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๐—š๐—ฆ๐—ง ๐—–๐—ผ๐˜‚๐—ป๐—ฐ๐—ถ๐—น'๐˜€ ๐—Ÿ๐—ฎ๐˜๐—ฒ๐˜€๐˜: Whether someone Exports, Drive Used Cars or Snack on Popcorn โ€“ Here's What's Changing!

Date 22 Feb 2025
Written By
Tax Updates: Merchant Exporters' Rate Cut to 0.1%, Used Vehicle GST at 18%, Popcorn Rates Vary by Type
Recent tax updates include a reduction in tax rates for merchant exporters to 0.1%, aligning with IGST, CGST, and SGST, simplifying compliance. The GST on used vehicles, including electric vehicles, has increased to 18%, applied only to the margin between purchase and sale prices. Popcorn is taxed at varying rates: 5% for salty/spicy, 12% for other types, and 18% for sweetened versions. Retrospective changes clarify that goods stored in specific warehouses are treated as exports, benefiting cross-border traders. Vouchers are now considered transactions in money, resolving previous disputes. Platforms like certain e-commerce sites benefit from no proportional GST reversal for seller payments. - (AI Summary)

1๏ธโƒฃ ๐—ฅ๐—ฒ๐—ฑ๐˜‚๐—ฐ๐—ฒ๐—ฑ ๐—–๐—ผ๐—บ๐—ฝ๐—ฒ๐—ป๐˜€๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—–๐—ฒ๐˜€๐˜€ ๐—ฅ๐—ฎ๐˜๐—ฒ ๐—ณ๐—ผ๐—ฟ ๐— ๐—ฒ๐—ฟ๐—ฐ๐—ต๐—ฎ๐—ป๐˜ ๐—˜๐˜…๐—ฝ๐—ผ๐—ฟ๐˜๐—ฒ๐—ฟ๐˜€

A much-awaited move: ๐—–๐—ผ๐—บ๐—ฝ๐—ฒ๐—ป๐˜€๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—–๐—ฒ๐˜€๐˜€ ๐—ฟ๐—ฎ๐˜๐—ฒ ๐—ฟ๐—ฒ๐—ฑ๐˜‚๐—ฐ๐—ฒ๐—ฑ ๐˜๐—ผ 0.1% for sales to merchant exporters (traders who buy locally and export).

This aligns with IGST, CGST, and SGST rates, simplifying compliance for exporters.

2๏ธโƒฃ ๐—š๐—ฆ๐—ง ๐—ผ๐—ป ๐—จ๐˜€๐—ฒ๐—ฑ ๐—–๐—ฎ๐—ฟ๐˜€ ๐Ÿš—

GST increased to 18% for old and used vehicles, including EVs, up from the earlier 12% for most vehicles.

๐—ž๐—ฒ๐˜† ๐—ฑ๐—ฒ๐˜๐—ฎ๐—ถ๐—น: GST applies only to the ๐—บ๐—ฎ๐—ฟ๐—ด๐—ถ๐—ป (difference between purchase and selling price), ensuring fairness.

๐—œ๐—บ๐—ฝ๐—ฎ๐—ฐ๐˜: Buyers from GST-registered sellers like ๐—ฆ๐—ฝ๐—ถ๐—ป๐—ป๐˜† may feel the pinch, but no GST applies to sales by unregistered individuals.

3๏ธโƒฃ ๐—ฃ๐—ผ๐—ฝ๐—ฐ๐—ผ๐—ฟ๐—ป ๐—–๐—น๐—ฎ๐˜€๐˜€๐—ถ๐—ณ๐—ถ๐—ฐ๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—–๐—น๐—ฎ๐—ฟ๐—ถ๐—ณ๐—ถ๐—ฒ๐—ฑ ๐Ÿฟ

Salty/spicy popcorn: 5% ๐—š๐—ฆ๐—ง (๐—ป๐—ผ๐—ป-๐—ฝ๐—ฎ๐—ฐ๐—ธ๐—ฎ๐—ด๐—ฒ๐—ฑ), 12% ๐—š๐—ฆ๐—ง (๐—ฝ๐—ฎ๐—ฐ๐—ธ๐—ฎ๐—ด๐—ฒ๐—ฑ) under ๐—–๐—ง๐—› 2106 9099.

Sweetened versions (e.g., caramel popcorn): 18% ๐—š๐—ฆ๐—ง under ๐—–๐—ง๐—› 1704 9090.

๐—–๐—ผ๐—ป๐˜๐—ฟ๐—ผ๐˜ƒ๐—ฒ๐—ฟ๐˜€๐˜† ๐—”๐—น๐—ฒ๐—ฟ๐˜: Neither classification aligns with ๐—–๐˜‚๐˜€๐˜๐—ผ๐—บ๐˜€ ๐—ง๐—ฎ๐—ฟ๐—ถ๐—ณ๐—ณ ๐—ฝ๐—ฟ๐—ถ๐—ป๐—ฐ๐—ถ๐—ฝ๐—น๐—ฒ๐˜€, where sweet and spicy popcorn might better fit ๐—–๐—ง๐—› 1904 1090.

