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New Delhi, The government has permitted <keyword id="19951327" type="General" weightage="20" keywordseo="gst" source="keywords">GST</keyword> Network to share data about GST-registered businesses, based on their consent, with the <keyword id="19922074" type="General" weightage="20" keywordseo="reserve-bank" source="keywords">Reserve Bank</keyword>'s 'Public Tech Platform for Frictionless Credit'. The move will help entities get loans faster on the basis of shared Goods and Services Tax (GST)-related information. The platform, created by the Reserve Bank of India (<keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>) subsidiary Reserve Bank Innovation Hub, is intended to enable seamless flow of necessary information to lenders to help in disbursing credit. In a notification, the Central Board of Indirect Taxes and Customs (CBIC) has said "the Central Government, on the recommendation of the Council, notifies 'Public Tech Platform for Frictionless Credit' as the system with which information may be shared by the common portal based on consent...". The platform has been developed for the operation of a large ecosystem of credit, to ensure access of information from various data sources digitally. The financial service providers and multiple data service providers can converge on the platform using standard and protocol driven architecture, the notification said. Moore Singhi Executive Director <keyword id="19994271" type="General" weightage="20" keywordseo="rajat-mohan" source="keywords">Rajat Mohan</keyword> said with appropriate consent from the supplier/recipient, GSTN is empowered to disclose specific details submitted in the GST registration application, along with data from outward tax returns, monthly and annual tax returns, and invoice preparations. "This arrangement ensures that borrowers cannot withhold any transactional information provided to lenders or the government portal. It enhances credit efficiency by minimising costs and the time required for processing. "Moreover, lenders gain access to authenticated monthly sales and purchase data directly from government-sanctioned sources, allowing for a more accurate and timely assessment of credit risk," <keyword id="19973713" type="General" weightage="20" keywordseo="mohan" source="keywords">Mohan</keyword> said. GST filings will become a crucial factor for businesses seeking to obtain credit and leverage government-sponsored credit programmes in future, Mohan added.

GSTN to share data with RBI's frictionless credit platform

<ul><li>Businesses with turnover of over Rs 5 crore will have to generate electronic or e-invoice for B2B transactions with effect from August 1. </li><li>Currently, businesses with turnover of Rs 10 crore and above are required to generate e-invoice for all B2B transactions.</li></ul>New Delhi, May 11 (PTI) Businesses with turnover of over Rs 5 crore will have to generate electronic or e-invoice for B2B transactions with effect from August 1. Currently, businesses with turnover of Rs 10 crore and above are required to generate e-invoice for all B2B transactions. The finance ministry through a notification dated May 10 has notified a reduction in threshold for e-invoicing. Effective August 1, any taxpayer with turnover exceeding Rs 5 crore should raise e-invoices for B2B supplies. <keyword id="3419539" type="General" weightage="50" keywordseo="deloitte-india-partner" source="Orion">Deloitte India Partner</keyword> Leader <keyword id="17382865" type="General" weightage="50" keywordseo="indirect-tax-mahesh-jaising" source="Orion">Indirect Tax Mahesh Jaising</keyword> said with this announcement, scope of MSMEs under e-invoicing will be expanded and they will need to implement e-invoicing. "For companies e-invoicing is a boon rather than a bane as suppliers who are e-invoicing compliant result in proper flow of input tax credit and reduce the churn around credit issues," Jaising added. AMRG &amp; Associates Senior Partner <keyword id="2913637" type="General" weightage="80" keywordseo="rajat-mohan" source="Orion">Rajat Mohan</keyword> said phased implementation of e-invoicing has resulted in reduced disruptions, improved compliance and increased revenue. E-invoicing was initially implemented for large companies with turnover of more than Rs 500 crore, and within 3 years the threshold has now been lowered to Rs 5 crore. "Inclusion of MSME sector in the e-invoicing regime would benefit the overall business ecosystem by reducing costs, rationalising errors, ensuring faster invoice processing, and also limiting commercial disputes in the long term," Mohan added. Under <keyword id="6359833" type="General" weightage="50" keywordseo="goods-and-services-tax" source="Orion">Goods and Services Tax</keyword> (GST) law, e-invoicing for business-to-business (B2B) transactions was made mandatory for companies with turnover of over Rs 500 crore from October 1, 2020, which was then extended to those with turnover of over Rs 100 crore effective January 1, 2021. From April 1, 2021, companies with turnover of over Rs 50 crore were generating B2B e-invoices, and the threshold was brought down to Rs 20 crore beginning April 1, 2022. From October 1, 2022, the threshold was further lowered to Rs 10 crore. EY Tax Partner Saurabh Agarwal said the industry needs to review their vendor masters and ensure that any vendor supplying goods or services and crossing the threshold turnover of Rs 5 crore is necessarily issuing a e-invoice from August 2023 to avoid any dispute with respect to availment of input tax credit (ITC). SEE ALSO: <a href="https://www.businessinsider.in/tech/news/google-launches-passkeys-for-hassle-free-login-to-gmail-and-youtube-without-a-password-heres-how-to-set-them-up/articleshow/99977103.cms">Google launches Passkeys for hassle-free login to Gmail and YouTube without a password - here's how to set them up</a> <a href="https://www.businessinsider.in/tech/news/apples-safari-is-the-worlds-second-most-used-and-least-vulnerable-desktop-web-browser/articleshow/99926825.cms">Apple’s Safari is the world’s second-most-used and least vulnerable desktop web browser, yet only 1% of Indians use it</a>

