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With Chhattisgarh communicating its acceptance of Option-1 to meet the revenue shortfall arising out of GST implementation, all the states barring <keyword id="6360371" type="UNKNOWN" weightage="20" keywordseo="jharkhand">Jharkhand</keyword> have joined the Centre's suggested formula on compensation settlement. The number of states who have favoured Option-1 has gone up to 27. All states except Jharkhand and all the 3 union territories with Legislative Assembly have decided in favour of Option-1. The states &amp; union territories who choose Option-1 are getting the amount of shortfall arising out of GST implementation through a <keyword id="7651774" type="UNKNOWN" weightage="20" keywordseo="special-borrowing-window">special borrowing window</keyword> put in place by the Government of India. The window has been operationalised since October 23, 2020 and the government has already borrowed an amount of Rs 30,000 crore on behalf of the states in five instalments and passed it on to the states and union territories, who chose Option-1. The funds borrowed through the special window were released to the states and uts on October 23, 2020, November 2, 2020, November 9, 2020, November 23, 2020 and December 1, 2020. Now, Chhattisgarh will also receive funds raised through this window starting from the next round of borrowing. Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, the states are also entitled to get unconditional permission to borrow the final instalment of 0.50 per cent of Gross State Domestic Product (GSDP) out of the 2 per cent additional borrowings permitted by the government, under AtmanirbharAbhiyaan on May 17, 2020. This is over and above the Special Window of Rs 1.1 lakh crore. On receipt of the choice of Option-1, the government has granted additional borrowing permission of Rs 1,792 crore to the state government of Chhattisgarh (0.50 per cent of Chhattisgarh's GSDP). SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/rbi-directs-hdfc-bank-to-suspend-its-digital-business-and-new-credit-cards-amid-rising-incidents-of-outages/articleshow/79542055.cms">RBI tells HDFC Bank to stop new digital launches and selling new credit cards after recent outages of online banking</a> <a href="https://www.businessinsider.in/tech/news/india-may-reportedly-block-wikipedia-if-the-site-doesnt-delete-the-map-showing-aksai-chin-as-a-part-of-china/articleshow/79541391.cms">India may reportedly block Wikipedia if the site doesn't delete the map showing Aksai Chin as a part of China</a> <a href="https://www.businessinsider.in/science/environment/news/geo-tagged-bottles-in-the-ganges-river-show-how-plastic-pollution-can-travel-thousands-of-kilometres-in-just-a-few-months/articleshow/79540173.cms">Geo-tagged bottles in the Ganges river show how plastic pollution can travel thousands of kilometres in just a few months</a>

Jharkhand is the only state holding out against the Indian government's suggested formula on GST compensation

States which failed to submit their options before the <keyword id="3680839" type="PERSON" weightage="20" keywordseo="gst-council-meeting">GST Council meeting</keyword> in October will have to wait for at least two years to get compensation on Goods and Services Tax collection shortfall expected during the transition period, Finance Ministry sources said on Monday. The sources said that such states will have to wait till June 2022 to get compensation dues, subject to the condition that the GST Council extends the cess collection period beyond 2022. This is so because the Council is expected to adopt one of the two options given by the Centre to meet the <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> needs of the states this year. The states which decide against operationalisation of the new <keyword id="9971535" type="UNKNOWN" weightage="20" keywordseo="gst-compensation-formula">GST compensation formula</keyword> will get their dues only to the extent of compensation cess collected in FY21 and distributed in proportion among all states and union territories. The balance shortfall will only be met from the collection of GST compensation cess beyond the five-year transition period that ends in June 2022. This will be subject to GST Council approval to the extension of compensation cess. The GST Council, in its 41st meeting on August 27, 2020, had decided to give its member-states two borrowing options to meet their compensation shortfall and a response time of 7 working days from the formal receipt of the detailed proposal on the options by email. Almost 15 states had submitted their options by September 15 and more have joined since. Option-1 on GST compensation brought before the Council last month allows states to borrow, under a special dispensation from the Reserve Bank of India, a sum of about Rs 97,000 crore shortfall calculated by the Centre that is directly on account of GST implementation. Option-2 allows states to borrow the entire projected GST compensation shortfall of Rs 2,35,000 crore (total shortfall of Rs 3 lakh crore minus Rs 65,000 crore collected as GST compensation cess) for FY21. So far, 21 states/UTs have expressed preference for Borrowing Option-1 proposed by the Centre. With GST Act requiring voting for any resolution regarding an option by at least 20 states, the move is expected to be adopted by the GST Council at its meeting next month. If this option is indeed adopted, all states would be able to move ahead and borrow under the scheme suggested by the Centre to meet their shortfall arising due to GST switchover. If states still opt out, they will have to wait to get full compensation. Among the 21 states/UTs which support the first option on GST compensation are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Sikkim, Tripura, Uttarakhand, and Uttar Pradesh. Manipur, the only state which had earlier opted for Option-2, later preferred to change it to Option-1. A few more states are, also, to give their borrowing option in a day or two. However, some of them like Jharkhand, Kerala, Maharashtra, NCT of Delhi, Punjab, Rajasthan, Tamil Nadu, Telangana, and West Bengal are yet to respond to the GST Council proposal to decide their options. Under the existing GST Act, compensation for shortfall in GST collections over an agreed formula is payable by the Centre for the first five years of the operation of the new tax system from July 2017 to June 2022. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/top-ten-phishing-examples-and-tricks-used-by-companies-to-test-their-employees-cybersecurity-smarts/slidelist/78228072.cms">Top ten phishing tricks that companies are using to test their employees’ cybersecurity smarts</a> <a href="https://www.businessinsider.in/stock-market/markets/news/indian-tech-companies-hcl-tech-wipro-infosys-tcs-share-price-are-green-today/articleshow/78228700.cms">It’s not just the DWS deal, Morgan Stanley's outlook has painted HCL Tech green⁠ — along with TCS, Infosys and Wipro</a> <a href="https://www.businessinsider.in/tech/apps/news/google-hits-back-at-paytm-reiterates-that-repeated-policy-violations-will-lead-to-stricter-actions/articleshow/78229677.cms">Google hits back at Paytm ⁠— reiterates that ‘repeated policy violations’ will lead to stricter actions</a>

