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.
Changes in registration and permit requirements for foreigners
Authorities in the jurisdiction of Chennai in south India have notified new local registration requirements and changes in the process for obtaining residence permits and stay visas.
The updated requirements for foreign nationals include notification by foreigners within 24 hours after their arrival. Landlords, managers of apartments, hotels, and other housing accommodations must complete a C Form to provide notice to the Foreign Regional Registration Office (FRRO) within 24 hours of a foreign national’s arrival in Chennai. This is not the case for tourists.
If this is not carried out, the responsible person will need to submit an authorized explanation to the FRRO to explain why notice was not provided within the 24-hour time period.
Chennai’s FRRO also changed the process for obtaining residential permits and stay visas. Residential permits and stay visas will now be issued between 10 and 15 days after the submission of applications are submitted – instead of the same day.
Credit guarantee fund under Startup India
The Department of Industrial Policy and Promotion (DIPP) is framing a regulatory provision that creates a credit guarantee fund for entrepreneurs. The federal government will use this fund to stand guarantee for loans given to startups – a plan announced under Prime Minister Modi’s Startup India initiative.
As it stands, the fund managed by the DIPP has a corpus of US$313 million (Rs 2,000 crore). Each eligible startup can receive loans up to US$780, 000 (Rs 5 crore) – without collateral under the credit guarantee scheme.
The foreign direct investment (FDI) policy for 2017 includes provisions that allow startups to raise money from overseas from venture capital funds and instruments such as convertible notes.
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