BUDGET 2019: UPDATES

July 5, 2019 karthikandsunilLeave a comment

Finance Minister Mrs.Nirmala Sitaraman started her first budget speech…

ESI: Rate of ESI Contribution reduced to 4% for 6.5%

June 14, 2019 karthikandsunilESI, ESI Press release, ESI Rate ReductionLeave a comment

Government of India had reduced the contribution under ESI Act, to 4% from the existing 6.50% as per the press release issued by Ministry of Labour and Employment dated 13th June, 2019. The Contribution by employers is reduced to 3.25% from the existing 4.50% and the contribution of employees is reduced to 0.75% from the existing 1.75. The reduction in rates would benefit 3.60 crores of employees and 12.85 lakhs employers as per the press release. The reduction will be applicable from 01st July 2019 as per the press release. The entire text of the press release is given below:

The Government of India has taken a historic decision to reduce the rate ofcontribution under the ESI Act from 6.5% to 4%(employers’ contribution beingreduced from 4.75% to 3.25% and employees’ contribution beingreducedfrom 1.75% to 0.75%). Reduced rates will be effective from 01.07.2019.Thiswould benefit 3.6 crore employees and 12.85 lakhemployers.

The reduced rate of contribution will bring about a substantial relief to workers and it will facilitate further enrollment of workers under the ESI scheme and bring more and more workforce into the formal sector. Similarly, reduction in the share of contribution of employers will reduce the financial liability of the establishments leading to improved viability of these establishments. This shall also lead to enhanced Ease of Doing Business. It is also expected that reduction in rate of ESI contribution shall lead to improved compliance oflaw.

The Employees’ State Insurance Act 1948 (the ESI Act) provides for medical, cash, maternity, disability and dependent benefits to the Insured Persons under the Act. The ESI Act is administered by Employees’ State Insurance Corporation (ESIC). Benefits provided under the ESI Act are funded by the contributions made by the employers and the employees.

Under the ESI Act, employers and employees both contribute their shares respectively. The Government of India through Ministry of Labour and Employment decides the rate of contribution under the ESI Act. Presently, the rate of contribution is fixed at 6.5% of the wages with employers’ share being 4.75% and employees’ share being 1.75%. This rate is in vogue since01.01.1997.

The Government of India in its pursuit of expanding the Social Security Coverage to more and more people started a programme of special registration of employers and employees from December, 2016 to June, 2017 and also decided to extend the coverage of the scheme to all the districts in the country in a phased manner. The wage ceiling of coverage was also enhanced from Rs. 15,000/- per month to Rs. 21,000/- from01.01.2017.

These efforts resulted insubstantial increase in the number of registeredemployees i.e. Insured Persons and employersand also a quantum jump in therevenue income of the ESIC.The figures are as under: –

Year	No. of Employers	No. of Insured Persons (in crores)	Total contribution received(in Rs. crores)
2015-16	7,83,786	2.1	11,455
2016-17	8,98,138	3.1	13,662
2017-18	10,33,730	3.4	20,077
2018-19	12,85,392	3.6	22,279

The Government of India is committed to the cause of welfare of employees as well asemployers.

It is also committed to improve the quality of medical services & other benefits being provided under the ESI scheme.

rcj/skp-ESI rate reduction13-04-2019
(Release ID :190452)

Eid Mubarak…

June 4, 2019 karthikandsunilLeave a comment

GST: Interest on Delayed Payment of Tax – Recent Judgement

May 2, 2019 karthikandsunilLeave a comment

As per Section 50 of Central Goods and Service Tax Act, 2017 interest on delayed payment of GST will be applicable in the following cases as per the rates mentioned in Nofication no.13/2017 (Central Tax):

Sl. No	Description	Rate
1.	Every person who is liable to pay tax to the Govt., fails to pay with in the time period prescribed	18% on tax or any part thereof remains unpaid
2.	Taxable person claiming undue or excess claim of ITC or undue or excess reduction in output tax	24% on such undue or excess claim of ITC or reduction in output tax

The general assumption is that, the interest is payable on the net amount after adjusting the Input Tax Credit (ITC). The department had a different view on the above subject and they had issued notices stating that the interest is payable on output tax liability.

Recently the Telengana High Court in the case of Megha Engineering And Infrastructures Ltd Vs CCT also upheld the view of the department mainly on the following grounds:

The liability to pay interest u/s 50(1) is self imposed and also automatic without any determination by any one.
In terms of s.39(1) and s. 39(7), period prescribed for payment of tax in respect of every month is on or before the 20th day of the succeeding calendar month
Until a return is filed as self-assessed, no entitlement to credit and no actual entry of credit in the electronic credit ledger takes place. It is only after a claim is made in the return that the same gets credited in the electronic credit leger and it is only after a credit is entered in the electronic ledger that a payment could be made even though the payment is only by way of paper entries
If no payment is made, the mere availability of the same will not tantamount to actual payment
Recommendations of the GST Council in its 31st meeting that interest should be charged only on the net tax liability of the taxpayer after taking into account the admissible input tax credit as communicated in the Press Release of the Ministry of Finance are still on paper and, therefore, High Court cannot interpret section 50 of the CGST Act in the light of the proposed amendment.

Even if the Government issues notification (not issued 30-04-2019) with regard to payment of interest based on 31st meeting decision of GST Council, the applicability of that notification maybe prospective only. The assessees have to take due care and pay the interest if any applicable before filing Form GSTR 9, GSTR 9A and GSTR 9C.

GST: Returns by 6% Composition Scheme

April 24, 2019 karthikandsunilLeave a comment

CBIC vide notification number 21/2019 Central Tax dated 23rd April, 2019, notified the returns/statements that needs to be filed by a Service Provider opted for 6% composition Scheme, as notified by Notification 2/2019 Central Tax issued on 07-03-2019. The following Statements/returns needs to be submitted by such person:

Quarterly Return – FORM GSTR – CMP -08: The registered persons opted for the scheme shall furnish a statement, every quarter or, as the case may be, part thereof containing the details of payment of self-assessed tax in FORM GST CMP-08 of the Central Goods and Services Tax Rules, 2017, till the 18th day of the month succeeding such quarter.

Annual Return – FORM GSTR – 4: The registered persons opted for the scheme shall furnish a return for every financial year or, as the case may be, part thereof in FORM GSTR-4 of the Central Goods and Services Tax Rules, 2017, on or before the 30th day of April following the end of such financial year.

GST Returns Due Date – Apr-Jun, 2019

March 12, 2019 karthikandsunilLeave a comment

GST RETURN DUE DATES

Period: April 2019 to June 2019

Month	GSTR-3B	GSTR-1 (Monthly/More than Rs.1.50 crores)	GSTR-1 (Quarterly/Less than Rs.1.50 crores)
April, 2019	20-05-2019	11-05-2019	Not Applicable
May, 2019	20-06-2019	11-06-2019	Not Applicable
June, 2019	20-07-2019	11-07-2019	Not Applicable
April – June, 2019	Not Applicable	Not Applicable	31-07-2019