GST pain: Retailers charge goods and services tax on MRP, complain consumers

It has been 10 days since the Goods and Services Tax (GST) was rolled out at the stroke of midnight on July 1 but confusion about the indirect tax reform persists while complaints continue to pour in about traders charging GST unfairly.

The consumers are raising their concern through various mechanism the government has floated including its Twitter handle @askGST_GoI and through online community 'Connected Consumers' run by Department of Consumer Affairs on social engagement platform LocalCircles.

Many consumers have complained that some retailers are charging the GST over and above the MRP of products. The government has made it clear that the MRP is the maximum price of a product to be sold in retail and charging anything above this is an offence.

One of the consumers shared a bill generated at popular restaurant at Noida in Uttar Pradesh. The invoice was generated two days after the GST was introduced. The restaurant charged central and state GSTs over and above a packet of snacks.

A chemist in Mumbai charged GST on the total MRP of medicines purchased for patient Atul Shah. In this case, the computer generated bill does not show any GST, which was charged and mentioned in ink by the retailer.

This overcharging of GST is not limited to local markets only. Even the online retailers and e-commerce portals are allegedly charging GST over and above MRP.

One of the consumers produced a bill whose invoice was generated on July 4 for a can of edible oil priced at MRP Rs 380. After discount it was priced at Rs 371.43 but then inter-state GST was applied making the edible oil costlier than the MRP.

In yet another case, a consumer reported buying a shirt from a popular e-commerce portal. After 60 per cent discount, the shirt was priced at Rs 720. This is the MRP for the shirt. But, an "estimated GST" of Rs 30.60 was added to it.

In a survey conducted by the LocalCircles, only 23 per cent consumers said that they were being charged only the MRP amount for products.

About 51 per cent complained that they were being charged GST over and above MRP with or without discount. About 20 per cent of over 8,800 participants of the survey said that they got discount on MRP but were charged GST over and above that price.

Interestingly, 26 per cent still had purchases without taking or asking for bills or receipts. The GST reform focuses a lot on invoice generated purchases.

Under the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act 2006, maximum retail price (MRP) means the price above which a retailer cannot charge his consumers. The MRP already factors in all taxes levied on the product.

A manufacturer is required to mention in clear and bold print the maximum retail price on all the products. A retailer is prohibited under the law to sell at a price higher than the MRP.

In fact, the Consumer Affairs Department has led several campaigns telling consumers to bargain on the MRP as it covers good margin of profit that may range from 10-35 per cent.

There are several laws including the Monopolies and Restrictive Trade Practices Act (MRTP Act), the Essential Commodities Acts and the Consumer Protection Act which make selling a product over and above MRP a punishable offence for unfair trade practice.

Even under the new tax regime, selling a product over and above MRP is a violation of the anti-profiteering clauses of the GST Act. This may lead to cancellation of registration of the retailer.

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Beware!! The danger of purchasing from unregistered person in GST

Beware!! The danger of purchasing from unregistered person in GST

Hello friends, I read a article of CA Umesh sharma somewhere I really like the way in which he explain the whole reverse charge mechanism in case of purchase of goods from unregistered dealers. I thought it is good to share this article of Mr. Sharma because the  ultimate purpose of my blog is to enhance the knowledge of my bloc viewers. here is the article of CA Umesh Sharma

Arjuna (Fictional Character): Krishna, from various peculiar provisions of GST the provision of RCM comes. According to this RCM provision what will happen if purchases are made from unregistered person?

Krishna (Fictional Character): Arjuna, The provision of reverse charge is already in service tax and the same provision is brought in GST. In service tax there are only specified persons who were required to pay tax on reverse charge basis but in GST all the persons are required to pay tax on reverse charge on purchase of goods and services.

Arjuna: Krishna, What is meant by R.C.M?

Krishna: Arjuna, R.C.M means reverse charge mechanism which means that tax on purchase of goods or services has to be paid by the recipient. In simpler terms R.C.M means paying tax of the other person. Which transaction will be covered in RCM has been specified.    

Arjuna: Krishna, What if a taxpayer purchases goods or services from an unregistered person?

