GST Bills Have Been Cleared By The Lok Sabha

Before the clearance of the four bills of the GST, there was a heated argument between the opposition and the treasury benches over the rates’ multiplicity, legislation’s nature, right of the parliament over the new tax system and the boundary of the new tax system. The subordinate rules to be taken up by the GST and the specified rates of the taxes to be recommended by the officers of the committee for the new indirect tax system to be rolled out from the 1^st July are awaited by everyone.

After the clearance of all the bills associated with the union territory GST, central GST, Integrated GST and compensation, the Prime Minister Mr. Narendra International Tax  Advisory Consultant In India Modi tweeted, “Congratulations to all the countrymen over passage of the GST Bills. New Year, New Law, New Bharat.”

Now the states will have to pass the GST bill for the state that would be a carbon copy of the union territories’ GST bills and central GST bill. Bill’s interpretation would mean that the lease of land, equated monthly instalments on under construction houses and renting of the commercial building would all come under the GST Top GST Consultant In India however; the  clarity on the rules would be required. Mr. Jaitley stated that after a year of the roll out of the GST, the GST would be imposed on Petroleum as well.

Till the time the council takes a decision on the Petroleum till then it’ll be considered to be part of the GST but it would be rated zero. This implies that the excise duty would be imposed by the center and the value added taxes of the states on such products.

The limit of the cash transactions have been lowered to Rs. 2 lakh

As part of the 40 amendments of the finance bill the limit of the cash payments proposed Business Process Outsourcing Solutions In India to be 3 lakh in the budget of 2017 – 18 has been reduced to Rs. 2 lakh. The amendments were moved in the lower house by the finance minister; Mr. Arun Jaitley. It is aimed at tightening the loop of the ones dealing in immense cash transactions. Enormous other amendments have also been made for reducing the Black money.

These include applying for the PAN, the permanent account number, Adhar made mandatory Company Formation Consultants In India for filing of the tax returns and payments to be allowed only through the non-cash modes like the electronic transfers, the cheques and the drafts. After demonetization a report stated that the digital transactions have been reduced.

Therefore, the amendment of the reduction of the cap on the transactions of the cash has been made. The proposal of the government is to reduce the cash transactions from Rs. 3 lakh to Rs. 2 lakh. It was stated by the revenue secretary, Mr. Ind AS Implementation In India Hasmukh Adhia that the fine due to the violation would be equivalent to the amount of the transaction made by cash. The fine would be paid by the organization that would be receiving the cash. This provision is applicable for single transactions.

CBDT Has Signed Two Unilateral APAs With Taxpayers

For reduction of the litigation by providing assurance in transfer pricing, the CBDT has signed two APAs, advance pricing agreements with the taxpayers of India. These APAs are related to the automobile and informational technological sectors. These agreements cover the international transactions like the software Financial Control In India development services, business support services; IT enabled services and manufacturing services. This has been mentioned in an official statement.

After these two agreements, the CBDT has entered into 117 APAs. These comprise of 110 Unilateral APAs and 7 bilateral APAs. In this financial year, the CBDT has entered into 53 APAs (49 unilateral and 4 bilateral). The scheme of APA was introduced in 2012’s income tax act. The rollback provisions of this scheme were introduced in 2014.

The scheme aims at providing the certainty to the taxpayers in the areas of transfer pricing Business Advisory In India by mentioning the methods of pricing and fixing the pricing of the international taxations in advance.

Since the time these agreements have started, the APA schemes have provided enormous interest to the taxpayers. This has been the reason of the filing of more than 700 applications (unilateral as well as bilateral) in only four years. This has been stated by the CBDT.

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Benami Property Transactions On IT Radar

The registration authorities and the property dealers have been directed by the officials of the income tax department to prepare a list comprising of the topmost property deals being done in the last three years in the descending order of the valuation.

An IT official stated that the key agenda of the IT department is to track the Benami transactions as well as the Process Outsourcing property. The IT department has decided to probe such cases on the basis of the information associated with the bank deposits and the property transactions. These cases would be probed under the new enforced Benami transactions act.

The violators of the act would be prosecuted and rigorous jail term of about seven years would be sentenced. The Benami amount deposited after the demonetization would be confiscated. The violator would be fined to about twenty five percent of the fair market value of the Benami property.