Businesses with turnover of over Rs 5 crore to generate e-invoice from August 1

Education, healthcare and pilgrimages will continue to be out of service tax even under the <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> regime as the Centre is against giving any shock in the first year of the rollout by bringing in new services, according to a <keyword id="6367495" type="COMPANY" weightage="20" keywordseo="PTI">PTI</keyword> news report. 
 Besides making a strong case to the <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword> for not touching services that are out of tax net currently, the Centre will also pitch for keeping concessional rate for services like transport at the current level, Revenue Secretary <keyword id="6377137" type="PERSON" weightage="20" keywordseo="Hasmukh-Adhia">Hasmukh Adhia</keyword> told PTI in an interview. 
 The GST Council, headed by Union <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> and comprising representatives of all states, is scheduled to meet in <keyword id="41568" type="COMPANY" weightage="20" keywordseo="Srinagar">Srinagar</keyword> on May 18-19 to decide on rates various good and services will be charged in the new indirect tax regime that is being targeted for rollout from July 1. 
 <keyword id="265326" type="ORGANIZATION" weightage="20" keywordseo="Adhia">Adhia</keyword> said the endeavour would be to maintain the current tax incidence on a commodity or service at the same level in the new Goods and <keyword id="645517" type="COMPANY" weightage="20" keywordseo="services-tax">Services Tax</keyword> (GST) regime. 
 
GST will subsume central levies like excise duty on manufactured products and service tax on rendering of services as well as state VAT on sale, to make for a national sales tax that will be levied at the time of consumption of a product or service. 
 
Adhia said the approach for the GST rollout would be to avoid any shock in the first year and any review for inclusion of a service or change in rate could be done in the second or third year of the implementation based on revenue realisation. 
 
"Our entire purpose will be that we don't upset anything that is there now. We will try to do some smooth landing. So we will recommend to GST Council that whatever is the existing exemption list for service tax they should continue because we cannot do too many things at the same time," he said. 
 
Currently, there are 17 items in negative list of services on which service tax is not levied. 
 
On top of that there are over 60 services, like religious pilgrimage, healthcare, education, skill development, journalistic activities which are exempt from service tax. 
 Rajat <keyword id="1051" type="PERSON" weightage="20" keywordseo="Mohan">Mohan</keyword>, Director at tax consultant <keyword id="2632542" type="COMPANY" weightage="20" keywordseo="Nangia-Co">Nangia &amp; Co</keyword>, said: "GST is the biggest change that our country would see in last 50 years. I see that it was imperative that the government should continue exemptions on the current list of services which are tax neutral under the service tax regime." 
 
"I am ecstatic that there would be no levy of GST on services rendered by Government, Reserve Bank of India, public conveniences, educational institution, services relating to agriculture, transmission or distribution of electricity, renting of residential dwelling for use as a residence, burial, healthcare, specified schemes of general insurance etc," Mohan said. 
 
Mohan, however, felt that this might lead to cascading effect of taxes, but by maintaining the status quo government has ensured that neither the consumer nor the small and medium-sized companies are not in a state of shock. 
 
Asked if these services would be kept exempt from GST, Adhia said: "We presume so... We will recommend to the GST Council that whatever is in the exemption list they should continue in the first year." 
 
He said the main service tax rate will be standard rate of 18 per cent. 
 
"But there may be items of services where abatement (concessional rate) is given for valid reasons. So those items, because there will be no provision for abatements (in GST), we will have to fit them in the rates closed to the present incidence," he said. 
 
The GST Council has approved a four-rate tax structure of 5, 12, 18 and 28 per cent. 
 
Adhia said transport sector, for example, currently gets abatement of 60 per cent and only 40 per cent of the present service tax rate of 15 per cent is being collected. 
 
And so, the tax in the GST will be fixed in the closes bracket of 5 per cent, he said. 
 
Asked if rates for certain services will go up because current tax rate is 15 per cent and the nearest bracket that would not upset the revenue collections is 18 per cent, he said, "some services may become a little more expensive." 
 
The exact ones that become expensive or cheaper will be decided by the GST Council, he said. 
 On the issue of crude oil, petrol, diesel, aviation turbine fuel (<keyword id="44833" type="ORGANIZATION" weightage="20" keywordseo="ATF">ATF</keyword>) and natural gas being kept out of GST net for the time being by continuing with existing taxes of excise and VAT, Adhia said the GST Council decided that to give states comfort of revenue collections. 
 
"For them it is some kind of a risk insurer. That 30 per cent income is already assured. Now 70 per cent (of products and services) they are putting it into the common kitty," he said. 
 
States, he said, want to wait and see how much revenue is generated in the GST regime. 
 
"So, after a year or two if they find that the buoyancy (in tax revenues) is good, they could very well like to bring it (petroleum products) in GST," Adhia added.

