GST on real estate: How will it impact home buyers and the industry

The GST Bill was approved in the Lok Sabha on March 29, 2017 with four supplementary legislations- The Central GST Bill, 2017; The Integrated GST Bill, 2017; The GST (Compensation to States) Bill, 2017; and The Union Territory GST Bill, 2017.

At the debate preceding the passing of the bills, finance minister Arun Jaitley said the GST, which will usher in a uniform indirect tax regime in the country, will make commodities ‘slightly cheaper.’ “Today, you have tax on tax, you have cascading effect. When all of that is removed, goods will become slightly cheaper,” he said. On why the GST Council has decided on multiple GST rates, Jaitley said one rate would be ‘highly regressive as hawai chappal and BMW cannot be taxed at the same rate.’

Intent of the GST
The GST will subsume central excise, service tax, VAT and other local levies to create a uniform market. GST is expected to boost GDP growth by about 2 per cent and check tax evasion. States will have to pass their State GST or SGST law that will allow them to levy sales tax after levies like VAT are subsumed.

Tax structure under the GST
The GST Council has recommended a four-tier tax structure – 5, 12, 18 and 28 per cent. On top of the highest slab, a cess will be imposed on luxury and demerit goods, to compensate the states for revenue loss in the first five years of GST implementation. However, the Central GST (CGST) law has pegged the peak rate at 20 per cent and a similar rate has been prescribed in the State GST (SGST) law, which takes the peak rate to 40 per cent which will come into force only in financial exigencies.

GST’s impact on taxes
In the present tax system, there are a lot of different taxes that one has to pay, like the VAT, octroi or the local body taxes. GST will subsume all these taxes into it. Diipesh Bhagtani, Chairman-Exhibition, CREDAI-MCHI, explains: “Instead of paying various taxes, at various states and cities, we would soon have just one tax that is going to benefit us. So, in this process, a lot of labour will be saved, along with large sums of money. Also, we look at taxes to be in line with the standard of the absorption of the industry. We as an industry, who have been suffering from excess of taxes, which in sum, amounts to 40%; if all that can be reduced then it’s a big advantage to all of us.”

See also: GST impact on the realty sector: The short to long-term analysis

Current real estate transaction taxes
Bengaluru Mumbai Pune Chennai Gurugram
VAT 4.0% 1.0% 1.0% 2.0% 4.0%
Service Tax 4.5% 4.5% 4.5% 4.5% 4.5%
Stamp Duty 5.7% 5.0% 5.0% 7.0% 6.0%
Registration Charges 1.0% 1.0% 1.0% 1.0% 0.5%
Total Taxation 15.2% 11.5% 11.5% 14.5% 15.0%
Source: Industry, JM Financial

Impact of GST on real estate
The construction of a complex building, civil structure, or a part thereof, intended for sale to a buyer, wholly or partly, is subject to 12 per cent tax with full input tax credit (ITC), subject to no refund in case of overflow of ITC. In other words, residential construction services, will invite GST at the rate of 12 per cent, which will apply to developers selling residential units before completion of construction to the home buyers.
According to the JM Financial report on GST, for states with non-composite VAT (Karnataka, Tamil Nadu, Andhra Pradesh), the transaction value changes marginally from 10-11% to 12% under the new regime. With input cost credits available, developers in these regions may witness improvement in margins in case no price revision takes place (subject to the anti-profiteering clause).

Abhishek Anand, assistant vice-president (Equity Research), JM Financial Ltd, explains: “In the current regime, states with composite VAT require developers to pay lower VAT rates on the total property value without any input tax benefit (Maharashtra, Haryana) or partial benefit (intra state offset- Bangalore). Under this regime, developers pass on the transaction cost – VAT (1%) and service tax (4-5%) to buyers (total 5-6%). Developers get offset for only the input service tax component. In the GST regime, the transaction cost increases to 12%, with input credit available on both, services and material. Property transaction costs will increase by 6%, in case no input credit is passed on by developers. If developers pass on the input credit to buyers, the property price increase could be restricted to 1-2%.” If the developers pass on the credits completely and bring down the base prices, then, home buyers may marginally benefit under the GST regime.

Nevertheless, stamp duty will continue to be applicable, irrespective of whether the property is under-construction or constructed, in the pre-GST and post-GST regime.

Will GST help home buyers?
With the introduction of the Goods and Services Tax (GST), the total incidence of tax will increase from 5.5 per cent to 12 per cent. However, developers will be able to avail of input credit, on all the goods and services purchased and spent in the construction of the property.

