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There is a lot of ambiguity on the GST service provided by the tour operator whether they will take the input credit or not. Which option will be the best for the tour operator service. In this blog, we will check all the details

 What are the options for Tour package services –
There are three options, first Act as a tour operator without claiming input credit and second claim input credit and the Third option is to act as a pure agent.  

1) Act as a Tour Operator with No Input credit
Charge 5% GST to the customer on the total package and claim no input credit. But in this, there is one exception an Entity can claim the input credit

2) Act as a Tour Operator and Claim Input credit
Charge 18% GST to the customer on the total package and claim input credit. But in this, while taking credit we need to understand the place of supply rule. In this tour operator will get the credit of general expenditure like Rent, Professional fees, etc. While difficult to claim the Traveling and Hotel expenses.

Place of Supply Rule –

For Hotel booking – In the case of the hotel place of supply will be the place where the hotel is located, So the hotel will charge  only CGST and SGST, So if the tour operator is located in that area then only he can claim the GST credit.

For Traveling – Place of supply for the flight will be where the flight embarks, so if the tour operator is located in that area then only he can claim the GST credit

3) Act as an Agent –
In this entity will act as a pure agent, Entity will raise the invoice to the customer and charge 18% GST on that. All the direct expenses incurred like traveling, hotel, and boarding will be taken as reimbursement on an Actual basis from the customer.

Note – In that case all the direct expenses need to be separately mentioned on the invoice and proper records should be kept.

 Which Option is beneficial for tour operator in GST?

Each tour operator will do the own analysis and select the best option. In general, we can tell

Option 1 – Is best for Small Tour operators, with less accounting hurdle in that. Also, it will be good for the packaged tour.

Option 2 – Is best for Large Tour operator who is operating in more than one city and having GST number in almost all-states. Also where the business is mainly on B2B basis.

Option 3 – Is best for a Large Tour operator who is operating from one place on PAN India basis and can do the proper accounting and documentation of each transaction. Also where more hotel accommodation is done.

 What is the HSN Code for Tour operator in GST?
9985 is the HSN Code as GST Tariff Act.

 Can a Tour operator in a single registration select more than one option?
Yes, Tour operator on each and every deal take his views in which option he will go. As there is no Restriction visible in law.

Option 1 – Charge 5% GST with No Input tax credit for Package tour. 

Option 2- Charge 18 % GST Act as a Tour Operator and Claim Input credit for B2B customer

Option 3- Charge 18 % GST on commission amount and Act as pure Agent for hotel booking

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 One-time Waiver of late fees in the GST from the beginning of the GST to till date

– In this one-time waiver there is no turnover limit any assesses can claim the benefits. This waiver has been given as per tax liability. Tax liability will be output tax less Input tax.

• Reduction in late fees from January 2017 to January 2020 if there is TAX PAYMENT.

If anyone has not filed the old return, he can file the return now with maximum fees of Rs 500 Per return.

• Waiver in late fees from January 2017 to January 2020 if there is No tax payment.

If anyone has not filed the old return, he can file the return now with Nil Payment of fees.

Due Date for claiming the One-time benefits –

GST return should be filed from 01 July 2020 to 30 September 2020.

Interest Rate in One-time benefits –

Interest will be 18% per annum payable from the original due date.

Waiver of late fees in the GST for the Period (February, March and April 2020)

– In this only small taxpayers can claim the benefits. A small taxpayer means having a turnover of less than 5 crore. There is NIL late fees for the period (February, March and April 2020).

Due Date for (February, March and April 2020) Return

Due date will be 6^th July (staggered date will be notified). The staggered date means a different date for the different state.

Interest Rate

There will be no interest if payment is done before the extended due date of filing return (6^th July 2020). If payment is done after 6^th July than interest will be 9% per annum till 30thg September. After 30^th September interest will be 18% per annum.

Waiver of late fees in the GST for the Period (May, June and July 2020)

– In this only small taxpayers can claim the benefits. A small taxpayer means having a turnover of less than 5 crores. There are NIL late fees for the period (May, June and July 2020).

Due Date for (May, June and July 2020) Return

Due date will be 30th September (staggered date will be notified). Staggered date means a different date for the different state.

Interest Rate

There will be no interest if payment is done before the extended due date of filing return.

