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GST - Discussion on all aspects.

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
M_Joshi
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Re: GST - Discussion on all aspects.

Postby M_Joshi » 05 Aug 2017 18:55

JohnTitor wrote:^^ I think we should get back to the thread and see if the issue that jamwal brought up can be addressed... I.e.



How can professional like doctors be taxed ? Only a small fraction accept card payments


There are two types of doctors, i) those who run individual clinics i.e. self professional income, ii) who run small hospitals i.e. a registered business. Other than salaried doctors who may Income Tax from their salaries. For the 1st kind it is hard to ascertain source of income. If the doctor wants to hide it, they can & they do. They will not give you an invoice, give prescription on a small letterhead, take cash & you're done. Only individual scrutiny can bring these crooks to books. The 2nd type is more inclined to pay taxes as they've a business with P&L. But since they cannot claim input on the equipment & consumables purchased, they'll also be susceptible to purchase in cash, as much as possible. Only the willing will pay tax, other will do what has been done till now. For other professionals like CAs, Consultants, etc., it is tougher than Doctors to dodge taxes because their clients are corporates & their TDS is deducted thus declaring their income. I think the only way to increase compliance with doctors is to make healthcare taxable under GST, even if at 5% so that inputs can be claimed & the white money does not get black in doctor's pockets.

disha
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Re: GST - Discussion on all aspects.

Postby disha » 10 Aug 2017 02:12

VKumar wrote:
disha wrote:IGST collection from imports rises about 60% in just one month of GST http://economictimes.indiatimes.com/news/economy/indicators/igst-collection-from-imports-rises-about-60-in-just-one-month-of-gst/articleshow/59853786.cms

^^ With the above trends., 1.2 lakh crore additional tax revenues per year will be mopped up by GOI and States. Think about it., what happens if all of the above goes into infrastructure spending by August 2018?

GST nets a million more taxpayers, registrations cross the 10 lakh ... : http://timesofindia.indiatimes.com/business/india-business/gst-nets-a-million-more-taxpayers-registrations-cross-the-10-lakh-mark/articleshow/59827226.cms

The tax base just went wiiiiiide. Imagine if if 10 lakh tax payers report revenue of 10 lakhs per year., that is additional 1 lakh crore revenue reported and 12000 crore mopped up.


The GST collected on imports will be set off against GST collected on sales. Also Keep in mind that CVD and SAD are subsumed in GST.


I have to put both the quotes to create the context.

No., the GST collected on imports will *not* be set off against GST collected on sales., for the simple reason being that earlier the various taxes collected by the chain from the consumer was never ever reported to the government. However to now get the sales-tax credit due to GST., everybody up the chain is reporting the sales revenue and taxes collected on it.

Hence GOI is seeing a huge bump in number of taxpayers and further in the actual tax collected.

One can see the result of this in the economy itself., the inflation numbers are down - almost edging towards deflation. And in fact in some sectors (real estate) it is full-fledged deflation.

Put it this way., basic inflation is a crude index of cost of living. And cost of living basically translates into shelter, food, clothing, utilities (electricity+water) and transportation.

Shelter+Food+Clothing are the most basic necessities without which one cannot survive. One can switch off fan or ac to save on electricity or take a ride_share for transportation.

Housing costs are dropping due to lack of black money running behind speculation. That is because the loopholes of the black money (for example octroi and sales-tax theft) itself has closed (or rather minimized).

To correlate it., check out the Indian stock market and bank deposits. If there is net increase in both., that means there is enough capital which is either being invested in the stock market or lying in bank deposits waiting to be invested.

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 10 Aug 2017 12:50

disha wrote:
VKumar wrote:

Housing costs are dropping due to lack of black money running behind speculation. That is because the loopholes of the black money (for example octroi and sales-tax theft) itself has closed (or rather minimized).

.


-------------------------------------------------------------------------
^^^^^^

Housing costs have not dropped , on the contrary real estate prices have increased by 6-10% due to GST and other factors
Please see the prices quoted in ads for new developments

What is happening is that developers seem to have the capacity to hold out till they get the desired price

Even resale sellers are holding out for better prices , no one is in a rush to sell at distress levels

Chennai market has seen a clear 10% increase in the last 1 year alone , don't know about other cities

vnms
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Re: GST - Discussion on all aspects.