Shrikant Paranjape, president of CREDAI Pune Metro, maintains that “The impact of the GST on property prices, will be difficult to gauge at this stage because of the lack of clarity on abatement for land value. In a product, where the major raw material is not covered by the GST and the completed unit is also not covered by the GST, the tax input benefit will be hard to calculate or justify. Only the market forces, the ready reckoner rates and time, will decide whether and how much benefit will be passed on by the developers to the purchasers.”

Moreover, the prices of input materials can also be volatile. Cement and steel prices can soar, without warning. Similarly, sand is always in short supply and not available in the monsoons. Hence, it is likely that these industries may not pass on the entire benefit of tax credit.

Another important factor that needs to be examined, is the stage of construction. If the project is at an advanced stage, where substantial cost has already been incurred before the application of the GST, very little input credit will be available and very less benefit will be passed on. If the project is at an early stage, more benefits can be passed on.

GST on under construction property – Affordable housing
It is important to note that if GST exemption is extended to affordable housing projects (affordable housing is currently exempted from service tax and a clarification is expected from the government for exemption from GST), then, affordable homes may become cheaper under the GST regime.

Impact of GST on property prices – Luxury segment
In the case of a premium properties, while the basic construction cost may come down a little, but as the input tax credit is limited to 12 per cent, it will not be sufficient to bring down the fresh tax liability to nil because of the taxes paid on other expenditures.

GST rates for real estate – Input materials
HSN Description of goods Rate
Chapter 72 Steel 18 per cent
2523 Cement 28 per cent
6802 Marble and granite 28 per cent
2515 Blocks of marble and granite 12 per cent
Chapter 68 Sand lime bricks and fly ash bricks 12 per cent
2505 & 2517 Natural sand, pebbles, gravel 5 per cent
8428 Lifts and elevators 28 per cent
Data provided by: BMR

Under the tax regime, many of the construction materials are under the 18 and 28 per cent slab. For example, steel and steel products, are mostly in the 18 per cent segment and cement and prefabricated structural components for building or civil engineering, are in the 28 per cent slab. However, as the input tax credit is available on products utilised for construction, the overall tax incidence should be neutralised.

Reverse charge mechanism in GST and its impact on construction costs
The mechanism, where the recipient of services pays the service tax, is called as ‘reverse charge mechanism’ (RCM). The same concept, with wider application, has been borrowed from the service tax laws in the Goods and Services Tax (GST) regime.

A developer has to pay GST on services availed, like those provided by a person who is located in a non-taxable area, services provided by goods transporters, legal services provided by an individual or firm, etc. The developer also has to pay GST under the reverse charge mechanism, on the services provided by government or local authorities, like municipalities, etc. Nevertheless, some of the services provided by the government, like renting of premises, specific services provided by the postal authorities, transport of goods by railways or by state transport undertakings, etc., are outside the scope of the GST, similar to the service tax regime.

A significant departure under the GST laws, compared to the erstwhile service tax provisions, is that under the reverse charge mechanism in GST, a person who is registered under the GST has to pay GST on all the services and goods that are procured from a person who is not registered under GST.

This has significantly expanded the scope of the reverse charge mechanism for all taxable persons and it will adversely affect the developers. Moreover, the tax payable under the reverse charge mechanism under the GST, cannot be adjusted by the developer against the input credit available from the GST paid on the inputs, but has to be paid by cash/bank payment.

So, under the GST, the builders are worse off, due to the dual effect of the levy of GST on the services availed from unregistered person, as well as the requirement to discharge the reverse tax on goods received from unregistered suppliers.This will certainly increase the costs for the developer, especially the small developers who were availing goods and services from unregistered suppliers earlier and were not bearing the cost of taxes to that extent.

GST on ready properties
If the OC for the project has been received, then, no GST will be applicable. A CRISIL report points out that at present, a developer pays excise tax and VAT, on inputs like cement and steel, at 27.7 per cent and 18.1 per cent, respectively, which vary from state to state. Now, under the GST regime, cement and steel will be taxed at 28 per cent and 18 per cent, respectively, while other inputs like paint and white goods, will be taxed at 28 per cent. The final product – the housing unit – will be taxed at 12 per cent, with credit for taxes paid on inputs. As the tax levied on the entire cost including the land will be 12 per cent, the amount would be sufficient to provide for the input credit for developers. Hence, a buyer opting for a ready-to-move-in apartment, is saved from the tax burden.

