In today’s fast-paced business world, time is of the essence, and entrepreneurs are constantly seeking ways to optimize processes and increase productivity. One such critical process that can be streamlined is GST (Goods and Services Tax) return filing. In this blog, we unveil an exciting new development that promises to revolutionize the way businesses handle their GST returns – the one-click GST return filing solution. Say goodbye to lengthy paperwork and tedious calculations, and say hello to efficiency, accuracy, and an attractive bottom line!

The GST Filing Challenge:

GST return filing has been a cumbersome task for businesses since its implementation. The process involves gathering and reconciling vast amounts of data, performing complex calculations, and ensuring compliance with ever-changing regulations. For small businesses and startups with limited resources, this burden can be overwhelming, leading to potential errors, penalties, and wasted time.

Introducing the One-Click GST Return Filing:

Enter the one-click GST return filing solution – a groundbreaking innovation that streamlines the entire GST return process into a seamless, user-friendly experience. With a simple click, businesses can now fulfill their GST obligations accurately and on time, freeing up valuable time and resources for core activities.

How it Works:

The one-click GST return filing platform integrates cutting-edge technologies like Artificial Intelligence and Machine Learning, empowering businesses to automate data extraction, validation, and computation. Here’s how it works:

1. a) Automated Data Extraction: The solution automatically extracts GST-related data from your invoices, purchase receipts, and other financial records. No more manual data entry or sifting through piles of paperwork!
2. b) Real-time Compliance Updates: Stay up-to-date with the latest GST rules and regulations. The platform continuously updates its algorithms, ensuring your return filing remains compliant with the ever-changing tax laws.
3. c) Error-Free Calculations: Eliminate human errors and miscalculations. The advanced algorithms accurately compute your GST liability, input tax credit, and tax payable, giving you peace of mind during filing.
4. d) Seamless Integration: The one-click solution seamlessly integrates with your existing accounting software, ERP systems, or financial tools, making implementation a breeze.

The Benefits:

1. a) Time-Saving: With one-click GST return filing, businesses can complete the entire process within minutes, allowing them to focus on strategic decision-making and growth opportunities.
2. b) Cost-Efficiency: By reducing the need for manual labor and minimizing the risk of errors, businesses can cut down on operational costs and improve their bottom line.
3. c) Improved Accuracy: The precision of the automated system ensures accurate calculations, reducing the likelihood of audits or penalties due to errors.
4. d) Enhanced Compliance: Businesses can confidently comply with GST regulations in real-time, mitigating the risk of non-compliance issues.
5. e) User-Friendly Interface: The intuitive user interface makes the process accessible to all, regardless of their technical expertise.
6. A Transformative Step towards Digitization:

The one-click GST return filing solution represents a significant stride towards digitization and embracing the digital transformation that is shaping the modern business landscape. By leveraging the power of technology, businesses can move away from archaic, paper-based processes and step into a more agile, data-driven era.

Empowering Small and Medium Enterprises (SMEs):

Small and Medium Enterprises (SMEs) often struggle with limited resources, including time and personnel, making GST return filing a daunting task. The one-click solution levels the playing field for these businesses, enabling them to compete with larger corporations on an equal footing. This empowerment opens up new growth opportunities for SMEs, helping them reach their full potential.

Data Security and Confidentiality:

With the advent of technology, concerns about data security have become paramount. The one-click GST return filing solution addresses these concerns by implementing robust security measures. Your financial data remains encrypted, ensuring that sensitive information is safeguarded against unauthorized access.

Seamless Audits and Reporting:

The transparency and accuracy offered by the one-click GST return filing platform simplifies the auditing process. Businesses can now generate detailed reports and access historical data with ease, facilitating a smoother audit experience. This not only saves time during audits but also fosters a positive relationship with tax authorities.

Mobile Accessibility:

The one-click GST return filing solution is designed with mobility in mind. Accessible via mobile apps or web browsers, businesses can file their returns from anywhere, anytime. This mobile accessibility adds a layer of convenience, particularly for entrepreneurs who are always on the move.

Real-Time Insights and Analytics:

Gone are the days of waiting for monthly or quarterly reports to assess your financial standing. The one-click solution provides real-time insights and analytics, offering businesses valuable data-driven intelligence. With access to instant financial information, businesses can make informed decisions promptly, gaining a competitive edge.

Customer Support and Assistance:

Adopting new technology can be intimidating for some businesses, especially those not well-versed in digital processes. However, the one-click GST return filing solution comes with comprehensive customer support and assistance. Expert professionals are available to guide businesses through implementation, troubleshoot issues, and answer any queries that arise.

