 67,300
> Price of new Mac and iPad models have also been slashed

rahulm · Post by **rahulm** » 01 Jul 2017 18:19

The crack team: Those who made GST a reality

IndraD · Post by **IndraD** » 01 Jul 2017 18:36

rahulm wrote:The crack team: Those who made GST a reality

sad and disappointed not to have found name of a key person not cos he is my elder bother but he has spent more time in Fin Min than his home in last 2 years... he has drafted legal chapters of bill and is GST commissioner (there are more than 3 commissioners dealing with techincals, legalities, corporates etc)...tells you media has fixed propaganda to feed in or doesn;t have real access to GST team.
He appeared on many interviews on Doordarshan regarding GST...

chetak · Post by **chetak** » 01 Jul 2017 18:46

IndraD wrote:
rahulm wrote:The crack team: Those who made GST a reality
sad and disappointed not to have found name of a key person not cos he is my elder bother but he has spent more time in Fin Min than his home in last 2 years... he has drafted legal chapters of bill and is GST commissioner (there are more than 3 commissioners dealing with techincals, legalities, corporates etc)...tells you media has fixed propaganda to feed in or doesn;t have real access to GST team.
He appeared on many interviews on Doordarshan regarding GST...

take heart, IndraD saar.

Ram Ram saab kahe, Dashrath kahe na koi,

agar Dashrath, kashrath na kare, taab Ram kahan se hoi??

disha · Post by **disha** » 01 Jul 2017 23:40

IndraD wrote:..tells you media has fixed propaganda to feed in or doesn;t have real access to GST team.
He appeared on many interviews on Doordarshan regarding GST...

IndraD'ji - exactly. Some #mediapimp must have done a google search and wrote up the article. Editor might have said - Kuuch GST per leenkh lo and immediately lo and behold article comes out.

vijayk · Post by **vijayk** » 01 Jul 2017 23:43

KrishnaK · Post by **KrishnaK** » 02 Jul 2017 05:07

Goods and Services Tax: miles to go before we sleep

rahulm · Post by **rahulm** » 02 Jul 2017 08:02

Party’s over for millions, as India launches GST

New Delhi: Rakesh Sachdeva sells auto parts in a busy market in central Delhi, just a few miles from Prime Minister Narendra Modi’s office. Yet despite having a flourishing business he does not pay any tax.

Until now, his rundown premises and small scale operation has kept the business below the radar of India’s tax officials. Come 1 July, however, “the party will be over”, says the 51-year-old, with a resigned shrug.

Nair’s company, which makes beauty and personal care products, has just streamlined its supply chain, dropping vendors that were not going to be GST-compliant.

Elior Group, a French catering and food service company, said it has mandated GST-compliance as one of the eligibility criteria for its orders.

Today, morning tea is tasting and feeling much better. Wonder why !

rahulm · Post by **rahulm** » 02 Jul 2017 09:47

The worst tendencies of the Indian State and politics and business have found their way into the design of the GST that was launched yesterday. Many of the flaws in the design were the result of forced political compromise, writes P Chidambaram

The article is by PC so apply appropriate filter.

Having said that and taking the messenger away from the message for a moment I too wonder about some of the classifications

Is KitKat chocolate or biscuit?’, because chocolates and biscuits suffer different rates.

From the rate schedule, 'biscuits and waffles without chocolate'. The attention to detail and the granularity in slicing and dicing 'waffles without chocolates' is frankly incredulous and seems to be a vestige of socialist thinking.

Just say ''confectionary' and put all bikkis, ,chocolates, ravalgaon,oreo, candy, in one basket.

Also, chewing pan and contraceptives are exempt but sanitary napkins @18%. ? WhT does the government want 50% of the population to do ? Happy to be corrected if my info is wrong.

I mean what's the issue the Indian state has with chocolate and is there really a 'waffle babu' some where whose remit is to ensure waffles are classified properly ?

Talk about majoring in minor things.

Also, chewing pan and contraceptives are exempt. Good. But sanitary napkins at 18% ? What does the government expect 50% of the population, the 'desh ki beti ' to do ? Happy to be corrected if my info is wrong.

Actually pan should be in the sin category because it's such a public nuisance and all the spitting is also a health hazard.

Sicanta · Post by **Sicanta** » 02 Jul 2017 10:06

What is this - Anti-profiteering Authority’? Dont we have CCI to stop cartelisation?

rahulm · Post by **rahulm** » 02 Jul 2017 10:09

Sicanta wrote:What is this - Anti-profiteering Authority’? Dont we have CCI to stop cartelisation?

