TAX WARDO

Rates of Taxes applicable Taxation of various transactions   1.       Consolidated Bill: Customers walks into a Jeweler showroom and buys a Gold ornament worth Rs. 1,00,000. a)       The Jeweler will charge GST @ 3% on Rs. 1,00,000. b)       The charge would include Making Charges & Wastage c)       Hence, it’s a composite supply as defined under section 2(30) comprising of supply of Gold ornament along with supply of ornament making services. d)       Gold ornament being the principal supply, the entire value of taxable supply shall be charged @3% as per section 8 of the CGST Act. 2.       Itemized Bill: Customers walks in to a Jeweler showroom and buys a Gold ornament worth Rs. 1,00,000 and the Jeweler charges separately for Gold and making charges.             i.  ...

 Answer : The benefits of GST can be summarized as under: ·          For business and industry o       Easy and Transparent compliance : All tax payer services would be available online, which would make compliance easy and transparent. o       Uniformity of tax rates and structures : GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. o       Removal of cascading : A system of seamless tax-credits throughout the value-chain, and across boundaries of States, would ensure that there is minimal cascading of taxes. This would reduce hidden costs of doing business. o       Improved competitiveness:  Reduction in transaction costs of doing business would eventually lead to an improved competitiveness for the trade and industry. o       Gain to manufacturer...

What is the impact of GST on real estate buyers and investors? As the perception of the sector is said to have improved, the prices are likely to drop around one to three per cent if it all they do, according to a report by Edelweiss Securities.  The taxation earlier was too complicated for buyers. For instance, buyers were earlier liable to pay taxes depending on the construction status of the property and the state where it is located. Buyers also had to pay VAT, service tax, stamp duty and registration charges on purchase of an under-construction property. However, if the purchase was for a completed property, the tax applicable were stamp duty and registration charge. Furthermore, since VAT, stamp duty and registration charges were state levies, each state specified its own figures. Service tax was a central levy and was charged on construction. So the calculation of taxes was very tedious in the earlier regime. GST charges all under-construction properties at 12 pe...

GST has finally become a reality. For seamless migration to GST, the Central Board of Direct Taxes has time and again come up with frequently asked questions (FAQs) pertaining to various segments. The CBEC, under the purview of the Department of Revenue, clarified that traders dealing only in exempt goods or where their turnover is below Rs. 20 lakh in a financial year are not required to register under GST. Also, traders not opting to pay tax under the composition scheme need to file returns on a monthly basis. Form GSTR-1 is to be filled for outward supplies made by the trader (made in the month for which return is being filed) by the 10th of the next month. Other parts of the return Form GSTR-2 and Form GSTR-3 are auto-populated and only needs to be verified and submitted by the 15th and the 20th of the next month respectively. Here are some other queries addressed by the CBEC What is the basic information that needs to be furnished in Form GSTR-1? The d...

As per section 16, Zero rated supply refers to any of the following supplies of goods or services or both, namely: a.       Export of goods and/or services; or b.       Supply of goods and/or services to Special Economic developer or a Special Economic Zone unit The concept of zero rated supply is limited to exports and supply to SEZ developer/unit. Hence, supplies made to EOU, EHTP, STP, etc. does not come under zero rated supply. It is also important to understand that zero rated supply is different from tariff rate of 0%, as here the recipient of supply is entitled to pay 0% GST to the supplier. While 0% rate of tax is not eligible for input tax credit, zero rated supply does receive tax credit (except if it is an exempt supply). Manner of claiming refund of accumulated input tax credit (ITC) under zero rated supply is as follows: Option 1- Without payment of IGST Option 2- With payment of IG...

Goods and Services Tax (GST) has been rolled out from July 1, and most of the services attract a higher tax slab of 18 per cent compared to around 15 per cent service tax charged earlier. GST replaces service tax, excise, VAT and many other local levies. All goods and services are now classified under four tax slabs of 5, 12, 18 and 28 per cent.  However, a government official clarified GST would be levied on any bill that is generated from July 1 even if the service has been consumed prior to that, provided that no advance payment was made by the consumer as per NDTV Reports. In case billing cycle ends on June 25, invoice is generated on July 10 and payment was not made in advance. So when invoice is issued the liability is of GST because under law the date of providing of service is the date of issue of invoice. Under existing rules, service tax is levied on the date of issue of invoice or date of making of payment, whichever is earlier. Invoice for services has to be g...

Reversal of Input Tax Credit in respect of Inputs or Input services   Note: Taxable supplies above includes Zero Rated Supplies Input Tax Attributable to Business Purpose, Taxable Supplies and Reversal of inadmisable Credit[Rule 42] Description Formula Total Input Tax on Inputs and Input Services T ITC used exclusively for other than business purpose included in T above T1 ITC used exclusively for exempted supplies included in T above T2 ITC Credit not allowed as specified under section 17(5) of CGST Act T3 Amount of ITC credited to the electronic ledger (C1) C1 = T –(T1+T2+T3) ITC attributable to inputs and input services used exclusively for other than exempted supplies T4 Common ITC i.e. input tax credit left after attribution of all input tax credit stated above (C2) C2 = C1-T4 Aggregate value of Exempted Supplies E ...