Indian Tax Solution
On Wednesday, the Central Government spared businesses from paying GST on advance amounts they have received for goods which are to be supplied later in the future. The step was aimed to help clear the confusion over tax liabilities on remainder supplies and to ease the disruption in the supply chain.
This benefit of not having to pay GST on advances received is in line with the decision of the council and similar exemptions are also soon to be notified by the State Government as well. Experts described the Centre's move for paying GST only at time of supply, as a massive concession for taxpayers.
Pratik Jain, partner and leader of indirect taxes, PwC India talked about the amendment being a significant one indicating that its implementation would help clear the blockage in working capital in the industry. Specific mention was given regarding GST still being applicable on advances received for services.
Earlier this tax exemption for advances was only available for small businesses under the composition scheme but now this is available for all businesses registered under GST.
The 23rd GST council meeting resulted in slashed GST rates as well as a host of other announcements, which were issued in the form of formal notifications on Wednesday adding this exemption to it's list as well.
The highest tax slab of 28% is now reserved for lavish goods and demerited items like pan masala, aerated water and beverages, cigars and cigarettes, tobacco products, cement, paints. Perfumes, air-conditioners, dish washing machines, washing machines, refrigerators, vacuum cleaners, cars and two-wheelers, and aircraft and yachts are some of the other items in this slab.
The tax rate for all restaurants other than luxurious hotels having room tariff more than Rs.7,500 were reduced to 5%, earlier which was 12% and 18% for Non-AC and AC restaurants ,respectively.
Finance Minister Arun Jaitley announced more GST rate cuts in the future and encouraged businesses to pass on the benefit of these rate cuts to the customers. However, he also indicated that the rate cuts would be dependent on revenue generations and that the current burden of tax is already less than what it used to be.
Huge relief for manufacturers -No GST payments on advances received for supplying goods
On Wednesday, the Central Government spared businesses from paying GST on advance amounts they have received for goods which are to be supplied later in the future. The step was aimed to help clear the confusion over tax liabiliti ...