CBIC looks for public feedback to check GST avoidance by e-tailers

20 Aug 2019
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Tax Update
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Before considering Customs laws, the Central Board of Indirect Taxes and Customs (CBIC) is looking for public input on checking duty and GST evasion allegedly by ecommerce companies situated outside the nation.

The CBIC is searching for tech-empowered solutions to guarantee duties are paid effectively and to make imports through express messenger consistent, as indicated by custom authorities and others in the know of the matter.

The arrangement should enable clients to get deliveries quicker and free up from red tape those courier services and abroad ecommerce business firms that are happy to do business legitimately, an authority said on the state of anonymity. “We’re available to suggestions, including changing laws to present a flat rate of duty and GST for courier imports, yet the system should be consistent,” said a senior Customs official.

The CBIC has asked community platform LocalCircles to gather the input. In fact, there were 340 remarks from people and other community individuals in response to a blog post by LocalCircles on the issue. The proposals included compulsory registration of all overseas ecommerce substances in India and information captured at single source inside the CBIC. A flat rate on imports through express courier and denying overseas ecommerce business transactions from being named as B2B transactions through local partners, were different recommendations.

The government has effectively looked for suggestions internally on how to curb duty avoidance, another senior Customs authority told ET. A system to deduct customs duty and GST when consumers pay could be one solution to stop avoidance, he said.

The government has taken action against ecommerce business imports named as duty free ‘gifts and samples’. It has blocked clearance of every single such parcels at express courier ports in Mumbai, Delhi and Bengaluru. After the move, these ports have seen an intense decrease in the number of incoming gifts, yet other ports keep on clearing such gifts.

Our strategies for duty avoidance, as well, have been flagged.

In June, customs authorities in Mumbai seized more than 500 huge consignments of Chinese ecommerce firm Shein and sealed a distribution center of its Indian reseller Sino India Etail for underestimating goods imported through the low-value(under Rs 1 lakh) consignment route. Sino India Etail was only one of a dozen or so firms against which action had been taken. The company fits in with local laws and pays taxes correctly and on time, it said already.

Imports already make up around 7-8% of India’s overall ecommerce market by worth and are growing quicker than the general market pace, an expert following the ecommerce business segment at one of the Big Four consulting company said.

Despite the fact that Amazon.com is a sizeable player in ecommerce business imports, a critical bit of such imports is by Chinese ecommerce based business firms that purposely evade taxes and duties.

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Seven indirect taxation related laws being altered

25 Jul 2019
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Uncategorized
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Finance Minister Nirmala Sitharaman Thursday said seven enactments under indirect taxation are being revised to guarantee more simplicity, as she moved the Finance Bill in the Lok Sabha. She advised the Lower House that amendments to laws are being made through the Finance Bill in five major classifications, incorporating in the Goods and Services Tax (GST).

Aside from seven Acts identified with indirect taxation being altered, the government would also be making changes to seven laws related to direct tax collection. The changes would guarantee that indirect taxation related issue would have more simplicity and be compelling, she said. About proposed amendments to direct taxation collection related laws, Sitharaman said those are being accomplished for promoting the plan of Make in India, including the nation needs much all the more manufacturing activities.

The GST alone has five different amendments that would likewise make consistence simpler for the MSME (Micro, Small and Medium Enterprises) segment, she included. As indicated by her, eight Acts relating to financial markets, including Sebi Act, are being altered. RSP member N K Premachandran protested the Finance Bill having the arrangements to correct various laws, including Benami Act, Sebi Act and PMLA Act, and asked Speaker Om Birla to disallow it.

A Finance Bill can just have taxation proposals, Premachandran stated, soon after the finance minister stood up to move the bill for consideration and passage.

He additionally blamed the government for bypassing Parliament to evade discussion and investigation for changing existing laws by incorporating them in the bill.

Sitharaman said rules and constitutional arrangements refered by Premchandran don’t rule out non-taxation proposition for incorporation in the Finance Bill however possibly state that it ought to be done just when imperative.

“The government considers it very imperative,” she declared.

Birla, in his decision, refused Premachandran’s objections and said there have been occasions before too when non-taxation recommendations were incorporated into the Finance Bill.

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Understanding Direct Taxes & Indirect Taxes In India

28 Jan 2019
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GST, Income Tax, Tax Update
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Understanding Direct Taxes & Indirect Taxes In India

Before examining the Direct Taxes and Indirect Taxes in India, let us initially comprehend what is the significance of expense.

What is a Tax?

A duty might be characterized as a “monetary weight laid upon people or property proprietors to help the legislature, an installment demanded by authoritative specialist. In basic words, the assessment is only cash that individuals need to pay to the administration, which is utilized to give open administrations.