States not choosing GST compensation options by October will have wait another two years

The Centre is willing to provide further borrowing flexibility to states to help break the deadlock and allow their participation in the new <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> formula put on the table. Government sources said that the unconditional borrowing limit for states could be raised by another 0.5 per cent if they agree on the new GST compensation options suggested by the Centre. Under Fiscal Responsibility and Budget Management (FRBM) Act, states are allowed to borrow up to three per cent of gross state domestic product (GSDP) to bridge the fiscal deficit. An additional, two per cent borrowings with both conditional and unconditional elements has been added recently under the Atmanirbhar Bharat package. With Covid-19 inflicted revenue shortfall and rising GST compensation load, the Centre has given new options to compensate states for shortfall in their revenue due to GST switchover. The two options given by the Centre under the Atmanirbhar Bharat package allows flexibility to the states to make additional borrowings to meet their shortfall in GST compensation with the Centre repaying the states in full by levying compensation cess beyond the five year transition period that ends in June 22. While states have been asked to give their views on the compensation options suggested by the states soon, so that the new mechanism could be rolled out, some states have shown reluctance to be part of the suggested options and want that it should be the Centre that should borrow to meet compensation shortfall rather than putting the burden on states. "Centre is willing to unconditionally relax another 0.5 per cent under the FRBM window over what has already been provided under the options (while keeping the borrowing within the Atmanirbhar Bharat package limit of up to 200 basis points of GSDP) for states if they agree for the first option on GST compensation suggested by the Centre," government sources said. What this would mean that the four specific reform linked instalments of 0.25 per cent borrowing allowed under the Atmanirbhar Bharat package would be converted into just two while additional 0.5 per cent borrowing would be made unconditional. This would mean that under option one, the state will get an unconditional additional browsing limit of 1.5 per cent over the three per cent FRBM target. The first option given by the Centre over GST compensation allows states to borrow, under a special dispensation from the RBI, a sum of about Rs 97,000 crore being the shortfall calculated by the Centre that is directly on account of GST implementation. The borrowing under the first option will not be treated as debt of the state and they would also be permitted to avail full additional borrowing limits given under Atmanirbhar Bharat package unconditionally. Under the Atmanirbhar Bharat package states are allowed unconditional additional borrowing of 0.5 per cent of GSDP (over and above three per cent allowed) performance or reforms linked borrowing of one per cent in four reaches of 0.25 per cent each and an additional 0.5 per cent borrowing on completing three out of four reforms. If the states come on board with the latest offer, this would keep the overall borrowing limit of states at five per cent of GSDP but allow states flexibility to borrow unconditionally over Rs three lakh crore in FY21. On a total GST compensation need of about Rs three lakh crore in FY21, the Centre expects to collect Rs 65,000 crore from the GST compensation cess. The shortfall in GST compensation is estimated at Rs 2,35,000 which the Centre wants the states to bridge through borrowings under the two options suggested by it. But the Centre is keen that its first option is accepted as it would put a lesser burden on the market and bond yields due to extra borrowings. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/supreme-court-inclined-to-excuse-moratorium-interest-on-interest-as-it-gives-the-government-another-two-weeks-to-file-detailed-affidavit/articleshow/78033878.cms">Supreme Court ‘inclined’ to excuse moratorium interest on interest as it gives the government another two weeks to file detailed affidavit</a> <a href="https://www.businessinsider.in/defense/news/india-china-border-tensions-are-a-part-of-mind-games-ahead-of-the-meeting-between-the-two-foreign-ministers-says-former-diplomat/articleshow/78031314.cms">India-China border tensions are a part of "mind games" ahead of the meeting between the two foreign ministers, says former diplomat</a> <a href="https://www.businessinsider.in/science/space/news/northrop-grumman-names-its-next-space-ship-after-kalpana-chawla-the-first-woman-of-indian-origin-to-go-to-space/articleshow/78018575.cms">Northrop Grumman names its next space ship after Kalpana Chawla — the first woman of Indian-origin to go to space</a>

Government's new GST compensation formula may raise unconditional borrowing limit by 0.5%

