Regulatory Brief

Cess Hike on Motor Vehicles and Revision of GST Rates, New Permit Requirements for Foreigners – India Regulatory Brief

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GST cess hike for cars, rate reduction for common items, extension of return filing

The 21st GST Council’s meeting on September 9 resulted in the increase in cess for mid-size, large, and sports utility vehicles (SUVs) by 2 percent, 5 percent, and 7 percent, respectively. The Council opted for this segregated policy instead of the 10 percent increase effected by the GST regime. Overall tax incidence for mid-size cars will now be 45 percent, large cars – 48 percent, and SUVS – 50 percent.

On the other hand, the Council slashed GST rates for around 30 items of common use. These include: walnuts, cleaning broom, custard powder, idli and dosa batter, rubber bands, raincoat, corduroy fabric, computer monitors, and table and kitchenware, among others. Khadi fabrics sold through Khadi and Village Industries Commission (KVIC) will be exempt from GST.

The GST Council also extended the return filing deadline: the GSTR1, which was to be filed by September 10, can be filed till October 10 by smaller businesses and large ones by October 3. This is because of technical glitches in the GSTN portal.

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Right to Privacy Ruling Impacts Aadhaar, FDI Restrictions for Power Grid, Telecom – India Regulatory Brief

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Supreme Court rules individual privacy as fundamental right

On August 24, the nine-judge bench of the Supreme Court (SC) of India upheld the right to individual privacy as a fundamental right under the Constitution.

The landmark verdict came on an array of petitions challenging the federal government’s move to make Aadhaar mandatory for availing benefits of various government schemes, and extending its provisions for several other essential activities, such as opening bank accounts, making financial transactions above US$780 (RS 50,000), securing loans, and filing tax returns.

Though the SC ruling does not overturn the constitutional validity of Aadhaar Act, it will play an important role in a separate court hearing that will examine the validity of Aadhaar on the principles of the right to privacy. Separately, the judgment does not have a direct or immediate effect on data sharing as India does not have a data privacy law. However, the decision does provide solid grounding for any future data privacy policies in India.

The impact of the SC ruling is evolving. Businesses should monitor the issue closely to understand how it impacts Aadhaar-related transactions, as well as data privacy rules.

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GST Council Finalizes E-Way Bill, CBDT Clarification on Non-Resident Tax Filing – India Regulatory Brief

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GST Council finalizes e-way bill

At its 20th meeting held on August 5, the Goods and Services Tax (GST) Council approved the electronic way (e-way) bill, which mandates pre-registration of goods before transportation.

The e-way bill, which is likely to come into force by October 1, 2017, would be applicable for consignments worth more than US$780 (Rs 50,000) only. The Council has decided that the e-way bill will not apply to the inter-city movement of goods within 10 kilometers distance, as well as on items exempted from the GST.

The introduction of the e-way bill is expected to significantly reduce wait times at checkpoints, and will streamline the transportation process.  The bill would be valid for a period between one day and 20 days, depending on the distance to be traveled.

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