Duties are comprehensively characterized into 2 Types-

1. Direct Taxes

2. Indirect Taxes

What is Direct Taxes?

A direct tax is imposed directly on the income or wealth of individuals or organizations and is paid directly to the government. It cannot be transferred or shifted to another person or entity. The burden of direct taxes falls solely on the taxpayer, meaning the individual or business entity bearing the tax is the one responsible for paying it.

Key Examples of Direct Taxes in India:

Income Tax: One of the most significant direct taxes, levied on individuals, firms, and corporations based on their income. The tax rate varies according to income slabs and differs for individuals, senior citizens, and companies.
Corporate Tax: Companies are required to pay tax on their profits. Corporate tax rates may vary for domestic and foreign companies and include surcharge and cess.
Wealth Tax: Though largely abolished in India, this tax was previously levied on the net wealth of individuals or companies exceeding a specified threshold.
Capital Gains Tax: Imposed on profits from the sale of assets, such as real estate, stocks, and bonds. Capital gains tax can be short-term or long-term, depending on the holding period of the asset.
Gift Tax: Tax levied on any gifts received, especially in cases where the amount exceeds a certain exemption limit.

Characteristics of Direct Taxes:

Progressive Nature: Direct taxes are typically progressive, meaning the tax rate increases as the taxpayer’s income or wealth increases. This ensures that higher-income individuals contribute a larger share to the tax pool.
Cannot Be Transferred: Direct taxes are non-transferable; the liability to pay remains with the individual or entity taxed.
Transparency: Direct taxes are transparent as they are collected directly, allowing taxpayers to know their exact tax liabilities.

What is Indirect Taxes?

They are Transferable duty starting with one individual then onto the next. The whole weight of the assessment is on a definitive shopper, yet the prompt obligation to settle government expense is on provider of merchandise or administrations.

They are additionally called utilization based expense and backward in nature since they are not troubled standard of capacity to pay. All customer including Bagger bear the weight of the expense.

Backhanded duties are demanded on products or administrations however not on pay or property. From first of July 2017 all aberrant duties on merchandise or benefits or converge into one brought together code called as products and enterprises charge.

Key Examples of Indirect Taxes in India:

Goods and Services Tax (GST): Implemented on July 1, 2017, GST unified various indirect taxes, such as excise duty, service tax, and VAT, into a single national tax. GST is levied on the supply of goods and services, streamlining tax administration and reducing cascading taxes.
Customs Duty: This tax is imposed on goods imported into the country. It is designed to protect domestic industries by making imported goods more expensive.
Excise Duty: Previously, excise duty was levied on the manufacture of goods within India, but since the implementation of GST, it applies mainly to specific products, like alcohol and petroleum.

Read More: GST Audit Limit Guide for Taxpayers with Turnover Above 2 Crores

Characteristics of Indirect Taxes:

Transferable Nature: The burden of indirect taxes can be shifted from one person to another until it ultimately falls on the end consumer.
Regressive in Nature: Since everyone pays the same tax on goods or services, indirect taxes are often considered regressive, impacting lower-income individuals proportionately more.
Encourages Saving and Investment: Since indirect taxes are primarily consumption-based, individuals may be incentivized to save and invest rather than spend, which can benefit the economy.

Difference between Direct Taxes and Indirect Taxes?

Key Differences between Direct and Indirect Taxes

Aspect	Direct Tax	Indirect Tax
Incidence	On the income or wealth of individuals or companies	On goods and services, ultimately paid by consumers
Burden	Cannot be shifted	Can be shifted to the final consumer
Nature	Progressive (tax rate increases with income)	Regressive (same rate for all consumers)
Administration	Paid directly by taxpayers to the government	Collected by intermediaries and passed to the government
Examples	Income Tax, Corporate Tax, Capital Gains Tax	GST, Customs Duty, Excise Duty
Impact on Inflation	Limited direct effect on prices	Often increases prices of goods and services

Understanding direct and indirect taxes in India is essential for taxpayers and businesses alike. Direct taxes contribute to economic equity, as higher earners pay more, while indirect taxes can boost revenue quickly through consumption. Both types of taxes play significant roles in financing public goods and services, building infrastructure, and supporting welfare programs. Tax policies continue to evolve in India, with reforms aimed at increasing transparency, simplifying compliance, and enhancing revenue for sustainable development.

To discuss tax-related topics, compliance, or advisory needs with Certicom Group of Chartered Accountants, you can reach out directly to them. They have expertise in various areas, including direct and indirect taxation, and can provide professional guidance tailored to your requirements.

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CBIC looks for public feedback to check GST avoidance by e-tailers

Seven indirect taxation related laws being altered

Understanding Direct Taxes & Indirect Taxes In India

Understanding Direct Taxes & Indirect Taxes In India

What is a Tax?