Future-Proofing your Business:

The one-click GST return filing solution is continuously evolving to adapt to the dynamic tax landscape. Regular updates ensure that businesses remain compliant with changes in tax regulations and benefit from the latest advancements in technology. By future-proofing their tax processes, businesses can stay ahead of the curve and embrace innovation fearlessly.

Environmental Impact:

By transitioning from traditional paper-based filing to a digital platform, businesses contribute to a greener environment. Reduced paper consumption not only saves trees but also reduces the carbon footprint, making the one-click solution an environmentally responsible choice.

Future Advancements and Adaptability:

The world of technology is ever-evolving, and the one-click GST return filing solution is no exception. With advancements in AI and Machine Learning, the platform is continually evolving to offer even more intelligent automation and enhanced accuracy. Additionally, the solution’s adaptability ensures that businesses can seamlessly integrate it with new accounting tools or software, future-proofing their tax processes for years to come.

Embrace the One-Click Revolution Today:

Marg ERP Software: Your Gateway to One-Click GST Return Filing Excellence

In the vast landscape of GST return filing solutions, Marg ERP Software stands out as the epitome of efficiency, accuracy, and user-friendliness. With its cutting-edge technology and innovative features, Marg ERP Software has emerged as the best choice for businesses seeking to file GST returns seamlessly with a single click.

1. Streamlined One-Click Filing:

Marg ERP Software’s one-click GST return filing feature simplifies the entire process, ensuring that businesses can complete their GST returns effortlessly and swiftly. With just a single click, all the data required for filing is extracted, validated, and computed, sparing businesses from the tedious manual entry and calculation work.

2. Intuitive User Interface:

Marg ERP Software boasts an intuitive and user-friendly interface that requires minimal technical expertise. Businesses of all sizes, including SMEs, can quickly adapt to the platform without any hassle. This accessibility eliminates the learning curve, allowing users to file GST returns with ease from day one.

3. Real-time Compliance Updates:

With frequent changes in GST regulations, staying compliant can be a challenge. Marg ERP Software takes care of this by providing real-time updates to ensure that businesses are always aligned with the latest tax laws. This proactive approach minimizes the risk of non-compliance and potential penalties.

4. Advanced Automation and Accuracy:

The software’s advanced algorithms and automation capabilities eliminate the chances of human errors in calculations and data entry. Businesses can confidently rely on Marg ERP Software for accurate GST return filing, reducing the possibility of audits and ensuring smooth tax operations.

5. Seamless Integration:

Marg ERP Software seamlessly integrates with various accounting systems, ERPs, and financial tools, making it a perfect fit for businesses that have existing setups. The platform effortlessly assimilates with your current processes, facilitating a smooth transition to one-click GST return filing.

6. Dedicated Customer Support:

Marg ERP Software offers dedicated customer support to guide users through the implementation process and address any queries or concerns that may arise. This comprehensive support ensures that businesses can optimize the software’s capabilities and make the most out of their investment.

7. Robust Security Measures:

Data security is a top priority for Marg ERP Software. The platform employs robust security measures to safeguard sensitive financial information from unauthorized access, giving businesses the peace of mind they need while handling their financial data.

Conclusion:

When it comes to filing GST returns with a single click, Marg ERP Software leads the way with its advanced technology, user-friendly interface, real-time compliance updates, and automation prowess. Businesses of all sizes can benefit from the platform’s streamlined processes, accurate calculations, and seamless integration, making Marg ERP Software the best choice for optimizing tax operations and staying ahead in the competitive business landscape.

Embrace Marg ERP Software as your gateway to one-click GST return filing excellence and unlock the full potential of your business with this revolutionary solution. Say goodbye to the complexities of GST return filing and welcome a more efficient, productive, and compliant future.

Read more useful content:

• GST Rules and Regulations in India
• GST Software
• GST Billing Software
• Billing Software
• GST on diamonds
• Making GST Payments
• GST E-invoice

The Goods and Services Tax (GST) was introduced in India in 2017 to simplify and streamline the country’s indirect tax system. As a part of this system, taxpayers are required to file various types of returns and forms to comply with the regulations.

One such form is GSTR 9C, which is an annual reconciliation statement that needs to be filed by taxpayers who have a turnover exceeding Rs 2 crores. In this blog, we will discuss the basics of GSTR 9C and its various components.

What is GSTR 9C?

GSTR 9C is a reconciliation statement that is filed by taxpayers along with their annual GST return, GSTR 9. It is essentially a statement that reconciles the figures provided in GSTR 9 with the audited financial statements of the taxpayer.

In other words, GSTR 9C is a statement that provides a summary of the taxpayer’s GST returns and their financial statements. It ensures that there is no discrepancy between the two and helps in identifying any errors or discrepancies that may have occurred while filing the returns.