Extension of Due Date in Tabular Form

Frequently Asked Question on Extension of Due Date?

What is the Due date of GSTR-1?

GSTR-1 Due date extension is yet not specified in the Notification

What is the Due date for Composite Dealer?

Due date extension is yet not specified in the Notification for composite dealer

Any Relief is given for the taxpayer having turnover more than 5 Crore?

No there is no relief given for the taxpayer having turnover more than 5 Crore

What happens if I already paid the late fees?

There is no relief if you have already paid for it. In India government always believe if any taxpayer is honestly paid the tax he is capable and does not need any relief.

Tax Baniya – Business & Investment Advisors

Start New Business, Company Registration, LLP Registration, Partnership Firm, Accounting, Tax Compliance, GST, Income Tax, Mutual Funds
Mumbai, Thane, New Mumbai, Palghar, Surat, Rajasthan, Kolkata

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 Further to our blog https://taxbaniya.com/changes-in-input-tax-credit-rule-364-in-gst/

 Relief due to COVID-19 spread:

Notification No. 30/2020 – Central Tax, 3rdApril, 2020

In the said rules, in sub-rule (4) of rule 36, the following proviso shall be inserted, namely:-

“Provided that the said condition shall apply cumulatively for the period February, March, April, May, June, July and August, 2020 and the return in FORM GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition above.”

It is provided that the said limit of 10% shall apply cumulatively for the tax periods Feb-20 to Aug-20 and the return in GSTR-3B for Sep-20 shall be furnished with the cumulative adjustment of ITC for the said months in accordance with the above condition of 10%.

Therefore, vendor compliance will again play a very important role for maximizing the ITC. Rule 36 (4) is not suspended but its effect of Feb 2020 to Aug 2020 has been deferred till September, 2020.

CONCLUSION:

• Whether 10% rule is suspended? – No its postponed for monthly basis rather need to comply on Cumulative basis in Sep 20 Return for February 2020 to August, 2020
• May I file GSTR 3B without applying rule 36(4)? – Yes, you may.
• Whether this deferment will cause the interest deferment on the excess ITC taken for the period Feb 2020- Aug 2020? – If the cumulative effect of the period of Feb 2020- Aug 2020 is taken care of as per the Notification No. 36/2020 – Central Tax, 3rdApril, 2020 in the months of Sep 2020 then there is not a consequence of interest to be into the picture

The post 10% ITC RULE FOR AVAILMENT OF ITC appeared first on Tax Baniya.

Process to upload the ledger confirmation in Maharashtra

Today in this blog we will share the step by step process to upload the ledger confirmation in MVAT. This is  the latest process come by the Maharashtra vat department to clear the vat mismatch. In this blog we will share how the old mismatch in MVAT can be cleared.

How to clear old mismatch in MVAT

Kindly upload the ledger utility in MVAT site. It will clear the old mismatch issue. Note for uploading the ledger confirmation utility all the Mvat return form no 231,233 etc and Audit report 704 if applicable must be uploaded on the site.

Who can upload the ledger confirmation utility in Mvat Site?

Ledger confirmation utility in Mvat site can be filed only for the sales. Ledger confirmation utility can be uploaded by the saler for the sale made to him by the respective buyer. Once saler uploaded the ledger confirmation utility he can give the printout to the buyer and buyer can give that ledger confirmation to the department and clear the vat mismatch.

How to upload ledger confirmation utility in Mvat site?

1. Visit mahagst.gov.in site.
2. Click on download <form <electronic form <ledger confirmation utility file will appear on the screen.
3. Download the ledger confirmation utility
4. Fill the ledger confirmation utility and generate the txt file.

What is the Process to upload the ledger confirmation utility?

Mention the Vat number, Name of dealer who is uploading the form. Also mention the year for which ledger confirmation utility needed.

Click on validate after doing this.

Click on I agree and click to proceed.

5. After generating the text file upload this in file mahagst.gov.in <log in for e-services <log in for vat and allied act

6. log in for tin no and upload text file

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What is the GST Rate for Supply of Goods to Merchant Exporters for Exports?

CBEC has notified a concessional rate of .01% for the goods sold to merchant exporters for exports subject to certain conditions.