Krishna: Arjuna, if a registered person purchases goods or services from an unregistered person then the registered person has to pay tax on such purchases. For Ex. If a registered person purchases Tea from an unregistered person and if such expenses are accounted in the books of account then the registered person has to pay tax on such payment. Everyday a businessman incurs various transactions with unregistered person, now because of R.C.M the registered dealers has to pay tax on such purchase. Composition Dealers are also required to pay tax on reverse charge on purchases from an unregistered person. Further the dealer have to give the details of purchases from unregistered person in the monthly return.

Arjuna: Krishna, what will be the time of supply in case purchase of goods in Reverse charge mechanism?

Krishna: Arjuna, The time of supply for purchase of goods in reverse charge mechanism will be the earlier of the following-

The date of receipt of goods or
Date on which payment is made or
The date immediately following 30 days from the date of issue of invoice
For Ex. If a taxpayer purchases stationary from an unregistered person on 25th July 2017 and he provides the bill for the same on 2nd August 2017 and if the consideration is paid on 28th August 2017, then according to the provisions of RCM the time of supply will be 25th July 2017.

Arjuna: Krishna, what will be the time of supply in case of services in Reverse charge mechanism?

Krishna: Arjuna, The time of supply for services in reverse charge mechanism will be the earlier of the following-

The date on which payment is made
The date immediately following 60 days from the date of issue of invoice
Arjuna: Krishna, whether credit of GST paid in RCM will be allowed?

Krishna: Arjuna, Every taxpayer can avail credit of tax paid on Reverse charge mechanism but he has to pay tax first then he can avail credit on such purchase in the next month. As per the provisions of GST credit cannot be availed on food and beverages, building, passenger vehicle even if tax is paid on R.C.M basis that means the burden of such tax shall be borne by the taxpayer. For Ex- If a businessman has purchased food beverages of Rs. 20,000/- from unregistered person and paid GST in RCM of Rs. 2,400 then credit shall not be available on such goods and Rs. 2400/- will be added to the cost of the businessman.

Arjuna: Krishna, what one should learn from the provisions of reverse charge mechanism of GST?

Krishna: Arjuna, because of this provision in GST the number of registered persons will increase. Purchase from an unregistered person can prove costly for any registered person. Every person has to look at his expense side of profit and loss account every month and has check if there are purchases from any unregistered person because that will attract reverse charge. Hence business has to be done very carefully, in case of any mistake interest and penalty will have to be paid on such purchase. The provisions of RCM will affect drastically on small traders, service providers like Plumber, repairs maintenance person etc.

I hope you guys find it hhelpfull. I also thanks to Mr. Sharma for such a good article.

Stay connected and follow my blog akashjaindiwan.blogspot.com for more updates.you can also mail me your queries on my mail id akashjain070@gmail.com.

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GST: A Introduction

GST: A Introduction

GST: Goods and Services Tax

Finally wait is over from 1st july 2017 GST is applicable in full fledged manner in India. I study a little about GST and want to share my knowledge. This article explains GST and its impact in a simplified manner.

What is Goods and Services Tax (GST)?

GST is a single tax that will replace all the existing indirect taxes levied in India. These taxes include Sales tax (VAT), Excise duty (CENVAT), Service tax, Octroi, Entertainment tax, Luxury tax etc.

GST is proposed to have a dual structure. It will have two components: Central GST and State GST. Central GST will replace Central excise duty, services tax and additional customs duties etc. and will be levied by the centre. State GST will replace VAT, Central State Tax, entertainment tax, luxury tax, lottery tax, electricity duty etc. and will be levied by the states.

GST will be charged on the value-added at each stage of sale/ purchase in the supply chain.

Lets just take an example for better understanding-: Assume the GST rate is 10 %. A chipsmanufacturer buys raw materials worth Rs. 10 (potatoes etc.), makes chips andsells it to a retailer at Rs 20. The value-added by the Chips manufacturer is Rs. 10 (20-10). Thus, GST payable by him is Re. 1 (10 % of 10). Similarly, if theretailer sells the chips to final consumers at Rs. 25, the value-added by him is Rs. 5 (25-20). The GST payable by the retailer is Rs. 0.5.

