May 9, 2024

Whether Implementation of GST is Boon or Bane to the economy

Goods & Service Tax / /

The goods and services tax (GST) was created to unify indirect tax applicable on most products and services in India. It was introduced as a replacement to several other taxes that were present in the country. GST was a measure to reduce the discrepancies and loopholes that existed with all the previous taxes. The Goods and Services Tax (GST) is the most-talked about upcoming comprehensive indirect tax in our country subsuming the major indirect taxes like Customs duty, Excise duty, Service tax and Value Added Tax (VAT). Based on recent newspaper reports, one would realize that it has become so controversial that the opposition political parties are not supporting the same despite several attempts by the government in power. This non-cooperation explains the delay in passing the bill. One hopes that the bill gets nod of the parliament in the foreseeable future and becomes an Act and will become effective from the next fiscal. In my view, GST is simply the streamlining of various indirect taxes in order to avoid the effect of cascading so that the final cost to customer will go down. What is GST? GST is the common indirect tax applicable on most products and services we consume or use in our daily life. It is applied to the supply of goods and services.  GST was first introduced by the Indian government in 2017. To understand the impact of GST and to determine whether the policy change has been good or bad, it is essential to understand how things functioned before and after its implementation.  GST was first introduced in France in 1954. And there are currently almost 160 countries that have GSTs (with slight variations in their nature, scope, and applicability). Most of the countries with GST systems are well-developed/fast developing countries. Only Canada has a Dual GST system which has paved the way for Dual GST (CGST & SGST) in our country. Being a technology-based and transparent tax structure, it will clarify things to be applied with equal value across the country. In the initial stage, the idea of ​​5 different tax tables will facilitate the classification of goods and services. Indirect tax issues will be resolved within a limited timeframe. Generating more revenue will enable the government for more development work in all sectors of the country. Before GST Before the GST, we had VAT or ‘value added tax’, service tax, excise duty tax etc. VAT was introduced in 2005 by the Indian government with a similar intention to unify the Indian tax system. VAT is also a form of indirect tax. It was calculated on the basis of the value the product adds to the supply chain. It also considers the product’s price and takes in account previous tax added to the product. VAT was not uniform across the country and varied from state to state, defeating its purpose. Every state had its own municipality, making it even more cumbersome to calculate taxes and even resulting in higher tax rates. There was also no reliable source to claim tax credits on services. One had to jump through hoops to get a simple thing done. Hence a uniform tax reform was introduced again, this time in the form of ‘GOODS AND SERVICE TAX’ also known as GST in the year 2017. Working of GST GST was brought into motion to: achieve the ‘one nation, one tax’ goal  eliminate the avalanche of taxes and procedures  promote online procedures for tax payments and smoothen the workings of municipalities overall reduce tax evasion increase competitive prices and increase consumption  Benefits of GST implementation The emergence of GST has completely replaced various indirect taxes at both the central and state levels (eg excise duty, service tax, value added tax, sales tax, luxury tax, entertainment tax, excise, and entry tax and many others). The whole nation became a common market for trading. Poor and underdeveloped states were given a chance for economic growth. The huge growth in foreign direct investment. Tax management has become simpler, more transparent, and simpler. Reducing tax evasion and corruption Completely removed the concept of cascading effects Various tax rates (i.e. 0%, 5%, 12%, 18% and 28%) have been introduced for the convenience of manufacturers/service providers as well as consumers. He completely and successfully eliminated various tax barriers between the center and the state. A great increase in government revenue. The number of taxpayers has increased significantly. Positioned in the global ranking of “Ease of Doing Business”, India is becoming known as a perfect, profitable, and new destination for foreign investors. Composition of GST GST is made up of three components: the CGST, SGST and IGST. There are parts of GST that are levied upon transactions between states. The CGST is the tax collected by the central government on sales within the state. The SGST is the tax collectable by the state government on sales within the state. The  IGST is the tax collectable by the central government on sales outside the state, and transactions between states.  For example, if we were to purchase an electric motor vehicle within the same state, the tax applicable would only be 5 % (CGST & SGST) whereas if any goods from Kerala are sold to the state of Andhra Pradesh only a certain percentage of IGST is applicable (around 18% for goods). Henceforth, the GST mode of tax payment and collections made a significant impact on products, reducing the amount of resources spent on the previous tax collections as well, making the procedure much more user friendly and also bringing about some degree of uniformity in the indirect tax department of India.  The taxes that have redirected or reduced into the GST taxes are : Central Excise Duty Duties of Excise Additional Duties of Excise Additional Duties of Customs Special Additional Duty of Customs Cess State VAT Central Sales Tax Purchase Tax Luxury Tax Entertainment Tax Entry Tax Taxes on advertisements Taxes on lotteries, betting, and gambling Boon of GST Implementation It’s nearly impossible to collect all indirect