Postby vnms » 10 Aug 2017 16:56

This is interesting. Considering the fact that there are different tiers in the housing market, which tier has shown increases? How much of the increase happened demo vs after demo?

Aditya_V
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Re: GST - Discussion on all aspects.

Postby Aditya_V » 10 Aug 2017 17:42

Regarding imports, I think GST is a big blow to the informal smuggling business, earlier since retailers were only somewhat bothered about VAT, they didnt bother about full input credits, Now they all want Invoices with input credits, this in itself will some of the smuggled imports costlier.

chetak
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Re: GST - Discussion on all aspects.

Postby chetak » 11 Aug 2017 15:11

Image

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 14 Aug 2017 10:23

GST on residential property is a very bad idea

Now property prices have gone up by 6-8% minimum simply because of GST

I cant think of any other country that imposes GST or VAT on residential property , as its impact is high due to the large sums of money involved

If you are looking at 2.5-3 Cr property , it has gone up by 30-40 lakhs due to GST

I think the way forward is to stop looking for new developments and instead focus on resale flats to avoid this tax

Our mandarins are simply not thinking through while fixing GST rates on various items

JayS
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Re: GST - Discussion on all aspects.

Postby JayS » 14 Aug 2017 11:00

Schmidt wrote:GST on residential property is a very bad idea

Now property prices have gone up by 6-8% minimum simply because of GST

I cant think of any other country that imposes GST or VAT on residential property , as its impact is high due to the large sums of money involved

If you are looking at 2.5-3 Cr property , it has gone up by 30-40 lakhs due to GST

I think the way forward is to stop looking for new developments and instead focus on resale flats to avoid this tax

Our mandarins are simply not thinking through while fixing GST rates on various items


I don't know about other countries. But in India, GST is not a new tax on RE. Its merely replacing existing ST+VAT. One can argue whether it was a good idea to apply tax on RE in first place. But thats another topic, unrelated to GST. In fact tax load has decreased under GST, so much so that now the new constructions post 1 July would be almost tax neutral for the consumer which means reduction upto the previous % of ST+VAT which was as high as 11.5% in some states. For under construction properties there is a gray area - its not clear how much can be claimed as ITC. That would be case to case basis. And also we need to keep in mind that typically majority of agreement value is paid far earlier than the actual completion date. Since GST is applicable only on the money paid post 1st July, the impact is going to be limited only. IMO only those properties which are almost complete but the majority of agreement value for which was paid post 1 july would see some increase in tax (~5-6%). But then people can always wait and buy ready to move properties or resale for which there is no tax. IMO only a small % of buyers will see significant increase in tax. Majority will see small increase to a hefty decrease. It also depends on one's ability to negotiate. Builders obviously try to tell buyers how GST is bad for them, but if the buyer is well informed, he should be able to see through the smoke and be able to extract benefits of GST. Add to that RERA also has come into place. So things are gonna change for good.

In fact I saw that only for Residential properties the GST mentions - additional ITC more than final tax liability would not be eligible for refund in monetary terms. That is if you end up having more ITC than the final GST on sale, you won't get the different refunded, it would be forfeited. This means it is expected that the ITC would be sufficient or even more than required to cover final GST on sale. Thus the GOI claim that Residential properties should be tax neutral after ITC is claimed.

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 14 Aug 2017 11:36

Earlier ( before GST ) , there was no VAT on property in TN
The effective service tax rate was 3.5-4.2 %

Now the effective rate is min 12% with GST

JayS
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Re: GST - Discussion on all aspects.

Postby JayS » 14 Aug 2017 11:59

Schmidt wrote:Earlier ( before GST ) , there was no VAT on property in TN
The effective service tax rate was 3.5-4.2 %

Now the effective rate is min 12% with GST


ST was 4.5% or 6.5% on the construction cost depending on whether it was Residential Contract or work contract. (Note that these taxes are applicable only on Construction value and not land value. So if developer makes two contracts and keeps construction cost to actual (about 1500-1800 psft), then effective tax can be as low as 1-2% on the entire cost of apartment.) It was central Tax so TN cannot have separate rate. I don't know about VAT in TN. VAT was state tax and was upto 5%-6% in some states. And there was a provision for claiming input tax credit on VAT called CENVAT. The builders won't tell you that. But there was no credit on ST on input AFAIK.