Trouble is in india, any authority with any sort of power becomes a haven for corruption. So I have my doubts on this one but am keeping an open mind.

rahulm · Post by **rahulm** » 02 Jul 2017 10:09

Duplicate

Schmidt · Post by **Schmidt** » 02 Jul 2017 11:33

Street corner Patanjali store has switched to handwritten bills as their s/w is not yet GST compliant

Getting sticker shock when we see the Health&Glow bills for cosmetics coming in at 28%

This morning TV channels were showing Su Swamy who made a sarcastic remark that Pasta is rated 5% while Idly/Dosa is taxed at 18%

Customers at a restaraunt where cheesed off their regular masala dosa is now more expensive by nearly 8%

I think the bureaucrats have not really applied their minds while fixing the tax rates for he various items

Products that could be considered luxury / premium even 10 years ago or now considered merely normal or even essential

We cannot apply a 1950s yardstick to determine what is a luxury

I wold even argue that 2/4 wheelers are essential - the govt has failed to provide any kind of decent and reliable / comfortable transport services in most cities , hence what right do they have to charge us usurious rates

JohnTitor · Post by **JohnTitor** » 02 Jul 2017 12:35

The rates are a joke. Sanitary towels @ 18%?? Chocolate @ 18%?? Baboons have had their way and if Jaitley doesn't fix it, it will not lead to any good.

srin · Post by **srin** » 02 Jul 2017 13:03

Jaitely isn't responsible for the rates. The GST council is. The centre has one-third vote and all states combined have two-thirds vote. And to pass a resolution or amendment, you need three-fourth of votes. Which means that neither centre nor states by themselves can push anything through. So far, the decision making has been by consensus and not by vote.

The core of the issue is that during the erstwhile VAT regime, each state had its own rate for each item, based on how much was produced in each state (and how much lobbying was done). So, getting states to agree on a single rate for any single item itself is a big deal. Over a period of time, these rates will get fine-tuned.

Sicanta · Post by **Sicanta** » 02 Jul 2017 13:56

About this Anti profiteering authority -

http://www.business-standard.com/articl ... 384_1.html

rahulm · Post by **rahulm** » 02 Jul 2017 14:30

For reference GST Council Meeting Members Composition & Chairman

I can't find a list of the Council members by name. I wanted to see the number of women in the present Council.

geeth · Post by **geeth** » 02 Jul 2017 14:57

JohnTitor wrote:The rates are a joke. Sanitary towels @ 18%?? Chocolate @ 18%?? Baboons have had their way and if Jaitley doesn't fix it, it will not lead to any good.

You remove the excise duty(12.5%) CST(5%) Octroi, service tax to transporter and any other miscellaneous taxes from the previous base price. To that add 18% tax and see what is the new price.

No point in keep on harping on rates of individual items. The Govt need to keep in mind that revenue doesnt fall sharply. If the compliance is good, then there will be enhaced collection of taxes. If and when it happens (the states have extracted a guaranteed rise of average growth of past 3 years (say 14%- 20%) for the next 5 years from centre. Where is the centre going to get the money from?

Once they are comfortable with tax collection, the first to go will be the cess. After that they will probably merge 12% & 18& and make it 15% or so...then probably they will tinker with the rest of the rates.

By the way, if you remove excise duty part from 18%, effective VAT on Chocolate becomes 5.5%.

One more point...previously VAT was calculated based on base price+ excise duty. Means, if the VAT rate was 14.5%, on Rs 100 (base price), you were paying VAT= 100×1.125×0.145 = Rs 16.31/- instead of Rs 14.5/-. I.e., you were forced to pay VAT on excise duty also. Now every tax will be calculated based on base price (RS 100). There is substantial effect on final price. It stops cascading effect.

Naveen · Post by **Naveen** » 02 Jul 2017 15:07

All old rates summed up on one side and GST rate on the other side should be the comparison equation. Only then the GST rate decided for that product will make sense. People are looking at individual product rates in isolation.
Convergence of bands will happen over a period of time and that is the ultimate target to achieve. Even then there will be 3 slabs.

IndraD · Post by **IndraD** » 02 Jul 2017 15:52

glad to see all deserving names there finally ..!!
(including the one I whined about yesterday)
The unsung heroes who made GST a reality

While the final decisions were taken by the GST Council comprising Finance Minister Arun Jaitley and his state counterparts, who met on an average twice a month in the last nine months, officials in the fitment and rate committees met thrice or four times a week to sort out differences between the Centre and states and present an acceptable proposal to the Council

New Delhi, Jul 2 India ushered in a new economic reality with a 60-minute star-studded midnight gala at the imposing Central Hall of Parliament, thus becoming only the seventh country in the world to have a nationwide Goods and Services Tax (GST).

But away from the media glare and relentless public commentary, there were men and women who worked tirelessly to bring to fruition the country's biggest taxation overhaul since Independence.

The rollout of the GST was in the making for over a decade, which was effected through an amendment to the Constitution and five supporting laws being passed by Parliament and state assemblies.

