GST: 'No clarity yet on tax on services a worry'
Despite the rollout date of July 1 for the Goods and Services Tax (GST) drawing closer, there is still no clarity on the tax rate for services under the new indirect tax regime, an auditor firm pointed out on Friday.
"Entire discussion on GST, is related to goods. There is no discussion on services. We don't know if services will be as per the same rate," Prashant Deshpande, Partner in auditor firm Deloitte Haskins and Sells, told BTVi in an interview.
"Services unlike goods are peculiar. If we are providing a service from multiple locations, what will be our GST rate? There needs to be clarity of law on this, so that there are no litigations later," he said.
"If a trader has multi-state presence, would he be assessed by states at some places and by the Centre in others?" he asked.
As per the understanding between the Centre and states, 90 per cent of the GST payers with up to Rs 1.5 crore turnover will be assessed by states, while 10 per cent will be assessed by the central government.
As far as those above Rs 1.5 crore turnover are concerned, the assessment will be done on a 50:50 basis between the Centre and states.
Deshpande also noted that the tax rates for various commodities and services should be announced soon, as traders would need at least three months to plan out details.
"We need to know the rates at least three months in advance. So, many things go into packaging, etc. There has to be some point of time when rates need to be announced and not just a week before GST," Deshpande said.
However, the decision on rates seems to be a long way, because the fitment into tax slabs -- 5 per cent, 12 per cent, 15 per cent and 28 per cent -- is currently ongoing, which will then need approval of the Council.
On the rollout date of July 1, he said that from the government's perspective it might not be far-fetched, but the states should also be ready to hold special assembly sessions to get the GST bill passed.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Delhi HC vacates ITAT stay on Rs525 crore penalty on NDTV
    The Delhi High Court has vacated a stay granted by the Income Tax Appellate Tribunal (ITAT) on the Rs525 crore penalty on New Delhi Television Ltd (NDTV), saying that the Tribunal does not have any powers in this matter. This is a big setback to the Prannoy Roy-controlled NDTV within this month.
    The Delhi High Court was hearing the case (W.P.(C)­1327/2017) related with a stay granted by the ITAT on 15 September 2016. In its order, the ITAT had directed Income Tax (I-T) Department not to pass any order for the proposed penalty of Rs525 crore against NDTV till final disposal of the main appeal pending before the Tribunal. 
    However, the HC Bench of Justice S Ravindra Bhat and Justice Najmi Waziri felt that, in such matters, the ITAT does not have any powers in the penalty matter and hence the stay given by the Tribunal was vacated. 
    A senior official from NDTV said the company will appeal against the ruling of Delhi High Court. “This entire case relates to a baseless and outrageous charge by the Income Tax department that in effect accuses (Jeff Immelt, CEO) GE (US) as well as (Jeff Zucker, then CEO) NBC (US) of money laundering -- which is an offence that is punishable with jail in the US. In 2008, NBC (a 100% subsidiary of GE) invested $150 million in an entertainment wing of NDTV. Subsequently, without any evidence whatsoever, the I-T Department in Delhi called this legitimate investment a 'sham transaction' and in effect accused NDTV of round tripping money and using NBC and GE to act as a 'front' in a case of money laundering by GE and NBC,” says KVL Narayana Rao, Group Chief Executive & Executive Vice Chairperson of NDTV, in an email reply.
    He says, “The ITAT has been unable to hear the case as the Delhi I-T Department has asked for 20 consecutive adjournments - with a succession of flimsy excuses. With the basic case not even being heard, the Delhi I-T department suddenly tried to levy a further penalty on NDTV for a delay in the case. Please note the delay is entirely the fault of the Delhi IT dept. asking for adjournments. The ITAT stayed the penalty. Now the Delhi High Court has ruled that the ITAT does not have the authority to stay the penalty. The Delhi I-T department's accusations against GE, NBC and NDTV are very damaging for the global image of India.  With all due respect to the High Court, NDTV will appeal against this ruling.”
    Earlier this month, the Reserve Bank of India (RBI) rejected NDTV's application to compound from the Rs2,030 crore notice issued by the Enforcement Directorate (ED) under the Foreign Exchange Management Act (FEMA). "Filing compounding application to RBI by those who served notice under FEMA means that they have admitted their contravention in routing money from abroad and plead guilty by paying a fine. So NDTV admitted its guilt and offered its readiness to pay a fine. Many FEMA defaulters were using this compounding method to escape from being prosecuted under the FEMA. Continuing prosecution under FEMA also has a danger of converting the case to PMLA, when money laundering is established," says an article in
    However, according to Mr Narayan Rao, the RBI has not rejected NDTV's application for settlement under FEMA provisions. “The RBI has asked NDTV to approach a particular division of the RBI called the Foreign Investment Division of RBI's Central Office,” he said.
    Earlier in November 2015, the ED had slapped a Rs2,030 crore notice on NDTV for allegedly violating FEMA provisions for routing huge funds through the channel’s foreign units. The notice served to promoters Prannoy Roy, his wife Radhika Roy and senior executive KVL Narayan Rao stated that NDTV had violated RBI provisions on fund transfers. 
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    3 years ago

    Dr Pronoy Roy, Ur game is over..U were protected by Sonia Gang but finally got caught in ur own trap..Thank God, God is there to punish people who indulge in financial frauds .

