Record GST collection

Record GST collection

Subject: Economy

Context:

Gross Goods and Services Tax (GST) collections rose to Rs 1,51,718 crore for October, the second highest level since the roll-out of the indirect tax regime in July 2017.

Details:

• Monthly GST revenues have been above the Rs 1.4 lakh crore mark for the last eight months in a row.
• Revenue growth is crucial for fiscal arithmetic this year as the government tackles additional spending needs on account of fertilizer, food and fuel subsidies.

Causes:

• High inflation rate-increase in retail prices of many consumption goods,
• The festive season demand–increased spending on account of the festive season
• Actions taken to ensure compliance-introduction of e-invoicing system, e-way bills coupled with the crackdown on fake invoicing. Also linking the customs portal with GST portal

Concept:

E-Way bill system:

• E-Way bill system is for GST registered person / enrolled transporter for generating the way bill (a document to be carried by the person in charge of conveyance) electronically on commencement of movement of goods exceeding the value of Rs. 50,000 in relation to supply or for reasons other than supply or due to inward supply from an unregistered person.
• E-Way Bill is a compliance mechanism wherein by way of a digital interface the person causing the movement of goods uploads the relevant information prior to the commencement of movement of goods and generates an e-way bill on the GST portal.
• An electronic way bill or ‘e-way bill’ system offers the technological framework to track intra-state as well as inter-state movements of goods of value exceeding Rs 50,000, for sales beyond 10 km in the Goods and Services Tax (GST) regime. When an eway bill is generated, a unique E-way Bill Number (EBN) is allocated and is available to the supplier, recipient, and the transporter.
• It was launched to:
  • Facilitate faster movement of goods.
  • Improve the turnaround time of vehicles.
  • Help the logistics industry by increasing the average distances travelled and reducing the travel time as well as costs.
• E-Way Bill Rules
  • According to notified e-way bill rules, every supplier requires prior online registration on the e-way bill portal for the movement of goods. Tax officials have the power to scrutinise the e-way bill at any point during transit to check tax evasion.
• Validity:
  • The rules also specify that the permits for conventional cargo (other than over-dimensional carve) are valid for one day for the movement of goods for 100 km, and in the same proportion for the following days.
  • In general, validity of the e-way bill cannot be extended but a commissioner may extend the validity period only through issuing notification for certain categories of goods.
• Penalty for goods moved without generating a valid e-way bill:
  • A fine of Rs 10,000 or amount of tax sought to be evaded, whichever is higher, may be imposed by tax authorities.
  • In such a situation, goods, and the vehicle transporting them, can be detained or seized.
  • An e-way bill can be regenerated by the transporter before expiry, but, if the e-way bill has expired, the system won’t allow regeneration linked to the same invoice.
• Specific goods that are exempt from e-way bill rules are:
  • Liquefied petroleum gas for supply to household and non-domestic exempted category customers
  • Kerosene oil sold under Public Distribution System (PDS)
  • Postal baggage transported by Department of Posts
  • Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal
  • Jewellery, goldsmiths’ and silversmiths’ wares and other articles
  • Currency
  • Used personal and household effects
  • Unworked and worked coral
  • Goods transported are alcoholic liquor for human consumption, petroleum crude, high-speed diesel, petrol, natural gas or aviation turbine fuel.
  • Goods being transported are not treated as supply under Schedule III of the Act. Schedule III consists of activities that would neither be a supply of goods nor service like service of an employee to an employer in his employment, functions performed by MP, MLA etc.
  • Goods transported are empty cargo containers
  • Goods other than de-oiled cake being transported as specified:
    • Curd, lassi, buttermilk
    • Fresh milk and pasteurised milk not containing added sugar or other sweetening matter
    • Vegetables
    • Fruits
    • Unprocessed tea leaves and unroasted coffee beans
    • Live animals, plants and trees
    • Meat
    • Cereals
    • Unbranded rice and wheat flour
    • Salt
    • Items of educational importance (books, maps, periodicals)
• Other transactional cases where e-way bill is not required are:
  • e-Way Bill is optional for doods of value less than Rs. 50,000 (except in cases of mandatory e-way bill provisions like the movement of Handicraft goods and movement of goods for Interstate Job work)
  • If goods are being transported by a non-motorised conveyance (Ex. Horse carts or manual carts)
  • If goods are being transported:
    • From the port, airport, air cargo complex and land customs station to an inland container depot (ICD) or a container freight station (CFS) for clearance by Customs
    • From ICD or CFS to a customs port, airport, air cargo etc under customs bond
    • From one customs port/station to another one under customs bond
    • Goods transported under the customs supervision or customs seal
    • Goods transported within the notified area
    • Goods transported are transit from/ to Nepal/ Bhutan
    • If goods are transported to a weighbridge within 20kms and back to the place of business covered under a Delivery Challan (DC)
    • Where Government or local authorities transport goods by rail as a consignor
    • Goods transported to/from the Ministry of Defence