Skip to main content

No GST on Advance Taken by FMCG Cos

Image
By
No GST on Advance Taken by FMCG Cos
Cos say amount taken from dealers was not against a specified product and so tax rate was not clear
In a big relief to all FMCG companies and others that take advance from dealers before they supply goods, no goods and services tax (GST) would be levied on such advance.The department of revenue has issued a notification allowing the relaxation after the same was approved in the GST Council meeting last week in Guwahati. The notification exempts all taxpayers from payment of tax on advances received in case of supply of goods.
The companies were having trouble levying GST on such advance as it was not against a specific product and so it was not clear what rate had to be applied.Besides, some funds were blocked because of this payment of tax on advances. “Under VAT regime, there was no tax on advances for goods but was introduced under GST. Since the input credit was only available after receipt of goods, this led to working capital blockage for industry and additional compliance burden.
Further, there was ambiguity around the state where tax has to be paid in few cases,” said Pratik Jain, indirect tax partner, PwC For services, GST continues to be payable on advance in line with the provisions under erstwhile service tax laws.“In furtherance to the government’s earlier move of exempting businesses with up to ?1.5 crore from paying GST on receipt of advances for future supply of goods, similar exemption has also been extended to all except those who have opted for composition scheme,” said Abhishek Jain, tax partner at EY India.
“This comes as a huge sigh of relief for businesses both in terms of compliances as well as working capital loss.”The relief is available only to those who have not opted for composition scheme.On Tuesday night, the Central Board of Excise and Customs (CBEc) issued 12 notifications implementing the decisions taken by the GST Council, including those relating to the reduction in rate of tax on over 200 goods and restaurants.
Suppliers of services through an ecommerce platform have been exempt from obtaining compulsory registration. The relief is available to those with a nation-wide turnover of less than ?20 lakh. The other notifications provide the extension in filing approved by the GST Council and quarterly filing for those with turnover of less than ?1.5 crore.
Now, Exporters Can File for GST Refunds Manually
The government has allowed exporters to file manual application for refund of GST. Exports are zero rated under the GST and thus all taxes paid on inputs have to be refunded. ACBDT circular has prescribed conditions and procedures for manual filing and processing of refund claims.
The Economic Times, New Delhi, 16th November 2016

Comments

Post a Comment

Popular posts from this blog

Shrinking footprints of foreign banks in India

By
Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…
Post a Comment
Read more

RBI rushes in to prop up falling rupee

By
RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…
Post a Comment
Read more

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

By
GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…
Post a Comment
Read more