GST - Discussion on all aspects.

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Yagnasri
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Re: GST - Discussion on all aspects.

Postby Yagnasri » 07 Jun 2018 12:11

Sure. But the looting is largely contained. We can aim for perfection but we all know that it is very difficult to achieve. Most of the paths are now closed. But Baboons will find new paths in time.

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Re: GST - Discussion on all aspects.

Postby SBajwa » 07 Jun 2018 19:05

http://www.tribuneindia.com/news/punjab ... 56139.html

The man behind the multi-crore fake GST bills scam, Manish Aggarwal, a small-time accountant, has been nabbed by the Ludhiana police. The accused also had a role in the VAT refund scam in Mandi Gobindgarh and Ludhiana two years ago.

He has been booked for cheating, fraud and criminal conspiracy as well as under the Goods and Services Act.

(Follow The Tribune on Facebook; and Twitter @thetribunechd)

According to the police, Aggarwal worked hand in glove with a clerk (under suspension) in the Excise and Taxation Department, Rajiv Kumar, who is yet to be traced. “They set up fake firms, registered these under GST and purchased bills from small retailers which they sold to exporters and large manufacturers in Ludhiana and Mandi Gobindgarh,” SHO Jatinder Singh told The Tribune.

The firms bought GST bills at 2-7 per cent of the GST levy on goods sold from retailers. They then sold these bills at 5-14 per cent to exporters and large manufacturers, who took input tax credit by submitting these bills while there was no actual sale/export of goods. Aggarwal was tracked through the IP address of a computer used by him to register a company.

SBajwa
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Re: GST - Discussion on all aspects.

Postby SBajwa » 07 Jun 2018 19:06

http://www.tribuneindia.com/news/punjab ... 52109.html

Modus operandi
*The companies were buying GST bills from retailers of paints, hardware goods and cement amongst others at just 2-7 per cent of the GST levied on these (the GST levy is 5-28 per cent on the items).

*They were then selling these bills to other large manufacturers and exporters.

*They, in turn, were taking input tax credit (ITC) by submitting these bills when actually no sale of goods was taking place by them.

Ruchika M Khanna

Tribune News Service

Chandigarh, March 1
In the first major action against the "organised gang" involved in the Rs 100 crore fake GST billing scam, the Punjab Excise and Taxation Department has got police complaints registered against 134 persons associated with 70 companies/ firms in the state.

Those booked in the fake billing scam are mostly registered as either iron and steel or yarn traders and manufacturers. But investigation, so far, has shown that most of these companies did not exist at the registered address.

These companies were buying GST bills from retailers of paints, hardware goods and cement amongst others at just 2-7 per cent of the GST levied on these (the GST levy is 5-28 per cent on the items).

They were then selling these bills to other large manufacturers and exporters, who in turn were taking input tax credit (ITC) by submitting these bills when actually no sale of goods was taking place by them.

As soon as the case was registered in Ludhiana yesterday, joint teams of Excise and Police started conducting raids against the companies and their functionaries.

Even today, raids were conducted on two big yarn manufacturers in Ludhiana, informed sources.

While the GST on cotton yarn is 5 per cent and on polyester yarn is 12 per cent, most of the trade in yarn takes place without any bills being cut.

The bills that the polyester yarn manufacturers cut are sold to exporters at just 4-5 per cent of the GST rate of 12 per cent, so the exporters claim ITC on these.

Other than conducting raids on these people, the Excise and Taxation Department has also moved the case for cancelling the GST registration of these 70 companies.

Vivek Pratap Singh, Excise and Taxation Commissioner, Punjab, told The Tribune that it was physical verification of some of these companies as well as data mining by the department that helped unearth the multi-crore scandal. He maintains that this is just the tip of the iceberg.

Interestingly, official sources say that most of these companies against which the FIR has been registered had even filed their GST returns.

Since the companies or traders are required to mention the details of their bank accounts while registering under GST, their accounts remained dormant.

They used other bank accounts (not registered) to get the credit of the amount mentioned in the bills from the manufacturers/exporters through RTGS and would then withdraw the money and refund them the amount.

"Investigations have shown cash withdrawals from these accounts worth several crores,” said Vivek Pratap Singh.

JayS
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Re: GST - Discussion on all aspects.

