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Cos could however claim input tax credit on intra-company transactions India Inc may have to deal with another avatar of GST — the tax may be applicable on senior executives’ big-ticket perquisites over and above those mentioned in the employment contract and on gift items of over Rs 50,000. However, companies should be able to claim input tax credit on these intracompany ‘transactions’. Tax professionals ET spoke to said the rate may be in the 1843% band, depending on the nature of the perk/gift. A finance ministry official, who did not wish to be identified, said an employer’s gifts to employees will be treated as supplies without any consideration and attract GST. However, companies are likely to be able to claim input tax credit on it. Keeping tabs on company perks and gifts will not be an additional enforcement cost to the government, tax experts said. All purchases by companies will be available on GSTN. Therefore, during audits these issues can be easily identified. GST ...

The finance ministry has said that 5% central goods and services tax will not apply on products paneer, natural honey, wheat, and rice that are not registered under the Trade Marks Act. "Unless the brand or trade name is actually on the Register of Trade Marks and is in force under the Trade Marks Act, 1999, CGST (Central Goods and Services tax) rate of 2.5% will not be applicable on the supply of such goods," an official statement said. Economic Times New Delhi, 06th July 2017

Amount may be raised from Rs 10,000 to Rs 30,000 a month; tribunals also proposed to get more teeth The Union government is planning to hike the maintenance amount payable to parents and senior citizens under the Maintenance and Welfare of Parents and Senior Citizens Act. The amount could triple to Rs 30,000 a month from the existing Rs 10,000. The Act provides for financial support to seniors by their children or relatives who are neglecting them or have abandoned them. While increasing the amount was due as the decade-old regulations have not kept pace with inflation, experts say that the government should also increase the powers of tribunals and focus on implementation to provide the required financial support to seniors in their golden years. “To be fair to seniors and their relatives, the government should keep the maintenance amount as a percentage of the income of the children or relative, rather than a fixed sum. Medical treatment, for example, can sometimes burn a hole in...

Advent of the goods and services tax (GST) is likely to hit small distributors and investment advisors, says the mutual fund (MF) sector.Players say ambiguity over input tax credit and interstate transactions has created confusion among distributors, particularly those earning less than Rs 20 lakh a year. Meanwhile, fund houses and the Association of Mutual Funds in India (Amfi) are helping distributors get GST ready, by conducting workshops and educating through lists of ´Frequently asked questions (FAQs). Amfi has also appointed consultancy entity PwC India to assess the impact on the sector. According to industry players, registration and obtaining of GST number is mandatory for all MF distributors, irrespective of their income.Fund houses are expected to deduct GST from distributors´ commission, even those whose income is below the threshold of Rs 20 lakh, if they haven´t provided their GST number. Those providing it will be paid the entire brokerage and distributors will have ...

The home ministry has given security clearance to the Goods and Services Tax Network (GSTN), the information technology backbone of the goods and services tax (GST) regime, paving the way for its operationalisation soon.Security clearance to the GSTN,anotforprofit private limited company, was delayed as the home ministry was examining threat perception to national security from any of the stakeholders,a ministry official said. Business Standard New Delhi, 06th July 2017

Delhi Deputy Chief Minister Manish Sisodia on Wednesday said he would pitch for lowering tax rates under the goods and services tax (GST) regime, calling 28 per cent rate uncalled for. “Highest slab of GST at 28 per cent is uncalled for. As long as this slab is not moderated, the GST cannot be termed as one of the most influential tax reforms in the history of India,” Sisodia said at a PHDCCI event. He said he would press for bringing down the higher slabs to considerably lower rates in the GST Council’s meeting. Business Standard New Delhi, 06th July 2017

Many companies considering price hikes over the next few months to pass on the burdens of GST and material cost. Prices of televisions, airconditioners, washing machines and refrigerators may rise twice this year because of higher input costs and a new tax structure. Videocon, Panasonic, LG and Whirlpool are considering immediate price hikes to pass on the additional tax burden under the goods and services tax (GST). The rise in material prices over the past few months may be passed on during the festive season. Prices of steel, copper and plastic have been rising since February. Prices of components such as compressors for ACs and refrigerators have risen up by 4 per cent and prices of TV panels have risen by 3 per cent. Under margin pressure, companies had postponed price hikes till the festive season. Rajeev Bhutani, vice-president, marketing, Samsung India Electronics, had told Business Standard earlier that the increased cost of TV panels would have to be passed on. “We have n...

Consumer cos say changing price labels on stock operational & logistical challenge Consumer goods makers are unlikely to change prices of pre-GST stock by putting fresh stickers as mandated by the government because it will be costly and operationally challenging to pull back unsold stock. Fast-moving consumer goods (FMCG) firms have decided to keep prices intact for old stock even in cases where their tax incidence has increased under the goods and services tax regime and will change prices only for the new stock that will be manufactured henceforth. For products where tax rates have been lowered and prices tracking down unsold stocks with distributors and retailers across India is impossible need to be reduced, companies said they would rather release fresh stock with reduced MRPs than go through the hassle of relabelling old inventory. Large companies such as PepsiCo, Parle, Dabur, Britannia and Marico had started controlling inventory in May and June, so unsold stocks o...

Cash of over Rs 2 lakh can be used to pay credit card bills, with the Central Board of Direct Taxes (CBDT) relaxing norms that barred such transactions exceeding this amount. The limit will also not apply to business correspondents appointed by banks, issuers of pre-paid instruments and some loans. The Finance Act of 2017 had banned cash transactions of Rs 2 lakh or above with effect from April 1, 2017, in respect of a single transaction or transactions related to one event or occasion by an individual. The restriction was another measure to curb black money and violation would invite a penalty of 100% of the amount involved on the receiver of cash. However, the apex direct taxes body has notified five carve-outs to address genuine difficulties, providing relief to banks and rural borrowers.Cash payments to wards loan repayments shall not be aggregated for the purpose of determining applicability of this norm. This would be for loan repayments to non-banking financial companies and...

Manufacturers and retailers can sell old stock for 3 months after stamping new prices Manufacturers and retailers can stamp new prices on their preGST stock of goods and sell them till end September, the government has said, ending the confusion over the stock that was left unsold on July 1, and checking potential malpractices. But a section of industry was upset that the government had not issued this clarification earlier. “If we would have known this earlier, the industry could have planned the transition better. Retailers would have not have been under pressure to liquidate old stock at almost cost price and primary sales from companies to trade would not have declined the way it did in June,” said Videocon chief operating officer CM Singh. Any increase in maximum retail price (MRP) due to GST on the older inventory will have to be advertised in two national papers, but there is no such requirement if the new MRP is lower, said a notification issued on Tuesday. The government h...

After making the insolvency process easier for companies After making the insolvency process easier for companies, the focus is now turning to proprietary firms.The NITI Aayog will have a meeting, in this regard, with the Insolvency and Bankruptcy Board (IBB), the ministry of small and medium enterprises and insolvency professionals on Wednesday. An official said, “NITI Aayog wants to expedite this process as the current provisions only allow companies and limited liability partnerships to file for insolvency.” IBB plans to notify the bankruptcy provisions in the Insolvency and Bankruptcy Code (IBC). At least 90 per cent of small firms are proprietary firms, said insolvency professionals. Once the bankruptcy provisions are notified, these proprietary firms will benefit, as IBB plans to consider them as individuals. The IBB plans to notify the bankruptcy code in three phases. The first will be of corporate guarantors. In the second phase, an individual with proprietary business will...