This plan of action has been prepared by the income tax department under the supervision of the CBDT, the central board of direct taxes. The banking channels and the financial intelligence unit have Fixed Asset Management received certain inputs and on the basis of the inputs received, the tax department has decided on doing the searches and the surveys. The taxmen would initially approach the people who have exceeded the deposition of Rs. 50 crore since 1^st November 2016.

The IT officials have been asked to coordinate with the ED, enforcement directorate and the CBI, the central bureau of investigation for widening the probe. CBDT has requested the IT in a meeting to circulate the information about the IT departments’ field offices throughout India.

Till now the tax department has given about 5000 notices to varied entities. These entities are inclusive of the car dealers and the charitable trust. The notices have been given to the people to reveal their Company Registration In India balances in their accounts. The notices have also been given to the people who have deposited extensive cash in their accounts. As per the recent data attained, the undisclosed income of about Rs.4000 crore has been detected.

Also, as part of the operation of ‘black money collectors’, the new notes of about Rs.105 crore have been seized. This has been done after the demonetization.

The government has carried out about 1000 searches tentatively. All this has been done under the provisions of the IT Accounting Audit In India act. These searches have been made to find the Hawala dealers, the money operators, etc.

Google Tax May Be Faced By More Online Services

Since last few years the digital space has seen extensive expansion. It is expected to further rise in the next few years. The maximum benefit has been attained by the companies that have been earning through the digital advertisements like Facebook, Twitter, Google, LinkedIn, etc.

Since these companies are not stationed in India therefore, these are not subject to the taxes in India. The new business GST Rates In India models have challenged the current methodology of levying the taxes on the basis of the permanent establishment rules.

The “Facebook tax” or the “Google tax” as announced by the finance minister, Mr. Arun Jaitley, in the budget statement of FY 17, will be levied from the 1^st June. The intricacies of the “Google Tax” are as-

What is Google or Facebook Tax?

Google Tax is the tax to be levied on the income of the foreign e-commerce company outside India. This would impact Transactions Advisory the major giants like the Facebook, Google, etc.

Why has the Google Tax been introduced?

The tax would be paid by the online companies making money through online advertisements. This tax would bring the foreign e-commerce companies under the tax radar of India. Such a tax is already levied in other countries like the European countries. Therefore, India has been added in the list of the Organisation for Economic Cooperation and Development (OECD).

The government has already earned Rs.100 crore on account of the equalization levy. Companies like Twitter, Google, Yahoo and Facebook have been earning ample revenue from the local advertisers Company Registration Consultants of India. The Central Board of Direct Taxes set up a committee for examining the indirect taxation of the e-commerce in India. The recommendation of the equalisation levy of six to eight percent on thirteen broad services was based on the profit shifting guidelines and the OECD’s base erosion by the committee.

The scope of the equilisation levy is expected to be enhanced by the government of India. The tax net might cover more digital transactions for curbing the avoidance of the tax by the multinational firms. The services to be considered by the government for levying the tax would be online Business Setup Services selling of the services and the goods, downloading of the movies and books, software, songs and consumption of the online news.

The trend internationally is to bring the transactions being done digitally into the tax net because the multinational companies try to avoid paying the taxes. The beginning was done the last year by levying six percent tax on the online advertisements.

GST Impact On The Telecom Sector

The GST provides the power to the states to levy tax on the services. Therefore, compliance requirement and a decentralized registration would have to be having an appropriate definition of “the place of supply” for avoiding the controversies associated with the judicial system.

Although there is a separate clause of “place of the supply provisions” affiliated with the telecom Formation Of A New Company services yet there are probabilities of disparities occurring because of the distinction persisting on the nature of the service, that is, pre-paid or post-paid and the methodology adopted for the payment that is, recharge vouchers or e-payment.

The basis for the determination of the place of the supply is the address of the recipient therefore; the telecoms possess enormous responsibility of keeping their database updated. Operation of the telecoms is on the basis of the circles or areas that have nothing to do with the geographical areas. Therefore, accounting to be done as per the state wise revenues would require an enormous overhaul of the accounting system.

Another imperative aspect is the services, intra circle roaming and intra circle termination, for the same operator especially in case of the multi-state circles. There is no mechanism Inventory Management In India available with the telecoms as of now for tracking roaming supplies and intra circle termination. Additionally, the aspects of the valuation need to be specifically addressed in case of self-supplies as these appear to come under the tax net as per the proposed GST regime. Furthr, it becomes pivotal that Multi state registrations should be replaced by a single PAN-India registration.