However, the tax calculations under the GST regime, for the real estate market, are not so simple. For example, the GST on under-construction projects will be charged to home buyers on the sale price but the credit can be availed by the developers, only on the cost of construction. As the builder will have to pay the GST on the full project and the input availed is only on the construction cost, there may be a gap that is no less than 30 per cent. Consequently, whether you opt for an under-construction property or ready-to-move-in unit, the developer will hike the prices in that proportion, to make sure this gap is bridged.

GST on property rentals
“Credit/set-off of input GST is available to a developer, if the sale is executed prior to obtaining the completion certificate or prior to first occupancy. However, this credit is not allowed if the developer chooses to rent out the property. Hence, we might see a spike in commercial rentals,” explains Amit Sarkar, partner and head – indirect taxes, BDO India.

GST has also been levied on the renting of residential property, for use as an accommodation. Consequently, tenants may witness a hike in rent payment under the GST system, as there is no service tax applicable on residential properties, in the existing system.

Here’s how the GST will impact the tax computation on rental income:

With the clubbing of taxes on goods and services, under the GST regime, the confusion about levy of separate tax on service and goods is done away with.

Unlike under the service tax regime, the threshold limit for applicability of GST has been increased from Rs 10 lakhs to Rs 20 lakhs. So, many of the landlords who were covered under the service tax regime, will go out of the indirect tax net, under the GST.

It may be interesting to note that for the purpose of computing the aggregate limit of Rs 20 lakhs under the GST, all the taxable, as well as exempt goods and services supplied, shall be taken into account. So, unlike the service tax regime, where it is only the taxable services, which are taken into account for determining whether you have crossed the basic threshold, under the GST, the value of all the service and goods supplied in India, as well as exported, whether taxable or exempt, are taken into consideration for the Rs 20-lakh limit. The GST is proposed to be levied at 18 per cent, on the letting-out of commercial properties.

There is one more major tax implication under the GST, with respect to rent on commercial properties. The parliament has borrowed the concept of ‘reverse charge mechanism’ from the service tax regime, under the GST. However, unlike in the service tax regime, where the reverse charge mechanism is applicable in case of services and is not extended to the sale or manufacturing of goods, the same is made applicable for goods as well as services, under the GST regime. A person who is registered under GST, who gets supplies of goods or services from a person who is not registered under GST, will have to pay the GST under the reverse charge mechanism. Under the service tax regime, there is no provision of reverse mechanism, with respect to the rent paid by the lessee. The proposed GST provisions, due to the increased rate and the levy under the reverse mechanism, will eventually make it costlier to take any commercial premises on rent.

Will GST make home loans expensive?
Before evaluating the likely impact of the GST on home loan costs, it is important to understand the components that will be impacted by the increased rates under the GST. The main cost of taking a home loan, is the interest payment on the money. This cost will not change, as there is no service tax or GST on it. Similarly, any stamp duty charged in connection with the documentation of the home loan, will not change with the GST, as stamp duty is not subsumed under the GST.

However, there are various charges that are levied by lenders on home loans. First and foremost is the processing fee that is paid at the time of taking the home loan. At present, it is 15 per cent but it will go up by 3 per cent under the GST, to 18 per cent. This is generally a one-time cost and its overall impact on your home loan tenure, will be insignificant. The banks may also recover other charges like advocate fees, valuation charges, etc., in connection with the home loan, which will go up proportionately.

Like the processing fee paid at the time of application, you may have to pay prepayment charges, in case you decide to prepay the home loan before the completion of its tenure or shift the home loan to another lender. This is generally payable, in case the home loan is taken under a fixed rate of interest. For floating rate home loans, banks cannot levy any prepayment charges. Housing finance companies can, however, levy the prepayment charges, if you decide to shift the home loan to another lender. However, for payment of the home loan from your own resources, the housing finance companies cannot levy any prepayment charges.

The lenders can also charge you for any EMI default, either due to return of the cheque or ECS return, on which the GST rates will go up. So, it is practically on all the charges that are recovered by the lenders that the GST rates will go up by 3 per cent.

How are banks affected by the GST?
The implementation of the GST, will bring some tax savings for the lenders, as the input credit with respect to the services availed, as well as goods purchased, will be available for set off, against the GST output taxes liability. However, the reverse charge mechanism, which is borrowed from the service tax regime and which is expanded under the GST, will adversely affect the profitability of banks. Moreover, lenders are now required to register in all the state under the GST, whereas, under the service tax regime, they could have obtained one centralised registration. This will significantly increase the compliance costs of the lenders and affect their profitability.

