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New Delhi: Employers will soon be able to claim an input tax credit such as food, transportation and insurance for employees once the proposed changes to the GST Act have been pbaded. approved by Parliament and the state legislatures.
The government has proposed up to 46 amendments to the Goods and Services Tax (GST) legislation – the central GST, the state GST, the integrated GST and the Compensation Act. states.
The amendments provide, among other things, a modification of the reverse charge mechanism, a separate listing for companies with different business sectors, the cancellation of registration, new standards reporting and issuing consolidated debit / credit notes covering multiple invoices.
amend the GST legislation by July 15, 2018.
Once the amendments are finalized by the Ministry of Revenue, they will be transferred to the GST Board for approval. Subsequently, they will be submitted to Parliament and the state legislatures to amend the GST Act.
According to the proposed amendment, employers will be able to claim an input tax credit for the supply of food, beverages, health services, life insurance, travel benefits, renting or leasing. leasing of motor vehicles to employees, provided that it is required by law.
Through the amendments, the government seeks to clarify this, but for specific exemptions, the ITC will not be available food and beverage supply, outdoor catering, beauty care, health services, surgery aesthetic and plastic, rental or rental of motor vehicles, ships and aircraft, life insurance and health insurance.
Image of representation. AFP
Similarly, he would not be available for membership in a club, health and fitness center, nor for travel benefits granted to employees on vacation or on a sightseeing trip. Respect for these goods or services, or both, must be available when the supply of these goods or services or both are mandatory for an employer to provide to its employees under a law in effect for the moment, "said the draft amendments.] She added that the ITC would be available on motor vehicles with a capacity of more than 13 pbadengers.
MS Mani, partner of Deloitte India, said: "The proposal to allow the CIT to provide services to employees is mandatory. excellent decision and put an end to the controversies arising from recent advance rulings and harmonize GST legislation with other employee welfare laws. "
Abhishek Jain, Partner, EY, said:" With the proposed modification of the GST it's like renting a taxi, insurance, etc. When mandated under any law, the pool of credits for companies like BPOs, factories, etc. can witness an increase. However, the explicit refusal of ITC for insurance, repair, maintenance, etc. vehicles may result in higher tax costs on car-related expenses for businesses. "
According to the changes, e-commerce companies will not have to register provided that their annual business turnover is less than Rs 20 lakh and are not required to collect the fee. Tax at source under Article 52.
"This is a measure favorable to taxpayers. Small e-commerce operators who are not required to collect tax at source under section 52 would now be eligible to benefit from the exemption threshold for the purposes of the exemption. Registration, "said the government while justifying the amendment. such as the removal of general provisions on purchases from unregistered dealers, the adoption of provisions providing for a new TPS reporting process, the establishment of single debit / credit notes for multiple invoices, etc., make it easier for businesses to pay for GST.
"However, transactions such as the refusal of credit on the repair and maintenance, general insurance, etc. for motor vehicles, a transition of the credits of stop, and d & rsquo; Others may require a revision of the tax position adopted by some companies.In addition, the specific denial of the education credit transition would cease would be against the tax position that some taxpayers had taken, "Jain said. .
Mani said the facility of a modified return to correct the return of origin, the ability to issue consolidated debit / credit notes covering multiple bills, the ceiling of Rs 25/50 crore on the pre-filings with the appeal / court authority, the near-immediate scrapping of self-financing costs would help companies to comply with the GST.
Pratik Jain, PwC stated that the changes relating to the definition of the offer, the extension of credits on vehicles and the limitation of liability for purchases of non-registered suppliers to a a set of people are welcome.
disappointed with the provisions relating to the restriction of the transfer of the credit balance of education and so on. The proposed amendments do not cover some of the amendments that were already pointed out at the GST Board, such as the tax liability on services deemed to be provided by branches to foreign parents / offices.
"It would be interesting to see what provisions are proposed to have a retroactive effect and which ones are given Effectively," added Pratik,
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