What are conditions for Supply of Goods to Merchant Exporters for Exports at concessional rate

1. Both Buyer and seller should be registered in the GST and the registered supplier shall supply the goods to the registered buyer on a tax invoice
2. The registered Buyer shall export the said goods within a period of ninety days from the date of issue of a tax invoice by the registered supplier
3. The registered buyer should mention the GST and invoice Number of the registered supplier in the shipping bill or bill of export.
4. the registered buyers shall be registered with an Export Promotion Council or a Commodity Board recognized by the Department of Commerce
5. the registered buyers should give purchase order to the registered supplier and jurisdictional tax officer of the registered supplier for procuring goods at concessional rate
6. Movement of goods –the registered recipient shall move the said goods from place of registered supplier –

   (a) directly to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported; or

   (b) directly to a registered warehouse from where the said goods shall be move to the Port, Inland Container Deport, Airport or Land Customs Station from where the said goods are to be exported;

7. After exporting the goods buyers should provide following documents to the registered supplier and jurisdictional tax officer of the registered supplier
8. Shipping bill or bill of export
9. Tax invoice of the registered supplier
10. Proof of export general manifest or export report

 Documents needed from the Buyers  

1. Export Promotion Council certificate of buyers
2. Purchase order copy from the buyers that he need to buy the goods at concessional rate.
3. GST Certificate of the buyers
4. Shipping bills

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Changes in Input tax credit Rule 36(4) in GST

Today we will discuss very important changes done by the GST committee in the Input credit rule 36(4) of the GST Act. In this we will also discuss Input tax Provision in GST Till 9th October 2019 or after 9^th October 2019. In this blog we will also explain you the increase in compliance burden in the GST and why the monthly reconciliation in the GST is mandatory now.

Input tax credit Provision in GST Till 9^th October 2019

Conditions and documents required for claiming input tax credit as per section 36(1).-

The input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of any of the following documents, namely,-

1. an invoice issued by the supplier of goods or services or both in accordance with the provisions of section 31;

1. an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of section 31, subject to the payment of tax; https://cleartax.in/s/cgst-rules-chapter-6-tax-invoice-credit-and-debit-notes

1. a debit note issued by a supplier in accordance with the provisions of section 34;

1. a bill of entry or any similar document prescribed under the Customs Act, 1962 or rules made thereunder for the assessment of integrated tax on imports;

54. an Input Service Distributor invoice or Input Service Distributor credit note or any document issued by an Input Service Distributor in accordance with the provisions of sub-rule (1) of rule 54.

(2) Input tax credit shall be availed by a registered person only if all the applicable particulars as specified in the provisions of Chapter VI are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person: (GSTR 2 is not enabled by department yet, hence in our opinion if other conditions are satisfied then you are eligible for ITC)

Additional Input tax credit Condition in GST after 9^th October 2019

Input tax credit to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37, shall not exceed 20 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub-section (1) of section 37 (GSTR 1 Monthly – 11^th of Succeeding month,  Quarterly – Month end after quartier end)

Why Monthly Reconciliation in GST is Compulsory after 9^th October 2019

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Last date to file the GST Annual return and audit is 30^th august. Lots of people facing the problem in uploading the GST audit. In this blog we will try to help you to solve the GST Audit problem.

First step – Computer Configuration required for GST Audit

1. Operating system 7 and above
2. Microsoft Excel 2007 and above
3. GST emsigner downloaded from gst.gov.in
4. Internet Explorer 10+

Second step – Security Settings for Internet explorer

We need to do the following security settings in internet explorer for signing the GST Audit Report (9C)

1. a) Open Internet Explorer
2. b) Tools -> Internet Option -> Tools -> Security – Custom Level

• Enable the “Automatic prompting for Active control”
• Promp “Download unsigned ActiveX Controls

1. c) Tools -> Internet Option -> Tools -> Security – Trusted Sites – Sites

Make sure that gst website is added to trusted website both https://gst.gov.in, https://127.0.0.1:1585

Third Step – Do Java Setting for uploading the GST Audit

1. a) Start -> Configure Java -> Security – Edit Site List

Make sure that gst website is added to website both https://gst.gov.in, https://127.0.0.1:1585

1. b) Run Emsignor as administrator

Steps to Generate json file of GST Audit GSTR-9C

1. Check that you are using latest version of GSTR-9C utility
2. GSTR-9C offline utility folder should be on the local disk of the system and not on the network.
3. Wsweb file should be in the same folder of GSTR-9C offline utility.
4. All other application should be closed on your system.
5. Only GST emsigner should be running (as run as administrator). Same setting for emsigner how you use for filing monthly GST returns.
6. Validate all sheets of GSTR-9C
7. Digital signature of Chartered Accountant whose PAN is mentioned in GSTR-9C should be attached to your system.
8. Click on “Generate JSON file to generate GSTR-9C details to GST portal”.
9. It will ask you to save the json file, save it in same folder of offline utility and internet pop-up will open.