Postby JayS » 07 Jun 2018 19:53

Suraj wrote:All these idiots fudging with a tax system that depends on a paper trail with at least two counterparties, need to realize they'll ultimately end up being caught because of ... the paper trail. You can only hide when there's no trail . Once an anomaly is detected, it's simply a matter of reading off the names of those involved and sending pulis their way.


Not just the GST trail but GOI now has a good hold on money trail as well. How will one fudge money trail even if let's say GST paper trail can be managed somehow or vice-versa...? There is double trap. When the bills say 100Cr transactions has occurred but actually only <10% of that money has exchanged hands (in selling bills). And vice versa is also true.

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 08 Jun 2018 03:11

JayS wrote:
Suraj wrote:All these idiots fudging with a tax system that depends on a paper trail with at least two counterparties, need to realize they'll ultimately end up being caught because of ... the paper trail. You can only hide when there's no trail . Once an anomaly is detected, it's simply a matter of reading off the names of those involved and sending pulis their way.


Not just the GST trail but GOI now has a good hold on money trail as well. How will one fudge money trail even if let's say GST paper trail can be managed somehow or vice-versa...? There is double trap. When the bills say 100Cr transactions has occurred but actually only <10% of that money has exchanged hands (in selling bills). And vice versa is also true.

Yes indeed. The formalization of the economy, including monetary system and taxation system, are a great boon in catching all those crooks who for decades were able to get away simply because the rudimentary formal system and the parallel informal system made it easy to siphon off cash to their hearts content. DeMo and GST are simply two of multiple steps this admin has taken towards economic formalization. There are several others, such as the JAM mission (Jan Dhan / Aadhaar / Mobile) , MUDRA scheme, all of which engender formal economic activity, as opposed to dealing with cash, moneylenders, and other informal means prone to abuse.

jaysimha
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Re: GST - Discussion on all aspects.

Postby jaysimha » 19 Jun 2018 11:22

Central Goods and Services Tax (CGST) Rules, 2017. This updated version of the Rules as amended upto 13th June, 2018 has been prepared for convenience and easy reference of the trade and industry
https://cbec-gst.gov.in/pdf/13-06-2018-CGST-Rules.pdf

Vips
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Re: GST - Discussion on all aspects.

Postby Vips » 02 Jul 2018 20:07

A year since GST, Maharashtra govt’s coffers fuller by 28%

The criticism be damned, GST has brought in more moolah for the state government. Its coffers have seen an increase of 28.08 per cent since the GST regime was enforced.

In 2016-17, the government earned Rs 90,525 crore through value added tax (VAT). But after GST kicked in on July 1, 2017, its revenues rose to Rs 1,15,940 crore in 2017-18. “One of the major reasons behind this is that the number of traders who are registered with the state GST department has risen from 8.30 lakh to 14.55 l a k h , ” said state GST Commissioner Rajiv Jalota.

From April-June this year, the state’s revenues jumped by 39 per cent — to Rs 39,915 crore — as compared to the corresponding period last year. Maharashtra accounts for nearly 15 per cent of the country’s GST collection.

States have to be compensated by the Centre for the first five years if their revenues fall as compared to the previous VAT regime.
What made a number of traders quickly adopt GST was the realisation that if one buys goods and services from an unregistered dealer, then a registered dealer would have to pay the entire tax and they won’t get any credit for it. This resulted in big traders, manufactures and service providers insisting that vendors register for GST. Besides, in many cases transporters also refused to carry goods without proper e-way bills, which resulted in registration of a large number of vendors, thus widening the tax net.

He said over the past year, data on traders and the returns they have filed have been compiled.

“Now, we plan to scrutinise this data thoroughly. If major violations are found, then the vendor will lose his/her GST registration,” he warned.

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 02 Jul 2018 20:24

What made a number of traders quickly adopt GST was the realisation that if one buys goods and services from an unregistered dealer, then a registered dealer would have to pay the entire tax and they won’t get any credit for it. This resulted in big traders, manufactures and service providers insisting that vendors register for GST. Besides, in many cases transporters also refused to carry goods without proper e-way bills, which resulted in registration of a large number of vendors, thus widening the tax net.