As far as this 12% GST rate is concerned, after the builder claims ITC, the final GST liability would be nil or minimal in worst case scenario. The builder is suppose to pass on this benefit to buyer. If he is not doing so, the buyer has to negotiate to get the benefit.

It some builder tells you that there is net increase in prices after GST, most probably he is lying.

Also do note there is only one rate of GST in RE now - 18%. (12% rate was changed on 29th June, but 1/3rd of value as deduction added so effective rate remains same). But depending on type of contract, it could be either 12% or 18%. Though effectively, after everything is said and done the RE sale should be tax neutral for all new launches post 1st July.

tandav
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Re: GST - Discussion on all aspects.

Postby tandav » 25 Aug 2017 08:41

GST system seems to be very poorly designed or our CA/Accounts people have messed up. I was hoping that the credits for GST would be automatically available on our dashboard from all our suppliers, but no such luck. Apparently the GST portal expects us to only make payments and not help us track who has paid GST on our behalf. Now it seems we have to collate all the bills from all our employees who have spent money on procurement on various work sites, find the GST numbers of the vendors from the invoices figure out whether it is SGST or CGST or IGST and which state figure out how to take input credits for our invoicing and then pay the residual. Complicated and tedious.

I would have thought that it would have been supremely easy for the government to ask companies to upload on to the GST portal a list of invoices with 1) Amount 2) CGST, IGST, SGST paid and 3) the GST number of the Client. Simultaneously when everyone does this the system would be able to give input credits to all entities registered on the portal.

Isn't the above what the GST system supposed to do... so far I could not find any input credits from my vendors on the portal... what give???

tandav
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Re: GST - Discussion on all aspects.

Postby tandav » 31 Aug 2017 19:54

In another never ending saga. We have a client in some other state and we were advised by CA to register in that state in order to bill the client from that state itself. Now it appears to me that we could have simply billed the client using IGST from our home state rather than start registering our company in N number of states that we do business in. In effect it appears that once we start billing our client using IGST from the Home State then we actually acheive the holy grail that GST was supposed to be... and the CGST + SGST can be simply be replaced by IGST billing in non home state sales.

Apparently IGST input credit can be used to offset IGST, CGST and SGST. Though I am not sure if there are other issues with this interpretation. Any CA can weigh in??

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 01 Sep 2017 11:13

tandav: is this feedback you've provided to GSTN authorities, or have you reached out to official government sources in any way at all ?

Not challenging you, just asking, because this forum itself isn't quite tailored to help you sort out your situation.

chetak
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Re: GST - Discussion on all aspects.

Postby chetak » 01 Sep 2017 19:11

Schmidt wrote:GST on residential property is a very bad idea

Now property prices have gone up by 6-8% minimum simply because of GST

I cant think of any other country that imposes GST or VAT on residential property , as its impact is high due to the large sums of money involved

If you are looking at 2.5-3 Cr property , it has gone up by 30-40 lakhs due to GST

I think the way forward is to stop looking for new developments and instead focus on resale flats to avoid this tax

Our mandarins are simply not thinking through while fixing GST rates on various items



I think that the GST council has gone revenue crazy. They wish to grab the maximum tax and then swindle it locally when the respective state govts spend it on "social welfare" programs.

Imagine how much can be skimmed off the top in projects like amma or indira canteens where there is no audit, no audit trail in terms of who or how many folks ate in a canteen on a particular day or week or month.

why would any state govt be so keen on feeding "migrant" labor?? Those guys cannot even vote.

what has been tightened by the center in the PDS leakages is now flowing out through these canteens. More states have caught on and another mammoth scam is building.

Is it any wonder as to why no BJP state is having such canteen schemes??

VKumar
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Re: GST - Discussion on all aspects.

Postby VKumar » 01 Sep 2017 23:08

The e-waybill is a very bad idea and sure to cause lot of grief to SME, who will have to dedicate manpower for this. Already most MSME are employing two persons full time for GST. Moreover it will give lots of opportunity for corruption, as in India, one day per 100 km doesn't always work .

Moreover, in addition to supplier filing e-waybill, transporter has to generate a number for the same and buyer has to accept it.