Though the debate related to the finalization of the rate of the GST is still on (18% is suggested by the chief economic advisor’s report). It is expected that the GST would bring in sudden rise of charges for the ultimate consumers of the services of the telecoms attracting a tax rate of fifteen percent today.

Since there wouldn’t be any uniformity of GST rates across states therefore, the recharge coupons to Roadmap Of Ind AS Implementation be priced for the pre-paid customers would create issues. Also, the draft model of the GST does not address the problem of the invalid credits related to the expenditure being done on the passive infrastructure therefore; the room for the credit blockages does persist. This negates the flow of the credit seamlessly and provides room for the litigation.

For telecom equipment and service provider composite supply’s concept needs to be addressed. The compliance requirements because of the GST would impact the telecoms extensively. As of now there is single registration and two to three returns but with the coming of the GST manifold returns would have to be filed. Also, assessments Top GST Consultant In India would have to be done separately and audits in each and every state would also have to be done. The new GST regime would result in making of a box for the telecoms associated with the taxability of the recharge coupons, SIM cards, etc.

The concerns associated with this sector need to be addressed effectively and efficiently.

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Auto Industry Demands Two Rates Under GST

The government intends starting the GST plan from the next financial year. The passenger vehicles should have two rates instead of four rates as per the SIAM (Society of automobile manufacturers). As per the body of the industry, the standard rates Roadmap To IND AS Implementation should be applicable for small cars, two wheelers, commercial vehicles and three wheelers.

The bigger cars should have eight percent more rates than the standard rates. Only two rates should be available for the conventional vehicles. Since a long time only two rates of excise duties on the passenger cars were available and with the change of the time four rates for the passenger cars have been made compulsory.

These rates are not applicable for the electric and hybrid electric vehicles as the lower rates are Inventory Management In India applicable for these. It is stated that a lower GST rate would be prevalent for the electric GST vehicles, hybrid electric vehicles and vehicles with alternative fuel. The rates of the above mentioned vehicles should at least be eight percent less than the other vehicles.

SIAM stated that the present scenario need not make one think carefully about the GST rates to be GST Rates In India fixed for the cars. SIAM also stated it’s building of the nation responsibly because of which no automotive product should be clubbed with the health hazardous goods like cigarette, liquor, pan masala, etc.

Tax Experts – Goods and Services Tax Will Make The GDP Grow By 2 Percent

GST, Goods and services tax, one nation one tax, would be implemented from 1^st April, 2017. The CAs was guided by the Financial Advisory experts in a regional tax conference held by the ICAI, the institute of the Chartered Accountants of India of Nashik and Jalgaon branches.

The businesses have been driven in India by the present indirect taxes for structuring and modelling their supply chain and systems owning to the taxes’ multiplicity. GST would be a game Business Advisory changing reform because a common Indian market would be developed and it would reduce the effect of taxes on the goods’ and services’ cost.

Irrespective of the size and nature of the business, GST possessing wide implications, would impact the entire organization. Because of one tax one nation formula, uniform tax structure would be prevalent throughout India. At present, the taxes prevalent on the supply of the goods are 27 percent and GST’s standard rate would be 18 percent.

As per the constitution’s federal character, the power of taxing the domestic trade has been divided between the Ind AS Implementation state and the central governments; therefore, the need for the dual GST model was felt. It would serve the purpose and would also take care of the state’s fiscal autonomy. As per the dual GST model, two streams of GST would be running together. This was stated by Mr. Vimal Jain, the chairman of the Indirect Tax committee.

S Gupta, another expert stated that the implementation of the GST would provide competitive benefits in the international market. This would bring in the growth of the GDP by 2 percent. Since GST Rates In India international competitiveness would increase by 5 percent therefore, foreign direct investment would also increase in the country.

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Social Security Deal Between India And Japan Will Benefit The Skilled Workers

A social security agreement was signed between India and Japan. As per the Indian foreign ministry, thousands of skilled workers and the Japanese and Indian professionals working in both the countries would get benefited.

This agreement between Japan and India has been signed to ensure that the employees as well as the Inventory Management For Small Business employers come under the social security law of one country. This would make them avoid paying the liability of double social security system. As per this agreement, the employees would remain within the social security scheme of their country, that is, Japan or India, if the agreement’s specific conditions are met.