Grey areas in the GST that could determine the final price of properties
It is still not clear what would be the abatement available for the land cost, for calculating service tax on under-construction projects. The abatement rules, as applicable under the service tax regime and the input tax credit facility for developers, will determine if the effective tax incidence on real estate, is lower or higher under GST.

Effectively, the composition scheme allowing for abatement against cost of land to the extent of 75 per cent of the house cost, for residential units priced under Rs 1 crore and less than 2,000 sq ft, makes the effective rate at 3.75 per cent. In other cases, the abatement goes down to 70 per cent, making the effective rate at 4 per cent. This will go a long way, in determining whether GST is tax neutral or tax adverse for real estate.

In addition, as states have different state-level taxes, the implication of GST may not be uniform, across all states.

Strong case for bringing real estate under GST: Finance minister Arun Jaitley
Finance minister Arun Jaitley, while delivering a lecture at Harvard University on October 12, 2017, has said that the real estate sector should, ideally, be brought under the ambit of the Goods and Services Tax (GST). “The one sector in India, where maximum amount of tax evasion and cash generation takes place and which is still outside the GST, is real estate. Some of the states have been pressing for it. I personally believe that there is a strong case to bring real estate into the GST,” Jaitley said. The finance minister said the move would benefit consumers, as they will only have to pay one final tax on the whole product. “As a result, the final tax paid on the whole product under the GST, would almost be negligible,” he said.

Will GST on real estate benefit home buyers and the sector?

There are many issues and grey zones that need to be ironed out, before GST becomes a reality in real estate. Niranjan Hiranandani, president of NAREDCO, maintains that bringing real estate under GST’s ambit, will benefit the consumers who will only have to pay one final tax on the whole product.

However, if the GST slab for real estate is finalised above 12 per cent, then, home buyers and developers may take a hit, at a time when property prices are already unaffordable in many places.

Moreover, the finance minister will also have to convince states to come on board, to create a consensus. This maybe particularly tough, in states where real estate transactions are major source of revenue for the state, through stamp duty and property registrations.

GST Sends Services Activity Plunging Most In 4 Years

Bengaluru: Activity in India’s predominant administration area contracted at the most keen rate in about four years in July after another assessment strategy sowed disarray and sent new requests into free fall, a study appeared on Thursday. Starting disarray on the national merchandise and ventures impose (GST) drove July’s Nikkei/IHS Markit composite Purchasing Managers’ Index, which measures both assembling and administrations movement, to sink to 46.0 – its least perusing since March 2009 – from June’s eight-month high of 52.7.

The PMI for India’s overwhelming administration industry dropped to a close to four-year low of 45.9 in July from 53.1. June’s perusing had been the most astounding since Prime Minister Narendra Modi restricted high-esteem cash notes in November.

The most recent review is the first run through in a half year where the administrations perusing was beneath the 50 check that isolates development from withdrawal.

“PMI information for July feature an inversion in fortunes crosswise over India, with the economy going into switch mode subsequent to seeing a get in development energy amid June,” said Pollyanna de Lima, primary financial analyst at IHS Markit.

“A large portion of the constriction was credited to the execution of the merchandise and enterprises impose (GST) and the perplexity it caused.”

Surging costs caused by the expense, actualized on July 1, scratched interest for administrations and pushed the sub-record on new business to 45.2 in July, its least in about four years, from 53.3 in June.

Correspondingly, perplexity among makers over the evaluating of their items after the GST was actualized dragged manufacturing plant action to its most minimal level in over nine years in July, a sister study appeared on Tuesday.

In spite of introductory GST interruptions, members in the overview stayed idealistic about development in administrations movement over the coming year, which helped the business desire sub-list to a 11-month high.

“Many will address how profound an effect the GST will have on the economy in the close and long haul, firms appear to be persuaded that prospects will light up as the new expense administration progresses toward becoming clearer,” said Ms de Lima.

The GST means to supplant different falling duties. The change should enable India to recover its position as the quickest developing real economy this year, market analysts surveyed by Reuters a month ago said.

On Wednesday, the Reserve Bank of India cut its approach rate by 25 premise focuses to 6.0 for each penny, which should help development.

Accounts and Records required to be maintained under GST

All You Need to Know

Appraisal in GST is predominantly centered around self-evaluation by the citizens themselves. Each citizen is required to self-survey the charges payable and outfit an arrival for each assessment period i.e. the period for which return is required to be documented. The consistence check is finished by the office through investigation of profits,

review or potentially examination. In this way the consistence confirmation is to be done through narrative checks as opposed to physical controls. This requires certain commitments to be thrown on the citizen for keeping and keeping up records and records.