No GST for education and health
care this year

<keyword id="20243474" type="General" weightage="100" keywordseo="telecom-companies" source="keywords">Telecom companies</keyword> will have to pay <keyword id="19951327" type="General" weightage="20" keywordseo="GST" source="keywords">GST</keyword> along with the instalments paid towards <keyword id="20434667" type="General" weightage="20" keywordseo="spectrum-charges" source="keywords">spectrum charges</keyword>, a senior official said. The <keyword id="62528" type="General" weightage="20" keywordseo="Department-of-Telecom" source="Orion">Department of Telecom</keyword> (DoT) will hold the next round of <keyword id="20509941" type="General" weightage="20" keywordseo="spectrum-auction" source="keywords">spectrum auction</keyword> on June 6 for eight spectrum bands meant for <keyword id="20501236" type="General" weightage="20" keywordseo="mobile-phone-services" source="keywords">mobile phone services</keyword>. The base price for the auction has been set at Rs 96,317 crore. The spectrum will be assigned for 20 years and successful bidders will be allowed to make payments in 20 equal annual instalments in the coming mega auction. The official said Goods and Services Tax (GST) will have to be paid at 18 per cent by telecom companies along with each instalment. "The <keyword id="19994390" type="General" weightage="20" keywordseo="GST-Council" source="keywords">GST Council</keyword> in its next meeting is likely to clarify the procedure for payment of GST by companies winning the bids during the spectrum auction," the official told PTI. The clarification will end confusion among field formations regarding the method for collection of GST in the auction process. All the available spectrum in the 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 2,500 MHz, 3,300 MHz, and 26 GHz bands are part of the auction. The total frequencies being put under the hammer are valued at Rs 96,317 crore on base price. Moore Singhi Executive Director Rajat Mohan said under the GST law, spectrum payment is covered under licensing services for the right to use other natural resources on which tax is levied at 18 per cent. "Spectrum charges are payable in a phased manner over a period of time, and thereby tax payment shall also be staggered. The board should issue a clarification in this respect so as to avoid any litigation in this regard," Mohan said.

GST to be paid by telecom companies, along with instalments towards spectrum charges: Official

New Delhi: The <keyword id="19903456" type="General" weightage="20" keywordseo="income-tax-department" source="keywords">income tax department</keyword> has notified the <keyword id="21803475" type="General" weightage="100" keywordseo="Cost-Inflation-Index" source="keywords">Cost Inflation Index</keyword> for the current fiscal beginning April 2024, for calculating <keyword id="20584761" type="General" weightage="20" keywordseo="long-term-capital-gains" source="keywords">long-term capital gains</keyword> arising from sale of immovable property, securities and jewellery. The Cost <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">Inflation</keyword> Index (CII) is used by <keyword id="20081991" type="General" weightage="20" keywordseo="taxpayers" source="keywords">taxpayers</keyword> to compute gains arising out of sale of capital <keyword id="19975917" type="General" weightage="20" keywordseo="assets" source="keywords">assets</keyword> after adjusting inflation. The CII for <keyword id="19910979" type="General" weightage="20" keywordseo="financial-year" source="keywords">financial year</keyword> 2024-25, relevant to assessment year 2025-26, stood at 363, as per a notification of the Central Board of Direct Taxes (<keyword id="19980145" type="General" weightage="20" keywordseo="CBDT" source="keywords">CBDT</keyword>). The CII number for last fiscal was 348 and for 2022-23 financial year it was 331. Moore Singhi Executive Director Rajat Mohan said the CII reflects the inflation in the economy, which causes the prices of goods and services to increase over time. The index for the following financial year, 2024-25, has been updated to 363, marking an increase of 15 points, which corresponds to an annual inflation rate of approximately 4.3 per cent. "This is consistent with the retail inflation rate of 4.83 per cent recorded in April 2024. Taxpayers usually prefer a higher CII as it allows them to claim larger tax rebates," Mohan said. AKM Global Partner-Tax Sandeep Sehgal said the index is useful to adjust the capital gains for inflation, so that the taxpayers are taxed on real appreciation of the assets and not the gains due to inflation. "Taxpayers can use this to calculate gains for long-term capital assets sold during FY 24-25 and reduce the tax liability accordingly," Sehgal said. CII is notified under the Income-tax Act, 1961 every year. It is popularly used to calculate "indexed cost of acquisition", while calculating capital gains at the time of sale of any capital asset. Normally, an asset is required to be retained for more than 36 months (24 months for immovable property and unlisted shares, 12 months for listed securities) to qualify as 'long-term capital gains'. Since prices of goods increase over time resulting in a fall in the purchasing power, the CII is used to arrive at the inflation adjusted purchasing price of assets so as to compute taxable long-term capital gains (LTCG).