Very complicated and not small business friendly.

tandav
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Re: GST - Discussion on all aspects.

Postby tandav » 02 Sep 2017 12:59

Suraj wrote:tandav: is this feedback you've provided to GSTN authorities, or have you reached out to official government sources in any way at all ?

Not challenging you, just asking, because this forum itself isn't quite tailored to help you sort out your situation.


No! have not reached out to anybody yet... it is still early days... Had to attend to GST since our CAs themselves were very confused and causing us even more confusion. I was hoping that there would be others in the same boat and would advise me better. There is an online method to give suggestions to the GST guys will try that now

vish_mulay
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Re: GST - Discussion on all aspects.

Postby vish_mulay » 02 Sep 2017 13:31

tandav wrote:
Suraj wrote:tandav: is this feedback you've provided to GSTN authorities, or have you reached out to official government sources in any way at all ?

Not challenging you, just asking, because this forum itself isn't quite tailored to help you sort out your situation.


No! have not reached out to anybody yet... it is still early days... Had to attend to GST since our CAs themselves were very confused and causing us even more confusion. I was hoping that there would be others in the same boat and would advise me better. There is an online method to give suggestions to the GST guys will try that now

Tandav check out twitter feed of handle Ashu from Pune. Appears to have good knowledge of new GST law and might be of help. Check out on twitter and see whether he might be of any help for your particular concerns.

Yagnasri
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Re: GST - Discussion on all aspects.

Postby Yagnasri » 02 Sep 2017 14:16

Most of the problems with RE is the Cement Steel and another material has a tax on it which is now becoming GST. VAT is gone. Now if the material to Mumbai is coming from Guj there used to be VAT which no one used to pay properly or pay at all. Now they are forced to pay GST. The increase in price most of the time is a profiteering drama by the Builders who never paid taxes properly and pocketed amounts and are now forced to pay some.

tandav
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Re: GST - Discussion on all aspects.

Postby tandav » 02 Sep 2017 16:14

vish_mulay wrote:
tandav wrote:
Snipped...

Tandav check out twitter feed of handle Ashu from Pune. Appears to have good knowledge of new GST law and might be of help. Check out on twitter and see whether he might be of any help for your particular concerns.


Link?? Also I have dropped a suggestion to the GST folks as of now with my concerns... got an auto response.. lets see what happens

vish_mulay
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Re: GST - Discussion on all aspects.

Postby vish_mulay » 02 Sep 2017 16:22

https://twitter.com/muglikar_
He has helped lot others with their GST concerns. Frankly I have very little understanding of these matters, so you can check it if he is the right person for your queries. Hope it helps. Cheers!

manjgu
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Re: GST - Discussion on all aspects.

Postby manjgu » 02 Sep 2017 16:54

have the GST tax collections been on expected lines or more or less??

putnanja
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Re: GST - Discussion on all aspects.

Postby putnanja » 02 Sep 2017 18:02

tandav wrote:
Suraj wrote:tandav: is this feedback you've provided to GSTN authorities, or have you reached out to official government sources in any way at all ?

Not challenging you, just asking, because this forum itself isn't quite tailored to help you sort out your situation.


No! have not reached out to anybody yet... it is still early days... Had to attend to GST since our CAs themselves were very confused and causing us even more confusion. I was hoping that there would be others in the same boat and would advise me better. There is an online method to give suggestions to the GST guys will try that now


Tandav, check with the govt GST handle @askGST_GoI , seen people asking lots of queries and getting answers

wig
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Re: GST - Discussion on all aspects.

Postby wig » 02 Sep 2017 22:15

tandav ji,
in the case of issuing of interstate bill for supply of goods / services you will charge IGST. This IGST can be set off by the customer.
The protocol governing set-of for the IGST received by the enterprise against the CGST and SGST payable is set out in section 49(5) of the CGST Act, 2017. for ready reference I have reproduced the same hereunder

section 49(5)
The amount of input tax credit available in the electronic credit ledger of the registered
person on account of––
(a) integrated tax shall first be utilised towards payment of integrated tax and the
amount remaining, if any, may be utilised towards the payment of central tax and
State tax, or as the case may be, Union territory tax, in that order;
(b) the central tax shall first be utilised towards payment of central tax and the
amount remaining, if any, may be utilised towards the payment of integrated tax;
(c) the State tax shall first be utilised towards payment of State tax and the amount
remaining, if any, may be utilised towards payment of integrated tax;
(d) the Union territory tax shall first be utilised towards payment of Union territory tax
and the amount remaining, if any, may be utilised towards payment of integrated
tax;
(e) the central tax shall not be utilised towards payment of State tax or Union
territory tax; and
(f) the State tax or Union territory tax shall not be utilised towards payment of
central tax.

tandav
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Re: GST - Discussion on all aspects.