Image result for accounts and records under gst

Key focuses that are huge from the point of view of upkeep of records and records are:

1. Area 35 of the CGST Act and “Records and Records” Rules (hereinafter alluded to as guidelines) give that each enlisted individual should keep and keep up all records at his primary place of business. It has thrown the duty on the proprietor or administrator of distribution center or godown or some other place utilized for capacity of products and on each transporter to keep up indicated records.

The area likewise enables the Commissioner to advise a class of assessable people to keep up extra records or archives for indicated reason or to keep up accounts in other endorsed way.

It additionally gives that each enlisted individual whose turnover amid a budgetary year surpasses as far as possible should get his records reviewed by a contracted bookkeeper or a cost bookkeeper.

2. Each enlisted individual is required to keep up genuine and revise record of following:

(a) generation or fabricate of products

(b) internal and outward supply of merchandise or benefits or both

(c) load of products

(d) input charge credit profited

(e) yield assess payable and paid and

(f) such different particulars as might be recommended

(g) merchandise or administrations imported or sent out or

(h) supplies drawing in installment of assessment on invert accuse along of the applicable reports, including solicitations, bills of supply, conveyance challans, credit notes, charge notes, receipt vouchers, installment vouchers, discount vouchers and e-way charges

The previously mentioned list is on a full scale level and what should be put away on ground level as a feature of the rundown is given beneath:

(a) records of stock in regard of merchandise got and provided; and such record might contain particulars of the opening equalization, receipt, supply, products lost, stolen, decimated, discounted or discarded by method for blessing or free examples and adjust of stock including crude materials, completed products, scrap and wastage thereof

(b) a different record of advances got, paid and modifications made thereto

(c) a record containing the subtle elements of expense payable, impose gathered and paid, input charge, input assess credit

asserted together with an enlist of duty receipt, credit note, charge note, conveyance challan issued or gotten amid any expense period

(d) names and finish locations of providers from whom merchandise or administrations chargeable to impose under the Act, have been gotten

(e) names and finish delivers of the people to whom supplies have been made

(f) the total locations of the premises where the products are put away including merchandise put away amid travel alongside the particulars of the stock put away in that

(g) month to month generation accounts demonstrating the quantitative points of interest of crude materials or administrations utilized as a part of the make and quantitative subtle elements of the merchandise so made including the waste and by items thereof

(h) accounts demonstrating the quantitative points of interest of merchandise utilized as a part of the arrangement of administrations, subtle elements of info administrations used and the administrations provided

(i) isolate represents works contract appearing:

• the names and addresses of the people for whose benefit the works contract is executed

• portrayal, esteem and amount (wherever pertinent) of products or administrations gotten for the execution of works contract

• portrayal, esteem and amount (wherever material) of products or administrations used in the execution of works contract

• the subtle elements of installment gotten in regard of each works contract and

• the names and addresses of providers from whom he has gotten products or administrations

3. On the off chance that more than one place of business is determined in the testament of enrollment, the records identifying with each place of business should be kept at such places of business. On the off chance that records can be kept up electronically and access to such records is at each place of business, no necessity to keep up printed copy records at each place of business.

4. In the event that records are looked after electronically, following prerequisites have been endorsed:

(an) information so put away should be validated by method for computerized signature

(b) appropriate go down of records

(c) create, on request, the important records or archives, properly validated, in printed version or in any electronically lucid organization

5. Any section in registers, records and archives might not be eradicated, destroyed or overwritten and all wrong passages, other than those of administrative nature, should be scored out under validation and from that point the right passage might be recorded and where the registers and different reports are looked after electronically, a log of each passage altered or erased might be kept up.

Advance every volume of books of record kept up physically by the enrolled individual should be serially numbered

6. Period for safeguarding of records: All records kept up together with all solicitations, bills of supply, credit and charge notes, and conveyance challans identifying with stocks, conveyances, internal supply and outward supply might be saved for a long time from the due date of outfitting of yearly return for the year relating to such records and records.

7. Records to be kept up by proprietor or administrator of godown or distribution center and transporters: The transporters, proprietors or administrators of godowns, if not effectively enlisted under the GST Act(s), might present the insights with respect to their business electronically on the Common Portal in FORM GST ENR-01. A one of a kind enrolment number might be created and conveyed to them. A man in whatever other State or Union region might be regarded to be selected in the State or Union Territory.