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The Significance of Shipping Bills in International Trade

learn / /

In export trade, international shipping and delivery is an important step – making sure products reach the importer or end-customer without any damage is key to a successful export business. In this process, a shipping bill is an essential document issued by the Customs Service Centre. This bill allows an exporter to get customs clearance and initiate shipping. While sending products from one country to another, an exporter has to go through various formalities like submitting a few applications, acquiring licenses, paying duties, etc. To obtain clearance from customs, an exporter has to apply for a shipping bill to avoid any challenges while shipping. All products can only be exported out of the country if the shipping bill has been checked by the customs with ‘Let Export Order’ and ‘Let Ship Order’. What is a shipping bill? An exporter, while sending goods from one country to another has to go through various formalities including submitting various applications, acquiring licenses, paying duties and so on. To acquire a clearance for export, from the Customs, an exporter will have to submit an application called the ‘shipping bill’. One cannot load the goods unless the exporter files the shipping bill. The export may be by air, vehicle, or vessel. The goods can only be taken on board if the goods are accompanied by certain documents as described below: At seaport/ airport Shipping bill At land customs station Bill of export For goods transhipment Bill of transhipment. A shipping bill is to be submitted electronically. However, the Principal Commissioner or the Commissioner may grant an exemption and accept a physical application, where an electronic submission is not feasible. A shipping bill has various forms which are differentiated by colour. The colour schemes denote the following: Sr. No. Form Name Colour 1. Dutiable Goods Yellow 2. Duty-free goods White 3. Goods with drawback claims Green 4. Goods allowed to be exported as duty-free ex-bond Pink 5. Export goods under DEPB Scheme Blue A shipping bill is an important document that an exporter needs to obtain from the customs department before getting his products ready to ship from India. While shipping products from one country to another, an exporter is required to follow a certain export procedure, obtain documents and get clearance from customs. After receiving a shipping bill, the customs authority conducts inspection, post which, it issues an Let Export Order – the final legal procedure required to move goods out of India. This process is completed by the Indian Customs Department by finding out the net value of the goods to be exported) on the shipping bill which is signed and sealed by customs officers2. What does the shipping bill include? A shipping bill usually includes:• Details of exporter, buyer or importer and customs agent• Name of the vessel• Transportation and port of loading and discharge details• Cargo details (gross and net weight, nature)• Invoice details (number of commercial invoices, nature of payment, invoice value in both currencies)• GST and export duty-related information• FOB (Freight on Board) price and insurance amount of items• Container