Government releases ₹40,000-crore GST dues to States

Government releases ₹40,000-crore GST dues to States

Amount to help meet shortfall in compensation cess

Through back-to-back borrowings from the market, the Centre issued 40,000 crore to States and Union Territories on Thursday to help overcome the gap in GST compensation cess revenues.

The Finance Ministry stated this was part of a 1.59 lakh crore gap in the Compensation Fund for States that will be covered by market borrowings, but that the overall GST compensation to be paid in 2021-22 could be more than the States’ actual dues for the year.

In July, a total of 75,000 crore was transferred to states, leaving 44,000 crore to be borrowed and dispersed during the remainder of 2021-22.

The remaining funds will be released as soon as possible, according to the Ministry.

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Over and above

“This is in addition to usual GST compensation being distributed every two months out of actual cess collection,” the Ministry said, adding that more than Rs 1 lakh crore was expected to be released to States based on GST cess collections throughout the financial year.

Write-off possibility

“The entire amount of 2.59 lakh crore is projected to exceed the amount of GST compensation accruing in FY 2021-22,” it added, implying that some of the outstanding dues dating back to 2020-21 would be written off to that extent.

The Ministry stated, “It is believed that this publication will assist States/UTs in planning their public expenditure, among other things, for enhancing health infrastructure and undertaking infrastructure projects.”

Are you a freelancer? Key points to know about GST payment

Are you a freelancer? Key points to know about GST payment

As a freelancer, you now perform services, and the Indian government has established that there are conditions in which you must pay GST.

Depending on where their clients are located, freelancers are responsible for IGST, CGST, or SGST. It’s crucial to keep in mind that there are no GST exemptions. Even if you only work with international customers, you may be subject to GST.

Any person supplying taxable services must be registered in the state from which he or she is providing such taxable services under current GST laws; if the person’s aggregate turnover in a financial year is more than Rs 20 lakh ( Rs 10 lakh in some states such as those in the North East), the same would apply to freelancers once they exceeded the specified threshold.
Based on the nature of the services offered, the GST rate applicable to any other service provider (which is normally 18%) would also apply to such freelancers.

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The GST costs for a freelancer will be 18% of the total bill amount because it is the replacement service tax. Every bill or invoice you send out must contain 18% GST clearly visible.

What Is The GST Return Filing Process?

GST returns are due quarterly or monthly, depending on the amount of revenue and whether you have chosen the composition scheme. Quarterly returns can be filed by composition vendors or dealers with yearly sales of less than Rs.1.5 crore. You must file GST returns once you have obtained a GST Identification number.

Is it necessary for a freelancer to register for GST?

GST registration for a freelancer is dependent on the following variables, regardless of the nature of your services:

  • Annual income of less than $20,000 – No registration necessary.
  • Annual income of more than 20 lacs, regardless of customer location in India – Prior registration is necessary.
Who Is Responsible for GST Fees?

Your customers will pay you, and you will pay the government the same. Clients can then claim it as a tax credit when they file their taxes, making it a win-win situation for everyone. Even if your clients ask for a discount, do not pay the GST yourself because you will be responsible for it and your clients will receive a tax credit.

Profits and benefits of plying, hiring, or leasing goods

Input tax credit claims

To claim an input tax credit (ITC), freelancers must have an invoice, have received the products and/or services, and guarantee that the tax levied by the supplier has been paid to the government. They must also file their own return. Because obtaining ITC on the basis of fraudulent invoices is a common method of tax evasion, a restriction has been imposed under Section 16(2)(aa), but it is not yet in effect.

This provision strengthens Rule 36(4), which authorises ITC only if the details of the said invoices issued by the suppliers appear in the recipient’s Form GSTR 2A.

GST collections for July at Rs 1,16,393 crore, improving the govt’s income collection.

GST collections for July at Rs 1,16,393 crore, improving the govt’s income collection.

After falling below the Rs 1 lakh crore barrier in June, the government earned Rs 1,16,393 crore in GST income in July.

The income for July is 33% greater than the same period last year when Covid’s first wave impacted the majority of economic activity.

Increased tax collection also aided in managing the first-quarter fiscal deficit, which was at an eight-year low.

GST income had been steadily increasing for eight months, before falling to Rs 92,849 crore in June as municipal lockdowns hampered economic activity.

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CGST is Rs 22,197 crore, SGST is Rs 28,541 crore, IGST is Rs 57,864 crore (includes Rs 27,900 crore collected on goods imported) and Cess is Rs 7,790 crore for July (including Rs 815 crore collected on import of goods).

GST collected from GSTR-3B returns filed between July 1, 2021, and July 31, 2021, as well as IGST and cess collected from imports, are included in the aforementioned figure.

“With the removal of COVID limits, GST collection for July 2021 has surpassed Rs 1 lakh crore for the second time, indicating that the economy is rapidly recovering. GST revenues are expected to remain strong in the next months as well “In a statement, the finance ministry stated.

SECTION 206AB- SPECIAL PROVISION FOR DEDUCTION OF TAX AT SOURCE FOR NON-FILERS OF INCOME-TAX RETURN. Read More…

GST revenue collection is expected to pick up steam in the coming months as economic activity returns to normal.

“While GST revenues in July 2021 showed a positive sequential increase as well as a significant YoY gain, they are still far below the all-time high set in April 2021. This, in our opinion, is more evidence that the June 2021 graded unlocking sparked an incomplete recovery, which is projected to intensify in July 2021, enhancing August 2021 GST receipts even more. In July 2021, the rate of growth throughout the states was quite varied, with some industrial heavyweights reporting a strong increase.”