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]]>1. Save Big on Daily Essentials
| ITEM | Rate |
| Items like shampoo, toothpaste, and soap. | 18% to 5% |
| Butter, ghee, cheese, and dry snacks. | 12% to 5% |
| Processed namkeens, Bhujia, and mixtures. | 12% to 5% |
| Utensils. | 12% to 5% |
| Feeding bottles, napkins for babies, and baby carriers. | 12% to 5% |
| Sewing machines and parts. | 12% to 5% |
2. Affordable Education
| Maps, charts, and globes. | 12% to nil |
| Pencils, sharpeners, crayons, and pastels. | 12% to nil |
| Exercise books and notebooks. | 12% to nil |
| Erasers. | 12% to nil |
3. Relief in Healthcare Sector
| Individual health and life insurance | 18% to 5% |
| Thermometers. | 18% to 5% |
| Medical grade oxygen. | 18% to 5% |
| All diagnostic kits and reagents | 12% to 5% |
| Glucometers and test strips. | 12% to 5% |
| Corrective spectacles | 12% to 5% |
4. Save on Electronic Appliances
| Air Conditioners | 28% to 18% |
| Television (above 32″ including ultra LCD TVs). | 28% to 18% |
| Monitors and projectors. | 28% to 18% |
| Dish washing machines. | 28% to 18% |
5. Automobiles made affordable
| Petrol and petrol hybrid, LPG, and CNG cars (not exceeding 1200cc and 4000mm). | 28% to 18% |
| Diesel and diesel hybrid cars (not exceeding 1500cc and 4000mm). | 28% to 18% |
| Two-wheeler vehicles. | 28% to 18% |
| Motorcycles (350cc and below). | 28% to 18% |
| Motor vehicles for transport of goods. | 28% to 18% |
6. Uplifting Farmers & Agriculture
| Tractors, tractor tires, and parts. | 18% to 5% |
| Specified bio-pesticides, micro-nutrients, and drip irrigation systems. | 12% to 5% |
| Agricultural, horticultural, or forestry machines for soil preparation, cultivation, harvesting, and threshing. | 12% to 5% |
Registration: Automatic registration within three working days for applicants. It will be simplified for ease based on data analysis.
Refunds: Refunds will be sanctioned by a proper officer through a system to limit the risk of human bias. The reform also includes zero rated supplies and supplies with inverted duty structure.
Rate Rationalization: This change replaces the complex rate structure i.e., 5%, 12%, 18% & 28% slabs with primary two i.e., 5% & 18% along with a new, special 40% de-merit rate for selected luxury and sin goods such as Pan Masala, Cigars & Cigarettes, Tobacco, Revolvers, Pistols, Car exceeding 1200CC & Motorcycle exceeding 350CC.
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]]>The post Understanding Section 74 of the CGST Act 2017 appeared first on AccountsUp.
]]>Key Provisions of Section 74
1. Scope and Applicability: Section 74 applies when the tax has not been paid, short paid, erroneously refunded, or ITC has been wrongly availed or utilized due to fraud, willful misstatement, or suppression of facts. This section is invoked to counter and discourage any act of deceit intended to evade tax
2. Issuance of Show Cause Notice: When it appears to the proper officer that any tax has been evaded due to the aforementioned reasons, a show cause notice (SCN) is issued to the person chargeable with the tax. The notice requires the person to explain why they should not pay the amount specified along with interest and a penalty equivalent to the tax amount
3. Time Limits for Issuance of Notice and Order: The proper officer must issue the SCN at least six months before the time limit specified for the issuance of the order. The order determining the tax liability must be issued within five years from the due date for filing the annual return for the relevant financial year
4. Penalty Provisions: Section 74 mandates a penalty equivalent to the tax amount specified in the notice. This penalty is imposed to deter fraudulent activities and ensure compliance with tax laws. The penalty is in addition to the interest payable under Section 50 of the CGST Act
5. Voluntary Disclosure and Reduced Penalty: If a person voluntarily discloses tax evasion before the issuance of the SCN, the penalty is reduced to 15% of the tax amount. However, if the disclosure is made after the issuance of the SCN but before the issuance of the order, the penalty is 25% of the tax amount
6. Summary of Notice and Order: The proper officer must provide a summary of the notice in Form GST DRC-01 and the order in Form GST DRC-07. These forms contain details of the amount payable, including tax, interest, and penalty
Implications and Importance
Section 74 of the CGST Act is pivotal in maintaining the integrity of the GST system. By addressing fraudulent activities and ensuring that taxes are correctly paid, it helps in safeguarding government revenue. The stringent penalty provisions act as a deterrent against tax evasion and promote voluntary compliance among taxpayers.
Moreover, the provision for reduced penalties in cases of voluntary disclosure encourages taxpayers to come forward and rectify their mistakes without facing the full brunt of the law. This balance between strict enforcement and incentivizing compliance is crucial for the effective functioning of the GST regime.
In conclusion, Section 74 of the CGST Act 2017 is a vital tool in the fight against tax evasion. It ensures that taxes are paid accurately and timely, thereby contributing to the overall efficiency and fairness of the tax system. Understanding and complying with this section is essential for businesses to avoid legal complications and foster a culture of transparency and accountability.
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