New Delhi, All the 28 states and three <keyword id="390245" type="COMPANY" weightage="20" keywordseo="Union-Territories">union territories</keyword> with legislature have decided to go for the Centre-suggested compensation formula to meet the <keyword id="2182311" type="PERSON" weightage="20" keywordseo="revenue-shortfall">revenue shortfall</keyword> arising out of the <keyword id="2406193" type="PERSON" weightage="20" keywordseo="GST-implementation">GST implementation</keyword>. Jharkhand, the only remaining state, has now communicated its acceptance of Option-1 given by the <keyword id="6356303" type="LOCATION" weightage="20" keywordseo="Centre">Centre</keyword>. All the three union territories with Legislative Assembly who are members of <keyword id="9255807" type="COMPANY" weightage="20" keywordseo="the-gst-council">the GST council</keyword> have already decided in favour of Option-1. The Central government has set up a special borrowing window for the states and union territories who choose Option-1 to borrow the amount of shortfall arising out of GST implementation. The window has been operationalised since October 23 and the Centre has already borrowed an amount of ₹30,000 crore on behalf of the states in five instalments and passed it on to the ones who chose Option-1. Now Jharkhand will also receive funds raised through this window starting from the next round of borrowing. The next instalment of ₹6,000 crore will be released on December 7. Under the terms of Option-1, besides getting the facility of a special window for borrowings to meet the shortfall arising out of GST implementation, the states are also entitled to get unconditional permission to borrow the final instalment of 0.50 per cent of Gross <keyword id="695884" type="ORGANIZATION" weightage="20" keywordseo="State-Domestic-Product">State Domestic Product</keyword> (GSDP) out of the 2 per cent additional borrowings permitted by the Centre under the Atma Nirbhar Abhiyaan on May 17. This is over and above the Special Window of ₹1.1 lakh crore. On receipt of the choice of Option-1, the Centre has granted additional borrowing permission of ₹ 1,765 crore to Jharkhand (0.50 per cent of the state's GSDP). SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-ril-airtel-indigo-spicejet-sbi-bank-of-baroda-vodafone-idea-granules-india-and-others/articleshow/79557810.cms">Top stocks to watch — RIL, Airtel, IndiGo, SpiceJet, SBI, Bank of Baroda, Vodafone-Idea, Granules India, and others</a> <a href="https://www.businessinsider.in/business/corporates/news/ultratech-cements-5477-crore-expansion-plan-is-a-sign-that-birla-is-betting-on-a-faster-economic-recovery/articleshow/79549626.cms">UltraTech Cement's ₹5,477 crore expansion plan is a sign that Birla is betting on a faster economic recovery</a> <a href="https://www.businessinsider.in/tech/news/sbis-mobile-banking-app-is-down-for-the-third-time-in-last-30-days/articleshow/79548953.cms">SBI’s mobile banking app is down for the third time in 30 days — digital services take a hit for the 25th time this year</a>

All 28 states and three union territories decided to go for Centre's GST compensation formula

The <keyword id="6355040" type="UNKNOWN" weightage="20" keywordseo="GST-Council">GST Council</keyword> is likely to approve a two-year extension of compensation cess levy on goods and services to allow Centre to pay entire shortfall in GST tax collection by states expected till June 2022. Sources in the government said that with 21 states expressing their preference for the Borrowing Option-1 proposed by the Centre to meet the <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> needs of states this year, the next course of action would extend the period of cess levy beyond five year GST transition period that ends in June 2022. As the Council is likely to adopt the compensation formula suggested by t he Centre in the difficult year of Covid-19 pandemic, sources said it may also decide how long compensation cess levy should be extended to clear all dues to states. "A two-year extension of cess is the most likely outcome of the Council cil meeting scheduled on October 5. However, the council may decide to adopt compensation formula for FY21 in the next meeting and defer decision on cess extension till a more appropriate study of the issue is done," sources quoted earlier said. Under the existing GST Act compensation for shortfall in GST collection over an agreed formula is payable by the centre for the first five years of the operations of new tax system from July 2017 to June 2022. This is paid through collection made on account of cess levy on certain goods and services. The term of the cess is co-terminus with compensation liability with the Centre. So, the Council should withdraw cess also after completion of five years. But with Covid presenting different challenge before the governments and h as lead to states bleeding over GST collections, the compensation needs of the Centre has grown manifold. As cess could not cover this high level of compensation needs this year and may be next year, there is talk of extending the levy of cess beyond June 2022. As per the Centre's projection, the total amount expected to be collected from Compensation cess would be to the tune of Rs 65,000 crore in fy21 while total compensation payable to all states and union territories may be to the tune of Rs 3,00,000 crore. So there is a total shortfall of Rs 2,35,000 crore expected this year. The Centre wants this shortfall be met through extra borrowings under special dispensation by the states while their dues get settled after June 2022 by extending the compensation cess levy. SEE ALSO: <a href="https://www.businessinsider.in/science/space/news/jeff-bezos-blue-origin-is-eyeing-the-commercial-space-station-business-wants-nasa-as-one-of-its-first-customers/articleshow/78272862.cms">Jeff Bezos' Blue Origin is eyeing the commercial space station business — wants NASA as one of its first customers</a> <a href="https://www.businessinsider.in/science/space/news/school-bus-sized-asteroid-is-scheduled-to-make-its-closest-approach-to-earth-on-september-24/articleshow/78271529.cms">A school bus-sized asteroid will make its closest approach to Earth tomorrow — safely zooming past the planet</a> <a href="https://www.businessinsider.in/tech/enterprise/news/microsoft-acquires-exclusive-license-for-elon-musks-largest-gpt-3-ai-language-model/articleshow/78269391.cms">Microsoft acquires exclusive license for Elon Musk’s largest GPT-3 AI language model</a>