4๏ธโƒฃ ๐—™๐—ง๐—ช๐—ญ ๐—ง๐—ฟ๐—ฎ๐—ป๐˜€๐—ฎ๐—ฐ๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐—ฆ๐—ถ๐—บ๐—ฝ๐—น๐—ถ๐—ณ๐—ถ๐—ฒ๐—ฑ

Retrospective clarification (effective ๐—๐˜‚๐—น๐˜† 1, 2017):
Sales of goods stored in ๐—™๐—ฟ๐—ฒ๐—ฒ ๐—ง๐—ฟ๐—ฎ๐—ฑ๐—ฒ ๐—ช๐—ฎ๐—ฟ๐—ฒ๐—ต๐—ผ๐˜‚๐˜€๐—ถ๐—ป๐—ด ๐—ญ๐—ผ๐—ป๐—ฒ๐˜€ (๐—™๐—ง๐—ช๐—ญ) will ๐—ป๐—ฒ๐—ถ๐˜๐—ต๐—ฒ๐—ฟ ๐—ฏ๐—ฒ ๐˜๐—ฟ๐—ฒ๐—ฎ๐˜๐—ฒ๐—ฑ ๐—ฎ๐˜€ ๐—ฎ ๐˜€๐˜‚๐—ฝ๐—ฝ๐—น๐˜† ๐—ผ๐—ณ ๐—ด๐—ผ๐—ผ๐—ฑ๐˜€ ๐—ป๐—ผ๐—ฟ ๐˜€๐—ฒ๐—ฟ๐˜ƒ๐—ถ๐—ฐ๐—ฒ๐˜€.

This change relieves cross-border traders, extending benefits similar to those for ๐—–๐˜‚๐˜€๐˜๐—ผ๐—บ๐˜€-๐—•๐—ผ๐—ป๐—ฑ๐—ฒ๐—ฑ ๐—ช๐—ฎ๐—ฟ๐—ฒ๐—ต๐—ผ๐˜‚๐˜€๐—ฒ๐˜€ (๐—–๐—•๐—ช).

5๏ธโƒฃ ๐—ฉ๐—ผ๐˜‚๐—ฐ๐—ต๐—ฒ๐—ฟ ๐—ง๐—ฎ๐˜…๐—ฎ๐˜๐—ถ๐—ผ๐—ป ๐—ฆ๐—ถ๐—บ๐—ฝ๐—น๐—ถ๐—ณ๐—ถ๐—ฒ๐—ฑ ๐ŸŽŸ๏ธ

Vouchers will now ๐—ป๐—ฒ๐—ถ๐˜๐—ต๐—ฒ๐—ฟ ๐—ฏ๐—ฒ ๐˜๐—ฟ๐—ฒ๐—ฎ๐˜๐—ฒ๐—ฑ ๐—ฎ๐˜€ ๐—ฎ ๐˜€๐˜‚๐—ฝ๐—ฝ๐—น๐˜† ๐—ผ๐—ณ ๐—ด๐—ผ๐—ผ๐—ฑ๐˜€ ๐—ป๐—ผ๐—ฟ ๐˜€๐—ฒ๐—ฟ๐˜ƒ๐—ถ๐—ฐ๐—ฒ๐˜€, akin to "transactions in money" under the earlier service tax regime.

While this change seeks to resolve disputes, the final outcome depends on the specifics in the ๐—–๐—š๐—ฆ๐—ง ๐—”๐—ฐ๐˜ ๐—ฎ๐—บ๐—ฒ๐—ป๐—ฑ๐—บ๐—ฒ๐—ป๐˜๐˜€.

6๏ธโƒฃ ๐—œ๐—ง๐—– ๐—ฅ๐—ฒ๐—น๐—ถ๐—ฒ๐—ณ ๐—ณ๐—ผ๐—ฟ ๐—˜-๐—–๐—ผ๐—บ๐—บ๐—ฒ๐—ฟ๐—ฐ๐—ฒ ๐—ข๐—ฝ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ผ๐—ฟ๐˜€

A win for platforms like ๐—จ๐—ฏ๐—ฒ๐—ฟ and ๐—จ๐—ฟ๐—ฏ๐—ฎ๐—ป ๐—–๐—ผ๐—บ๐—ฝ๐—ฎ๐—ป๐˜†:
No proportional reversal of ๐—œ๐—ป๐—ฝ๐˜‚๐˜ ๐—ง๐—ฎ๐˜… ๐—–๐—ฟ๐—ฒ๐—ฑ๐—ถ๐˜ (๐—œ๐—ง๐—–) for payments made on behalf of sellers under section 9(5).

Thatโ€™s all from the GST Council for now!
While these updates promise to untangle the GST web (finally!), ๐—ฑ๐—ผ ๐˜†๐—ผ๐˜‚ ๐˜๐—ต๐—ถ๐—ป๐—ธ ๐˜๐—ต๐—ฒ๐˜†โ€™๐—น๐—น ๐—บ๐—ฎ๐—ธ๐—ฒ ๐—ฎ ๐—ฑ๐—ถ๐—ณ๐—ณ๐—ฒ๐—ฟ๐—ฒ๐—ป๐—ฐ๐—ฒโ€”๐—ผ๐—ฟ ๐—ถ๐˜€ ๐—ถ๐˜ ๐—ท๐˜‚๐˜€๐˜ ๐—ฏ๐˜‚๐˜€๐—ถ๐—ป๐—ฒ๐˜€๐˜€ ๐—ฎ๐˜€ ๐˜‚๐˜€๐˜‚๐—ฎ๐—น?

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