 There are always some exceptions. These are: petroleum product, Entertainment and amusement tax levied and collected by Panchayat/ Municipality/ district council, alcohol, stamp duty, customs duty, tax on consumption and sale of electricity.

What are the benefits of GST?

GST has been adopted by around 140 countries around the world. It’s benefits are:

1. Simplified tax practice: Currently there are multiple indirect taxes (around 15) levied by the Central and the State Government and they differ across states. GST will simplify and rationalise the tax structure of India by bringing in a regime of a single and uniform tax.

2.Increased revenues: There is no doubt about that the revenue of govt will increase in future. A simple tax regime will reduce the cost of compliance and hence increase the number of taxpayers. All the procedure's became online hence no bribes😎.

3.Reduce the cascading effect of taxation: As mentioned earlier, GST is a uniform tax levied on value-added. Levy at each stage of sale/ purchase will be set-off against taxes paid by the supplier in the previous stage. Through this set-off mechanism, GST is levied only on value-added. To illustrate: Let’s say GST is 10 %. Continuing with our earlier example, if you make a packet of chips (manufacturer) and sell it for Rs. 20, your GST should come out to be Rs 3 (10 % of Rs. 30). But, this tax is levied only on value-addition and so you’ll be allowed to claim a tax credit to the value of GST already paid by the supplier in the previous stage.

4.Improve ease of doing business: Currently, doing business across state borders is very difficult due to differences in tax procedures. GST will lead to a unified economy and allow businesses to expand its operations with ease. It will alsoimprove manufacturing in India, attract foreign investment and lead to job creation because all the foreigners find GST friedly because mostly countries already adopted GST and reduce the unnecessary compliance's. The founder of Flipkart, Sachin Bansal has described GST as a reverse brexit moment for India.

5.Boost GDP: The economists forecast that the roll-out of GST will boost GDP by 0.5%-2%. This is because of the positive impact on tax revenues and economic effects of a unified tax regime.

Disadvantages of GST:-

While it has many inherent benefits, following are the main flaws of GST as it is being implemented in Bharat -

1. Difficulties in understanding GST- very few people understand the GST Laws even professional like C.A. and advocate s finding difficulties in understanding new law and bussinessman have no idea about compliance's. It takes lots of effort to understand the law for noth professional's and businessman

2.Onus of ITC on dealers - this is going to cause a huge amount of lnconvinience.

3.ITC mismatch - very short time spans mean it's going to lead to dealers paying more tax upfront and getting into the procedural difficulties of claiming refunds.


4. Increased cost of services: The Service Tax in India is now 15% but the proposed GST is about 18-20%. so all the services will be Costlier.


Benifits for Tax Professional's:

Being a completely new tax, businesses and professionals will approach CAs to help them to be GST compliant, to file the new GST returns.

Businesses having turnover limit more than the prescribed amount (Rs. 1 crore as per Draft Rules) will have to get their accounts compulsorily audited by CAs under GST.

These will boost business of CAs and generate a greater market demand for CAs.

Other benefits-

Many CAs are publishing articles, speaking, giving seminars to educate everyone regarding GST. This brings in more newer opportunities for CAs.

GST law is very hudge and takes time to understand . In this article i just give a brief introduction and pros and cons of GST.
I My blog help you,I am coming back with an another article just stay connected and follow my blog "All about Chartered Accountant's (C.A.)".You can also contact me on my mail akashjain070@gmail.com. Cheer's!!!

New curriculum of CA

New CA Curriculum Syllabus from 2017 or 2018

New CPT, CA Final & CA IPCC Syllabus 2017, that is being revised by the ICAI has officially announced the date of its applicability. There has been some confusion among the students about the course so here I am to describe make you guys understand new curriculum.

New CA Syllabus Applicability date
As is a known fact that, the syllabus of CA Course is being drastically changed. It is hereby clarified by institute that, the new syllabus will likely come into effect only from May/June 2018 exams.Students registered under existing syllabus will likely be given 2-3 attempts chance to pass the exams, after which the new syllabus will be made applicable.Old students do not need to panic you have given sufficient time to clear your exams. New students who registers themself after 1st july 2017 will be registered in new scheme.

