India Regulatory Brief: New GST App Launched and Health Insurance Proposed for Retired Industrial Workers

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Government launches app for taxpayers as GST becomes effective July 1

The Central Board of Excise and Customs (CBEC) launched a new app last week to facilitate the transition of taxpayers onto the new Goods and Services Tax (GST) regime. The government will roll out the GST from July 1.

CBEC GST – the new Android mobile application platform – will contain all the requisite information related to migration to the GST regime, toll free numbers for queries, as well as material explaining the draft GST laws and rules.

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Once implemented, the GST will be a revolutionary tax reform uniting India’s fragmented markets into a single common mass market, and will simplify the existing convoluted indirect tax regime. Through the app, the government aims to provide maximum awareness to ensure the GST transition is smooth, effective, and immediate.

Expanded health insurance coverage for retired industrial workers under ESI scheme

In what could be a breakthrough move, the central government has proposed a US$22,484 (Rs 1.5 million) ‘super specialty health insurance package’ to all retired industrial workers subscribed to the Employee State Insurance (ESI) scheme, effective April 1. According to the ESIC, the health insurance benefit will cover a maximum of US$14,990 (Rs 1 million) in a financial year for treatment and US$22,484 (Rs 1.5 million) as a lifetime benefit for retired industrial workers and their spouses.

The new plan has the approval of the Employee State Insurance Corporation that oversees the implementation of the ESI. This will significantly enhance the healthcare facilities provided to insured industrial workers, and diversify the limited health insurance options available to India’s senior citizens.

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Clarification on the POEM tax rule to favor SMEs

The Central Board of Direct Taxes (CBDT) has clarified that Place of Effective Management (POEM) norms will not apply to firms with a turn over or gross receipts of less than US$7,494,570 (Rs 500 million) in a financial year.

This will come as a huge source of relief to small and medium enterprises worried over potentially expanded tax liabilities. The government announced the clarification as the latest POEM circular did not include the leeway present in the original notification.

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India and Germany ratify Social Security Agreement

India and Germany finally ratified their Social Security Agreement (SSA), which will come into effect on May 1. The SSA will promote greater bilateral investment and replaces the 2008 social insurance pact that “exempts detached workers of the two countries from making social security contributions in either countries so long as they were making such contributions in their respective countries”.

With the latest ratification, India has Social Security Agreements (SSAs) with 18 countries: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Japan, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and South Korea.

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