• One more pop-up will come where you have to select “Allow block content”
• In Internet explorer pop-up there will be two option.. Select on “Initiate Signing” and then “Open emsigner”. Once you click on emsigner, emsigner will open and you can generate the file.

Common Error in uploading the GST Audit

• Your all figure should be match with gstr 9, point difference also not allowed
• Auditor’s signature invalid. Please get it re-signed and then upload” if this issue is showing then close all application restart again
• If there is Microsoft ole action the use another pc excel try the same process given above

Filing process in GST portal by client login

1. After login -> Annual Returns -> Select Financial Year
2. Go to GSTR-9C -> Prepare Offline -> Upload GSTR 9C offline generated by Chartered Accountant
3. Attach Balance sheet, Profit and Loss, Cash Flow and option attachment through Initiate Filing and click on Proceed to file

The post HOW TO UPLOAD GSTR 9C WITH DIGITAL SIGNATURE  (DSC) appeared first on Tax Baniya.

Income tax on blogging and Freelancer income

There are five heads of income under Income Tax Act, 1961. The income from Blogging can be taxed under either one of the two heads depends upon the time you give to blogging–

a). Income from Business or Profession or

b). Income from other source.

If a person is doing blogging on regular basis then the income from such blogging is taxed under the head “Income from business or profession”. On the other hand if a person is doing blogging on part time basis then the income from such blogging is taxed under “Income from Other Sources”.

All the expenses incurred in relation to blogging can also be claimed as deduction. Some of the expenses are-

• Blog Designing expenses,
• Advisory expenses to expert Bloggers,
• Domain hosting expenses,
• Domain purchase expenses,
• Salary to employees,
• Rent expenses of place from you are doing blogging,
• Electricity expenses,
• Telephone expenses,
• Internet expenses,
• Any other expenses incurred in relation to earning revenue from blogging.

Now one question also arise whether income from blogging is to be taxed on accrual basis or cash basis. Accrual basis means income earned in May month is credited to account after one or two months. There is an option for bloggers either to show on receipt basis or accrual basis. But care should also be taken if you are showing your income on accrual basis then expenses should also be shown on accrual basis.

All the statements showing income & expenses of Ad sense should kept as proof. Following are the main income relating to blogging-

• Affiliated sales (Purchase made by person through the link of blogger)
• Advertisement income (third party ad sales, direct ad sales, Google ad sense)
• Income from consultancy relating to blogging
• Income from services like blog designing, referral link etc.
• Any other source of income relating to blogging.

It is compulsory to pay Income tax on net income from blogging profession. If you do not pay tax on Blogging income then such income will be treated as black money & attracts huge penalty or imprisonment. At what rate the income should be taxed depends upon the slab rates in which you are covered. For more details relating to Income tax slab rate copy & paste the link to your browser http://www.taxbaniya.com/income-tax-slab-rate-for-assessment-year-2015-2016/.

Now we can understand the above discussion with an example-

Suppose you have following income relating to blogging:

1. Advertisement Income: 1,50,000/-
2. Income from consultancy relating to blogging: 40,000/-
3. Blog designing fees: 20,000/-
4. Affiliated sales income: 10,000/-

Following are the expenses relating to blogging:

1. Domain purchase: 10,000/-
2. Internet charges: 5,000/-
3. Domain hosting expenses: 4,000/-
4. Telephone expense: 2,200/-
5. Web designing expenses: 5,000/-

The Net Income from Blogging Profession is :

=(1,50,000+40,000+20,000+15,000)-(10,000+5,000+4,000+1,000+5,000)

=Rs. 2,00,000/-

The Net income should be taxed according to Income tax slab rates.

If there is an loss from blogging profession then same should be carried forward like business loss.