Postby tandav » 03 Sep 2017 11:56

A pox on those advised us to register in a non home state location to service clients in those locations!

Instead of monitoring "N" number State accounts we could have nicely issued IGST bills to our client who are outside our home state with no taxation difference to our clients. Instead we were advised to find a CA in each non home state location pay rent for a registered address and CA fees. Then pay SGST CGST to all those states and monitor these "N" accounts each month...

tandav
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Re: GST - Discussion on all aspects.

Postby tandav » 06 Sep 2017 00:46

Apparently there is something called GSTR1 which makes all people upload their invoices online and pay GST as per their invoices sent to clients. Which does exactly what I thought should have been the case i.e Upload on to the GST portal
a list of invoices with 1) Amount 2) CGST, IGST, SGST paid and 3) the GST number of the Client. Simultaneously when everyone does this the system would be able to give input credits to all entities registered on the portal.

It appears only 10% of people have uploaded their invoices via GSTR1 for July and Aug, Our company has certainly has not uploaded the GSTR1 so far. Tomorrow I think I will attempt to take over control of GST filings from the rest of the team all by myself.

Gus
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Re: GST - Discussion on all aspects.

Postby Gus » 06 Sep 2017 00:54

tandav saar, please keep posting on this - both the practical issues and your discoveries as you are actually going through the process.

arshyam
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Re: GST - Discussion on all aspects.

Postby arshyam » 06 Sep 2017 07:14

^^ +1 to Gus's request. It's very useful for us non-business folk to understand how this works out in reality.

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 06 Sep 2017 12:03

There are some minor irritants

For eg , I learnt that we can only set off the input credit on ED paid ( interstate purchases ) against the CGST component but not against the SGST component , so we would have to wait a while in order to avail the full credit

Also , I had a fight with my CA firm who handles our GST filing , as a result the filing got delayed by 3 days and we were hit with a 300 Rs penalty ( 100 per day)

I blew a fuse and told them it was their fault , but the begged me to let it go this once . Now the govt has waived the late filing penalty so we have to see they refund the same

One of these days I have to log into our account and see how the whole thing looks.

The Singapore GST is a whole lot easier process , you just file one form with input-output figures ( no need to upload actual sale / purchase invoices ) and just one flat 7% rate. You can choose to file monthly or even quarterly basis based on your convenience. Takes approx 5 min to file the damn thing if you have the figures ready.

vijayk
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Re: GST - Discussion on all aspects.

Postby vijayk » 11 Sep 2017 05:25

July data - 97,000 crores taxes paid

Guess what? Refund claims of 60,000 crores... Govt. is shocked. I think we are heading for a disaster

Rishirishi
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Re: GST - Discussion on all aspects.

Postby Rishirishi » 11 Sep 2017 05:38

vijayk wrote:July data - 97,000 crores taxes paid

Guess what? Refund claims of 60,000 crores... Govt. is shocked. I think we are heading for a disaster


That sounds normal.

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 11 Sep 2017 09:56

There are 2 separate things

1 - they asked for total value of transitional stocks as on 30th June - for which we have paid ED / VAT
2. the amount you can actually set off as input credit would be against future GST sales - this is same as what happened under ED / VAT , and this happens over a period of time

Don't understand what is shocking the govt

The firms claiming refund were already registered for ED/ VAT , and would have claimed exactly the same amount under the previous system

If anything the govt revenues wd have gone up due to GST rate increases and better compliance

Yagnasri
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Re: GST - Discussion on all aspects.

Postby Yagnasri » 11 Sep 2017 14:18


JayS
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Re: GST - Discussion on all aspects.

