GST Suvidha Providers say IT systems not ready for July 1 roll-out
With three weeks to go before the country moves to big bang tax reform, Goods and Services Tax (GST) Suvidha Providers -- key links between taxpayers and the government -- say the IT systems for a July 1 roll-out are not ready.
 
"All the rules are yet to be notified. Only after the rules are finalised can the IT systems from Goods and Services Tax Network (GSTN) be ready. The GST Suvidha Providers (GSPs) would be ready only after that," Tejas Goenka, Executive Director at Tally Solutions told IANS.
 
GSPs are expected to help large businesses with complex internal processes to comply with the GST regime. A meeting was held between GSTN officals and suvidha providers on Friday.
 
Neeraj Hutheesingh, Founder and Director, Cygnet Infotech said that with the roll-out date closing in, "the worst fears of the market are coming true -- lack of IT preparedness. July 1 fails to appeal as a feasible deadline."
 
All the GSPs shortlisted and licensed by GSTN, he explained, were dependent on the application progam interfaces (APIs) furnished by GSTN network. In all, 34 GSPs have been selected.
 
GSPs will use the APIs for accounting software, enterprise resource planning (ERP) software, filing software and billing software that will help businesses comply with the new indirect tax regime.
 
Analyst Pritam Mahure said that the roll-out date of July 1 is not an issue but the problem is that things were undecided even with 20 days remaining. It was hampering testing needs of the Suvidha Providers.
 
"Significant testing needs to be carried out by the ecosystem. However, GSTN sandbox release does not appear to be geared up for the same. It's a catch-22 situation. The problem is that everything is still in a fluid sate -- the tax rates, Rules," Mahure told IANS. A sandbox is a virtual space where new software can be tested securely.
 
"The primary focus is to handle the forms for which the APIs are avaible from GSTN. For the remainder forms, the entire flow is being finalised so that once the APIs for the same are available, we can be ready to offer the (service) to clients," Saket Agarwal, Global CEO, Spice Digital said.
 
Vinod Tambi, COO, Excellon Software, said: "Many of the aspects of GST such as rates, exemptions, have only been announced a few days back while we are still awaiting some other inputs. Hence July 1 does look like an uphill task."
 
GSTN has said that the API specifications will be released in staggered manner for all the GSPs so that they can study and analyse the same for making changes in their software developed on old design of returns.
 
Subsequent to publishing of the specifications, GSTN will also make available live APIs on the sandbox for testing of the codes that the GSPs will modify/develop. The live API will be made available only by June 29. 
 
But the government has maintained a strict stance that July 1 deadline won't be deferred.
 
With a view to assessing preparedness in various areas of GST, a joint presentation by officials from the Centre and state tax administration was held in the national capital on June 4.
 
"In all interactions with trade industry and public, it should be clearly indicated by officers at all levels that the target date of implementation is July 1 only and the implementation of this big reform will not be deferred beyond this date," according to the minutes of the meeting accessed by IANS.
 
"All officers should keep a check on adverse publicity or criticism of GST and should counteract it promptly," it was noted at the meeting.
 
West Bengal Finance Minister Amit Mitra, has also been voicing serious doubts about the IT readiness by July 1.
 
"Entire GST will depend on one IT system of GSTN. The presentation given by them clearly shows that they are not ready and need more time. They have appointed 34 Suvidha providers for the whole country...will that be sufficient?" Mitra had wondered.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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IPOs, bonus issue, share gifts exempted from capital gains tax
India on Tuesday amended its income lax law to exempt genuine equity investments through initial public offerings (IPOs), bonus or rights issues by a listed company from long-term capital gains tax even if no securities transaction tax (STT) was paid.
 
The amendment provides that "the condition of chargeability to STT shall not apply to all transactions of acquisitions of equity shares entered into on or after the first day of October 2004," a Union Finance Ministry release said here, notifying three types of transactions where the provision shall apply.
 
The three transactions attracting the provision are "acquisition of listed shares in preferential issues of a company whose shares are not frequently traded in a recognised stock exchange, acquisition of existing listed equity shares in a company not through a recognised stock exchange of India and acquisition of shares of a company during the period of its delisting," it said.
 
For these three categories, payment of STT will be mandatory to avail benefit of capital gain exemptions.
 
The amendment has been introduced after the Income Tax Department detected that shell companies were being created by entering into fake transactions, and unaccounted income was being routed into these firms to avail long-term capital gains benefit. It has been designed to spare genuine transactions.
 