Components of GSTR 9C

The GSTR 9C form has two main components: Part A and Part B.

Part A of GSTR 9C

Part A of GSTR 9C contains details of the taxpayer’s financial statements. This includes the balance sheet, profit and loss statement, and cash flow statement for the relevant financial year.

These statements must be audited by a chartered accountant or a cost accountant. The auditor must then provide their findings and observations in the form of a certification in Part B of the form.

Part B of GSTR 9C

Part B of GSTR 9C contains the reconciliation statement, which compares the taxpayer’s GST returns with their audited financial statements. This includes the following:

1. Reconciliation of turnover: This section reconciles the turnover reported in the audited financial statements with the turnover reported in the GST returns.
2. Reconciliation of taxes paid: This section reconciles the amount of tax paid as per the audited financial statements with the amount of tax paid as per the GST returns.
3. Reconciliation of input tax credit: This section reconciles the input tax credit claimed in the audited financial statements with the input tax credit claimed in the GST returns.

Certification in GSTR 9C

The certification in GSTR 9C is provided by a chartered accountant or a cost accountant. The certification must state that the information provided in Part A is correct and that the reconciliation statement in Part B has been duly verified.

The certification must also mention any discrepancies or observations that were noted during the reconciliation process. If there are any discrepancies, the taxpayer must take corrective action and make necessary adjustments in their GST returns.

Challenges in filing GSTR 9C

Filing GSTR 9C can be a complex process and may present some challenges for taxpayers. Some of the challenges in filing GSTR 9C include:

1. Limited time: Taxpayers have a limited amount of time to file GSTR 9C, as the due date is the same as that of GSTR 9. This can be challenging for taxpayers who have a large amount of data to reconcile and may require more time to prepare their financial statements.
2. Complex reconciliation process: The reconciliation process in GSTR 9C can be complex, as it involves comparing the figures in the GST returns with the audited financial statements. This can be challenging for taxpayers who may not have the necessary expertise or resources to conduct a thorough reconciliation.
3. Dependence on auditors: Taxpayers are required to have their financial statements audited by a chartered accountant or a cost accountant, who then provides the certification in Part B of GSTR 9C. This can be challenging for taxpayers who may not have access to qualified auditors or may face delays in obtaining the necessary certifications.
4. Lack of clarity: The GST regulations and forms are subject to frequent changes, which can sometimes result in a lack of clarity regarding the filing requirements. This can be challenging for taxpayers who may struggle to understand the requirements and may require additional guidance or support.

Penalties for non-filing or late filing of GSTR 9C

Non-filing or late filing of GSTR 9C can result in penalties and fines for taxpayers. The penalties for non-filing or late filing of GSTR 9C are as follows:

Late fee: A late fee of Rs 200 per day (Rs 100 per day for CGST and Rs 100 per day for SGST) is applicable for the period during which the GSTR 9C is not filed, subject to a maximum of 0.25% of the taxpayer’s turnover in the state or union territory.

Interest: In addition to the late fee, interest is also applicable on the amount of tax payable. The interest rate is 18% per annum and is calculated from the date on which the tax was due to the date on which it is paid.

Penalty: A penalty of Rs 10,000 or 0.25% of the taxpayer’s turnover in the state or union territory, whichever is higher, is applicable for non-filing or incorrect filing of GSTR 9C.

It is important for taxpayers to file GSTR 9C on time and ensure that the information provided in the form is accurate to avoid penalties and fines.

GSTR 9C audit

GSTR 9C audit is conducted by a chartered accountant or a cost accountant to verify the accuracy and completeness of the information provided in GSTR 9C. The audit includes a review of the financial statements and GST returns, as well as an examination of the reconciliation statement in GSTR 9C.

The auditor is required to provide an audit report in Part B of GSTR 9C, which includes their opinion on the accuracy and completeness of the information provided in GSTR 9C. If the auditor identifies any discrepancies or errors in the information provided in GSTR 9C, they are required to report these to the taxpayer and make appropriate recommendations for correction.

Conclusion

In conclusion, GSTR 9C is an important form that taxpayers with a turnover exceeding Rs 2 crores need to file along with their annual GST return, GSTR 9. It is a reconciliation statement that ensures that the figures provided in the GST returns are in line with the audited financial statements of the taxpayer.

The form has two main components: Part A, which contains details of the financial statements, and Part B, which contains the reconciliation statement. The certification in GSTR 9C is provided by a chartered accountant or a cost accountant and must state that the information provided in Part A is correct and that the reconciliation statement in Part B has been duly verified.

The GSTR 9C audit conducted by a chartered accountant or a cost accountant helps verify the accuracy of the information provided in GSTR 9C and ensures compliance with the GST regulations.