When an Indian worker would go to Japan on a short term contract, he will not have to make a social security contribution. He would be able to avail this facility if he would be covered in India under the social security contribution.

He would have to continuously pay his contribution to the Indian government during his overseas contract. The Transactions Advisory same is applicable to the Japanese workers in India. The statement said that the pact would help in avoiding the double social security contributions.

The pact during relocation would make the remittance of the benefits easy. This would prevent the loss of benefits by aggregating the periods of the contribution.

Such a social security agreement has been signed by India with 16 countries. These countries are Germany, France, Sweden, Belgium, Canada, Denmark, Czech Republic, Finland, Hungary, Netherlands, Switzerland, Austria, Netherlands, Norway, Republic of Korea, and Grand Duchy of Luxembourg.

The competitive position and the profitability of India and Japan will get impacted because of the India Japan pact. The Business Setup foreign operations in either Japan or India would reduce the cost of doing business abroad.

This agreement would be beneficial for thousands of Indian as well as Japanese workers. This agreement of social security will help the companies of Japan to consider India to be a sound destination for their manufacturing investments.

 

India Singapore Revise Tax Treaty

A pact was signed between India and Singapore on the 30th December, 2016 about amendment of their tax treaty that is about a decade old. This treaty would allow taxation rights to have an upper hand over capital gains.

With a low tax jurisdiction and a zero jurisdiction, this agreement is the third double taxation avoidance agreement  Financial Advisory (DTAA) that has been amended. The previous two agreements were signed with the countries Cyprus and Mauritius.

For debt funds the best source of investment into India would be Mauritius and for equity investments the best source of investment into India would be Singapore.

As per the revised DTAA,double taxation avoidance agreement, between India and Mauritius, certain old rules would be applicable for certain situations that are existing now and new rules would be Tax Advisory applicable for all the situations that would exist in future .The investments from Singapore would enjoy a two year transition benefit.

This pact that has undergone a revision will be implemented from 1^st April,2017.From 1^st April,2017 to 1^st April,2019, that is, two years after 1^st April,2017,the tax of the capital gains would be imposed at fifty percent of the existing domestic rate. At present, the short term rate is 15 percent but the full rate would apply from 1^st April, 2019.

Since all the three treaties were amended, therefore, 2016, was indeed a historic year for India. Round trip domestic black money was generated through the misuse of these treaties bringing back the black Audit Outsourcing money to India via these routes. India has consistently been battling against the black money. Amendment of these treaties as per the finance minister, Mr. Arun Jaitley, would bury the route responsible for the generation of the black money. The two top sources for FDI, foreign direct investment to India, have been Singapore and Mauritius.

Tentatively half of the direct flow of foreign direct investment to India has been done by these two countries. For about the past decade and a half the FDI from Mauritius alone has been USD 95.9 billion.

The FDI from Singapore has been USD 45.8 billion. Fifty percent concessional rate would be given after the condition Business Setup Services of the limitation of benefit, LOB, gets fulfilled, an expenditure of Rs.50 lakhs in the previous financial year in Singapore and an expenditure of Rs.27 lakhs in the previous financial year in Mauritius.

E commerce Firms Would Deduct TCS Under GST

The operators of the E-Commerce firms would have to deduct the tax collected at source, the TCS, when the payment would be done to the suppliers. This would be done as per No 1 GST Consultant In India the new rule of the GST as the aggregator’s definition has been done away with.

This would increase the burden of the compliance on the operators of e-commerce as this deduction of two percent will have to be deposited to the government. This would not increase the burden of the taxation on the consumer as the tax credit would be given to the supplier.

As per the experts the inter- state movement of the goods would also result in levying the same Control Risk Assessment In India amount of tax making the total TCS deduction to be two percent though this would not increase the burden on the consumers.

When the goods would be returned by the consumers, the TCS will not have to be deducted by the e-commerce companies because the actual sale didn’t actually happen.

The GST law’s draft model does not define the aggregators and the government has stated that the government will provide the specifications and the notifications of the types of businesses to be covered under the draft model. Aggregators basically comprise of Ola, Urbanclap and Uber working as a platform for the Roadmap Of Ind AS Implementation providing transport. The provision of the TCS will not be applicable to the aggregators.

On the deductions of the TCS the e-commerce organizations would have to pay the taxes.

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