THIS is why GST works. It is self enforcing, and more critically, it imposes a cost on those who do not participate. Previously, staying out of the formal taxation system was something one could do without being hurt. Not anymore. One HAS to participate in order benefit, otherwise you're penalized not just by the government, but by your network refusing to do business with you.

The article is technically incomplete - it's not merely tax revenues that grew 28%. It's the formal economy that's grown in size by over a third .

The MH data is just spectacular:
2016-17: Rs.90,525cr
2017-18: Rs.1,15,940cr (+28%)
2018-19: Rs.39,916cr (Q1 data only), or approx Rs.1,60,000cr for full year extrapolated.

The current fiscal year extrapolated figure is a 75% gain in tax revenues within two fiscals. It's a good barometer as to the size of the informal economy.

JohnTitor
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Re: GST - Discussion on all aspects.

Postby JohnTitor » 05 Jul 2018 08:12

Question..

There was a recent news item about the government planning to abandon the reverse charge mechanism in GST. (Can't find the actual news item anymore but that was the gist)

This was one of the things forcing everyone to formalise and register. Isn't this a step back?

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 05 Jul 2018 09:30

Err, why not find the article, and explain why you think it's a step back ?

The reason why I ask this is that we'd like to discourage people from asking leading questions with no references or effort to explain their own point of view.

kittigadu
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Re: GST - Discussion on all aspects.

Postby kittigadu » 05 Jul 2018 10:20

https://www.newslaundry.com/2018/07/04/ ... -narrative

Supposedly contrary view on GST. Some numbers do not make sense. If Central GST is falling well short of budgetary estimates, the fiscal deficit will go through the roof. But that is not the case. What gives ?

JohnTitor
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Re: GST - Discussion on all aspects.

Postby JohnTitor » 05 Jul 2018 10:22

This isn't the exact article, as is states that the mechanism will be deferred rather than scrapped.

https://www.livemint.com/Politics/7pqWc ... r-GST.html

Under the reverse charge mechanism, entities (registered under GST) that purchase goods from small unregistered dealers have to pay a tax on behalf of the latter. This is expected to add to the compliance burden of all involved and discourage purchases from unregistered dealers.

The Narendra Modi government, in the final year of its tenure before elections are held by May, is trying to avoid further upsetting small traders, who have already been affected by the initial chaos following the implementation of GST last year.

The government is of the view that this anti-tax evasion measure will disrupt small businesses, especially those operating in the informal economy, without leading to a significant rise in revenue collections.


Reverse charge as I understand it is charging the buyer rather than the seller tax, if the seller is not registered. Smaller players have inventive to not register to reduce costs. Making buyers pay this would force buyers to buy from only those who are registered. But if this mechanism were not implemented, there would be higher tax evasion because of under invoicing. This is similar to the previous regime.

I understand the political compulsion to not want to implement this but based on my limited understanding of it seems like a step in the wrong direction. No?

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 05 Jul 2018 11:48

The article itself states that 1% of the companies pay 80% of the taxes under GST . The unregistered small traders fall beneath the 99% who pay the remaining 20%.

If the reverse charge is applied then those who buy from unregistered entities will either demand lower prices in order to pay the tax, or choose registered sellers . However they aren’t going to contribute much in taxes either way .

It’s not clear what you consider a backward move - applying the reverse charge or not applying it . It’s simply not numerically critical and heavy handed tax enforcement is bad optics in an election year . There’s sufficient buoyancy in revenue collections due to formalization of activity, and GST is demonstrably doing its job at being self-enforcing by and large .

Aditya_V
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Re: GST - Discussion on all aspects.

Postby Aditya_V » 05 Jul 2018 12:01

I am run a small firm, if reverse charge is applied it will be a total pain the neck, my cash flows will be totally affected as I will be paying huge GST one month to claim credit next month. Over all it will only bring pain in cash flow and compliance to tax payer but overall will not improve GST tax collections, there will be a one month timing surge. Quite frankly GST should be levied on Lawyers directly and not reverse charge.

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Re: GST - Discussion on all aspects.