Presumptive Tax on Bloggers and Freelancer

If an blogger not want to maintain the books of accounts. He can select the presumptive taxation in income tax. In that he has to pay the 50% tax on gross income received. Example If he has billed of Rs 10 laks in a financial year than he has to pay the income tax on Rs 5 laks

Benefits of Paying Tax on Blogging Income and Freelancer

The income shown in Income tax return can only be considered as your True Money. The income which is not disclosed in income tax return is considered as black money & attracts penalty or imprisonment. To be on a safer side it is required to show your income from blogging in income Tax return.

If you want to take a loan from bank & financial institutions then they also require Income tax return. Therefore to create your wealth it is necessary to file Income tax return

GST on Blogging and Freelancer

Now question arises whether GST is liveable on blogging income or not. The Goods and Service tax is liveable on blogging income if he has exceed the turnover of Rs 20 Laks.

You can check here how to take the GST Registration – http://taxbaniya.com/gst-registration-in-mumbai/

Composition Scheme in GST

For Service industry government has come with the composition scheme in which Blogging and Freelancer can charge 6 perecnt GST and pay to the government. In this scheme he cannot claim the input credit of any purchase.

Export of service in GST

If a blogger received any income from the outside India than it will be exempts. He needs to take the GST number and LUT in GST.

You can check here how to take the LUT – http://taxbaniya.com/letter-of-undertaking-in-gst/

Thus it is clear that Blog owners are liable to pay goods and service tax.

Income Received in Paypal Accounts

If a broker received any income in PayPal accounts than he should collect the FIRC Copy from the banks or from the PayPal. Also he needs to pay the income tax on money received in PayPal. In GST it will be considered as export of service and exempt.

TaxBaniya
Business & Investment Consultants
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(I) What is the meaning of GST TAX?

Today there are lots of Indirect taxes in India levied by state and central government like VAT,CST, Excise duty, service tax. GST tax will be a single simple indirect tax to be levied in India.

(II) Why there is a need of GST?

As there are many taxes in India, there are lots of complicacy in current tax system whether the particular transaction is covered under vat or service tax.

(III)What is the Advantage of GST to businessman?

GST will provide the Hassle free tax system to the Businessman, now there are lots of compliance to be done by the businessman under various tax (Service tax, Excise, Octroi, Vat, Turnover tax etc). After applicability of GST all the Indirect taxes levied by state and central government will be removed and there will be only one GST TAX levied by the central government.

(IV) What is the Advantage of GST to Consumer?

In current tax system final tax to bear by the consumer same will be in the GST also but consumer will be benefited due to elimination of multiple taxes on the product and double charging in the system.

(V) What is the Advantage of GST to Indian Goverment?

As of now many country in the world have GST System. It will help India to sale the goods overseas at the competative prices and boost exports also it will reduce the administrative cost of  Indian Goverment. Also hassle free tax system  will attract foreign investor to invest in India. Make in India programme of goverment will be boost by implementing GST in India.

(VI) What are the taxes covered in GST?

After applicability of GST all other taxes levied on goods and service like (VAT, CST, EXCISE, SERVICE TAX,OCTROI) will be removed.

(VII) What are the taxes not covered in GST?

Direct tax like income tax and Wealth tax will not be covered in GST.

(VIII) IS Tax credit allowed in GST?

 Yes, there will be the Input/Cenvat credit procedure in the GST.  As of now there is Cenvat credit in service tax and excise and input credit on material is allowed in Vat. In GST also there will be Tax credit procedure; tax credit will be available at each stage on each value chain. Ex if tax paid on Rs 2,00,000 @10% will be 20,000 at first stage and the same goods is sale at Rs 2,50,000 output tax will be 25,000/-. Tax credit will be 20,000/- and tax to be paid will be 5,000/-.

(IX) What are the goods and services covered under GST?

All the goods and service will be covered in the GST

(VIII) What are the disadvantages of GST?

As there are not so much disadvantage of GST, but it will take some time for the people to understand the compliance for the same.

(X) What are the Hurdles in implication of GST tax in India?

Many of the state government are not agree with the GST tax in India,  Today there are many taxes levied by the central government and many by the state government, Central government revenue will be from central tax and state government revenue will be from state tax.As there will be only one tax GST will be levied by the central government, State government are concern with their revenue share.

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