Read more useful content:

• GST Rules and Regulations in India
• GST on diamonds
• Making GST Payments

Frequently Asked Questions (FAQs)

Q1.) Who needs to file GSTR 9C?

Taxpayers with a turnover exceeding Rs 2 crores are required to file GSTR 9C along with GSTR 9.

Q2.) Is it mandatory to file GSTR 9C?

Yes, it is mandatory for eligible taxpayers to file GSTR 9C as per the GST regulations.

Q3.) What is the due date for filing GSTR 9C?

The due date for filing GSTR 9C is the same as that of GSTR 9, which is 31st December of the following financial year.

Q4.) What is the penalty for non-filing or late filing of GSTR 9C?

A late fee of Rs 200 per day (Rs 100 per day for CGST and Rs 100 per day for SGST) is applicable for the period during which the GSTR 9C is not filed, subject to a maximum of 0.25% of the taxpayer’s turnover in the state or union territory. In addition, interest and penalty may also be applicable.

Q5.) What is the process for filing GSTR 9C?

GSTR 9C can be filed online on the GST portal. The form must be prepared in two parts – Part A (Reconciliation statement) and Part B (Certification by auditor). The taxpayer must first prepare Part A and then have their financial statements audited by a chartered accountant or a cost accountant before filing Part B.

Q6.) What is the purpose of GSTR 9C?

The purpose of GSTR 9C is to reconcile the figures in the GST returns with the audited financial statements and ensure the accuracy and completeness of the taxpayer’s financial transactions.

Q7.) What is the difference between GSTR 9 and GSTR 9C?

GSTR 9 is an annual return that provides a summary of the taxpayer’s outward and inward supplies during the financial year. GSTR 9C, on the other hand, is a reconciliation statement that verifies the accuracy and completeness of the information provided in GSTR 9.

Q8.) Can GSTR 9C be revised?

No, GSTR 9C cannot be revised once it has been filed.

Q9.) Is there any format for preparing the financial statements for GSTR 9C?

No, there is no prescribed format for preparing the financial statements for GSTR 9C. However, the financial statements must comply with the applicable accounting standards and must provide all the necessary information required for reconciliation with the GST returns.

Q10.) Can GSTR 9C be filed without the certification by the auditor?

No, GSTR 9C cannot be filed without the certification by the auditor in Part B of the form.

The Goods and Services Tax (GST) is a comprehensive indirect tax that is levied on the supply of goods and services in India. The GST has replaced several indirect taxes such as excise duty, VAT, and service tax, and it is aimed at simplifying the tax system and promoting ease of doing business. The GST rates for different goods and services vary depending on the type of product and the industry it belongs to. In this blog, we will discuss the GST rate for bricks, one of the most essential construction materials in India.

GST Rate for Bricks

The GST rate for bricks depends on the type of brick and its classification. In general, bricks fall under the 5% GST tax bracket. However, there are certain exceptions and variations depending on the nature of the brick.

For instance, bricks used for construction purposes, including fly ash bricks, clay bricks, and building bricks, attract a GST rate of 5%. On the other hand, refractory bricks, which are used in the construction of furnaces, kilns, and other high-temperature applications, are taxed at a higher GST rate of 18%. The GST rate for bricks is determined by the government and is subject to change from time to time.

Impact of GST on the Brick Industry

The introduction of GST has had a significant impact on the brick industry in India. Prior to GST, the industry was plagued by several indirect taxes, including excise duty, VAT, and other state-specific taxes. This resulted in an increase in the cost of production and a decrease in profit margins for brick manufacturers.

However, with the implementation of GST, the tax system has been simplified, and the compliance burden has reduced significantly. Brick manufacturers now have to pay a single GST rate instead of multiple taxes, resulting in cost savings and increased profits. Moreover, the input tax credit mechanism under GST allows manufacturers to claim a credit for the tax paid on their purchases, which further reduces the cost of production.

Impact of GST on the Construction Industry

The construction industry is one of the major contributors to India’s GDP, and the introduction of GST has had a significant impact on this industry as well. With the GST regime, the construction industry has seen a reduction in the overall tax burden, as well as a simplified tax system that has led to increased compliance and transparency. The GST has eliminated the cascading effect of taxes, which has led to cost savings for construction companies.

Moreover, under the GST regime, input tax credit is available for all goods and services used in construction, including bricks. This has resulted in significant cost savings for construction companies, which has positively impacted the growth of the industry. The reduction in the overall tax burden and increased compliance has also made it easier for smaller construction companies to enter the market, leading to increased competition and innovation.