IT department declares 363 as cost inflation index for current fiscal

<ul><li>On Monday, Gunjan Patidar, Zomato’s co-founder and chief technology officer tendered his resignation.</li><li><keyword id="7349800" type="General" weightage="20" keywordseo="bharatpe" source="Orion">BharatPe</keyword>’s CEO Suhail Sameer has quit the top job to become its strategic advisor.</li><li>There has been a lot of churn in new-age companies like Nykaa, and also big techs like Meta India, WhatsApp Pay, Amazon India and more.</li></ul>New age companies in India have been hit by a flurry of exits by top executives, leaving them scurrying for replacements. This comes at a time when startups have been battling funding winter and elevated inflation, in a rising interest rate regime. BharatPe, a fintech is amongst those with multiple high profile exits, including its co-founder and former managing director Ashneer Grover, along with his wife Madhuri Jain Grover – who not only had to leave the company, but were also sued by BharatPe in December 2022 for ₹88.6 crore. The company alleged that both husband and wife engaged in misappropriation of funds including creating fake bills, enlisting fictitious vendors and so on. Adding to BharatPe’s woes is the <a href="https://www.businessinsider.in/business/startups/news/bharatpe-ceo-suhail-sameer-to-step-down-five-months-after-taking-over/articleshow/96703750.cms">departure</a> of its CEO Suhail Sameer on January 3. Sameer took over as the company’s CEO in August 2021, a year after being appointed as the company’s president. He will now serve as a strategic advisor starting January 7, 2023. Before Sameer, BharatPe witnessed the departure of four other high level executives last November. This includes Nehul Malhotra, head of PostPe which is BharatPe’s ‘Buy Now Pay Later’ arm. The others were the CTO Vijay Aggarwal; Rajat Jain, the chief product officer; and Geetanshu Singla, VP of technology. They moved on to pursue their own entrepreneurial passions, the company had then said in a statement. Zomato rocked by multiple top level exits, too Sameer’s resignation comes hours after Gunjan Patidar, Zomato’s co-founder and chief technology officer, tendered his resignation. Patidar was one of the first few employees of Zomato who built the core tech systems of the company. “Over the last ten plus years, he (Patidar) also nurtured a stellar tech leadership team that is capable of taking on the mantle of leading the tech function going forward. His contribution to building Zomato has been invaluable,” said the company. Patidar’s exit is the third high-level exit at the food delivery giant in two months. In November last year, another one of Zomato’s co-founders Mohit Gupta tendered his resignation. Its head of new initiatives Rahul Ganjoo; and Siddharth Jhawar, vice-president of global growth also quit in the same month. The list goes on as in September 2022, Zomato’s deputy CFO Nitin Savara also tendered his resignation. The company has been bleeding money and it reported a consolidated loss of ₹251 crore in Q2 FY23. New age companies’ top heads move in and out of big tech companies There is a lot of churn among top executives of new-age tech companies as well as big techs. Online beauty retailer Nykaa’s CFO Arvind Agarwal, who had been with the company through its IPO, quit and joined fintech major PayU as its India CFO, this November. On the other hand, new-age companies have also been able to attract executives from major companies into their fold as well. Case in point is Sugar Cosmetics who brought in Amit Aggarwal, Marico’s head of finance of its India business, as its CFO. Adding to it, Amazon India’s director of grocery, food and health Sameer Khetarpal resigned and moved to Jubilant FoodWorks as CEO, a franchisee that runs Domino’s Pizza, Dunkin Donuts outlets in India. Meta India country head Ajit Mohan tendered his resignation in November 2022, to join rival Snap as the President of Asia Pacific. Following this, WhatsApp India’s head Abhijit Bose and Meta India’s public policy head Rajiv Aggarwal also resigned. The latter joined Samsung India. WhatsApp Pay’s director and head Manesh Mahatme also left his position in September to join Amazon India as director, product and engineering. Last but not the least, another shocking exit was of Parag Agarwal, former CEO of Twitter who was fired by Elon Musk in October, a year after he was appointed for the position. Soon after his ouster, Agrawal changed his LinkedIn bio to “Not the CEO you are looking for”. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/radiant-cash-management-shares-debut-at-a-10-premium-after-company-reduces-ipo-size/articleshow/96727374.cms">Radiant Cash Management shares debut at a 10% premium after company reduces IPO size</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/shark-tank-indias-season-2s-sharks-meet-the-serial-investors-cas-and-iit-and-iim-alumni/articleshow/96714262.cms">Shark Tank India’s Season 2’s sharks: Meet the serial investors, CAs, and IIT and IIM alumni</a>

Zomato, BharatPe, Nykaa and more: the revolving door for top execs at new age companies