Since the passage of the Constitution Amendment bill in August 2016, there were over 175 officers' meetings and 18 sittings of the GST Council -- leading to 18,000-plus man hours of discussions for a smooth roll out of the new tax regime.

A battery of Central and state government officials burnt the midnight oil to meet the July 1 target for launching the GST.

Official sources said as many as 30 sub-groups and committees worked tirelessly to devise rules and laws as well as fix tax rates for over 1,200 goods and services.

While the final decisions were taken by the GST Council comprising Finance Minister Arun Jaitley and his state counterparts, who met on an average twice a month in the last nine months, officials in the fitment and rate committees met thrice or four times a week to sort out differences between the Centre and states and present an acceptable proposal to the Council.

Most of the state tax officers would camp at the national capital for the entire week during the meetings, before returning to their states over the weekend to look into issues there.

The widespread deliberations of Central and state officials laid the groundwork for the new law's implementation.

While Revenue Secretary Hasmukh Adhia and CBEC chairperson Vanaja Sarna were at the forefront, commissioner GST Upendra Gupta, Consultant in the Department of Revenue P K Mohanty, Joint Secretary (TRU) Alok Shukla, Chief Commissioner CBEC P K Jain, Commissioner CBEC Manish Sinha and many other Central officers ironed out numerous issues behind the scenes.

Among state officials, sources said innovative ideas came in from Commissioner Commercial Tax (CCT) Karnataka Ritvik Pandey, CCT Gujarat P D Vaghela, CCT Maharashtra Rajiv Jalota, Additional Secretary CT Bihar Arun Mishra, and Anwar Khalid Additional Commissioner, West Bengal.

All the state officers worked overtime to make the GST rates and rules as user-friendly as possible.

Joint Secretary Revenue Udai Kumawat was the man behind drafting of the GST Constitutional Amendment law as well the compensation to states law.

P K Dash (Director General-Training) manned the training academy preparing officers for the high-voltage reform which subsumes over 17 different taxes and transforms India into a unified tax market.

Nearly 55,000 state and Central officers have been trained in the academy and in-house training programmes were organised at the Commissionerate level. E-training modules were also released.

GST will reduce the cascading effect of taxes, decrease prices, create a common market that will not fuel inflation and make it easier to do business.

The self-regulating tax system and non-intrusive electronic architecture would decrease black transactions, officials said.

http://www.outlookindia.com/newsscroll/ ... --/1089472
http://economictimes.indiatimes.com/new ... 410004.cms
http://www.business-standard.com/articl ... 319_1.html

A_Gupta · Post by **A_Gupta** » 02 Jul 2017 16:00

JohnTitor wrote:The rates are a joke. Sanitary towels @ 18%?? Chocolate @ 18%?? Baboons have had their way and if Jaitley doesn't fix it, it will not lead to any good.

Per this, 12% for sanitary napkins. Should be tax-free, IMO.
http://www.india.com/news/india/gst-san ... 1-2284162/

Sicanta · Post by **Sicanta** » 02 Jul 2017 17:07

One return a month, not 3; rates lower than VAT: Adhia busts 7 GST myths

http://www.business-standard.com/articl ... 348_1.html

Gus · Post by **Gus** » 02 Jul 2017 17:22

Naveen wrote:All old rates summed up on one side and GST rate on the other side should be the comparison equation. Only then the GST rate decided for that product will make sense. People are looking at individual product rates in isolation.
Convergence of bands will happen over a period of time and that is the ultimate target to achieve. Even then there will be 3 slabs.

Yes. You get to step one then step two and so on to final step.

Right now it is a rate that is revenue neutral and something all states agrees on consensus. Blaming rates on "baboons" is ignorant on how GST council operates.

Gus · Post by **Gus** » 02 Jul 2017 19:41

You can only claim input tax credit for stock that's one year old. Before that, you have to declared in assets already. Folks who tried to cheat in income tax will now have to scramble.

JohnTitor · Post by **JohnTitor** » 02 Jul 2017 20:55

Gus wrote:You can only claim input tax credit for stock that's one year old. Before that, you have to declared in assets already. Folks who tried to cheat in income tax will now have to scramble.

Can you elaborate please? Don't quite understand what you meant.

Are you saying that input credit can only be claimed if you've held the inventory for a year?

srinebula · Post by **srinebula** » 02 Jul 2017 21:28

https://twitter.com/scarysouthpaw/statu ... 0156152833

Sachin · Post by **Sachin** » 02 Jul 2017 21:45

Is there any web site which explains the GST v/s the previous tax system? Perhaps with an explanation on how a simple purchase would have got taxed in the previous system v/s the new GST system? I have seen very many media reports, but honestly I cannot trust them. First of all they have an agenda, and secondly they don't have CAs as reporters.