Despite all the announcements, businessmen say they will have to wait until a formal notification is out and the date of implementation is clarified.
Hoteliers cheered as their long-standing demand to apply Goods and Services Tax (GST) on transaction value, and not declared tariff, was accepted by the GST Council on Saturday.
However, the decision to raise quarterly filing of returns from Rs 1.5 crore to Rs 5 crore annual turnover, may not actually materialise, fear tax experts. Despite all the announcements, businessmen say they will have to wait until a formal notification is out and the date of implementation is clarified.
Chartered Accountant Nitesh Jain summarised Saturday’s announcements by the Council as efforts to simplify the system, remove as many items from the tax slab of 28 per cent and ease compliance. “However, we have to wait until the fine print is out in the notification,” said Jain, adding that clarifications are needed in proposed returns for B2B and B2C transactions. If separate returns are to be filed then it will complicate matters for businessmen in both B2B and B2C businesses, he said.
The biggest announcement of the day is applying GST on transaction value of room tariffs for hoteliers. Until now, tax was applied on ‘Declared Tariff’, which is mostly for indicative purpose while actual tariff is mostly different.
“This has removed a long-standing hurdle. However, my tax experts say we will have to wait till the fine print is out. A lot of clarifications are required,” said Sanat Relia, vice president of Southern Gujarat Hotel and Restaurant Association. Deferring Reverse Charge Mechanism (RCM) till June 2019, practically meaning that the next decision will be taken on the topic by the next government in place. RCM refers to purchases from unregistered dealers and the buyer having to pay tax on purchases and deposit them in the treasury.
However, tax advocate Axat Vyas said that the announcement of quarterly returns for businesses with an annual turnover of up to Rs 5 crore (earlier Rs 1.5 crore), seen as a major relief, may not have much effect on ground as corporates put a condition of monthly filing of returns even if the vendor is entitled to quarterly returns, to ensure that they get tax refund on time.
EXPERT SPEAK
Tax advocate Axat Vyas said that the announcement of quarterly returns for businesses with an annual turnover of up to Rs 5 crore (earlier Rs 1.5 crore), seen as a major relief, may not have much effect on ground as corporates put a condition of monthly filing of returns even if the vendor is entitled to quarterly returns, to ensure that they get tax refund on time
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