GST Council likely to approve two-year extension of compensation cess levy

New Delhi, Feb 12 () Finance Minister Nirmala Sitharaman on Wednesday said inadequate realisation of GST compensation cess is delaying the payment to states and that the Centre was not according any differential treatment to states.The minister also said the government is committed to paying to states as per the provisions of the GST (Compensation to States) Act, 2017.At the time of the introduction of GST, it was agreed that the Centre would compensate states for shortfall in GST collections as per a defined formula."Now, there has been a delay in giving the 14 per cent compensation and we are running late in giving it timely," she said.The delays are because the compensation cess was not adequate to pay up the 14 per cent which was committed, she said, adding, devolution of taxes to states is committed as per the law. "There cannot be any tweaking here. Formula is given by the finance commission and the formula is given by the GST Act...That has nothing to do with me saying, I don't like XYZ state, so, I won't give...But if the revenue collection itself has gone down, of course the portion which goes to states will be lesser," she said at Times Now Summit here. When asked whether the government acknowledges that there is a slowdown in the economy, Sitharaman said the government is not in a denial mode and working on to address concerns of various sectors depending on need.Referring to opposition parties' barbs that the government had so many budgets even after unveiling Union Budget in July 2019, she said: "From July to February, there are people who tell me you presented a Budget every weekend, which means I've been acting on it".However, the minister also quipped she does not use certain jargons and terminology, which people wanted her to use.She further said there is a criticism that the government is in denial mode as it was "not saying" whether the economy is in a cyclical or structural slowdown, or stagflation. "Each one would want me to say the way in which he would want me to say and if I don't, then they say the government is in denial," the minister asserted. Emphasising that there are signs of recovery in some sectors, she said, Goods and Services Tax (GST) collection has consistently been rising since the last three months. Since November, she said, GST collection has seen a growth and the collection has been over Rs 1 lakh crore each in the past three months. This indicates revenue collection has improved. It means that commercial and economic activity is back on its feet, she said, adding, the capital expenditure between April-November has been increased by 22 per cent. In order to raise consumption, she said, the government has increased allocation to PM-KISAN, MNREGA and Direct Benefit Transfer under various heads. Expressing happiness over the RBI's decision to ease Cash Reserve Ratio, Sitharaman said, this will help increase banks lending towards housing, auto and MSME sectors. She said the concerns regarding slump in consumption were being taken care of and the government was taking steps to promote exports. "So the four engines you talk about constantly -- public investment, private investment, private consumption, and exports -- are all being given a push. Otherwise, why would you have green shoots? So the government is acting, revenue is improving," she said. When asked what the government was doing to bring back to the country 72 Indians facing charges of financial irregularities, she said, the government has not stopped pursuing the cases. "These people were happily living in India...and once they knew that the government was after them, they fled the country. "...We're not going to stop at anything else but get them back to the country to face the law of the land. So, they may choose to run away from this country, but they can't run away from the Indian legal system," she added. Asked if Delhi Assembly election result was a setback for BJP, Sitharaman said, "We have not lost Delhi. Delhi was with Aam Aadmi Party...we give out best in every election". While AAP only retained power in Delhi, the vote share of BJP has gone up in Delhi, she emphasised. DP NKD CS DP ANUANU

Payment to states delayed due to low realisation of GST compensation cess: FM

New Delhi, Jan 5 () States might be facing a consolidated revenue gap of up to Rs 1.23 lakh crore on account of withdrawal of compensation after the five-year GST transition period ends on June 30, 2022, says a report by economic think tank NIPFP.
 At the time of implementation of the Goods and Services Tax (GST) on July 1, 2017, the Centre had promised to compensate states for loss of revenue for five years at an agreed formula.
 "If the GST compensation is withdrawn after June 30, 2022, consolidated revenue gap of states would vary between Rs 1,00,700 crore to Rs 1,23,646 crore depending on expected tax buoyancy and reliability of data sources," the report said.
 "This implies that states will need to either generate an equivalent amount of revenue from exiting sources to continue with committed expenditures and/or cut down expenditures to cope up with revenue shock in 2022-23," it added.
 Due to the ongoing shortfall in overall GST collection as well as rising revenue gap between GST compensation requirement and GST compensation cess (GSTCC) mobilisation, timely release of GST compensation has become a matter of contention between the union and state governments.
 The report said that the withdrawal of GST compensation and fall in overall State Goods and Services Tax (SGST) collection will have substantial impact on state finances of Punjab, Odisha, Goa, Chhattisgarh and Karnataka, among major states.
 Among minor states, substantial revenue gap is expected for Himachal Pradesh, Uttarakhand, Tripura and Meghalaya.
 Given the ongoing shortfall in GST collection and uncertainty associated with revenue on account of SGST collection, many states have approached the 15th Finance Commission for possible extension of the GST compensation period by another three years, i.e. up to 2024-25.
 "Any shock to state finances due to withdrawal of GST compensation after the GST transition period may have profound impact on India's fiscal management and thereforemacroeconomic stability," the report noted.
 It pointed out that even if the GST compensation period is extended beyond June 30, 2022, the Centre may not have adequate fiscal space to provide GST compensation to states at the ongoing annual growth rate of 14 per cent, unless either tax buoyancy and/or nominal growth rate of GDP improves.
 To provide GST compensation to states, GST Compensation Cess (GSTCC) was introduced along with GST on some specific items to mobilise resources for the GST Compensation Fund.
 The union government manages the fund. BKS MKJ