Postby nandakumar » 05 Jul 2018 12:17

The 'reverse tax' concept in a value added tax regime is in my view, meaningless. It made sense under the old salestax regime where cascading levies were perfectly acceptable and 'purchase tax' the other name for 'reverse tax' was a more efficient form of tax collection. Consider this case. The government wants to impose a tax on sale of sugar cane but finds it messy to collect from thousands of farmers growing cane. So it imposes a purchase tax on the mills. But the mills would pay tax on the sale of sugar as well. That is because the tax regime accepted the concept of cascading levies. But under GST which is a value added tax regime the tax on output embeds a levy on input even where the input in question or the vendor in question pays no tax. This is because the seller of the output would get no input tax credit as there was no tax paid on the input in the first place.

Abhi_Z
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Re: GST - Discussion on all aspects.

Postby Abhi_Z » 05 Jul 2018 17:48

Respected Readers,
To add more knowledge about the subject. Government of India has introduced to make the whole taxation process hassle free. If we talk about scams they happen always. Not just in India but also in other countries. No society can exist without crime.

<advertisement removed>

Mod Note: This forum is not a place to advertise your business.

JohnTitor
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Re: GST - Discussion on all aspects.

Postby JohnTitor » 06 Jul 2018 03:10

Interesting, the reverse mechanism and tax on output is a bit confusing, though I've gone through it a few times.

I think I mistook one for the other.

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Re: GST - Discussion on all aspects.

Postby jaysimha » 13 Jul 2018 11:12

SURVEY ON ONE YEAR OF GST 6th July, 2018
http://ficci.in/spdocument/22999/One-Ye ... -ficci.pdf

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Re: GST - Discussion on all aspects.

Postby Supratik » 21 Jul 2018 23:29


hanumadu
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Re: GST - Discussion on all aspects.

Postby hanumadu » 21 Jul 2018 23:44

Image

hanumadu
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Re: GST - Discussion on all aspects.

Postby hanumadu » 22 Jul 2018 00:02

Image

Also GST on ethanol has been reduced from 18% to 5%.

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Re: GST - Discussion on all aspects.

Postby A_Gupta » 24 Jul 2018 00:45

https://swarajyamag.com/economy/latest- ... n-the-bush
Latest GST Cuts Mark Attitudinal Shift From Bird-In-Hand To Two-In-The-Bush

While it is true that many rates were cut in November 2017 ahead of the Gujarat elections, that move was seen as purely a political concession for Narendra Modi’s constituency. But by repeating the cuts, the GST Council has indicated that it does not intend to keep rates high forever, and is willing to let go of the bird in hand – selectively – to get two in the bush. That is the whole point of GST: letting lower rates increase economic activity first and then collecting higher revenues from higher turnover.

The abandonment of the idea of revenue-neutrality is essentially a move away from defensive thinking and that is good. It means Centre and states are now realising that the tax will deliver.

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Re: GST - Discussion on all aspects.

Postby Suraj » 09 Oct 2018 22:03

Central, State officials can act against GST evaders irrespective of jurisdiction: CBIC
The Central Board of Indirect Taxes and Custom (CBIC) has made it clear that irrespective of assessees assigned under the Goods and Services Tax (GST) regime, officials from the Centre or State can initiate enforcement action against tax evaders and take it to its logical conclusion.

The directive will remove the ambiguity on initiation of enforcement action by the Central tax officers in case of taxpayers assigned to the State tax authority and vice versa. It is also meant to end jurisdicational disputes.

The move will also help in higher revenue collection which is still in the range of ₹93,960- 1,03,459 crore while the estimate is between ₹1-10 lakh crore. Anita Rastogi, Indirect tax Partner at PwC, said that intelligence-based enforcement action has taken a new importance considering that GST revenue has not really seen the increase as expected by the Government coupled with some sector-specific tax evasions being noticed recently. “Businesses would now need to deal with both Centre and State in specific situations,” she said.

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Re: GST - Discussion on all aspects.

Postby M_Joshi » 10 Oct 2018 15:16

Just recently we've started getting notifications in our GST portal about our vendors who have taken GST amount on invoice from us, but have not filed their GST returns. Most of them are small vendors who have old habits of taking VAT on invoices, but did not file VAT returns, instead gobbled the VAT amount. Now we cannot claim that input GST unless those vendors have filed their returns & paid the GST we've paid them. Few have compiled & others will shortly. This will also increase the GST collections in the coming quarters.

Suraj
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Re: GST - Discussion on all aspects.

Postby Suraj » 10 Oct 2018 22:42

Thanks for that piece of feedback from the real world!


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