Postby JayS » 11 Sep 2017 14:32

vijayk wrote:July data - 97,000 crores taxes paid

Guess what? Refund claims of 60,000 crores... Govt. is shocked. I think we are heading for a disaster


I think its just plain stupid DDM headline.

JayS
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Re: GST - Discussion on all aspects.

Postby JayS » 11 Sep 2017 14:39

Schmidt wrote:There are 2 separate things

1 - they asked for total value of transitional stocks as on 30th June - for which we have paid ED / VAT
2. the amount you can actually set off as input credit would be against future GST sales - this is same as what happened under ED / VAT , and this happens over a period of time

Don't understand what is shocking the govt

The firms claiming refund were already registered for ED/ VAT , and would have claimed exactly the same amount under the previous system

If anything the govt revenues wd have gone up due to GST rate increases and better compliance


Can you help me understand one thing, if you are aware of it..? Related to the Real estate - what is the earliest date previous to 1st July 2017 that the builders can claim input tax on spending that they have done for the under construction property..? The sale of the property would attract full GST, but lets say its constructed 50% before 1st July, then how much of the Input tax that builder paid on that 50% construction expense that he could claim..? Under construction properties is a big grey area.

Another question - how is the applicability of GST (or any tax for that matter) - is it based on when the contact for sales or services is done or is it based on when the consideration is actually paid..? For example, say a contract for certain service is done between service provided and customer before 1st July and the customer paid say 30% of the agreed amount before 1st July and remaining 70% post 1st July. How will GST be applicable on this..? GST on 70% amount which was paid after 1st July while ST on 30% on amount paid before 1st July. Or no GST only ST on entire amount since contract done before 1st July...? As per my understanding it should be the former. But would love some confirmation.

Yagnasri
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Re: GST - Discussion on all aspects.

Postby Yagnasri » 11 Sep 2017 16:54

https://www.pgurus.com/gst-network-gstn ... g-returns/

We may be having a problem with GSTN gurus. People are reporting that they are unable to upload with their interim GST numbers as assured by the department.

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 11 Sep 2017 19:25

JayS wrote:
Schmidt wrote:There are 2 separate things

1 - they asked for total value of transitional stocks as on 30th June - for which we have paid ED / VAT
2. the amount you can actually set off as input credit would be against future GST sales - this is same as what happened under ED / VAT , and this happens over a period of time

Don't understand what is shocking the govt

The firms claiming refund were already registered for ED/ VAT , and would have claimed exactly the same amount under the previous system

If anything the govt revenues wd have gone up due to GST rate increases and better compliance


Can you help me understand one thing, if you are aware of it..? Related to the Real estate - what is the earliest date previous to 1st July 2017 that the builders can claim input tax on spending that they have done for the under construction property..? The sale of the property would attract full GST, but lets say its constructed 50% before 1st July, then how much of the Input tax that builder paid on that 50% construction expense that he could claim..? Under construction properties is a big grey area.

Another question - how is the applicability of GST (or any tax for that matter) - is it based on when the contact for sales or services is done or is it based on when the consideration is actually paid..? For example, say a contract for certain service is done between service provided and customer before 1st July and the customer paid say 30% of the agreed amount before 1st July and remaining 70% post 1st July. How will GST be applicable on this..? GST on 70% amount which was paid after 1st July while ST on 30% on amount paid before 1st July. Or no GST only ST on entire amount since contract done before 1st July...? As per my understanding it should be the former. But would love some confirmation.



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^^^^
Real estate - not sure at all.

Regarding the second issue , if you had raised an invoice prior to 1st July ( before GST ) then it would be subject to ST rules as applicable. Your collection of debtors is not really relevant. So yes , the whole amount would be subject to the earlier ST rules and you should have filed in July already.

JayS
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Posts: 2295
Joined: 11 Aug 2016 06:14

Re: GST - Discussion on all aspects.

Postby JayS » 11 Sep 2017 20:46

Schmidt wrote:
JayS wrote:
Can you help me understand one thing, if you are aware of it..? Related to the Real estate - what is the earliest date previous to 1st July 2017 that the builders can claim input tax on spending that they have done for the under construction property..? The sale of the property would attract full GST, but lets say its constructed 50% before 1st July, then how much of the Input tax that builder paid on that 50% construction expense that he could claim..? Under construction properties is a big grey area.