Here are the major highlight's of new scheme:

Changes in CA Foundation

1. Names changed from CPT to CA Foundation

2.Duration of CA Foundation to be 8 Months (In the previous draft – this was9 months)

3.The Exams would be held in the month of May and Nov

4. Students who appear in 12th had written thier CPT in june earlier but after applicability of new curriculam they are eligible for Nov attempt of Ca foundation. This not announced officially by ICAI but after discussion with CPT faculty we end upon conclusion that It is not practically possible to write exam in may for due lack of period and new vast course so sooner we surely recived clarification from institute on this issue.

4.The subjects as mentioned in the Revised New Draft are as follows:

Changes in CA Intermediate

1. Most awaited change from a longer period Cost Accounting and Financial Management to be 2 different subjects

2.Duration of Intermediate Course increased from 9 months to 12 months

3.Direct and Indirect Taxes were proposed to be 2 different subjects of 100 Marks each in the previous draft. In the revised draft, these have now been merged togethor into a Single subject

4.Information Technology and Strategic Management Reintroduced (ICAI was planning to delete these in the draft released earlier but now ICAI does not intent to delete them and these would continue to be applicable)The subjects as mentioned in the revised draft for the CA New Course are as follows:

Changes in CA Final

1.New subject introduced: Capital Markets and Financial Services. Our SFM facully is really happy to see this change.

2.Eligibility to appear for CA Final only after completion of full period of Articleship. No clarification regarding provisional final attempt to write final examination within last 6 months of articleship.

3.Major change in Information Systems Control and Audit (ISCA) which was proposed to be deleted in the previous draft has now been reintroduced in the revised draft. This would now form a part of Paper 6 and would be for 50 Marks but ICAI must reduce the sllaybus of icsa also otherwise it will become a headche to students.

I hope it helps you guys for any query you can ask me on mail i will definitely reply as soon as possible my mail Id is- akashjain070@gmail.com
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Benifits of being a CA

Being a CA is the biggest benefit.

But there are other benefits too, which a CA has or receives.

Your opinion gets a voice and is respectedeven by the people elder than you and much more wiser than you.

The same thing said in the same way by two different persons, amongst which one is a CA and other is not, CA’s opinion will be given more importance.

You get to sign certain forms and reports.

Most of the audits and accounting forms which are compulsory by law can only be signed by a CA.

No one else can do it. It is an advantage, since you can charge a good amount for that because no one else can do it.

You are in the rare community.

Out of 125 crore+ people in India, there will be hardly 3–4 lakh CAs. You will feel like you are special.

Indeed, you are. Not even everyone who started CA becomes a CA. So, you are a rare minority because of the intelligence you possess.

Along with CA, if you have any other particular skill, you are the most wanted CA.

Never go jobless.

Have you ever heard a CA who is jobless? No. Because there is always demand for CAs.

In fact, there is a great demand for a CA who has a deep knowledge in certain financial areas such as M&A, Portfolio Management, Private Equity Management, Wealth Management.

You know the laws.

A CA has a good knowledge of all general public laws which a normal citizen of India should have.

Knowledge of all general laws can help you in running business or getting a better job or just advising.

From company law to competition law to accounting law to taxation law. A CA knows it all.

Globally recognized Profession

Institute of Chartered Accountants of India aka ICAI has tie ups with most of the nation’s similar institutes.

So, if you are a CA from India, you have to just give one or two exams in that country and you will be a CA or equivalent of CA in that country.

For example, a CA from India has to give to give one or two papers to become a CA in Australia. (US and Canada MOU have expired)

What else do you want?

If somebody has this much available at their disposal, no one can stop him or her from being successful and achieving the dreams.

Interesting facts about CA

1. There is no place for reservation in CA course unlike other courses.
2. 40 could be a pass and 59 can be a fail.
3. Articleship is an adventure.
4. We know the shortcuts in calculator.
5. One of the toughest course.
6. You feel so respected while doing an audit at a young age (articleship period.)
7. We use an opposite tick.
8. We understand the real meaning of “after May there is November.”
9. There is no college for CA.
10. CA is not just a degree its a feeling.