India's biggest tax reform, the <keyword id="6359833" type="General" weightage="20" keywordseo="goods-and-services-tax" source="Orion">Goods and Services Tax</keyword> (<keyword id="6354679" type="General" weightage="20" keywordseo="gst" source="Orion">GST</keyword>), completes its half-a-decade journey on June 30, with many hits and some misses, and also brought about a paradigm shift in use of technology to bring about tax compliance and making over Rs 1 lakh crore revenue collection every month 'a new normal'. A nationwide Goods and Services Tax (GST), which subsumed 17 local levies like excise duty, <keyword id="6355686" type="General" weightage="20" keywordseo="service-tax" source="Orion">service tax</keyword> and <keyword id="6370857" type="General" weightage="20" keywordseo="vat" source="Orion">VAT</keyword> and 13 cesses, was rolled out at the stroke of midnight on July 1, 2017. Under GST, a four-rate structure that exempts or imposes a low rate of tax of 5 per cent on essential items and top rate of 28 per cent on cars is levied. The other slabs of tax are 12 and 18 per cent. In the pre-GST era, the total of VAT, excise, CST and their cascading effect led to 31 per cent as tax payable, on an average, for a consumer. Besides, there is a special 3 per cent rate for gold, jewellery and precious stones and 1.5 per cent on cut and polished diamonds. Besides, a cess is levied on the highest tax slab of 28 per cent on luxury, sin and demerit goods. The collection from the cess goes to a separate corpus — Compensation fund — which is used to make up for revenue loss suffered by the state due to GST rollout. GST also represents an unprecedented exercise in fiscal federalism as the Centre and states come together in the GST Council to thrash out modalities for smooth functioning of the relatively new tax regime. The Council has met 47 times so far and have taken measures which made Rs 1 lakh crore <keyword id="4943720" type="General" weightage="20" keywordseo="gst-collection" source="Orion">GST collection</keyword> per month 'a new normal' and on course to take the figure to Rs 1.4 lakh crore every month. As the government releases the June GST collection numbers on July 1, it is widely expected that the collections will follow the past four months' trend and be around Rs 1.4 lakh crore. The collections had touched a record Rs 1.68 lakh crore in April 2022, it had for the first time crossed Rs 1 lakh crore mark in collections in April, 2018. On the 5th anniversary of GST, <keyword id="4336899" type="General" weightage="20" keywordseo="Central-Board-of-Indirect-Taxes-and-Customs" source="Orion">Central Board of Indirect Taxes and Customs</keyword> (CBIC) tweeted "GST subsumed multiple levies and cesses, reduced compliance burden, removed regional imbalances and inter-state barriers, and significantly increased the transparency and overall Revenue collection". Over the past years the Government has been proactively issuing circulars and clarifications to clear doubts regarding taxation under GST and ensure ease of doing business. More recently, the GST Council, in its 47th meeting in Chandigarh, has decided to ease compliance for small taxpayers who supply through the e-commerce platform. Such suppliers, who make only intra-state supplies, need not seek GST registration if their annual turnover is less than Rs 40 lakh in case of goods and Rs 20 lakh in case of supplies. To help tax officers in administration, GST Network, which provides the technological backbone for the indirect tax regime, has been using artificial intelligence and machine learning to dish out newer data and plug revenue leakages. Tax experts, however, seek a simpler structure for Goods and Services Tax, a structure which would ensure seamless flow of input tax credit through the entire supply chain without losses. BDO India Partner and Leader - Indirect Tax Gunjan Prabhakaran said “over the past five years, the GST law has evolved and mitigated several issues faced by the taxpayers through timely clarifications and amendments. "However, the GST Council and the Government should quickly address few other hardships faced by taxpayers in relation to unwarranted and excessive issuance of show cause notices (for reconciliations of financial numbers, grant of registration, etc) and introduce a robust, technology driven single assessment process, which would achieve the twin objective of ease of doing business and remove the cascading effect of taxes". AMRG &amp; Associates Senior Partner Rajat Mohan said in the last five years, GST law has matured at a fast pace. First, the focus was on compliance and technology; sooner than later, it moved gears, and taxpayers were posed to self-regulate the annual filings. "Now it seems the law has entered the next phase whereby litigation needs to be reduced by either replacing ambiguous tax laws or clarifying the practical application of technical issues. Businesses expect the government to resolve all sectoral issues like would BPO/KPO qualify as an intermediary, tax credit for capital expenditure on building, levy of GST on Extra Neutral alcohol (ENA) etc," Mohan said. While the GST administration has moved forward with alacrity, it is still a long way to go to achieve the full potential of GST and make it a true 'good and simple tax'. With petrol, diesel, ATF outside GST, a large part of the economy is still not covered by the indirect tax regime. Inclusion of petroleum products under the GST net, could reduce cost for companies, tax experts say. With emerging technology, there is emergence of newer asset classes like the virtual digital assets (VDA) or cryptocurrency. There is a need for clarity on whether they would be classified as supply of 'goods' or 'services' and what would be the tax rate on them. Tax rate rationalisation is something which would happen sooner or later. Current inflationary concerns may have derailed the plans to tweak rates and GST slabs, but it would eventually be a reality as both the Centre and states need revenues and lesser slabs would mean a simplified tax regime. Besides, the decision makers in the Council too have to work out a solution as state governments, from July 1, 2022, stare at a stoppage of compensation for revenue loss due to GST implementation. When GST was rolled out on July 1, 2017, states were promised a compensation, from the cess fund, for five years if their GST collection falls short of the 14 per cent compounded revenue growth. Most states have sought an extension to the compensation mechanism and a final decision is likely to be taken at the next GST Council meeting in Madurai in the first week of August. Abhishek Jain, Partner Indirect Tax, KPMG in India, said going forward, the Government can consider setting up of Central authority to resolve conflicting AAR judgements across states and consider doing away with anti-profiteering provisions freeing businesses to set prices. "Further, bringing petroleum and electricity under GST ambit will help prevent cascading and ensure further uniformity. Lastly, some checks can also be incorporated on system generated GST notices, so as to avoid any unnecessary harassment of taxpayers," Jain said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/startups-like-unacademy-vedantu-blue-stone-caratlane-go-physical-from-digital-as-pandemic-boom-ends/articleshow/92564319.cms">Startups go physical from digital as pandemic boom ends</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/indian-credit-card-users-spend-40x-more-than-debit-card-users-online/articleshow/92543305.cms">Indian credit card users spend 40x more than debit card users online</a>