Challenges in GST Implementation for the Brick Industry

While the introduction of GST has been a positive step for the brick industry, there have been challenges in its implementation. One of the challenges faced by brick manufacturers is the lack of awareness about the GST system, resulting in non-compliance and penalties. Moreover, the introduction of GST has led to an increase in the cost of production for some manufacturers due to the requirement for additional compliance procedures, such as registration and filing returns.

Another challenge faced by the brick industry is the lack of clarity on the classification of bricks under GST. This has led to confusion among manufacturers and has made it difficult for them to determine the correct GST rate for their products.

Steps to Ensure GST Compliance in the Brick Industry

In order to ensure GST compliance in the brick industry, manufacturers must take certain steps to ensure that they are adhering to the GST rules and regulations. These include:

1. Obtaining GST Registration: All brick manufacturers must obtain GST registration in order to be compliant with the GST regulations. The registration process is simple and can be completed online.
2. Proper Documentation: Proper documentation is crucial for GST compliance. All invoices, bills, and other documents must contain accurate information and be maintained properly.
3. Filing of Returns: Brick manufacturers must file their GST returns on time to ensure compliance. They should ensure that all returns are filed accurately and on time to avoid any penalties.
4. Correct Classification of Products: As mentioned earlier, the classification of bricks under GST can be a challenge. Manufacturers must ensure that their products are correctly classified under the appropriate HSN code to determine the correct GST rate.
5. Availing Input Tax Credit: Brick manufacturers must avail input tax credit for all goods and services used in production. This helps to reduce the cost of production and increase profitability.

Conclusion

In conclusion, GST has simplified the tax system and reduced the overall tax burden for the brick industry in India. However, manufacturers must take steps to ensure compliance with the GST regulations to avoid penalties and other issues. By obtaining GST registration, maintaining proper documentation, filing returns on time, correctly classifying their products, and availing input tax credit, manufacturers can ensure GST compliance and drive the growth of their business. With proper compliance measures in place, the brick industry in India can continue to grow and contribute to the overall growth of the construction industry.

Read more useful content:

• GST Rules and Regulations in India
• GST on diamonds
• Making GST Payments

Frequently Asked Questions (FAQs)

Q1.) What is GST, and how does it impact the brick industry?

GST stands for Goods and Services Tax, and it is a tax reform that has replaced multiple indirect taxes in India. GST has a significant impact on the brick industry as it has simplified the tax system and reduced the overall tax burden for brick manufacturers.

Q2.) What is the GST rate for bricks in India?

The GST rate for bricks in India is 12%.

Q3.) Do brick manufacturers need to register for GST?

Yes, all brick manufacturers must register for GST to be compliant with the GST regulations.

Q4.) Can brick manufacturers avail input tax credit under GST?

Yes, brick manufacturers can avail input tax credit for all goods and services used in production, which helps to reduce the cost of production and increase profitability.

Q5.) Are there any challenges in implementing GST in the brick industry?

Yes, there are challenges in implementing GST in the brick industry, such as the lack of awareness and clarity on the classification of bricks under GST.

Q6.) How can brick manufacturers ensure GST compliance?

Brick manufacturers can ensure GST compliance by obtaining GST registration, maintaining proper documentation, filing returns on time, correctly classifying their products, and availing input tax credit.

Q7.) What are the benefits of GST for the brick industry?

The benefits of GST for the brick industry include a reduction in the overall tax burden, simplified tax system, availability of input tax credit, and increased compliance and transparency.

Q8.) How has GST impacted the growth of the brick industry?

GST has positively impacted the growth of the brick industry by reducing the cost of production, increasing profits, and boosting overall growth.

Q9.) Can brick manufacturers claim GST refund?

Yes, brick manufacturers can claim GST refund if they have paid excess tax.

Q10.) How can brick manufacturers resolve GST-related issues?

Brick manufacturers can resolve GST-related issues by contacting the GST department or seeking the help of a GST consultant.

Impact of GST on Indian Economy

GST is a game-changing reform for the Indian economy, as it will bring goods and services at reasonable prices.

• Competition will Increase: Goods and services manufactured before GST attract around 25–30% tax. After GST is implemented, the burden of paying taxes will be passed on to the end consumer which reduces the tax liability of the manufacturer. This increases production hence increases competition.

• Simple Tax Structure: There are many taxation systems under different stages of the supply chain before GST, GST is one tax system and the calculation and filing of taxes under GST are very simple.

• Uniform Tax Regime: Earlier, there were many taxes like service tax, VAT etc., which make the tax so complex and taxpayers often get confused between different taxation systems. GST is one tax system, it is easy to understand.

• Increase Tax Revenue: By simplifying the structures, GST will encourage compliance, this increases the number of taxpayers and, in turn, the collection of tax revenue will increase for the government.

