“How would you treat a car given to employees for their use under GST (goods and services tax)?” a tax head of a car company asked me.
‘Why should it be such a big problem?’ I wondered. Until I realised the nuances of such a transaction.
Is the car capitalised in the books of the company? Is it registered in the company’s or employee’s name?
As per the company’s HR policy, is the employee allowed personal use of the car? If yes, is there any way to identify that personal use? Are there different entitlements, different models or variants of cars specified for each level in the organisational hierarchy? And many more queries. Click to read more
There is good news for those bit by the travel bug who prefer staying at mid-market to luxury hotels. After the GST+ Council on Sunday, tweaked the tax incidence on hotel tariffs, room rates at such hotels are set to come down.
The GST Council led by Union Finance Minister Arun Jaitley in its 17th meeting, in a relief to the hotel industry, increased the threshold for the 28 per cent tax bracket to Rs. 7,500 from Rs. 5,000. This means that an 18 per cent GST will be levied on rooms with tariff between Rs. 2,500 and 7,500. According to the hotel industry, currently for this tariff range, a tax of 21.3 per cent is levied. Click to read more
Given the government’s thrust on infrastructure and allied activities, cement makers were hoping for 18% goods and services tax (GST). Unfortunately, the sector was categorized in the highest tax slab of 28%, dashing these rose-tinted hopes.
But while cement manufacturers profess disappointment, tax experts and analysts say that post-GST, the tax burden of cement players should come down. In the pre-GST regime, effective tax incidence for packaged cement was in the 29-31% range including indirect taxes such as excise duty and value added tax (VAT), tax experts said. Tax rates vary across states since tax is levied depending on whether the sale is made for retail or bulk use. Click to read more
Global hotel chains like Hilton, Hyatt Hotels and Resorts, and Carlson Rezidor said they are committed to their future investments and development plans in the country despite luxury hotels being taxed at 28% under the goods and services tax (GST) regime.
According to some industry estimates, GST rate of 28% on hotel rooms with tariffs of Rs 7,500 and above will make luxury hotels in the country the most taxed in the world, surpassing hotels in New York, London and Paris, without add-on levies such as municipal tax, service charge, etc. Click to read more
So at the stroke of the midnight hour on 30 June, a gong is reportedly going to be struck to signal the rollout of the goods and services tax (GST) regime. Even the most unimaginable wild card cannot now stop the beginning of what could be the biggest tax reform in Indian history on 1 July.
But will this be more disruptive than if implementation gets deferred to 1 September? Or by a year, or whatever period the unprepared and those opposing it for the sake of opposing it ask for? Not really. Change will always be disruptive; and businesses will never be fully prepared for it. Just look at the divergent stands of the apex business chambers – some have said industry is well prepared and others sought a deferral. Click to read more
The government is readying a big do to roll out the goods and services tax (GST), the marquee indirect tax reform, on 1 July.
Like it happened with Independence, GST will be made official at midnight on 30 June. Effectively the country will wake up on 1 July to a new indirect tax regime: GST.
Ahead of it, the Union government has convened a meeting of the GST Council, the apex decision making authority, which will ensure the presence of 32 finance ministers of the country’s states and Union territories. The meeting is scheduled to begin from 7pm. Click to read more
The Goods and Services Tax (GST) Council at its 17th meeting on Sunday decided to increase the room tariff threshold, above which the luxury rate of 28% will apply, to ₹7,500 from the ₹5,000 decided earlier.
The Council also decided to defer the dates of filing the detailed return for July and August.
It also approved the rules for advance ruling, appeals and revisions, assessment, anti-profiteering, and fund settlements. On e-waybills, it decided that the existing system would continue until consensus was reached on the rules. Click to read more
The anti-profiteering clause can play a dampener in Sept quarter while inventory de-stocking could hurt June, Lalit Nambiar, Senior Vice President & Fund Manager – Equity at UTI Mutual Fund in an exclusive interview with Kshitij Anand of Moneycontrol.
Existing provisions such as e-Sugam in Karnataka or e-Suvidha in Uttar Pradesh might continue under the goods and services tax (GST) regime till the electronic-way (e-way) Bill is approved. While the draft e-way Bill proposed a threshold of Rs 50,000 over which prior online registration of a consignment is required, there is no threshold in the current systems of states. Also, while the e-way Bill was proposed for both interstate and intrastate movement of goods, the existing system is only for interstate movement. So, any truck coming to Karnataka. Click to read more
Mutual fund body Association of Mutual Funds in India (Amfi) has appointed consultancy PwC to prepare a white paper on the implementation of the goods and services tax (GST) and its impact on the mutual fund sector. PwC is expected to finalise the draft this week which will then be forwarded to the Securities and Exchange Board of India (Sebi).
Under the GST regime, asset management companies (AMCs) will have to pay service tax of 18 per cent on the investment management fees they earn. Until now, the rate was 15 per cent. This might lead to an additional tax outgo of Rs 300-500 crore annually, assuming sector revenues of Rs 10,000-15,000 crore. Since the tax is ultimately borne by investors, their expenses will go up marginally. Click to read more
Finance Minister Arun Jaitley on Tuesday announced that the country will transition to the Goods and Services Taxes (GST) Bill over the midnight of June 30 to July 1. President Pranab Mukherjee will officially launch the Bill at Parliament’s Central Hall.
Mr. Jaitley spoke about needing to be prepared for challenges in the short term after the switchover, saying, “I anticipate over the medium and long term, being a more efficient system prone to checking evasion, the revenues will grow and the spending capacity of governments at the Centre and states will increase. And consequently, it shall have a positive impact on the GDP.” Click to read more
The decision to consider a Goods and Service Tax (GST) revision for the decentralized garment segment, three months after the rollout on July 1, would paralyze the synthetic spinning sector leading to thousands of units being closed, said Southern India Mills’ Association.
“More than 80 per cent of garment manufacturing units are in the decentralized sector and undertake job work. These units would become unviable with 18 per cent service tax on the job work when compared to vertically integrated manufacturing units,” said M Senthilkumar, chairman, SIMA. Click to read more
The Goods and Services Tax which comes into effect in just 15 days has triggered retailers into giving colossal discounts to clear their inventory before the start of a new tax regime.
E-commerce ventures are looking to clear stocks lying in warehouses as the new tax regime will result in tax burden. Sellers, both from online and offline platforms, cannot claim input tax credit for goods that have been purchased but sold after July 1.
Online portals have thus lined up sales across segments ranging from apparel, footwear, electronic accessories, mobile accessories, premium watches, handbags, leather products, and health and beauty products. Click to read more