GST had its hits and misses but made ₹1.3 lakh crore monthly tax, the new normal

<ul><li>The Indian government is reportedly all set to increase <keyword id="6354679" type="General" weightage="80" keywordseo="gst" source="Orion">GST</keyword> on online gaming to 28%, a proposal that could spell trouble for the industry and players alike. </li><li>The online gaming industry is expected to cross $5 billion valuation by 2025, but the taxman’s greed could kill the golden-egg laying hen. </li><li>Experts are worried about the impact this could have on the industry – both the players and the businesses, which are still in their early days. </li></ul>The Indian government is reportedly all set to tax casinos, online gaming and horse racing at the highest slab of GST – 28%. Looks like the taxman is intent on treating these recreational activities and skills on par with tobacco, cigarettes, <a href="https://www.businessinsider.in/cryptocurrency/news/28-gst-on-crypto-transactions-india-is-reportedly-mulling-another-tax-levy-next-week/articleshow/92407767.cms">cryptocurrencies</a> and luxury cars. Online betting, gambling, casinos and horse racing have long been treated ‘unfairly’ by the Indian taxman – while GST has been considerably moderate at 18% until now. Winnings and other income earned from these activities have been taxed at the highest rate of 30% without any deductions whatsoever. Now, a new <a href="https://economictimes.indiatimes.com/news/economy/policy/28-gst-likely-on-casinos-online-gaming-horse-races-on-gross-revenue/articleshow/92474293.cms?from=mdr">report</a> suggests that the government is mulling increasing the GST rate to 28% – the highest in effect currently. This will be applicable on compulsory food and beverages as well, driving up the costs for businesses and participants. <div type="Article" hostid="261" msid="92356710" title="INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Fantasies are taxed too, and that too doubly" comment="subhead" text="Fantasies are taxed too, and that too doubly">Fantasies are taxed too, and that too doubly</cmsannotation> The government proposal says that GST will be charged on the gross revenue, not the net value added, which goes against both global tax ethics – as well as the very foundation of the GST regime, which intends to remove the undesirable double taxation effect. "Taxing online gaming, horse racing, and casinos at gross revenue instead of net value addition would be a departure from the global tax ethics," Rajat Mohan, senior partner, AMRG &amp; Associates told PTI. This could have an adverse impact on the entire industry. For instance, the online gaming sector which includes the likes of MPL, Zupee, Winzo and other startups, is expected to cross $5 billion in valuation by 2025, according to a <a href="https://www.ibef.org/blogs/india-s-nascent-gaming-industry-on-the-rise">IBEF report</a>. The government earned nearly ₹1,500 crore from fantasy sports in the form of taxes in FY21. A Deloitte report says that the combined industry contribution could cross a whopping ₹16,000 crore cumulatively over the next two years. And the taxman believes that he found a goose which lays golden eggs. <cmsannotation type="cmsannotation" annotationid="The costly game of confusion" comment="subhead" text="The costly game of confusion">The costly game of confusion</cmsannotation> The online gaming industry has been plagued by the ambiguous nature of government’s tax policies. The taxman has often been said to be confused about the nature of online games – whether those involve skills or are just gambling. It might be justified to tax gambling at the highest rate of tax, but experts believe that punishing games of skill in the same manner is unfair. To make matters worse, the government wants to raise the tax from 18% to 28%. <cmsannotation type="cmsannotation" annotationid="Mukesh Ambani, Rakesh Jhunjhunwala and more, to be affected" comment="subhead" text="Mukesh Ambani, Rakesh Jhunjhunwala and more, to be affected">Mukesh Ambani, <keyword id="6398943" type="General" weightage="80" keywordseo="rakesh-jhunjhunwala" source="Orion">Rakesh Jhunjhunwala</keyword> and more, to be affected</cmsannotation> This can also have an adverse impact on telcos, which are banking on online gaming as a new revenue stream as the industry seems to be entering a phase of stagnation. “Rather than being just the pipe, telcos like Jio (RIL owned) and Bharti are focusing on gaming as an incremental source of ad/subscription revenue. In fact, RIL believes that gaming in India will be bigger than music, movies and television shows put together,” said a report by Bank of America Securities. This could also impact <keyword id="201442" type="General" weightage="50" keywordseo="delta-corp" source="Orion">Delta Corp</keyword>, the only listed casino operator in the country which has seen its fortunes fade away, with even Rakesh Jhunjhunwala paring down his holdings in the company considerably. <div type="javascript" title="Custom" contenttype=""><cdata><![CDATA[]]></cdata></div> “This would be a distress the business model to a great extent as the touted super tax will have to be funded either by the platform, who do not make that kind of money in this business or would go on to reduce the prize pool size – effectively bringing down the interest in customer engagement,” Adarsh Somani, senior partner at ELP Law, told Business Insider India. This would wreak havoc on the gaming industry, and even if the government wants to reduce difficulties by offering a single – but higher – rate of tax, the valuation methodology will have to be made clear, Somani added. As things stand today, there is plenty of ambiguity that will have to be worked out by the government – even a small misstep could spell a lot of trouble for the gaming industry and its participants. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/auto-and-finance-stocks-can-bounce-back-even-if-the-market-crashes-in-july/articleshow/92436186.cms">Auto and finance stocks can bounce back even if the market crashes in July</a> <a href="https://www.businessinsider.in/finance/news/rbi-kept-the-rupee-exceptionally-stable-so-far-and-the-tide-could-turn-for-the-better-say-experts/articleshow/92414356.cms">RBI kept the rupee ‘exceptionally’ stable so far, and the tide could turn for the better say experts</a> <a href="https://www.businessinsider.in/business/telecom/news/interview-the-big-picture-on-5g-big-tech-telco-war-with-coais-dr-sp-kochhar/articleshow/92356710.cms">INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar</a>

