In a development that may encourage increased investment in commercial real estate, the Supreme Court on Thursday gave the industry relief by permitting input tax credit (ITC) on construction expenses for buildings meant to be leased. "If the construction of a building was essential for carrying out the activity of supplying services, such as renting or giving on lease or other transactions in respect of the building or a part thereof, which are covered by clauses (2) and (5) of Schedule II of the CGST (Central Goods and Services Tax) Act, the building could be held to be a plant," said Justice Abhay S Oka and Justice Sanjay Karol.
The GST's significance for the BJP's politics is as important as its implications for the Indian economy, says A K Bhattacharya.
The Centre and states are looking to further tighten the GST registration process and legal measures to deal with the rising cases of fake invoicing. A meeting of the law committee of the GST Council has been convened on Wednesday to discuss these issues, finance ministry sources said. The committee, comprising senior central and state tax officers, would also discuss the GST fake invoice frauds, further tightening of the GST registration process and work out other legal measures including necessary law amendment required in the GST Act to curb the menace of fake invoicing, they added. Also the provisions related to deemed registration under Goods and Services Tax (GST) law may be tightened to prevent the misuse of such provisions by fake dealers and the provisions related to suspension of registration may also be streamlined to make the procedure of suspension and cancellation of registration more efficient and faster, so that such fraud operators can be prevented in time from continuing to pass on fake credit down the chain.
'At a recent event, says Kishore Singh, almost everyone present lamented art being labelled as 'goods', and therefore the artist its 'manufacturer'.
Since its rollout 13 months ago, the new indirect tax has yielded Rs 1 trillion only in in April 2018
Manufacturing taxes, VAT will come down, assures Jaitley
'We revolutionised the system in a manner so that the chances of leakage will be much lower than it was in the beginning.'
States are planning to pass resolutions in their legislative assemblies; however, such tactics will be used as the last resort if the Centre continues to stall allocations.
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.
States' demand for 5 years and Constitutional provision ruled out
The new restriction will be challenging for businesses, as they will have to do regular follow-ups with their suppliers.
The new tax rates will come into effect from January 1, 2019.
Any residual amount left in the Compensation Fund after five year compensation period shall be shared equally between the Centre and the states.
They've proposed a sub-committee under the proposed GST Council or the Empowered Committee of State Finance Ministers to resolve any disputes in the tax's implementation.
Retaining the GST rate assumes importance since states are under pressure to increase their revenues, hit hard by lockdown. Also, the Centre has not fully compensated states for their revenue losses on account of GST for 2019-20.
Banks have been demanding a single centralised registration system, like at present, as they feel multiple registrations would create procedural and compliance problems.
Petroleum being out of the goods and services tax initially will create some anomaly as tax credit on some of the inputs to oil industry may not be given, said revenue secretary Hasmukh Adhia.
Only luxury and 'sin' items could be left in highest slab. 12 and 18 per cent slabs could be merged in the future
Amid an outcry over record high petrol and diesel prices, Union Finance Minister Nirmala Sitharaman on Saturday said the Centre and state governments will have to together work out a mechanism to bring retail rates to reasonable levels.
With audits and greater emphasis on anti-evasion measures, more tax demands will lead to more litigation. So, it is a bit early to start celebrating. GST is still work in progress.
Strong gains in Vedanta Ltd, Adani Ports, Bharti Airtel and Maruti Suzuki helped the index touch record levels.
Deadline ends, after two extensions and only 70% file detailed return for July
The GST Council had given the option to real estate companies to either opt for old rates of 12% (for residential) and 8 per cent (affordable housing) with ITC benefits or the new tax rates of 5% for residential units and 1% for affordable housing without the benefit of adjusting the credit on inputs used during construction.
The heavy industries ministersaid that the proposal for the auto scrappage policy was ready and all stakeholders have provided inputs, therefore its announcement was likely very soon.
Bihar Deputy Chief Minister Sushil Kumar Modi said, a hike in GST rates would have hampered consumption amid the economic slowdown. The revenue augmentation panel in the Council meeting recently recommended revisiting and restructuring the GST rate slabs, besides correcting the inverted duty structure. The panel listed 24 items, including mobile phones, footwear, fabrics, LED light, medical equipment, utensils, agri machinery, pharma, and renewable components, which have an inverted duty structure, resulting in refunds of close to Rs 20,000 crore annually.
Despite a steady collection rate, the government faces a steep Budget target of Rs 6.1 trillion for CGST for 2019-20.
The cess levied on top of the maximum 28 per cent tax rate on petrol vehicles with capacity to carry 10-13 persons has been reduced to 1 per cent and the same for diesel vehicles has been cut to 3 per cent.
Once the GST is passed, the centre and states will have to adopt their own law.
In the video, Bachchan explains GST as an unifying force just like the three colours in the national flag.
'In a nation where safety standards are the lowest in the world, why make compliance expensive?' asks Aakar Patel.
The broad trends of GST collections will make you wonder if indeed the biggest indirect tax reform in the country has led to a real improvement in revenues, notes A K Bhattacharya.
5 commodities namely crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) were kept out of GST's purview given the revenue dependence of state governments on these sectors.
It was better to first build a single-rate GST with a low rate, achieve full mastery of this, and then consider more complex possibilities such as high rates and multiple rates.
The NSE 50-share after reclaiming the crucial 10,000-mark slipped back to close up 9.05 points, or 0.09 per cent, at 9,988.75.
The GST rates for all but six items were finalised at the first day of the two-day meeting of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.
For any proposal to be cleared, it has to get 75% of the vote.
The collections stood at Rs 98,202 crore in the month, against Rs 1.02 trillion in July. The figures indicate continuation of economic slow down which was reflected in the gross domestic product (GDP) growth which plummeted to a 25-quarter low of 5 per cent in the first quarter of 2019-20, experts said.
A government report revealed that fake companies floated with fake addresses, issued fake GST invoices and generated fake e-way bills, with fake vehicle registration details without supplying any goods causing huge loss to the exchequer.
Simplifying the processes will lead to greater efficiencies. Bad processes will not help even if implemented well, says T N C Rajagopalan