numbers• Duty Drawback details• Nature of goods exported• Country of destination and the port at which goods are to be discharged• Exporter’s address• Importer’s address• Details of packages such as numbers and marks Types of shipping bills in export Dutiable shipping bill- Payment of export duty on goods to be exported and here ‘dutiable shipping bill’ is to be filed. Ex-bond shipping bill- Goods that are imported and stored in the bonded warehouse which are to be re-exported have to be filed under ex-bond shipping bill. Coastal shipping bill- When goods are required to be shipped and they are needed to be moved from one port to another port, coastal shipping bill needs to be filed. Drawback shipping bill- Drawback shipping bill is to be filed for goods which are for refund purposes. Understanding the Shipping Bill Process in Export Transactions Vessel/Ship Entry Outwards: Before filing the shipping bill, the specific vessel, ship, or transportation mode intended for export must be granted an “entry outwards” permission. This permission allows the vessel to move out of the country. Submitting the Shipping Bill: The exporter can file the shipping bill once the vessel has been granted entry outwards. The shipping bill contains all the details about the exported goods and the intended destination. Physical Verification and Assessment: After submitting the shipping bill, customs authorities physically verify the goods and assess their value to ensure compliance with export regulations. Endorsement and Clearance: Upon successful verification and assessment, the customs authorities endorse the shipping bill with a ‘LET EXPORT ORDER’ and a ‘LET SHIP ORDER.’ These endorsements indicate that the goods are cleared for export and can be loaded onto the designated vessel or transportation mode. Documents Required for shipping bill In India, the shipping bill is obtained through Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange (EC/EDI) Gateway, known as ICEGATE. To obtain the shipping bill, exporters need to provide the following documents: Forms for Shipment: Required for exports to all countries. Packing List: Contains details of each package’s content, quantity, gross and net weight. Export License: Authorization for exporting specific goods. Indent: A formal order for goods placed with suppliers. Acceptance of Contract: Document confirming acceptance of export contract terms. Invoices: Contain comprehensive information such as package number, quantity, price, and accurate goods specifications. Purchase Order: Placed by the buyer, specifying the purchase details. Letter of Credit: A financial document guaranteeing payment to the exporter. Examination or QC Certificate: Ensures the quality of the goods. Port Trust Document: Relevant for shipment from port trust authorities. The Process of Shipping Bill Generation 1. Registration with EDI SystemBefore initiating the Shipping Bill filing process, exporters or Customs House Agents (CHA) must register with the Electronic Data Interchange (EDI) system using their Importer Exporter Code (IEC) code, Authorized Dealer (AD) code, and/or CHA license number. 2. Submission of Shipping BillUnder the Electronic Data Interchange (EDI) system, the Shipping Bill is meticulously filled out in the prescribed format