States stare at over Rs 1 lakh cr revenue gap post withdrawal of GST compensation

<ul><li>The Indian government freaked out small taxpayers yesterday, all thanks to a poorly worded text message. </li><li>The message sent out created confusion and panic, as taxpayers thought that they had defaulted on their <keyword id="4619469" type="PERSON" weightage="20" keywordseo="GST-Returns">GST returns</keyword>. </li><li>While the government has not issued a clarification yet, there is nothing to worry about. </li><li>If you have received a similar message, read on to find out what the government actually intends to say. </li></ul>It’s extremely important to word your messages carefully – especially when you’re a government agency. This couldn’t have been more evident when the government sent out text messages yesterday to <keyword id="6354679" type="DEFINITION" weightage="20" keywordseo="gst">GST</keyword> taxpayers. The messages sent out yesterday read something like this: <div type="image" title="GST message" msid="79862597" hostid="261" caption="&amp;lt;p&amp;gt;A screenshot of the message sent to GST taxpayers&amp;lt;/p&amp;gt;"></div> “Dear xxx as per QRMP scheme you are defaulted to file your GSTR-1 and 3B on quarterly basis from Jan-Mar 21. To change pls visit <a href="http://services.gst.gov.in/">services.gst.gov.in</a>” This caused widespread confusion among GST taxpayers. While the government intended to inform these users that they have been transferred to the Quarterly Returns Monthly Payment (QRMP) scheme, the wording confused people, suggesting that they had defaulted on their GST returns. Many took to Twitter expressing confusion and panic. <div type="twitter" handle="kaul_vivek" handlename="शिक्षित बेरोज़गार" image="http://pbs.twimg.com/profile_images/1271133473223270406/sqgIE4h5_normal.jpg" favoritecount="173" retweetcount="25" status="I got a message yest saying I had defaulted to file my GSTR-1 &amp; 3B on quarterly basis from Jan to Mar 21. How does… https://t.co/T1xfxawO5i" createdat="1608624212000" id="1341293279825055744"></div> <div type="twitter" handle="kalveerbb" handlename="kalveer" image="http://pbs.twimg.com/profile_images/623586064595202048/0T4uMITG_normal.jpg" favoritecount="0" retweetcount="0" status="@kaul_vivek Was confused too. https://t.co/VBpF3hq3Lb" createdat="1608625454000" id="1341298490740146176"></div> <div type="twitter" handle="dineshwadera" handlename="CA Dinesh Wadera" image="http://pbs.twimg.com/profile_images/1130863538874937344/1jiSrTJG_normal.jpg" favoritecount="289" retweetcount="79" status="GSTN going nuts. Sending this message to every registered person and creating unnecessary panic everywhere. Since m… https://t.co/0ftFunFGDR" createdat="1608561161000" id="1341028825883312129"></div> Some chartered accountants and tax consultants came to the rescue to clear the confusion. <div type="twitter" handle="CA_AnandKumar" handlename="Anand Kumar" image="http://pbs.twimg.com/profile_images/1295470612505169920/UUwglO5E_normal.jpg" favoritecount="1" retweetcount="0" status="The following Message is being received by a lot of tax payers from the GST dept. &quot;Dear 37AAA...as per QRMP scheme… https://t.co/6GAMhE30Td" createdat="1608582857000" id="1341119823347023872"></div> <div type="twitter" handle="sandychauhan44" handlename="SS Chauhan Advocate (TTS)" image="http://pbs.twimg.com/profile_images/1252325840664305664/NZZZmlx2_normal.jpg" favoritecount="1" retweetcount="0" status="#QRMP Scheme!With respect to #QRMP Scheme, recently small taxpayers received a message.Looks like intention was… https://t.co/uwSxAtvIFj" createdat="1608567994000" id="1341057484404846593"></div> Others pointed out that the Finance Ministry should have been careful in drafting the message. <div type="twitter" handle="CANitinNayak" handlename="CA Nitin Nayak 🇮🇳" image="http://pbs.twimg.com/profile_images/1189113991211208704/oiSqg81E_normal.jpg" favoritecount="85" retweetcount="45" status="The way GST portal is sending the QRMP SCHEME SMS with the word &quot;defaulted&quot;, has created lots of confusion among ta… https://t.co/N8yzjvk6dj" createdat="1608562507000" id="1341034467880624128"></div> <div type="twitter" handle="caprerakj" handlename="CA Prerak Jobanputra" image="http://pbs.twimg.com/profile_images/1022702408491773954/_BvtXupG_normal.jpg" favoritecount="4" retweetcount="2" status="@GSTN_IT system generated msg of #QRMP has created confusion due to improper language.Wordings should be:Dear 24… https://t.co/LcUq6iqB6F" createdat="1608559212000" id="1341020651134447616"></div> The Finance Ministry and the Central Board of Indirect Taxes &amp; Customs, the agency responsible for this, are yet to issue a clarification. There’s nothing to worry about As others have already clarified, if you have received this message, there is nothing to worry about. The message does not state that you have defaulted on your GST returns. However, if you want to continue to file your GST returns on a monthly basis, you will have to login to the GSTN portal and change your settings. Ideally, the government should have made this an opt-in facility instead of opt-out. To recap, the government <a href="https://www.businessinsider.in/personal-finance/news/gst-taxpayers-to-get-flexibility-to-decide-on-monthly-tax-payment/articleshow/79705932.cms">announced a QRMP scheme</a> for small taxpayers with turnover of up to ₹5 crore. This scheme comes into effect from January 1, 2021. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/gst-taxpayers-to-get-flexibility-to-decide-on-monthly-tax-payment/articleshow/79705932.cms">GST taxpayers to get flexibility to decide on monthly tax payment</a> <a href="https://www.businessinsider.in/india/news/all-28-states-and-three-union-territories-decided-to-go-for-centres-gst-compensation-formula/articleshow/79589184.cms">All 28 states and three union territories decided to go for Centre's GST compensation formula</a> <a href="https://www.businessinsider.in/finance/news/november-gst-collection-stands-at-1-04-lakh-crore/articleshow/79508752.cms">November GST collection stands at ₹1.04 lakh crore</a>