Impact of GST on various Sectors

• Financial Products and Services: Financial services such as banks, insurance and non-banking financial companies will be affected the most.

• Other Service Sector: In the Indian economy, the services sector contributes more than 55%. GST will reduce the tax burden in the service sector due to the absorption of multiple taxes.

• Start-Ups: GST has a positive impact on start-ups. Tax credits on purchases, free flow of goods and services, and a simple taxation system can help startups. Although startups in India are already facing a lot of stress, it is difficult to tell how the new GST rules will affect them.

• Manufacturing Industry: GST asks industry to have a set-up mechanism to meet the requirements. Therefore, when companies adapt to the requirements, compliance costs will fall drastically.

• Automobile Industry: GST absorbed indirect taxes such as excise, VAT, sales tax, road tax, motor vehicle tax, registration fee on the sale of vehicles spare parts and accessories.

• Chemical Industry: The implementation of GST is believed to be positive for the chemical industry, especially in the long term.

• Tobacco Industry: With the new GST rates, the effect on the tobacco industry is going to be largely neutral compared to the combined taxes during the pre-GST regime.

• Aviation Sector: The industry has expressed mixed feelings about the introduction of GST, new tax rates will impact on airline fuel and airfare.

• Cement Industry: GST could affect the industry, as higher rates of tax mean an increase in the cost of cement production.

• Digital Advertising Industry: This industry which is growing rapidly under various states and jurisdictions will have some difficulty under GST as compared to traditional marketing but will not have much effect.

• Handicraft Sector: One of the largest sectors of the country, which is most affected by GST. Therefore, GST is not welcomed by the artisans.

• Textile Industry: Despite some changes under the GST regime, the textile sector benefited with the implementation of the regime. As GST reduced the input cost of the industry

• Tourism & Hotel Industry: GST is a silver lining for the hotel and tourism industry. GST with uniform tax rates, better use of input credit will benefit the end-user in the event of an impact.

• Alcohol Industry: There is GST on alcohol, due to which there is an increase in the price of alcohol.

• Pharmaceutical Industry: The implementation of GST is believed to be positive as GST has absorbed various taxes levied on the industry.

• Real Estate Sector: The implementation of GST has mostly benefited the sector, as the sector is becoming more transparent. But we cannot fully assess it because it depends entirely on the tax rates.

• E-Commerce: GST proposes the “Tax Collection at Source (TCS)” mechanism. In which e-commerce operators in the form of TCS are required to collect 1% of the net worth of taxable supplies.

Lean About GST

Article Content:

• Increase in Compliance
• Input Tax Credit leveraged and de-leveraged
• Assessment and Adjudication will create some issues
• Problems related to revenue recognition under GST
• Financial Services Related to Account
• Paying GST at Applicable Rate
• Actionable Claims
• Problems related to services under GST
• Potential benefits of GST

GST is impacting every business sector in the country including the service sector. The impact of GST on the financial services sector will depend on the rate of GST fixed by the GST Council.

If the rate of GST is higher than the present rate of service tax, it will negatively affect customers and all services of the bank will become expensive. The financial services sector specifically, financial services based on funds and insurances, (Non-Banking Financial Company) NBFCs and banks are most affected.

Increase in Compliance

Almost every bank and NBFC has a multi-state presence and under the GST tax regime, they have to pay taxes at the states as well as at the centre level. Hence, banks and NBFC need to obtain registration for every state where they are operating. To maintain all these, they need separate books for each separate branch to create effective control over their usage and unused input tax credit. Performing intra-state and inter-state transactions can also become a problem for the bank.

This will substantially lead to an increase in compliance levels due to the rise of registration under service tax.

Input Tax Credit leveraged and de-leveraged

Banks and NBFCs currently opt for reversal of 50% credit under the CENVAT credit against inputs and input services and CENVAT credit has no reverse condition on capital goods.

In GST banks and NBFCs can avail 50% credit under the CENVAT credit against inputs and input services. Capital goods are reversed which reduces the credit of 50% on capital goods, due to which the cost of capital went up.

Assessment and Adjudication will create some issues.

Due to registration of all locations, all the banks and NBFCs need to register for all office locations. Due to an increase in accounting and other procedures, most of them will face a lot of problems that can complicate the payment of taxes under the GST regime. All critical assessments will be carried out under which the respective banks and NBFCs are registered and they need to justify using the input tax credit for the respective state. The imminent authority under GST will increase and this will create some issues as they have some differences or a new approach for similar old problems.

Problems related to revenue recognition under GST

Banks and NBFCs will have to face many problems related to revenue recognition as most of their services are related to different sectors and segments, some of which are mentioned below.