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How do I know if I have an Income Tax Notice

Income Tax / /

Receiving an intimation or a notice from the income tax department usually makes anyone worried. But, every time you get an intimation from the income tax department, it does not mean that you need to worry about it. Intimation serves to signify the result of processing your return or the conclusion of the assessment, and in many cases, it may not necessitate immediate action on your part (though exceptions do exist). On the other hand, receiving a notice demands your attention and requires action. It serves as a directive or communication necessitating a response or action from you. The Income Tax Department issues an income tax notice for a number of reasons under a number of provisions. This year, the income tax department has sent more than 22000 notices for multiple reasons such as filing errors, mismatched income, underreporting, etc. The income tax notice is issued by the tax department under sections 143(1), 142(1), 139(1), 143(2), u/s 156, Section 245, and Section 148. Types of Income Tax Notice Section 143(1) Intimation of the return When an ITR is filed, the Income Tax Department processes it electronically and notifies the assesses in three instances: Tax liability to be paid; Refund to be determined; There is no demand or return, but the amount of loss may increase or decrease. What to do if you receive a notice u/s 143(1) If there is no difference in the returns, no action is necessary. If a refund is required, it will be transferred to the specified bank account when the return is processed. Request a new refund if necessary. Tax debt must be settled within 30 days if it exists. Section 139(9) Defective Income Tax Return The department will issue a notice under Section 139(9) to ratify the error if it discovers any defects, inaccuracies, or missing information in the return filed. What to do if you receive a notice u/s 139(9) If your return is determined to be defective, under 15 days of receiving the notice, you must update your return to fix the issues the Income Tax Department has identified. If you cannot make the necessary changes to your ITR within 15 days, you can ask for an extension by writing to your local AO. Section 142(1) Inquiry Notice before Assessment When a return is filed and during the assessment period, the assessing officer is of the opinion that additional details and documents should be requested. The assessing officer may then do so, and the assesse is required to provide it. What to do if you receive a notice u/s 142(1) The assessee must provide the necessary documents under inquiry as soon as they receive the notice from the IT department. The taxpayer is given a justifiable chance to respond to any material that has been requested. Section 143(2) Scrutiny Notice In the event that the AO believes that there is a need to conduct scrutiny after receiving the document in accordance with the notification sent under section 142 (1), the AO may issue the notice under section 143. (2). The AO seeks to ensure that the assessors have not committed any of the following offences: Understated their income; Claimed excessive loss; Paid lesser taxes. What to do if you receive a notice u/s 143(2) Provide supporting documentation for your claims, such as records of your income and expenses, together with your online response to the notice issued under Section 143(2). The AO will issue an assessment order after reviewing all the evidence, stating the total amount of tax due or refund due to the assessee based on the supplied proof. Section 156 Notice of Demand The AO must give the assesses a notice of demand that includes the amount payable when any interest, tax, penalty, fine, or other sum is due in relation to a decision that has been made. What to do if you receive a notice u/s 156 This notification outlines the payment amount that will be due in the event that the assessing officer issues a demand for tax, interest, a penalty, a fine, or any other amount in according to the 1961 Income Tax Act. Within 30 days after receiving the notification, the assessee must pay the amount stipulated in the notice. Section 245 Notice of Intimation The term “inter-adjusted” refers to transactions in which the assesses must claim a refund after paying an amount to the government. It’s an intimation to the assesses. What to do if you receive a notice u/s 245 Check all the information in the Intimation u/s 245 as soon as you receive it, along with the deadline (usually 30 days), because if you don’t act, the outstanding demand as of that date will be taken into account for adjustment against your return. What are the Reasons for Receiving a Notice? If you fail to file your Income Tax Return by the due date If there are any discrepancies in the income reported by you and your employers, banks, etc. In case of errors, omissions, or inconsistencies in your income tax return, such as missing income sources, deductions, or credits. If the Income Tax Department suspects any underreporting of income to evade taxes. If you fail to pay the full amount of taxes owed based on your income and deductions. If there are any discrepancies in the TDS or TCS details reported by you and the details available with the tax department. If you have done any high-value financial transactions, like large cash deposits, property purchases, or foreign remittances, which are subject to scrutiny. If the tax department decides to assess or reassess your income under Section 143(2) or Section 148. What to do After Receiving a Notice? Read it carefully to determine the reason why it was sent. Check if it has the correct name, PAN number, and address to ensure that the notice has been sent to you. Determine if there is any mismatch in the income tax return, which has resulted in a notice. Respond to the notice within the specified time. Don’t forget to provide adequate information

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Registration with coir board