India is betting on casinos, online games and horse races to fill its coffers

New Delhi, Jun 18 () The value of exempted income, like interest on PPF, savings bank account and loans given to family/friends, will be included along with taxable supplies while calculating the threshold limit for obtaining GST registration, the Authority for Advance Ruling (AAR) has said. Under the Goods and Services Tax law, businesses and individuals are required to obtain GST registration if their aggregate turnover is Rs 20 lakh or more. An individual, not engaged in any business, had filed an application before the Gujarat bench of AAR asking whether interest received from savings bank, PPF and loans and advances to family would be considered for the purpose of calculating threshold limit of Rs 20 lakh for registration under GST law. The individual, in his application, had disclosed that his total receipts in 2018-19 fiscal were about Rs 20.12 lakh, including rent receipt of Rs 9.84 lakh, while the remaining was interest on bank, PPF deposits and from personal loans extended to friends/family. The AAR, while ruling that interest income would be included for calculating registration threshold, said that the applicant is required to consider the value of both taxable supply i.e. "renting of immovable property" and exempted supply of service provided by way of extending deposits, loans or advances for which he earned interest income, to arrive at "aggregate turnover" to determine the threshold limit for the purpose of obtaining registration under the GST Act. "We conclude that the Applicant is required to aggregate the value of exempted interest income earned by way of extending deposits in PPF &amp; Bank Saving accounts and loans and advances given to his family/friends along with the value of the taxable supply i.e. "Renting of immovable property" for the purpose of calculating the threshold limit of Rs.20 Lakh for obtaining registration under GST law," the AAR said. AMRG &amp; Associates Senior Partner Rajat Mohan said this ruling may lead to homemakers, retired persons and freelancers taking GST registration. "The Authority failed to distinguish between earnings made in the individual capacity and in the business capacity," Mohan added. JD RVK

Interest on PPF, savings bank deposit to be included for calculating GST registration threshold: AAR

New Delhi, Apr 14 () With aviation and hospitality sectors seeing mass cancellation of bookings following Covid-19 outbreak, the CBIC has allowed businesses to claim refund of GST in cases where invoice was generated but was subsequently cancelled. The Central Board of Indirect Taxes and Customs (CBIC) issued a set of clarifications in view of certain challenges being faced by taxpayers in adhering to the compliance requirements post Covid-19. Clarifying on the issue of advance received by a supplier and invoice generated for a service contract which got cancelled, the CBIC said "in cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under "Excess payment of tax, if any" through Form GST RFD-01". Similarly, where goods have been supplied for which tax invoice have been generated, but were subsequently returned by the recipient, the CBIC said in cases where there is no output liability against which a credit note can be adjusted, supplier of goods can file a refund claim through Form GST RFD-01. The CBIC clarification comes at a time when sectors like aviation and hospitality are grappling with mass cancellation of bookings in view of the lockdown due to the pandemic. Rajat Mohan, Senior Partner at AMRG &amp; Associates, said "this clarification would help worst-hit sectors of the business fraternity to claim a tax refund from the government, which would also have a ripple effect in the entire supply chain". Further, the CBIC has also clarified that exporters can now file letters of undertaking (LUT) till June 30 for full fiscal 2020-21, as against the earlier requirement of filing it by March end. Under Goods and Services Tax (GST), exporters are allowed to ship consignments overseas by just furnishing LUT, without paying integrated tax (iGST). JD ANSANS

Covid-19: Businesses can claim GST refund for cancellation of services, goods contract

