Is GST applicable for skipping notice period?

The Gujarat Authority for Advance Rulings (GAAR) has held that an
employee exiting a company without completing their notice period would
be liable to pay 18 percent goods and services tax (GST) on the recovery
of the pay.

This was in a case pertaining to an Ahmedabad-based export company
Amneal Pharmaceuticals that sought advance ruling on the issue of exit
from their job without serving the three-month notice period.

However, industry experts have said that while this shows that notice
pay is ‘not GST exempt’, the payment of this tax would differ based on
the employment terms and interpretations by the tax authorities.
MS Mani, Senior Director, Deloitte India told Moneycontrol explained
that on which transaction goods and services tax is applicable cannot be
certified in the GST law because there are far too many transactions all
over a country. GST law provides general guidance.
“Advance Ruling authorities interpret that law in a specific situation.
In this case, they have interpreted it to say that since serving the
notice period was a service, the notice pay of the employee should be
attracting GST,” Mani added.

What is to be noted is that this was a ruling in a specific case and may
not the same for all incidents where a corporate employee misses out on
serving the notice period.

So even while GST is applicable, depending on the employment contract
and terms set by individual companies, a decision will be taken.
Delhi-based HR consultant Nishant Tiwari who works with companies on
developing employment contracts said that it is ideal for employees and
employers to sit across and discuss all matters including GST.
“If GST is applicable, then the employee must be informed in advance of
the consequences of not serving the notice period. At the end, if the
employer is bearing the 18 percent GST, it will be recovered from the
employee,” he added.

For example, if the notice period pay is Rs 2 lakh, then the 18 percent
GST would mean an additional burden of Rs 36,000. This would be
recovered from the employee when they skip the notice period since it
amounts to a person promising ‘a service’ and not offering it.
So employees must be doubly-sure about the payment terms and sign the
offer letter only after careful verification. This will help avoid
penalty payments on account of GST.

A ruling ‘unites’ foodies with a single GST rate

A ruling ‘unites’ foodies with single GST rate

Be it a school kid in Ahmedabad whose favourite tea-time snack is a plate of Dhoklas or a senior citizen in Bengaluru who can’t do without his staple breakfast of piping hot Rava-Idlis, an advance ruling, issued by the Gujarat bench, has ‘united’ foodies across India with a single goods and services tax (GST) rate.

Despite various products of instant flour mixes falling in different sub-headings, fortunately the GST rate was the same at 5%.
On the flip side, the Authority for Advance Ruling did not agree with the submission of the applicant that a nil rate should apply as his instant flour products were nothing but grain and pulse flour mixed with spices, condiments and flavours.

In this case, a businessman who manufactured and sold varied types of instant mixed flour under the ‘Talod’ brand name sought an advance ruling to determine the GST rates on his products and also on chutney powder, which was provided free with a few products — such as the Bhajiya mix.
The instant mixed flour sold by him was used by customers to prepare a range of Indian dishes such as Khaman, Gota, Handwa, Dhokla, Rice Idlis, Rava Idlis, Dahiwada, Bhajiya, Upma and so on. The ingredients differed from product to product. To illustrate the Dhokla mix, flour consisted of Udad dal, Chana dal, Sugar, Salt, Sodium Bicarbonate, Citric acid and Asafoedtida. The ingredients of the Rava-Idli mix were Gram dal, Udad dal, Rava, Citric acid, Salt, Green Chilli, Curry leaves, and Mustard seeds.

The advance ruling bench has to delve deeply into the classification and sub-headings. While products such as the Dhokla mix, Dahi wada mix, Bhajiya mix and Idli mix fell under one sub-heading; Rava-Idli mix, Upma mix and Muthiya mix fell under another subheading. This despite the fact that all products were essentially flour and spices. The saving grace, there was no difference in the GST rate, which was the same at 5%. As regards Chutney powder, which was supplied free with a few flour mix categories, the AAR held it to be a ‘mixed supply of goods’ — this too had a GST rate of 5%.

CBIC withdraws GST circular on ITeS

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The Central Board of Indirect Taxes and Customs (CBIC) has withdrawn a circular which created confusion on whether IT service providers can be qualified as intermediaries based on self-assessment under the goods and services tax (GST).

In view of these apprehensions and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board (CBIC),…hereby withdraws, ab-initio, Circular No. 107/26/2019-GST dated 18.07.2019,” an official notification said.

The government earlier in the year issued a circular on the scope of information technology-enabled services (ITeS) and coverage under intermediary services.

Months after putting India’s business process outsourcing industry in a quandary, the government has withdrawn the circular that said anyone engaged in the facilitation of supply of goods/services will not be considered to be engaged in export and will now be considered as intermediary, unless it is on his own account

With this circular most BPO-KPO services were being treated as intermediaries under GST rules and could be taxed under GST. This meant GST authorities were denying any MNC BPOs

Hire GST Consultants For Small Businesses And Reap Numerous Benefits

For someone not aware of the term yet, GST or the Goods and Services Tax is a value-added tax levied on goods and services generally sold for domestic consumption. The tax is paid by the consumer and provides revenue for the government. More than 10 years have passed since the bill was passed and the concept of GST has evolved drastically over the decade. It has almost transformed the indirect taxation system in India. It is not just about big organisations but even start-ups and small business owners can reap numerous benefits with GST implementation as it helps in simplifying the indirect tax structure.