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The Coir Industry Act 1953 established the Coir Board, a statutory organization under the Government of India, to foster and grow the coir (coconut fiber) sector in India. Operating under the Ministry of Micro, Small, and Medium Enterprises, it has its headquarters in Kochi and Alappuzha. The board aims to support the coir industry, an agro-based rural sector that employs over 700,000 people, most of whom are from economically disadvantaged social groups and rural areas. The coir industry is promoted, researched, educated, and trained in. In every region of India where there is a sizable industry presence, The Coir Board maintains regional offices. The objective is to foster the expansion and advancement of the coir sector by offering assistance to coir producers as a means of subsistence. The board has actively participated in and is in favor of the International Year of Natural Fibers. The Coir Board is in charge of 48 facilities spread across India that are dedicated to promoting the export of coir and coir products. In 2018–19, this export-oriented sector brought in over Rs. 2192 crores in foreign cash for the nation.  Indian coir industry history It is believed that coconut was first introduced during the post-Vedic period. Various products made of coconut fibre (e.g., ropes) have been in use since ancient times. The fibre earned the name of ‘golden fibre’ and captured markets in Europe and other areas in no time. However, it was only in 1859 when the history of coir industry in India began, when the first factory for the production of coir products was set up in Alleppey/Alappuzha.   History of Coir industry in Kerala Coconut is one of the primary trees grown in the state of Kerala and Alappuzha is the centre of the coir industry in Kerala. The sector is regarded as the largest cottage industry in the state, with both men and women are engaged in the production of coir, though women make up the majority. The strategic location and waterways transportation system, that is, the backwaters available in Alappuzha saw the emergence of coir industrial units. The availability of raw material and labour, encouraged Mr. James Darragh to set up the first coir factory in India. Gradually, more units emerged in other cities of Kerala such as Kollam, Kozhikode, and Kochi. The potential of coir fibre not only encouraged other European companies to set up coir units, but Indian firms and local entrepreneurs also wasted no time to leverage the opportunity. The demand for coir products was triggered by many factors, one being the need for an economical and readily available insulate in European homes. The demand for coir as a suitable insulate resulted in the growth of the coir industry in Alappuzha and other cities in Kerala. The coir industry in Alappuzha bloomed, and by 1967 there were over 1400 coir units in the city. Other cities, namely Karnataka, Tamil Nadu and Andhra Pradesh were also witnessing setup of new coir units. The coir industry in Alappuzha bloomed, and by 1967 there were over 1400 coir units in the city. Other cities, namely Karnataka, Tamil Nadu and Andhra Pradesh were also witnessing setup of new coir units. Coir Industry in India – Exports and Products The coir industry in India is export driven. Coir pith is the largest exported coir product from India. USA, China, Netherlands, Spain, Australia are some of the top countries where coir is exported to. In 2020-21, coir tufted mats were exported to over 77 countries with 80% of the products being exported to the USA, the UK, Germany, Italy and Netherlands. 96% of the import of coir fibre is by China. Other popular products include: Coir tiles, ropes, baskets, plates, cushions, handbags, matting for cricket pitches or roof surface cooling, fibre discs, pith, plant climbers, doormats, geo-textiles, etc. Government initiatives for Coir Industry development The Coir Board is the statutory body set up for the promotion and development of the coir industry. To support the growth of the sector, there are several schemes introduced by the government. The popular ones include: Coir Industry Technology Upgradation Scheme (CITUS) A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) Scheme of Fund for Rejuvenation of Traditional Industries (SFURTI) Coir industry in Tamil Nadu The state of Tamil Nadu is also known for its coir production. When it comes to brown fibre, Tamil Nadu is the largest producer. There are several coir societies set up and schemes initiated to drive employment and increase the use of husk. Today, under the Department of Industries and Commerce, there are 64 societies operating to support the coir sector. Of that, there are 4 marketing societies at the regional level to market coir products. There are over 11,000+ members with a share capital of over ₹279.5 lakhs. There’s also a gradual shift of coir units from Kerala to Tamil Nadu, and the coir industry in Polacchi, Salem, Trichy is thriving. This is because there’s access to cheaper raw materials, and business friendly socio-political and industrial environment. There are also several ports in the state that facilitates exports (shipping) and hence reduces logistics and transportation costs. Role and Function of the Coir Board The main functions of the Coir Board in India are: Providing guidance and advice on all matters concerning the growth and development of the coir industry in India Ensuring that all manufacturers of coir products and those of husks, coir fibre and yarn are adequately and fairly remunerated Enabling the seamless establishment of coir factories and production units Facilitating marketing activities for coir fibre, yarn and other related products, and coconut husk in domestic and global markets, and promote export of coir products (Also read: How to design marketing strategies for business growth) Following regulatory and compliance requirements by registering coir spindles and looms for manufacturing, licencing exports, and other coir manufacturers Conducting timely inspection of coir produce to fix grade standards Supporting R&D in the field and supporting institutions carrying it out Collecting and publishing data and statistics from

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Building and Other Construction Workers Act, 1996 [BOCW (RE&CS) Act, 1996]