A poorly worded GST message freaked people out yesterday – but there’s nothing to worry about

Eventually the <keyword id="6359922" type="CITY" weightage="20" keywordseo="States">states</keyword> can breathe easy in Goods and <keyword id="6355686" type="COMPANY" weightage="20" keywordseo="Service-tax">Service Tax</keyword> or GST issue. The government is set to introduce a law to make sure the losses incurred by states in GST will get compensated. 
 
This legal ring fencing could help build consensus on GST rates when the issue is taken up next month, officials told the media. 
 "Compensation mechanism will be given a legal backing," a senior government official confirming some deliberations on the issue told <keyword id="77091" type="COMPANY" weightage="20" keywordseo="The-Economic-Times">The Economic Times</keyword>. The formula has broadly been agreed to at the first meeting of <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword> on Thursday and Friday, and its nitty-gritty would be finalised before the next meeting by officials. 
 "<keyword id="6354721" type="ORGANIZATION" weightage="20" keywordseo="parliament">Parliament</keyword> shall, by law, on the recommendation of the <keyword id="1200817" type="ORGANIZATION" weightage="20" keywordseo="Goods-and-Services-Tax-Council">Goods and Services Tax Council</keyword>, provide for compensation to the States for loss of revenue arising on account of implementation of the goods and <keyword id="645517" type="COMPANY" weightage="20" keywordseo="services-tax">services tax</keyword> for a period of five years," the amended law says, as per the <keyword id="6474066" type="COMPANY" weightage="20" keywordseo="economic-times">Economic Times</keyword> report. 
Another law that will be a guideline for provisions of a statutory framework is also being formed. GST is likely to get operational from April next year and would replace all indirect taxes on goods and services levied by central and state governments. 
 While the consensus has been passed in the parliament, a few states including DMK run <keyword id="20154" type="ORGANIZATION" weightage="20" keywordseo="tamil-nadu">Tamil Nadu</keyword> believes that GST would harm state’s income as they won’t be able to impose any state tax. 
 
The base year for GST compensation is fixed at FY16 but other details like what would be the percentage increase every year over the five year period are to be worked out. 
 
This new law assuring compensation for the states in case of loss would help central government to keep a lower GST rate as compared to 20% demanded by many states.

Government plans new law to compensate states for loss from GST, if any

The <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword> decided the annual turnover limit for exemption at Rs 20 lakh and stated that all cesses will be subsumed in the Goods and Services Tax (GST). 
 
The final drafting of rules on granting exemptions will be held in next meeting on September 30 will finalise draft rules on granting exemptions. 
 The <keyword id="6412918" type="UNKNOWN" weightage="20" keywordseo="GST-rate">GST rate</keyword> and tax slabs will be decided next month, during the October 17-October 19 meeting. 
 At the end of the first meeting, the Council headed by Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> decided that the state authorities will have jurisdiction over assessees with annual turnover of less than Rs 1.5 crore. 
 
Those with turnover of over Rs 1.5 crore, Jaitley said there would be cross examination either by officers from the Centre or state to avoid dual control. 
 
However, the power for assessment of 11 lakh service tax assessees who are currently assessed by Centre, would remain with it. New assessees which would be added to the list would be divided between the Centre and states. 
 
Talking to reporters after the meeting, Jaitley said while the annual exemption threshold for levy of GST would be Rs 20 lakh, it would be Rs 10 lakh in the north-eastern and hill states. 
 
"All items including cess would be included in GST," Jaitley said, adding the Council is working on a compensation law and draft compensation formula. 
 