"In order to curb the practice of declaring unaccounted income as exempt long-term capital gain by entering into sham transactions, the Finance Act, 2017 amended the provisions of Section 10 (38) of the Act to provide that exemption under this section for income arising on transfer of equity share acquired or on after 1st day of October, 2004 shall be available only if the acquisition of share is chargeable to STT," the ministry said.
 
"However, to protect the exemption for genuine cases where the STT could not have been paid, it was also provided that the central government shall notify the acquisition for which the condition of chargeability to STT shall not apply," it added. 
 
The amendment also exempts holding-subsidiary transactions, or those involving mergers and demergers, equity investments made by a non-resident Indian under foreign direct investment (FDI) regulations and employee stock options or gifts in the form of shares from long-term capital gains tax.
 
It provides that capital gains exemption will be available in case of share acquisition (without STT) made by non-residents and venture capital funds under the specified situations, for share acquisition made under employee stock ownership plan (ESOP) or approved M&A schemes and the Securities and Exchange Board of India (SEBI) guidelines.
 
It also extends relief to share acquisition, which has been approved by the Supreme Court, high court, National Company Law Tribunal, Securities and Exchange Board of India (SEBI) or Reserve Bank of India (RBI).
 
Commenting on the development, Abhishek Goenka, Partner and Leader Direct Tax, PwC said: "The notification comes as a breather for foreign investors and venture capital houses as well as shareholders, who have acquired shares upon corporate restructuring undertaken vide court approved schemes on which no STT was paid."
 
"The government has now provided a final list of transactions on which long-term capital gains tax shall be exempt in spite of STT not having been paid at the time of acquisition. Effectively, the notification covers 'all transactions' barring three specified transactions," Goenka said in a statement here.
 
The government has now carved out exceptions with respect to court-approved schemes, FDIs and investments made by a venture capital company. "The notification clearly intends to allow genuine transactions on the benefit arising from Section 10(38) without making any exceptions," he added. 
 
A crucial aspect of the notification is granting of exemptions to tax-payers, who have received shares in the course of employment (ESOP). The government has specifically excluded ESOPs from being taxed, even though no STT may have been paid at the time of acquisition.
 
"Framing laws that tackle abuse is always very difficult to balance with ease of doing business. This government's and the Department of Revenue's approach of open, rational and balanced dialogue with Industry has been evident from its start," Indian Private Equity and Venture Capital Association (IVCA) Chairman Gopal Srinivasan said.
 
"This is a wonderful example of ease of doing business, as it is in an area where tough laws and ease of investing are now in harmony in this remarkable new anti-abuse taxation rule, for lightly-traded listed company shares," he added. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Jaitley asks industry to fall in line for July 1 GST roll-out
Seeking to set at rest all doubts, Finance Minister Arun Jaitley on Thursday said the government is in a state of preparedness for the roll-out of the Goods and Services Tax (GST) from July 1 and asked the industry to fall in line as there will be no change in the date of implementation of the new indirect tax regime.
 
"GST decisions are all taken by consensus and so far we have succeeded in maintaining the consensus. In Srinagar meeting of the Council, ministers of almost all states who spoke to me were absolutely clear on maintaining the July 1 date. We are in a state of preparedness for July 1," he told a media conference here. 
 
He was replying to a question on West Bengal Finance Minister Amit Mitra's comment that there were serious doubts about the preparedness of the industry for GST by July 1.
 
"We are passing through a phase where government is in all steps ahead of the industry. So I will expect the industry also, all those sections who are saying they are not, to fall in line because we are quite clear about the date," he said. 
 
When asked about the concerns of some of the industry members on the GST rates, the Finance Minister said that there is a mechanism in the Council for fitment where all the officials meet and discuss the existing rates and fit them in the slabs after consideration. 
 
"First time in the country the consensus on indirect taxation was created through federal institution. The process to implement GST is in its last phase. When it is implemented, it will be a major taxation reform," he said.
 
Refuting any negative impact of GST on the country's growth, Jaitley said, "I see no reason why there will be any adverse impact of GST. GST by itself should normally add to growth."
 
Chief economic adviser Arvind Subramanian, who was also present at the press conference, said that GST will bring down the incidence of taxes which will have a positive impact on the country's growth. 
 
"The incidence of taxation is going to come down. It is like a tax cut which will both reduce prices and increase consumption. There may be some teething implementation challenges but economic effects of a tax cut will be positive to reduce inflation and stimulate consumption," Subramanian said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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