GST MAY IMPACT ON DIRECT TAX COLLECTION

Finance Minister Arun Jaitley on Wednesday said that the Goods and Services Tax (GST) is bound to impact the direct tax collection as well due to the increased detection technology and greater compliance.
“To claim input tax credit under GST, people need to disclose their volume of transactions. There is bound to be a corresponding impact on direct tax,” Jaitley said here during a book launch event.
“Therefore, the impact of GST will not only be on indirect taxes but also due to the efficient system, on direct tax. The possibility of tax detection is very high because of technology,” he said.
The Finance Minister said that even before GST was rolled out, the impact of demonetisation has expanded the number of assessees under the personal income tax.
Two months after the rollout of GST, Prime Minister Narendra Modi on Wednesday said apprehensions with regard to the indirect tax regime have been proven to be unfounded and a smooth transition has happened.
He asked chief secretaries of all states to further boost efforts to increase registration under GST (Goods and Services Tax) and to achieve a quantum jump in this regard within a month, a PMO statement said.
The prime minister was chairing his 21st meeting of Pro-Active Governance and Timely Implementation (PRAGATI), a monthly interaction with top officials of states through a vide conference.
GST was rolled out on July 1, ushering in a uniform indirect tax system in the country.
The last 20 meetings of PRAGATI have seen a cumulative review of 183 projects with a total investment of Rs 8.79 lakh crore, according to the PMO statement.
Resolution of public grievances has also been reviewed in 17 sectors, it said.
In Wednesday’s meeting, the prime minister reviewed the progress of nine vital infrastructure projects worth over Rs 56,000 crore in the railway, road, power and oil pipeline and health sectors, the statement said.
These projects are spread over several states including Uttar Pradesh, Madhya Pradesh, Gujarat, Haryana, Rajasthan, Maharashtra, Uttarakhand, Punjab, West Bengal, Karnataka, Tamil Nadu, Andhra Pradesh, Bihar, Odisha, Telangana, and Kerala, it said.
He reviewed the progress towards handling and resolution of grievances related to patents and trademarks.
He noted the improvement in performance and asked the officers concerned to work towards further expediting the processing of patent and trademark applications, the statement said. Officials explained the steps taken towards speeding up the grant of patents and trademarks, including enhanced manpower, it said.
The prime minister emphasized the importance of using latest available technology, to streamline the process, and reach global standards in this regard, the statement said.
The projects reviewed on Wednesday included the Delhi-Mumbai Industrial Corridor (DMIC), and construction of four new AIIMS at Manglagiri in Andhra Pradesh, Kalyani in West Bengal, Nagpur in Maharashtra and Gorakhpur in Uttar Pradesh.’
It pays to be honest; Income Tax Dept to go after evaders’
New Delhi: Finance Minister Arun Jaitley on Wednesday said the government will adopt a carrot-and-stick policy on taxation, saying post GST tax authorities will go after evaders whose invoices do not match tax payment. He asserted that the government over the last 2-3 years has made tax evasion difficult that has come as a “rude shock” to many, and GST will help expand the direct tax base in line with increase in indirect tax collection. “Even in the case of GST now, we are just having the initial voluntary compliance today going on.
When the matching of bills takes place, whether that voluntary compliance is fair and to what extent will become clear,” he said. “The experiment of first 1-2 months will demonstrate to assessees that today the mantra as far as taxation is concerned is ‘it pays to be honest’. The queries will only be addressed to those whose vouchers don’t match,” he added.
When the volume of indirect taxation grows, there is bound to be a corresponding impact on direct tax income, he pointed out.

About Nitika Bansal 113 Articles
I will regularly provide update on direct tax and indirect tax

FAQS

RBI updates on Demonitisation

1. Why was the Scheme of Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500 and ₹ 1000 introduced?

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Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 6

‘Ind AS Transition Facilitation Group’ (ITFG) of Ind AS (IFRS) Implementation Committee
has been constituted for providing clarifications on timely basis on various issues related to
the applicability and/or implementation of Ind AS under the Companies (Indian Accounting
Standards) Rules, 2015, raised by preparers, users and other stakeholders.
Ind AS Transition Facilitation Group (ITFG) considered some issues received from members
and decided to issue following clarifications on November 29, 2016:
Issue 1
A debt-listed company has net worth for the last 3 years as follows: (more…)

Frequently Asked Questions (FAQs) on Withdrawal of Legal Tender Character of the Old High Denomination Bank Notes

RESERVE BANK OF INDIA
(from m.rbi.org.in)
Frequently Asked Questions

Frequently Asked Questions (FAQs) on Withdrawal of Legal Tender Character of the Old High Denomination Bank Notes

1. Why is this scheme?

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Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 5

At the 5th meeting of Ind AS Transition Facilitation Group (ITFG) held on September 19, 2016 at Mumbai, certain issues received from members were discussed. The Group after due deliberations decided to issue following clarifications1 on the issues considered at the meeting:

Issue 1

ABC Ltd. is a listed company. The net worth of ABC Ltd. as on 31st March 2014 was Rs. 200 crores. ABC Ltd. had a subsidiary, namely, XYZ Ltd. as at 31st March, 2015 whose net worth, consisting only of share capital as at that date, was Rs. 600 crores. XYZ Ltd. was incorporated in January, 2015. It was incorporated only for the purposes of its divestment. The financial statements of XYZ Ltd. were not consolidated with that of ABC Ltd. as at 31st March, 2015 in view of requirements of paragraph 11 of Accounting Standard (AS) 21, Consolidated Financial Statements.

ABC Ltd. entered into agreement with a proposed acquirer of the subsidiary, i.e., PQR Ltd., in September, 2015. The entire ownership of XYZ Ltd. was finally transferred to the said acquirer in the first fortnight of April, 2016.

In the given case, whether the ABC Ltd. is required to comply with Ind AS from the financial year 2016-17? (more…)

FAQs on Place of Supply of Goods and Service under GST

Q 1. What is the need for the Place of Supply of Goods and Services under GST?

Ans. The basic principle of GST is that it should effectively tax the consumption of such supplies at the destination thereof or as the case may at the point of consumption. So place of supply provision determine the place i.e. taxable jurisdiction where the tax should reach. The place of supply determines whether a transaction is intra-state or inter-state. In other words, the place of Supply of Goods is required to determine whether a supply is subject to SGST plus CGSTin a given State or else would attract IGST if it is an inter-state supply. (more…)

FAQs on Transitional Provisions under Goods and Service Tax

Q 1. Will the CENVAT/ITC carried forward in the last return prior to GST under earlier law be available as ITC under GST?

Ans. Yes, the registered taxable person shall be entitled to such credit and it will get credited to his electronic credit ledger – section 143. (more…)

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