4 Reasons Why Small Businesses Should Hire GST Consultants In Kolkata

  • Starting A Business Becomes Easy

Earlier, business owners had to visit the sales tax department in the State they are willing to start a business and get their VAT registration done. This became a challenge for business owners operating in multiple States as different States had different procedures for tax registration. They could not maintain compliance with VAT regulations and would often end up paying fines. The GST registration procedure, on the other hand, is centralised and standardised. A single registration will be applicable across India.


  • Multiple Taxes Integration

One of the main reasons why every State in India had different VAT rates, regulations and procedures is that the VAT regime under which goods and products were taxed was implemented by the Central government. There were also the central sales tax, purchase tax, luxury tax and additional customs duty which complicated it further. Numerous taxes were summed up into one tax under the GST regime. Few of the taxes subsumed under GST are services tax, central excise duty, state-level value added tax, additional customs duty and surcharges, among others.


  • Exemption For Start-ups And Small Businesses

One of the primary reasons why numerous start-ups and small business owners are hiring experienced GST Consultants is that there is GST exemption for them. Under the new GST regime, organisations whose turnover is less than 40 lacks annually don’t have to register their business under GST. If your business turnover is more than that but you don’t have prior experience in GST registration, make sure that the GST consultant you are hiring has dealt with start-ups and small businesses earlier.


GST Consultant in Kolkata

  • Ease The Process Of Doing Business

Few businesses like computer sales and service or restaurants which provided goods and services had to earlier comply with both service tax regulations and VAT. This became a challenge for business owners as different items had different rates and they had to calculate taxes for those transactions. The difference between goods taxes and service taxes vanished after GST was introduced which eased the compliance process. Even invoicing became easier for businesses as they had to adopt only one rate.

Since there are so many ways through which start-ups and small businesses can benefit from GST, it’s time you start looking for experienced GST consultants.

Everything You Need To Know About Hiring GST Consultants In Kolkata

With the Goods and Services Tax (GST) being rolled out on July 1, 2017, are you scouting for reliable consultants who can advise you on the technical aspects of the tax? Do you think it’s high time you gear up and assess the probable impact of the Goods and Services Tax on your business? Read on then to check out everything you need to know about availing services from the specialists!

Businesses of all shapes and sizes are going to be impacted with the implementation of GST, the largest indirect tax reform in India. Taxes like Sales Tax, Central Excise Duty, State VAT, Purchase Tax, Entertainment Tax, Luxury Tax and several other indirect taxes have now been replaced by the GST. While it’s true that the GST aims to simplify the entire indirect taxation process, certain gaps still exist in the procedures. Availing assistance in the preparatory work for GST can thus be a wise decision!

Need For Availing Services From GST Consultants In Kolkata

With the introduction of the Goods and Services Tax, the taxation system in India has now become destination based. This has impacted diverse aspects of businesses like- the supply chain, the cash flow, profitability, sourcing and the enterprise resource planning. Thus, planning in advance can bring forth a good opportunity to the companies for evaluating and realigning their business objectives and models.

By hiring GST consultants in Kolkata who can advise and teach them about the laws and procedures of implementing the Goods and Services Tax, businesses can gain a competitive advantage over their competitors. Moreover, these professionals can even assist you in renewing your IT systems while coping up with the new tax structure.

GST Consultants in Kolkata

Benefits Of The Goods And Service Tax To Business And Companies

  1. Both state and the central GST will be applicable on the manufacturing cost. Not only will this benefit customers if the prices come down, but it will even lead to more consumption, thus helping companies gain more businesses.
  2. As per the Goods and Services Tax system, all taxes levied by the central and state government will be put together and merged into a single taxation system. This will do away with the earlier multiple tax system and bring in the concept of one common market for all.
  3. Under the Goods and Services Tax system, the burden of taxes will be divided equally between services and manufacturing through a lower tax rate.
  4. The tax will be levied only at the company’s destination unit and not at various points (from the manufacturing units to the retail outlets).
  5. With uniformity of tax structures and rates, GST has ensured that indirect tax rates and structures are common across the country. Irrespective of the place where the business is done, tax rates for companies throughout the country is neutral.
  6. Relaxation in the transaction expenses of doing business will gradually lead to an improved competitiveness for the company in the industry.
  7. With a seamless tax credit system throughout the country, there will be a nominal cascading of taxes. This removal of cascading will reduce the hidden costs of doing any business in India.

So what are you still waiting for? Quickly find a leading consultant and start availing some exemplary services to enjoy the benefits of GST!