The base year for calculating compensation would be 2015-16 and the formula for payment of compensation would be deliberated between the state and Central authorities. 
 
The officials will give a presentation with regard to the compensation formula which can be adopted at the next meeting of the Council on September 30. 
 
"All decisions today by the GST Council were taken on the basis of consensus," Jaitley said.

GST Council sets threshold limit at Rs 20 lakh; GST rate to be decided in October

<keyword id="6355040" type="ORGANIZATION" weightage="100" keywordseo="GST-Council">GST Council</keyword> at its meeting on Friday will finalise the rules regarding registration, refunds and payment and also take a view on exemption of goods under the upcoming Goods and <keyword id="645517" type="COMPANY" weightage="20" keywordseo="services-tax">Services Tax</keyword> (GST) regime. 
 To be chaired 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>, the Council will also deliberate on a formula for payment of compensation to states for revenue loss in the aftermath of implementation of the GST. 
 
“Tomorrow’s meeting is likely to finalise on the rules on GST. Also, a presentation will be made by the officials on compensation,” an official said. 
 
While 2015-16 will be the base year for calculating revenue compensation to states for any loss of receipts arising from rollout of GST, the final methodology will be worked out in next meetings, the official added. 
 
At the last meeting of the council, four alternatives came up for discussion for compensating states for loss of revenue after implementation of the GST. 
 
A state can be compensated if the revenue under GST falls short of the average tax earnings in best three years out of past five years. 
 
Secondly, of the five years, two outliers are left out and average is taken. If the revenue under GST is short of this, then states are compensated. 
 
Thirdly, a base year can be fixed and a particular growth rate decided for all states. If the revenue falls short of that, then the state gets compensated. 
Another suggestion was to base compensation on a fixed rate of revenue growth. 
 
The CBEC had already floated the draft rules for registration, refund, returns and invoice for the GST regime and sought stakeholder comments on the same. 
 
The Central government plans to roll out GST from April 1, 2017, and has lined up meetings of the GST Council to build consensus among the states.

GST Council to meet tomorrow to discuss rules, exemptions

The neighbourhood shopkeeper has been hurt more than modern retail chains in <keyword id="6359453" type="UNKNOWN" weightage="20" keywordseo="consumption">consumption</keyword> slump, and the industry will have to evolve innovative solutions to come out of it, <keyword id="6361485" type="ORGANIZATION" weightage="20" keywordseo="marico">Marico</keyword> Chairman <keyword id="126855" type="PERSON" weightage="20" keywordseo="Harsh-Mariwala">Harsh Mariwala</keyword> has said. He termed the <keyword id="29405" type="COMPANY" weightage="20" keywordseo="slowdown">slowdown</keyword> in consumption -- a major factor blamed for pulling down GDP growth to a six-year low -- as a "phase". The economic growth slowdown is a "reality" but all should keep a forward-looking approach to come out of it, he told .
 "While modern retail is showing better numbers, it is at the cost of general trade. It is just that one channel is compensating for the other channel. However, an overall low pick-up is a reality which is what FMCG (fast-moving consumer goods) companies have been progressively experiencing," Mariwala said.
 There is a need for the government to unleash both short-term and long-term reforms to reverse the slowdown, he said adding that there is no quick fix or set formula to fight the same.
 Listing out potential measures that can be taken, he pitched for making companies with less than Rs 1 crore revenues pay GST on a quarterly basis rather than monthly, reduction in the GST slab rates, adoption of direct tax code, bringing down land costs, reduction in real interest rate and upskilling incentives for auto workers to work on electric vehicles.
 To push up the consumption demand, Mariwala said the government needs to take steps to increase liquidity in the market and boost sentiments.
 He said businesses need to be innovative and take an opportunistic view of things by making fundamental improvements in their models.
 Companies need to look internally to counter cyclical "problems", he said adding that some companies have thrived in the worst-performing sectors by doing something impactful for the customers.
 "Businesses should not get swayed by the Indian <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword> not growing at higher growth rates. They should do something so that they stand out and they are certain to reap the rewards that come with making that effort," he said. Mariwala said inclusion of research and development spends as part of the corporate social responsibility (CSR) mandate will act as a nudge to companies to look at innovation, and also give rise to public-private partnerships. He also said there is a need for changes in the education system, which depends excessively on rote.
 "With too much emphasis on standardised test results and benchmarking, the education system can stifle children's natural creative ability making it difficult for them to be innovators later in life," he said.
 Offbeat approaches and methodologies that stir curiosity and instil fearlessness among the children is also needed, Mariwala said.
 In India, many sectors like agriculture are ripe for innovation, which requires attention on productivity, processing and supply chains, he said.
 Mariwala said that having benefitted from innovations as an entrepreneur, he has started the non-profit Marico Innovation Foundation.
 "We believe that innovation can spur creation and sustenance of successful and enduring Indian brands. That will enable India to reposition itself as a global economic superpower," he said. AA HRS

Consumption slump just a phase; neighbourhood shops hit hard, says Harsh Mariwala