A quick guide to India GST rates in 2017

The Goods and Services Tax (GST) has been one of the key things that has caught the attention of the market given its implications on earnings of companies. The government has kept a large number of items under 18% tax slab. The government categorised 1211 items under various tax slabs. Here is a low-down on the tax slab these items would attract:

Here is the complete updated list:

Gold and rough diamonds do not fall under the current rate slab ambit and will be taxed at 3% and 0.25% respectively.

No tax(0%) 

Goods
No tax will be imposed on items like Jute, fresh meat, fish chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, prasad, salt, bindi. Sindoor, stamps, judicial papers, printed books, newspapers, bangles, handloom, and horn cores, bone grist, bone meal, etc.; hoof meal, horn meal, Cereal grains hulled, Palmyra jaggery, Salt – all types, Kajal, Children’s’ picture, drawing or colouring books, Human hair

Image result for gst tax rates in india 2017

Services
Hotels and lodges with tariff below Rs 1,000, Grandfathering service has been exempted under GST. Rough precious and semi-precious stones will attract GST rate of 0.25 per cent.

5%
Goods
Items such as fish fillet, Apparel below Rs 1000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, coffee, tea, spices, pizza bread, rusk, sabudana, kerosene, coal, medicines, stent, lifeboats, Cashew nut, Cashew nut in shell, Raisin, Ice and snow, Bio gas, Insulin, Agarbatti, Kites, Postage or revenue stamps, stamp-post marks, first-day coversServices

Transport services (Railways, air transport), small restraurants will be under the 5% category because their main input is petroleum, which is outside GST ambit.

12%
Goods
Apparel above Rs 1000, frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, Bhutia, namkeen, Ayurvedic medicines, tooth powder, agarbatti, colouring books, picture books, umbrella, sewing machine, cellphones, Ketchup & Sauces, All diagnostic kits and reagents, Exercise books and note books, Spoons, forks, ladles, skimmers, cake servers, fish knives, tongs, Spectacles, corrective, Playing cards, chess board, carom board and other board games, like ludo,

Services
State-run lotteries, Non-AC hotels, business class air ticket, fertilisers, Work Contracts will fall under 12 per cent GST tax slab

18%
Goods
Most items are under this tax slab which include footwear costing more than Rs 500, Trademarks, goodwill, software, Bidi Patta, Biscuits (All catogories), flavoured refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, mineral water, tissues, envelopes, tampons, note books, steel products, printed circuits, camera, speakers and monitors, Kajal pencil sticks, Headgear and parts thereof, Aluminium foil, Weighing Machinery [other than electric or electronic weighing machinery], Printers [other than multifunction printers], Electrical Transformer, CCTV, Optical Fiber, Bamboo furniture, Swimming pools and padding pools, Curry paste; mayonnaise and salad dressings; mixed condiments and mixed seasonings.
Services
AC hotels that serve liquor, telecom services, IT services, branded garments and financial services will attract 18 per cent tax under GST, Room tariffs between Rs 2,500 and Rs 7,500, Restaurants inside five-star hotels28%
Goods
Bidis, chewing gum, molasses, chocolate not containing cocoa, waffles and wafers coated with choclate, pan masala, aerated water, paint, deodorants, shaving creams, after shave, hair shampoo, dye, sunscreen, wallpaper, ceramic tiles, water heater, dishwasher, weighing machine, washing machine, ATM, vending machines, vacuum cleaner, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use, will attract 28 % tax – the highest under GST system.

Services
Private-run lotteries authorised by the states, hotels with room tariffs above Rs 7,500, 5-star hotels, race club betting, cinema will attract tax 28 per cent tax slab under GST

GST Rates & HSN Codes

gst india
GST council has made the much-awaited announcements around tax rates on various categories of goods on day one of a two-day meeting of the said council at Srinagar. There has been a hype around these rates for a while and now these rates are finally in the public domain.

As soon as the GST rates were announced a huge wave of curiosity hit across industry and trade bodies. Everyone is evaluating their position as a result of this change. So in this article, we bring you our analysis of these GST rates.