Another question - how is the applicability of GST (or any tax for that matter) - is it based on when the contact for sales or services is done or is it based on when the consideration is actually paid..? For example, say a contract for certain service is done between service provided and customer before 1st July and the customer paid say 30% of the agreed amount before 1st July and remaining 70% post 1st July. How will GST be applicable on this..? GST on 70% amount which was paid after 1st July while ST on 30% on amount paid before 1st July. Or no GST only ST on entire amount since contract done before 1st July...? As per my understanding it should be the former. But would love some confirmation.



------------------------------------------------------------------------------------------
^^^^
Real estate - not sure at all.

Regarding the second issue , if you had raised an invoice prior to 1st July ( before GST ) then it would be subject to ST rules as applicable. Your collection of debtors is not really relevant. So yes , the whole amount would be subject to the earlier ST rules and you should have filed in July already.

Thanks for reply. Question was related to "Work contract" as in construction related contract. Not invoice as such.

Schmidt
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Re: GST - Discussion on all aspects.

Postby Schmidt » 11 Sep 2017 21:32

[/quote]
Thanks for reply. Question was related to "Work contract" as in construction related contract. Not invoice as such.[/quote]

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Would the billing ( based on the work contract ) be done in stages depending on completion of the work ?

If any billing is done after 1st July , then GST would be applicable for that portion ( as the work contract would only specify a basic rate on top of which appropriate taxes would be applicable )

As a comparison , when we quote for any product , we always quote Basic Rate and specify taxes would be charged as applicable ( be it ED / VAT or GST now ).

Manish_Sharma
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Re: GST - Discussion on all aspects.

Postby Manish_Sharma » 13 Sep 2017 15:39

https://swarajyamag.com/economy/the-nig ... tax-reform

The Nightmare Called GSTN: Implementation Issues Can Derail India’s Biggest Tax Reform
Aashish Chandorkar
- Sep 12, 2017, 3:00 pm


The Nightmare Called GSTN: Implementation Issues Can Derail
India’s Biggest Tax Reform
SNAPSHOT
With GSTN, the issue isn’t that there are technology glitches. Those were to be expected. The issue with GSTN is that the severity and the nature of these glitches out-shame the purpose of the network by a wide margin.

There’s a popular message being circulated on WhatsApp which says that filing your goods and service tax (GST) returns is the forty-ninth step of the Blue Whale game. The Blue Whale game is the latest internet fad, which urges participants to do difficult tasks, with the fiftieth and the last step being suicide. For a once in a lifetime indirect tax reform, it’s a pity that the Goods and Service Tax Network (GSTN), the backbone of the GST implementation, has not matched the historical nature of the work it is supporting.

To be sure, no large scale software implementation works without glitches. Anyone who has implemented and supported the post go-live phase of any large enterprise resource planning or core banking system software will attest to the sleepless nights. In fact many enterprises run two systems in parallel for a few days and mirror data, just to make sure day to day work is not affected. Now when new software is being implemented for 10 million users, the scale is unmatched, except in the world of consumer internet.

But with GSTN, the issue isn’t that there are technology glitches. Those were to be expected. The issue with GSTN is that the severity and the nature of these glitches out-shame the purpose of the network by a wide margin. The scale and the nature of use of GSTN were well known for many years. To then have the kind of troubles GSTN is having is really bad planning.

There are the usual traffic issues. The GSTN site won’t open or if it opens, navigating it for a transaction is near impossible. Memes about people staring at an immovable GSTN screen are flooding social media. Unless an unstoppable force – the resolve of the user – meets this immovable GSTN, it is very difficult to submit the desired data. But resolve comes at a cost – in this case, the time spent. Users are complaining of wasting hours on end spending time which should have been dedicated to sales or marketing or strategising.

Then there are the design flaws. If an invoice has line items with multiple tax rates, GSTN doesn’t accept it. The system takes only the first line as valid and the rest as duplicate. This is the kind of software requirement which should have been discussed practically on the first day of writing the software specifications. The same issue plagues credit and debit notes. If a credit or debit note is issued with multiple tax rates and multiple invoice references, the system generates multiple line items to match one such note.

