India Regulatory Brief: Filing GST Returns, Aadhaar Mandatory for Banking and Financial Transactions
Relaxation in filing GST returns till September 2017
The GST Council meeting on June 18, 2017 delivered key resolutions ahead of the GST launch at midnight of June 30. The Council opted for a relaxation in return filing until September, meaning no late fees or penalties will be levied in the interim period.
GSTR-1 with invoice level details for the month of July have to be filed by September 5, and for the month of August by September 20. Correspondingly, the GSTR-2 and GSTR-3 forms for these two months must be filed thereafter. The summary return form in GSTR-3B must be filed on a self-declaration basis for the first two months – July and August – by the 20th day of the following month, after paying taxes.
Resolution on the e-way bill system (electronic way bill for movement of goods) could not be reached and has been deferred to the GST Council meeting on June 30.
GST Council amends rates, approves anti-profiteering rules
The GST Council released amended rates of taxation for the hospitality sector on June 18. Hotels charging between US$39 and US$116 (Rs 2,500 to Rs 7,500) will be subject to 18 percent GST, while hotels charging upwards of US$116 (Rs 7,500) will attract 28 percent GST. Restaurants in these hotels will be subject to 18 percent GST, at par with air-conditioned establishments.
Integrated GST on shipping vessels will now attract a 5 percent tax. Also, input credit will not be available on ice cream, pan masala, and tobacco.
Further, the Council cleared anti-profiteering rules that will compel firms to reduce the prices of goods benefitting from lower taxation rates under GST. An anti-profiteering regulatory body will be setup for two years.
Previously, the GST Council widened the scope of a concessional tax payment scheme for small businesses and restaurants on June 11. This was in addition to revised GST rates for 66 items, including kitchen goods and movie tickets, the complete list of which is available on the website of the Central Board of Excise and Customs.
Aadhaar details mandatory for bank accounts, financial transactions
The federal government has now made Aadhaar (biometric identification number) mandatory for opening a new bank account.
The same is compulsory when conducting any financial transaction worth US$776.19 (Rs 50,000) and above. This amends the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, and mandates the quoting of the Aadhaar number along with the permanent account number (PAN) or Form 60 by individuals, companies, and partnership firms.
Meanwhile, according to a notice released by the Department of Revenue, existing bank accounts will need to be linked with the Aadhaar system by December 31, 2017, failing which the accounts will cease to be operational.
After June 1, a person opening a bank account in India will need to compulsorily furnish proof of application for enrolment in Aadhaar, and submit the Aadhaar number to the bank within six months of opening the account.
Petrol, diesel price to change daily in India
From June 16, India’s fuel sector moved to a system of daily price change for petrol and diesel. This means that petrol and diesel will be sold in sync with international rates (price of crude oil), a system currently followed by the U.S. and Australia.
The state-run oil companies Indian Oil Corp. Ltd (IOC), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) hold 90 percent of the country’s fuel market share, and previously tried the new dynamic pricing model in Udaipur, Jamshedpur, Puducherry, Chandigarh and Visakhapatnam since May 1.
The new pricing policy will hopefully reduce volatility in the fuel market, and ensure no drastic change in the domestic selling prices. Further, the benefits or costs of any change in the international oil prices can be carried unto the dealers and end-users. This also creates transparency in the sector.
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