We already know that the GST slabs are pegged at 5%, 12%, 18% & 28%. According to the latest news from the GST council, the tax structure for common-use goods are as under:

GST Rates Structure

Tax Rates Products
0% Milk Kajal
Eggs Educations Services
Curd Health Services
Lassi Children’s Drawing & Colouring Books
Unpacked Foodgrains Unbranded Atta
Unpacked Paneer Unbranded Maida
Gur Besan
Unbranded Natural Honey Prasad
Fresh Vegetables Palmyra Jaggery
Salt Phool Bhari Jhadoo
5% Sugar Packed Paneer
Tea Coal
Edible Oils Raisin
Domestic LPG Roasted Coffee Beans
PDS Kerosene Skimmed Milk Powder
Cashew Nuts Footwear (< Rs.500)
Milk Food for Babies Apparels (< Rs.1000)
Fabric Coir Mats, Matting & Floor Covering
Spices Agarbatti
Coal Mishti/Mithai (Indian Sweets)
Life-saving drugs Coffee (except instant)
12% Butter Computers
Ghee Processed food
Almonds Mobiles
Fruit Juice Preparations of Vegetables, Fruits, Nuts or other parts of Plants including Pickle Murabba, Chutney, Jam, Jelly
Packed Coconut Water Umbrella
18% Hair Oil Capital goods
Toothpaste Industrial Intermediaries
Soap Ice-cream
Pasta Toiletries
Corn Flakes Computers
Soups Printers
28% Small cars (+1% or 3% cess) High-end motorcycles (+15% cess)
Consumer durables such as AC and fridge Beedis are NOT included here
Luxury & sin items like BMWs, cigarettes and aerated drinks (+15% cess)

In addition to the above, a few other items were mentioned in the Council’s announcement of rates. These items, and the applicable rates on them are as follows:GST Rates

  • Sugar, Tea, Coffee and Edible oil will fall under the 5 per cent slab, while cereals, milk will be part of the exempt list under GST. This is to ensure that basic goods are available at affordable prices. However, instant food has been kept outside this bracket so, no relief for Maggie lovers!
  • The Council has set the rate for capital goods and industrial intermediate items at 18 per cent. This will positively impact domestic manufacturers as seamless input credit will be available for all capital goods. Indeed, it is time for “Make In India”.
  • Coal to be taxed at 5 percent against current 11.69 per cent. This will prove beneficial for the power sector and heavy industries which rely on coal supply. This will also help curb inflation. Expect a good run for Coal India tomorrow.
  • Toothpaste, hair oil, and soaps will all be taxed at 18 percent, where currently they are taxed at 28 percent. Most of the cosmetics and fast moving consumer goods (FMCG) brands should get the benefit of this tax reduction. After all, Fair and Lovely might seem fairer in its pricing from now on!
  • The ‘mithai’ from the neighbouring sweet shop might lose some of its flavour as Indian sweets will now be taxable at 5 per cent. If you have a sweet tooth, this could hurt your pocket a wee bit in the coming days.

Plus, it was announced that:

  • for restaurants serving alcohol, the tax bracket will be 18 per cent
  • education, healthcare are going to be exempted from GST
  • services on Non-AC restaurants will be 12 per cent

    Ref: https://cleartax.in

The History behind the names of places and streets in Hyderabad

Image result for about hyderabad

How many of us know the History behind the names of places and streets in Hyderabad? Here are some interesting facts from history —

1) Nampally:
Raza Ali Khan, was the Dewan of Nizam’s State in 1670 AD. His Title was ‘Nekh Nam Khan’ A jagir was granted to him, which came to be called nekh-Nampally. This became ‘Nampally’.

2) Begumpet:
Basheerunnissa Begum, daughter of Nizam II was married to a Paigah noble. She received lands in dowry. The village came to be known as Begumpet.

About hyderabad

3) Khairatabad:
The jagir granted to Khairunnisa Begum daughrer of Ibrahim Qutub Shah, came to be known as Khairatabad.

4) Begum Bazar:
Land gifted by Humda Begum ( the wife of Nizam Ali Khan Nizamul Mulk) to the merchants of Hyderabad for trade and commerce, finally developed as Begum Bazar.

Hyderabad

5) Sultan Bazar:
After 1933, the Residency bazar was renamed Sultan Bazar, when these areas were returned to the Nizam, by the British (Residency).

6) Afzal Gunj:
The Vth Nizam (Afzalud Dawlah) gifted land to the grain merchants for trade and commerce. The place was named Afzal Gunj.

7) Secunderabad:
Named after Sikander Jha (1806) (IIIrd Nizam). The Village where British troops were stationed.

8) Ma Saheba Ka Talab:
Hayat Bakshi Begum, wife of Quli Qutub Shah-VI, was called Ma Saheba. The tank constructed by her to irrigate lands of Mallepally village, was called Masaheba ka Talab. Finally it came to be called Masab Tank.