<ul><li>The monsoon session of the Indian Parliament is all set to begin on September 14, with over 20 bills on the agenda for discussion.</li><li>Amongst the key ones is the Companies (Amendment) Bill, 2020.</li><li>Some of the major highlights of the Bill include the decriminalization of minor offences and direct overseas listing for certain prescribed classes of companies.</li><li>The government has also proposed an evolved CSR policy, allowing companies to carry forward excess CSR spendings to future financial years.</li><li><a href="https://www.businessinsider.in/india/news/monsoon-session-2020-of-the-indian-parliament-will-debate-these-important-bills-and-ordinances/slidelist/77800892.cms">Check out the latest news and updates on Business Insider.</a></li></ul>In March 2020, the Indian government introduced the Companies (Amendment) Bill, 2020, recommending further measures aimed at improving the ease of doing business. Key amongst its recommendations include aspects like decriminalizing minor offences, allowing companies to list overseas directly, and more. With the monsoon session of the Indian Parliament all set to begin on Monday, September 14, we took a look at some of the crucial highlights of the Bill that will be tabled for legislation. “This Bill is a net positive, these are good steps and will enhance the ease of doing business,” Tarun Gulati, senior advocate, Supreme Court, told Business Insider. Also read: <a href="https://www.businessinsider.in/india/news/monsoon-session-2020-of-the-indian-parliament-will-debate-these-important-bills-and-ordinances/slidelist/77800892.cms">Monsoon session 2020 of the Indian Parliament will debate these important bills and ordinances</a> Highlights of the Companies (Amendment) Bill, 2020 Decriminalizing minor and technical offences The Bill includes 72 proposed amendments which decriminalize minor and technical offences. For example, it suggests doing away with jail time for offences which involve shareholder rights or reduction in shares, among others. It also suggests converting 23 compoundable offences which involve imprisonment, into a civil wrong with civil penalties. According to Gulati, this will improve ease of doing business and benefits startups and small companies which don’t have large teams to check compliance. It is worth noting that only those offences which are minor, technical, and do not involve fraud or affect public interest are proposed to be decriminalized. In addition to this, the government has also proposed removing penalties for certain offences and reducing penalties for others. Direct overseas listing and exclusion from listed companies The government has proposed to allow a certain class of companies to list directly in foreign jurisdictions, allowing them to raise capital easily. In addition to this, it has also proposed allowing companies to list debt securities on stock exchanges without having to list the company itself. This will allow companies to raise debt funds without attracting the compliance burden of listed companies. Set-off of excess corporate social responsibility (CSR) spending Companies that have a net worth, turnover, or profits above a specified amount are required to spend 2% of their average net profits of the last three years towards CSR in a financial year. If companies spend more than 2%, the excess amount does not count towards their past or future obligations. However, the government has now proposed that any excess amount over 2% of the current CSR obligation will be allowed to be carried forward and set off against future CSR obligations. This is likely to encourage companies to better spend on their CSR obligations instead of restricting themselves to the 2% target. Setting up of benches of National Company Law Appellate Tribunal (NCLAT) The government has proposed setting up benches of NCLAT to ease the burden and speed up the resolution of pending cases. Further, the maximum limit on the number of members in NCLAT, which is currently 11, is proposed to be dropped. Overall, Gulati believes that these proposed amendments will help in reducing the compliance burden on companies and allow them to focus on their business. It remains to be seen how effective the government’s execution is, though. SEE ALSO: <a href="https://www.businessinsider.in/india/news/this-monsoon-session-parliament-will-have-no-question-hour-weekend-breaks-or-private-members-bills/articleshow/77888123.cms">This monsoon session, Parliament will have 30-minutes of question hour, no weekend breaks or private members’ bills</a> <a href="https://www.businessinsider.in/india/news/monsoon-session-2020-of-the-indian-parliament-will-debate-these-important-bills-and-ordinances/slidelist/77800892.cms">Monsoon session 2020 of the Indian Parliament will debate these important bills and ordinances</a> <a href="https://www.businessinsider.in/india/news/governments-new-gst-compensation-formula-may-raise-unconditional-borrowing-limit-by-0-5/articleshow/78035700.cms">Government's new GST compensation formula may raise unconditional borrowing limit by 0.5%</a>

You Searched For "gst compensation formula" and got 13 results

Jharkhand is the only state holding out against the Indian government's suggested formula on GST compensation

IANS

States not choosing GST compensation options by October will have wait another two years

IANS

Government's new GST compensation formula may raise unconditional borrowing limit by 0.5%

IANS

All 28 states and three union territories decided to go for Centre's GST compensation formula

IANS

GST Council likely to approve two-year extension of compensation cess levy

IANS

Payment to states delayed due to low realisation of GST compensation cess: FM

PTI

States stare at over Rs 1 lakh cr revenue gap post withdrawal of GST compensation

PTI

A poorly worded GST message freaked people out yesterday – but there’s nothing to worry about

Rounak Jain

Government plans new law to compensate states for loss from GST, if any

BI India Bureau

GST Council sets threshold limit at Rs 20 lakh; GST rate to be decided in October

BI India Bureau

GST Council to meet tomorrow to discuss rules, exemptions

BI India Bureau

Consumption slump just a phase; neighbourhood shops hit hard, says Harsh Mariwala

PTI

Key proposals of Companies Amendment Bill 2020 include decriminalising offences, direct overseas listing and more

Rounak Jain

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