Karnataka’s GST collections are on the rise

KARNATAKA’S GST COLLECTION ARE ON THE RISE

When compared to the same period in the previous financial year (2020–21), gross goods and services tax (GST) revenue collections in Karnataka increased by 51% in the first eight months of the current financial year (April to November).

The state’s GST collection for the April–November period of this fiscal year was 54,517.94 crore, up from 35,991.61 crore in the same period of the previous fiscal year, a 51 percent increase.

The recent trend of rising GST receipts, according to the Union Finance Ministry, is the outcome of several legislative and administrative reforms implemented in the past to increase compliance.

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Experts in the field said that increased GST collection in Karnataka and other states was due to a revival of economic activity, as well as multiple compliance measures such as blocking of e-way bills and pausing (stopping) of input tax credit for non-filers taken by tax authorities to combat evasion.

In the first eight months of the 2018-19 and 2019-20 fiscal years, Karnataka’s GST income was 33,793.74 crore and 40,295.29 crore, respectively.

GST revenue in the current fiscal year reached five digits in two months, according to State Government sources: $12,338.21 crore in July and $13,915.86 crore in October. Only in the months of May, June, and August did GST collections fall below 5,000 crore, owing to COVID-19-induced economic limitations in the state. With four months left in the current fiscal year, the State is likely to achieve the greatest GST collection in 2021–22 since the NDA government introduced the new tax regime in July 2017.

Step-by-Step Guidelines for Logging In and Filing ITR using the New Tax e-filing Portal

The state’s commercial taxes are likely to surpass the amount of 82461.71 crore in the current fiscal year. In the first eight months, commercial tax collections totaled 68,618.27 crore.

Karnataka’s commercial taxes additionally include a sales tax on gasoline and fuel, as well as a professional tax. In the first eight months of 2021–22, sales tax income totaled 13,386.69 crore, while professional tax revenue totaled 713.64 crore.

No more re-registering for GST, states AAR

No more re-registering for GST, states AAR

A separate GST registration is not required in the state (the site of supply) by a subcontractor who is executing an infrastructure project, according to the Karnataka bench of the GST Authority for Advance Rulings (AAR). In a recent judgement, the bench upheld the principle of ‘Ease of Doing Business,’ saying the subcontractor can raise the invoice by charging integrated goods and service tax (IGST) from its office in Noida, Uttar Pradesh.

When goods and services are supplied between states, the IGST is imposed. The AAR’s decisions have persuasive power. According to tax professionals, if this judgement is implemented across the country, it will help businesses save money on registration and other administrative charges.

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On the negative side, the AAR ruled that a subcontractor cannot register as an input service distributor if it does not have an office in Karnataka. This registration was required in order to claim input tax credits for goods/services purchased from vendors on-site and distribute those credits to the company’s Noida registration.

GEW India, a private limited company with a unit in Noida and a registered office in Pune (Maharashtra), received a work order from Larsen & Toubro to complete a works contract at a naval base in Karwar, Karnataka. It entailed a mix of commodities and services, such as the construction of a steel structure for ship mooring. The steel was fabricated and installed on-site at the company’s Noida facility.

GST exemption items: Govt sets up ministerial panels to review tax slabs

According to GEW India, the resident engineer and anyone who may visit the work site will likely be housed in Karnataka, but there will be no office or administrative employees. The applicant company had only one major place of business, Noida, for which GST registration had been secured, according to the AAR. As a result, there was no need for a separate registration in Karnataka to carry out its contract.

Other Updates

1. CBDT has expanded scope information included in Form 26AS to include more high-value financial transactions and additional information. As per the rules reformed by the taxman, the Form 26AS will include details of mutual fund purchases, foreign remittances, as well as information in income tax returns of other taxpayers.

2. Submission of Form 3CA-3CD,3CB-3CD for AY 2021-22, AY 2020-21 is enabled. Download and use latest utility – e-Filing, Income Tax Department.

3. CBDT has notified an e-settlement scheme to settle pending income-tax settlement applications transferred to a settlement commission. The scheme will be applicable to “pending applications in respect of which the applicant has not exercised the option under sub-section (1) of Section 245M of the Act and which has been allotted or transferred by CBDT to an interim board.

4. Manpower Agency cannot escape GST liability on Gross amount by showing Services Charges and Salary/Wages Separately. Case Name : In re Prodip Nandi (GST AAR West Bengal)

5. BSE has collaborated with private sector lender HDFC Bank to further encourage and promote the listing of startups and small and medium enterprises (SMEs) across India. Through this pact, HDFC Bank and BSE will evaluate banking and lending solutions for startups, undergoing a listing process on startups and SME platforms.

GST exemption items: Govt sets up ministerial panels to review tax slabs

GST exemption items: Govt sets up ministerial panels to review tax slabs

The government has set up a task force on system changes to uncover potential sources of GST evasion.

Two committees of state finance ministers have been formed by the Finance Ministry to rethink rate slabs, assess GST exempt items, and identify potential evasion sources.

The seven-member panel, led by Karnataka Chief Minister Basavaraj Bommai and including West Bengal Finance Minister Amit Mitra, Kerala Finance Minister K N Balagopal, and others, will examine the supply of GST-exempt goods and services with the goal of expanding the tax base and eliminating ITC chain breaks.

It would also examine the current tax slab rates and make recommendations for modifications.

The Group of Ministers (GoM) on rate rationalisation will also examine items with an inverted duty structure to help reduce rebate payouts, as well as the supply of goods and services exempt from GST, with the goal of expanding the tax base and preventing the ITC chain from being broken.

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According to the Finance Ministry, the GoM may propose modifications that can be adopted immediately, with a short- to long-term implementation roadmap. In addition, the panel might produce an interim report with rapid suggestions.

Four years after the national Goods and Services Tax (GST) replaced the complicated indirect tax structure, the federal government and states have begun work on a “simpler rate structure under GST” by assessing current rate slabs, including special rates and rate slab mergers.

 

The GST has a four-rate system that exempts or charges a low rate of 5% on basic commodities and a peak rate of 28% on automobiles. The other two tax brackets are 12 and 18 percent. Furthermore, a 28 percent cess on luxury, demerit, and sin goods is placed on the highest slab.

To balance the impact of slab rationalisation on income, some have suggested merging the 12 and 18 percent slabs and removing specific items from the exempt list.

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


The GST Council has previously remedied the rate anomaly in the instance of mobile handsets, footwear, and textiles due to the inverted duty structure. The ministerial group will now examine representations of inverted duty structures and recommend appropriate rates to eliminate any circumstances where final goods are taxed at a lower rate than their inputs.

Aside from that, the finance ministry formed a new Group of Ministers (GoM) on GST system reforms to identify potential sources of evasion and recommend improvements to business processes and IT systems to stop revenue leakage.

The eight-member council would comprise Delhi Deputy Chief Minister Manish Sisodia, Tamil Nadu Finance Minister Palanivel Thiaga Rajan, and Chhattisgarh Finance Minister T S Singh Deo, and would be led by Maharashtra Deputy Chief Minister Ajit Pawar.

The panel would review IT tools and interfaces available to tax officers and suggest ways to make them more effective, identify possible uses of data analysis for better tax compliance, and suggest ways to improve coordination between central and state tax officers, and make recommendations to the council on a regular basis.

On September 17, the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, decided to establish these two GoMs.