Financial Services Related to Account

In the era of digitalization and centralization, anyone such as professionals, manufacturers, businessmen and others can get different services anywhere in India, and there can be a high probability that they will shift to a new location. This will cause problems due to a different address. On the other hand, branches provide many services related to payment and other goods, within states and outside the states, to determine the location where these services are provided will not be an easy task.

Financial Services not Related to Account

Providing financial services to those who are running a business from a remote area and managing a bank account from another location. Also, will cause some problems because the location of the service provider is different from the operator location.

Paying GST at Applicable Rate

With GST, services are expected to attract more tax compared to the current service tax rate. This may make their services like issue of cheque books and loan processing more expensive compared to previous times.

Actionable Claims

Actionable claims do not allow under service tax, meaning that no action can be claimed under the old tax regime. In GST the new tax regime, action claims are allowed and include the supply of goods, hence from bills discounted to securitization will come under the tax.

Problems related to services under GST

There are many services provided by banks and NBFCs which will be impacted with the implementation of GST, some of the services are.

• Loan: Loan being money to money transaction, is not subject to GST. Moreover, the interest that is to be charged on loans is also exempted from GST.
• Lease: Lease, in financial sectors, can either be a supply of services (transfer of the right to use goods for cash, deferred payment, etc.) or supply of goods (transfer of title in goods), which will attract GST at the rate similar to assets that are leased out.
• Hire Purchase: Hire purchase transaction includes a hirer providing an asset for use on hire rental basis and a right to acquire that asset at the end of the hiring tenure at a nominal rate. Therefore, this transaction will be done at the same rate at which the property is taken on rent under GST.

Potential benefits of GST:

• Smooth credit mechanism by reducing the cascading effect of many indirect taxes.
• Expansion of tax base with reduction of exemptions/concessions.
• Creation of a unified common market.
• Simplified/Value Compliance and Administration across India.

With the implication of GST on the financial sector, its impact on banks and NBFCs will require a complete rethinking of its operations, accounting, compliance and transactions. Besides, the IT system has to be vigilant enough to resolve the complexities related to GST procedures and high volumes of compliance.

Real Estate is the second largest employer in India after the IT industry. Indirect taxation is completely redefined with GST on real estate coming into play, after replacing several taxes like VAT and Service Tax.

Article Content for GST on Real Estate:

• Recent Update
• Impact for Buyers
• Impact on Builders, Developers, and Contractors
• Stamp Duty
• Reverse Charge Mechanism
• Input Tax Credit
• Claiming ITC
• Restriction on Input Tax Credit
• Other Stakeholders

Recent Update about GST On Real Estate

The 33rd GST Council meeting was held on February 24, 2019, from earlier February 20, 2019. It was held with real estate in limelight by Finance Minister Arun Jaitley. It was the first meeting after he announced Interim Budget 2019. The GST on the under-construction property was slashed without the benefit of ITC. No changes have been made to GST on cement or lottery.

GST on Real Estate – Impact for Buyers

Buyers needed to pay service tax, VAT, stamp duty and registration fees when buying under-construction properties earlier. Since registration charges, VAT and stamp duties were levied by the state, property rates also varied state to state. Developers also needed to pay several duties like custom duty, sales tax (CST), OCTROI and other charges.

On the other side, only 12% of GST on under-construction flats is charged and GST is not applicable on ready to sell or completed properties. So, buyers can now enjoy the benefits of reduced property prices under GST. Buyers may need to wait and watch to gain more info on the impact of GST on property rates.

Impact on Builders, Developers, and Contractors

Developers needed to pay VAT, Excise duty, Entry taxes, and customs duty, etc. on inputs/raw materials and service tax on several input services, such as professional fees for architect, approval charges, and legal charges. For duties like Customs duty, CST, and Entry Tax, ITC was not applicable. It affected the pricing and caused a burden to the buyer.

The construction costs are heavily reduced for the developers under the GST regime as several taxes are subsumed with input tax credit availability. In addition, logistics cost has been reduced as an added advantage. There might be an improvement in margins for developers. They needed to do several calculations to fall under ITC.

What about Stamp Duty?

When it comes to calculating GST for a limited purpose, registration charges and stamp duty are subsumed. Stamp duty will be applicable to both under-construction and completed properties like with the previous tax regime.

Reverse Charge Mechanism (RCM)

RCM is known to be termed from Service Tax law. Its scope has been expanded tremendously in GST which may impact developers.

• If an unregistered person under GST provides services or supplies good, a party which is GST registered needs to pay GST on all the supplies.
• When goods transporters render services, firm or individual, local authorities or government offer services, GST should be paid by the developer.
• The developer is unable to adjust the tax which is due against input tax credit under RCM from the GST on inputs. It should be paid by bank or cash deposit.