New Delhi, Feb 9 () Importers and exporters will have to mandatorily declare GSTIN in documents from February 15 as the revenue department moves to crackdown on evaders and plug Goods and Services Tax revenue leakage. In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said certain cases have come to notice where the importer or exporter did not declare their GSTIN in the Bill of Entry/Shipping Bill despite being registered with GSTN. GSTIN is a 15-digit PAN-based unique identification number allotted to every registered person under GST. While importers have to fill Bill of Entry with Customs department while importing goods, exporters have to file Shipping Bill. "With effect from February 15, 2020, the declaration of GSTIN shall also be mandatory in import/export documents for the importers and exporters registered as GST taxpayers," the circular said. Data analytics by the revenue authorities have detected rampant tax evasion through black market and under-valuing of imports. It has come to light that although importers are paying GST, they are supplying the goods without bill. Importers typically pay integrated goods and services tax or IGST on goods they bring into the country. This tax is supposed to be set-off against the actual GST paid by the final consumer, or claimed as refund. While importers are paying IGST on imports but not claiming credit for the same. This essentially means that the supply of imported goods to domestic channels is being done without a bill. A similar situation has been witnessed on cess charged on luxury and sin goods with companies paying it at the time of imports but not claiming credit or setting it off from final GST paid by consumers. "Compulsory capturing of GSTIN by importers and exporters would give an adrenaline rush to the data analytics especially in relation to cross-border transactions. This will push the tax authorities to arrest the massive tax evasion practices on the borders in the form of under-valuation, clandestine removal and under re-reporting," AMRG &amp; Associates Partner Rajat Mohan said. EY Tax Partner Abhishek Jain said the requirement to provide GSTIN in bill of entry/shipping bill will help plug GST revenue leakage and ensure that imports/export data is reconciled with GST data. Further, exporters have also been asked to provide details of the state and district of origin of goods and details of preferential agreements under which goods are being exported in the shipping bill. Jain said the data on district/state of origin of goods will help the Government take measures to facilitate and promote exports. "The requirement to provide details of preferential agreements under which goods are exported will help the Government track the effectiveness these agreements," Jain said. JD RVK MRMR

Importers, exporters to mandatorily declare GSTIN in documents from Feb 15

New Delhi, Mar 12 () GST rates on mobile phones, fertilisers, man-made fabrics and garments are likely to be hiked to 18 per cent in the next GST Council meeting on March 14. Experts said the rate hike would improve working capital position of the manufactures as it would correct the inverted duty structure but may lead to increase in price of the finished goods. Currently, under the goods and services tax (GST), certain manufactured goods attract a tax rate of 5 per cent or 12 per cent while their inputs, input services and capital goods attract GST at the higher rate of 18 per cent or 28 per cent. The manufacturers have to claim a refund of accumulated input tax credit (ITC) where the tax rate on input is higher than the finished goods. According to sources, the refund claimed on account of inverted rate structure is about Rs 20,000 crore per year and there is a need to correct this anomaly. Significant items in inverted rate structure are fertilisers, mobiles, footwears, man-made yarns and fabrics, renewable energy devices, and tractors. A number of other smaller items like utensils also attract inverted duty structure. "The GST Council will take up in phases the correction of inverted duty on items as per the recommendation of the officers' committee. On Saturday, 4 items -- mobiles, fertiliser, footwear and man-made fibre, fabric and garments -- would come up for correction," the official said. Currently, cellphones attract a GST rate of 12 per cent, while its inputs are taxed at 18 per cent. "There is hardly any justification for retaining mobile at the slab rate of 12 per cent, while many items like TV, torches, geyser, iron, heaters, mixer, juicers, etc, attract GST at a higher rate," the official added. In the pre-GST era, under the dual excise scheme, a manufacturer had two options for excise duty -- basic excise duty (BED) at 2 per cent or 1 per cent without CENVAT Credit, and BED at 12.5 per cent with CENVAT credit. Imported mobile phones were being subjected to additional duty of customs (equal to higher of the BED) at 12.5 per cent. In central excise, there was no provision for refund of input tax credit on account of inverted duty structure. While fertiliser was originally placed in 12 per cent slab, the Council later lowered the rate to 5 per cent. A total of Rs 6,000 crore have been claimed as input tax credit refund on fertilisers from July 2017 till date. Fertiliser manufacturers have been claiming lower rate on other inputs like ammonia and sulphur. Besides, 18 per cent rate on services and capital goods adds to duty inversion, the official added. The total pre-GST tax incidence, including central excise, tax on inputs, average VAT, CST and octroi, on fertilisers was estimated to be about 9.75 per cent. Besides, the duty inversion in man-made fibre (MMF) value chain has led to a total refund claim of about Rs 1,600 crore so far on man-made yarn and another Rs 2,300 crore on fabrics and other textile items. The MMF value chain such as polyester, acrylic and viscose has unlike GST rate structure. While fibre attracts GST at the rate of 18 per cent, their value-add products, namely yarns, attract GST at the rate of 12 per cent. Thus, there exists an inversion at fibre to yarn stage. Fabrics, however, attract GST at the rate of 5 per cent. The textiles sector currently has a differential GST rate of 5, 12 and 18 per cent. This leads to difficulty in issuing and claiming of refunds. With regard to footwear, the Council in June last year had lowered GST rate to 5 per cent on items worth up to Rs 1,000, while those above this value attract 18 per cent duty. However, inputs used by the sector attract GST rate in the range of 5-18 per cent. EY Tax Partner Abhishek Jain said, "An increase in the rate of GST for some of these products should help liquidating the accumulated credits and thereby bettering the working capital costs for businesses manufacturing these goods. However, the rate increase on these goods may result in price hike and, thereby, may impact demand of these goods." AMRG &amp; Associates Senior Partner Rajat Mohan said, "Economy is going through a rough patch and any further increase in tax rates would run negative sentiment throughout the entire sector and push the demands further down deteriorating the overall economic stability in the country." JD HRS

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India is betting on casinos, online games and horse races to fill its coffers

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