    Sumit Goyal

    3 years ago

    We are a Banana Republic under Modi. All govt. agencies and even the courts are now compromised. Inches away from being a dictatorship. Everyone who is against them is hounded.

    Taxes under GST 'to increase a bit', says CBEC Chairman
    While the effective rate of indirect taxes under the new Goods and Services Tax (GST) regime still remains unclear, as fitment in tax slabs is under way, the Central Board of Excise and Customs (CBEC) has said that taxes were likely to "increase a bit" from the current level.
    "That is our belief (that the current level of taxation will not lessen at least for first five years). It will be the same, that's our belief, and it will increase a bit," CBEC Chairman Najib Shah told IANS in an interview here.
    Shah said that the fitment of goods and services in the four tax slabs -- 5 per cent, 12 per cent, 18 per cent and 28 per cent -- is a work in progress.
    Apart from the tax rates, there will also be a cess on top of it, which will form the corpus to compensate the states for any revenue loss for the first five years of implementation of GST.
    "The Council will determine the commodities which will have the cess. We will suggest, but all decisions will be taken by the Council because, after all, it is a question of revenue for the states and the Centre," Shah told IANS.
    "Rates is an issue that is sensitive and will be determined only by the Council," he said.
    Revenue Secretary Hasmukh Adhia recently announced that the Council has increased the cGST (central GST) and sGST (state GST) peak tax rate from 14 per cent to 20 per cent each, amounting to a peak rate of 40 per cent.
    Though the current tax slabs will remain the same, the peak rate has been increased for future contingencies, Adhia had said.
    CBEC Chairman also said that GST is being looked upon as bringing about a possible 1-2 per cent increase in GDP.
    "Whenever we talk of GST, we talk of a possible increase in GDP by 1-2 per cent. That's the sort of belief we have got, he said.
    Where is that GDP going to come from?
    He said that with the implementation of GST, tax evasion should come down as all filings will be IT driven and evasion will get difficult.
    He also said the GST regime is likely to be rolled out by July 1.
    The Chairman said that it will ensure that the laws regarding the new indirect tax regime are finalised by April 1, so that the industry has three months to prepare for the transition.
    "That should give everybody time to adjust to the new requirements. We have trained 49,000 officers of the states and the Centre till last week. Goods and Services Tax Network (GSTN) -- GST's IT infrastructure arm -- and CBEC together will now conduct trainings, so that people know how to file their returns," he said.
    "Outreach programmes from April 1 are going to be massive. We are targeting all major towns. We will first create a group of master trainers and then ask them to train the trade and industry," he added.
    Shah said that he hoped the GSTN portal is able to handle the massive rush that it will see post July 1.
    "Existing VAT dealers, central excise assessees and service tax assessees are approximately over six million. The total number of assessees (under GST) will be lesser than that as there is some overlap. Instead of filing three returns, they would be filing one return now. When the final migration takes place, then only we will know the exact number of assessees," he said.
    Though any new change will have hiccups because of the existing legacy issues, the Central Board of Excise and Customs is trying to ensure the transition is smooth, he said.
    "It's a new law, all the states and the Centre are moving to a new taxation regime. So there are going to be challenges because not only the trade and industry but the administration also has to change. All existing legacy issues may continue for some time," Shah said.
    One of the hurdles before CBEC seems to be the concern of officials that their work load will reduce drastically, as 90 per cent of assessees below Rs 1.5 crore turnover will be assessed by the states.
    "There is a certain section of officers that is concerned that perhaps they would be having lesser work under the GST. We have flagged the concerns, but the government will take a final call. The 90 per cent assessees below Rs 1.5 crore turnover to be assessed by states is a decision taken by government. That is an administrative arrangement," he said.
    "We believe there would be enough work. Apart from the work, there are other concerns as well. We will be addressing those concerns as well," he added.
    Shah said they will not require any additional staff as of now. "We will manage with the existing staff. As we go ahead, we will see how the workload is," he said.
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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