Input Tax Credit – What is Eligible and What not?

The credit of taxes on all input and input services under GST are intended to be used or used and their availability would be subject to exceptions.

Claiming ITC

A registered person would be required to claim ITC only by fulfilling these conditions –

• He has received services and/or goods or both,
• He has tax invoice/debit note
• Tax charged on those supplies is paid by the supplier to government
• He has submitted valid GST Return
• The services and goods shouldn’t be used for personal purposes

What about the Restriction on Input Tax Credit?

The input tax credit is not available for construction supplies for the immovable property instead of machinery and plant. Keep in mind that ‘construction’ includes renovation, reconstruction, additions, or repairs or alterations to capitalization to the specific property.

What about other stakeholders?

The impact on the given services like material suppliers, labor, and service suppliers relies on the hike or decline of tax charged on the given goods and services. It will have an important impact as a whole on the real estate industry. For example, around 31% was charged on cement. Today, it is 18 percent. A rise in the prices of cement will obviously cause the situational rise of the overall construction cost.

With six months into GST, The GST council is now thinking of including electricity in GST. The power sector is mainly governed by the Ministry of Power which is a major need for growing Indian economy.

Starting from electricity generation to transmission and finally distribution all the attributes requires technology and manpower so that it could reach smoothly in our houses.

But the major concern for the GST council is the state of chaos created due to multiple electricity taxes which varies from state to state and across user categories, low for consumers and high for industrial users.

The capital goods and services consumed by the power sector is already covered under GST while the electricity still lies out of GST ambit. So all the power generating companies still lack the privilege to claim input tax credit i.e they cannot pass on the tax they paid for inputs to the consumers.

Under State VAT the cost of power is embedded with taxes on power generation and other inputs leading to increased electricity charges. So it is believed that once the electricity sector comes under GST umbrella it will have a positive impact on the market and a reduction in the indirect taxes is expected from 30 % to 15%.

Looking at the developing economy, universal electrification need and more demands of charging stations coming up the electric supply need is expected to rise and would definitely benefit when aligned with Goods and Service taxes .

Once under GST regime, the power sector will have reduced power production cost , increased the competitiveness of exporters and will definitely notice a reduction in the cross subsidization of electricity tariffs. This will ultimately reduce the competitiveness of manufacturers and exporters and help them in reducing the cost of the
manufactured item.

On 3rd June 2017 three major industries i.e Jewellery industry, Foot ware industry and Garment industry got their final GST rates. There has been a mixed reaction from the different industries mar but with the clarification on the rate part everyone is happy.

Effects of GST on jewellery end consumers

The gold has finally been taxed at 3% as told by Finance Minister Arun Jaitely.The whole jewellery association is happy with the announcement made by the minister and said that many unorganized sector will be able to join the main stream.

The gold is a luxury product for a rich class but also a important commodity for middle class people so that it could help them when they have a financial urgency. In Kerala the only state where the gold was earlier taxed at 4% will now have Gold taxed at 3% so a big relaxation for all the gold buyers in the State.

Textile sectors plays a major role in development of the Indian economy with regard to GDP and is one of the oldest manufacturing industry in India. The textile industry in the present tax regime pays taxes which is in between 5% to 7 % and will ultimately end up with a 12% GST. Moreover the cotton fabrics which were exempted from the tax slab will now be taxed at 5% GST.

Ready made clothes which are below Rs 1000 will be charged with 5% GST which under the present taxation system allowed a tax rate between 5% to 7%. The clothes costing above Rs 1000 will have to pay a 12 % GST thereby increasing the pocket burden for end users.

The textile industry has a very low compliance level because businesses which were earlier not paying any taxes will be entering the taxation system to pay the taxes for the first time.

The GST would enable a smoother input credit system and add more number of unorganized textile player shifting the balance towards an organized sector.
With the final rates clear on GST for textile industry it is for sure that in the long run the textile industry will have more registered taxpayers. Moreover it will help them to get more competitive in both the global and domestic markets.

The Dual tax rate slab for Foot ware Industry

The foot ware industry has a dual tax rate slabs as announced by the GST council on last Saturday.Foot ware is categorized under two main categories i.e. foot ware which is costing below Rs 500 will be charged with 5% GST as compared to the present rate of 9%. And the rest foot ware categories which are costing more than Rs 500 will be charged with 18% GST.

With a big variation in both the categories the customer will need to pay 13% more tax on a product which is priced even slightly more than Rs500. It is therefore very clear that the dual tax structure will add to more complexity when it comes to pricing and lets hope we will get all our branded shoes at slightly