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The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act or BOCW Act came into force in 1996 to keep vigilance over the working conditions of construction workers. The two primary purposes of this Act are to regulate the employment and service conditions of these workers and provide them with welfare measures. Read on to know how this Act affects business owners and workers.To address the hardships of unskilled workers, the Indian government passed the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, commonly known as the BOCW Act. This legislation aims to monitor and improve the working conditions of construction workers. To resolve the issues of unskilled laborers who work in intensive pitiful conditions, government of India has introduced the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996; the Act is also called “BOCW Act”. The purpose of this Act is to keep an eye on the working conditions of the workers. It acts as a social welfare scheme that works with the motive to provide benefits to the workers who are involved in the activities related to building and construction across the country. The preamble of the BOCW Act explains the following: “An act to regulate the employment and conditions of service of building and other construction workers and to provide for their safety, health and welfare measures and for other matters connected therewith or incidental thereto.” The zone of BOCW Act is extensive, its aspects cover framework of other labour law legislations but specifically talking it coordinates a lot with the Factories Act, 1948. What is the BOCW Act in India? The Building and Other Construction Workers (BOCW) Act is a set of regulations that protect construction workers’ interests, providing them with better working conditions and social security benefits.   Before 1995, India did not have specific laws to protect construction workers when it came to their working conditions and safety. In 1996, the BOCW Act came into force to address the vulnerabilities and challenges faced by the construction workforce in India.   BOCW Act: Full form- BOCW is an acronym for the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996. It is a social welfare legislation enacted by the Central government to regulate construction workers’ employment and working conditions. Purpose of forming BOCW Registration: The Act mandates that all establishments engaged in construction activities employing ten or more workers must register with the appropriate state authorities Welfare measures: The Act lays down provisions for the welfare of construction workers, including health and safety measures, adequate sanitation facilities, and drinking water, as well as provisions for welfare funds  Appointment of Welfare Boards: State governments are required to establish Welfare Boards to oversee the act’s implementation and provide various welfare schemes and benefits to registered workers  Social security schemes: The BOCW Act provides for various social security schemes, such as health insurance, disability benefits, and pension, aimed at providing financial assistance and support to registered construction workers and their families  Here is a table with a list of the important sections of the BOCW Act.  Section     Key takeaways  1-2  Preliminary   The act applies to an establishment that employs ten or more workers to undertake construction work. A building worker is a person who is involved in technical, manual labour, or clerical work. Exceptions to this act are people in administrative and managerial positions.   3-5  The advisory committees and expert committees  The Union government forms central building and advisory committee. The committee includes a chairman, centre-appointed Lok Sabha MPs, and other nominated members.  The State government constitutes the state building and advisory committee. The committee has a chairman, appointed MLAs, and nominated members.  6-10   Registration of establishments   When an establishment enters the purview of this act, it must apply with the Registering officer within 60 days.   Upon successful verification of information, the Registering officer issues a Registration Certificate.   The Registration Certificate can be revoked if the organisation is not compliant with the rules.   11-17  Registration of building workers as beneficiaries  Any construction worker aged 18-60 years can be registered as a beneficiary on completion of 90 days of work.   The employers must maintain a register of workers.   The worker can also authorise the employer to deduct and file the pension contribution from their wages.   Suppose a building worker cannot contribute to the fund for one year. Their membership can be withdrawn. However, the worker can appeal, and if the reason is found satisfactory, the Welfare Board can reconsider the withdrawal.  18-27   Building and other construction workers welfare boards  The board needs to help any building worker who is a beneficiary of the Act with monetary assistance when required.  28-37  Hours of work, welfare measures and other conditions of service of building workers  It defines the working hours (9 hours a day, 6 days, 1 day rest in a week) Provides guidelines for drinking water stations and lavatory provisions. An employer needs to provide first aid provisions.    38-41  Safety and health measures  A safety officer must be present if 500 or more building workers are on a site.   Any mishaps, death, or incident where the worker is injured and unable to report to work for 48 hours must be intimated to the authorities.  42-43  Inspecting staff  The appointment of Director-General, Chief Inspector, and Inspectors.  44-46  Special provisions  The employer needs to notify the Inspector 30 days before the commencement of work.  47-55  Penalties and procedure  If any safety measure is not followed, maximum 3-month jail or Rs 2,000 fine can be imposed. If the infringement continues, a penalty of Rs 100 per day will ensue.  56-64  Miscellaneous  This section discusses the powers of the Union Government to give directions to the State authorities.  BOCW Act: Benefits Social security: The BOCW Act establishes welfare boards in each state. The states implement various social security schemes for registered construction workers. These schemes include health insurance, disability benefits, pension, maternity benefits, and educational

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