Two transacting parties won’t obviously deal in multiple invoices or credit and debit notes just because the tax rates of the items mentioned were different. But then invoice matching is the holy grail of the GST regime – and rightly so for plugging tax leakages in a long value chain. However, this design puts a lot of onus on the users to work around and feed all relevant data to stay compliant.

The upload happens on the site in a specific file format called the json. Generating this format has its own complications, and currently a lot of time is being spent on this format compliance.

If a user gets all this data and file format in place, the user interface of the GSTN can play truant. It is very difficult to move between screens without either losing data or rekeying a lot of data, and there are many users and scenarios which require such a navigation. For example, if a user is checking input credit from one supplier and wants to check the GST numbers of suppliers to understand which supplier this input credit belongs to, it is not possible to do so without losing already keyed in data.

The current expectation of the Central Board of Excise and Customs (CBEC) that businesses should file invoices every week or even every day is grossly flawed. Invoices keep changing till the last minute as any small businesswoman will testify. The customers almost always ask for modifications of details until the last day of filing. One party representing a single side of a two-sided transaction cannot suo moto upload the details of the invoice on the GSTN. The other side has to agree as well. The GSTN process flow does not account for these practical challenges.

There have been problems with security too. Some users have complained that they are seeing data from other businesses when they login. Whether these issues are fleeting or related to inherent design flaws, they can wreak havoc with the confidence in any system. Nothing repels a user from a technology product faster than breach of privacy and data.

The government put forth mechanisms to answer questions, including a help desk and a Twitter Q&A provision. Users are sometimes getting different answers to the same questions from these channels. And there is no guarantee that the resolution will actually satisfy a tax inspector when the scrutiny starts.

The users are dreading the day the e-way bills go live. An e-way bill is needed for transporting any goods from one point to another. If the GSTN does not work flawlessly when e-way compliance comes into effect, it will not be possible to move any goods in the economic system. In an economy already bogged down with growth challenges, the last thing anyone expects is logistics problems.

To top it all, the monthly GST Council meeting has become another event to fear. New directions are being issued regularly – in fact some of them are useful and necessary. But constant changes are becoming distracting rather than comforting because the underlying infrastructure is misbehaving. And then there is the question of changing and updating tax rates on different goods. The merit or the otherwise of the changes aside, industries will need proper visibility to plan their businesses and decide on investments. Business strategies cannot be held hostage to monthly meetings and should certainly not be forced to change so often in a sluggish economy.

All of these issues and more were hypothesised. Swarajya raised the possibility of an implementation standstill ahead of the GST go-live. Unfortunately, these suspicions have played out exactly as feared in the first two months. The government is also worried about the surprisingly high Rs 62,000 crore input claim against the first month’s tax collection. Since this input credit is against the transitional stock and the returns can now be filed until end October, it is fair to assume that this number will only go up. Of course this is a one-time setup issue.

The GST implementation has tested the patience of the tax community and the businesses alike. The good news for the government is that it got the timing perfect – there is a lot of time for tide things over before any political ramifications catch up. The bad news is that September till date and August have not been significantly better than July in terms of GSTN availability and usage.

A nation which prides on it software industry cannot be held hostage by technology. Outside of the fine prints of contracts and warranty agreements, there is enough expertise in the country to fix these issues. It is incumbent upon the government to think of new ideas and ways to tap into this large talent pool available right under its nose.

Let’s make no mistakes – GST is indeed historical. We just need the urgency and resolve to steer history in the right direction. This indeed is a real test for Prime Minister Narendra Modi.

The author thanks Vivek Khaitan for his inputs to this article.


JayS
BRF Oldie
Posts: 2295
Joined: 11 Aug 2016 06:14

Re: GST - Discussion on all aspects.

Postby JayS » 13 Sep 2017 20:39

Schmidt wrote:
------------------------------------------------------------------------------------------------------------------
Would the billing ( based on the work contract ) be done in stages depending on completion of the work ?

If any billing is done after 1st July , then GST would be applicable for that portion ( as the work contract would only specify a basic rate on top of which appropriate taxes would be applicable )

As a comparison , when we quote for any product , we always quote Basic Rate and specify taxes would be charged as applicable ( be it ED / VAT or GST now ).


Contract done in June. Partial payment in June. Rest in July. So the quandary. I am not sure how it works for "work contract".


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