GST Council may correct rate anomaly on March 14
PrintListen to this Article
This imbalance in taxes, which is called inverted duty structure, has been resulting into a loss of close to Rs 25,000 crore per annum to the government as it has to refund the tax already paid.
Under the GST regime, a registered taxpayer can claim a refund on account of the rate of tax on inputs being higher than that on output supplies.
But when the raw material used attracts higher duty and the finished goods have a low duty, the finished goods producer gets a refund of the tax paid in the inputs he used.
This refund is often delayed as it is to be verified. Such a situation often led to a confrontation between the taxpayers and tax authorities, an official said.
The bulk of the refund demand due to inverted duty structure comes from the lower tax slabs of 5% or 12%.
The duty adjustment could be done by hiking the tax rate on finished products as also lowering the rate of the input tax credit.
At present mobile phones attract a 12% duty under the GST but its components attract 18%. Similarly, finished textiles have a 5% duty but the raw materials are taxed at 12%.
The industry associations have been raising the issue of this rate anomaly for some time. More than a dozen goods including mobile phones, footwear, fabrics, man-made yarn, ready-made garments fertilisers, tractors and pharma equipment attract lower duty on finished products but higher on the raw material.
The government was all set to take the decision in the GST Council meeting on March 14 but the only hitch is the prevalence of coronavirus issues that have already jacked up the cost of raw material and the finished products as well, the official said. #casansaar (Source - deccanherald Website)
Category : GST | Comments : 0 | Hits : 300
TEST
Dear Taxpayers, 1. GSTN is pleased to inform that an enhanced version of the GST portal would be launched on 3rd May 2024. The effort is to improve user experience and ensure that the information you need is accessible and easy to navigate. 2. Key Enhancements Include (PDF with screenshots attached): i. News and Updates Section: We have introduced a dedicated tab for all news and updates. This section now includes a bet...
The Supreme Court on Friday issued notices to the central government, the Central Board of Indirect Taxes and Customs (CBIC), the Goods and Services (GST) Council and the National Anti-Profiteering Authority (its functions have been taken over by the Competition Commission of India) on a petition challenging a Delhi High Court verdict, upholding the constitutional validity of anti-profiteering provisions filed by a real estate company. The petition, filed by Swati Realty, says the high court ...
The delectable Malabar Parota will taste even better with the Kerala High Court ruling that the popular flatbread will attract GST at 5 per cent and not 18 per cent. With this the court has turned down order by the State’s Authority of Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR). Disposing a petition by Kochi-based Modern Food Enterprises, a single judge bench of Justice Dinesh Kumar Singh said if key inputs (cereals, flour, starch, etc) and preparations are s...
A businessman from Delhi was taken into custody by the Noida police for his alleged involvement in a massive Rs 15,000 crore GST fraud that was exposed last year, TOI reported. Tushar Gupta, aged 39 and residing in Tilak Nagar, was arrested as the 33rd suspect in this case. The police revealed that Gupta had exploited input tax credit (ITC) using 35 fake companies, resulting in a loss of Rs 24 crore to the exchequer over the past two years. He was reportedly part of a syndicate that utiliz...
Comments