9) Kadve Saheb Ki Galli (lane):
After a person, who was always angry-faced and talked ill of others. This lane is in the old city.

10) Himayat Nagar:
New locality named after Himayat Ali Khan – Azam Jha – eldest son of VIIth Nizam – Osman Ali Khan (in 1933). His name was Himayat Ali Khan.

11) Hyderguda:
New locality named after Hyder Ali, who was 1st Talukhdar (District Collector) and owned lands in the village formerly the Jagir of Vaheed Unnisa Begum, wife of Nizam. The locality is called after him, as Hyderguda.

12) Basheer Bagh:
The garden of Sir Asman Jha, Basirud-dulah – a Paigah Noble, who had a palace at the Garden.

13) Somajiguda:
A revenue department employee, named Sonaji, who owned lands and resided in this village. Sonaji became Somaji and the hamlet came to be called ‘Somajiguda’. (Guda is from Godem a hamlet).

14) Malakpet:
Named after Malik Yakoob, a servant of Abdulah Qutub Shah Golconda King where he resided had a market, hence the name Malakpet.

15) Saidabad:
A Jagir village of Sayed Meer Momin, Dewan of Golconda (1591).

16) Abid’s Shop:
A Valet and steward of Nizam (VI) Mahboob Ali Khan. This man had his first shop here.

17) Saroornagar:
Named after Sarwari Afzal Bai, mistress of Arasthu Jha. Dewan of Hyderabad, who granted a Jagir,and constructed a palace and Garden for her.

Related image

18) Debirpura:
The village named after Abdul Samad with the titles; Dabir-ul Mulk, a noble man.

19) Noor Khan Bazar:
A market developed by Noor Khan, who came from Lucknow, during the time of the II Nizam.

20) A.C.Guards:
A locality to the West of Lakdi-ka-pul. The barracks of Abyssinian Cavalry Guards of Raja of Wanaparthy (1910) (Abyssinia is the old name of Ethiopia, an East African country).

Have a nice stroll of the Twin Cities !

FIR Can Be Quashed In Part If No Cognizable Offence Is Made Out Against Accused

The Supreme Court, in a brief order, has observed that an FIR can be quashed in part against some accused against whom no cognizable offence is made out. The apex court bench comprising Justice Pinaki Chandra Ghose and Justice RF Nariman, in Lovely Salhotra vs State, set aside a Delhi High Court order and observed that the court could not refuse to quash FIR only on the ground that the investigation against co-accused is still pending.

The petitioners before the high court had sought to quash the complaint on the ground that on a reading of the FIR, no offence was made out against the petitioners.

Refusing to quash the case, the Delhi High Court had observed: “It cannot be said that on a reading of the FIR, prima facie, no cognizable offence is made out against the petitioners. Even otherwise, the FIR cannot be quashed at this stage of investigation and that too in part, since there are other accused including accused no.1 Madhvi Khurana against whom the case is under investigation.”

The apex court bench observed that the FIR is an afterthought with the sole intention to pressure the appellants not to prosecute their criminal complaint filed by them under Section 138 of the Negotiable Instruments Act. Setting aside the high court order, the bench observed: “It ought to have appreciated the fact that the appellants cannot be allowed to suffer on the basis of the complaint, only on the ground that the investigation against co-accused is still pending.”

Disciplinary Power of Bar Council of India

Section 36: Disciplinary Power of Bar Council of India:-

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(1) where on receipt of complaint of otherwise the Bar Council of India has reason to believe that any advocate whose name is not entered on any state roll has been guilty of professional or other misconduct,it shall refer the case for disposal to its Disciplinary Committee.

(2) Not with standing anything contained in this Chapter in this chapter, the Disciplinary Committee of the Bar Council of India  may,either of its own motion or on a report by any state Bar Council  or on an application made to it by any person interested, withdraw for inquiry before itself any proceedings for Disciplinary action against any advocate pending before the Disciplinary committee of any State Bar Council and dispose of the same.

(3) The  Disciplinary committee of the Bar Council of India, in choosing of any case under this section,shall observe,so far as may be,the procedure laid down insection 35, the refernces to the Advocate-General in that section being construed as references to the Attorney-General of India.

(4) In disposing of any proceedings under this section the Disciplinary committee of the Bar Council of India may make any order which the Disciplinary committee of the Bar Council  can make under sub-section(3) of section 35, and proceedings have been withdrawn for enquiry before the Disciplinary committee of the Bar Council  of India, the State Bar Council concerned shall give effect to any such order.

Section 36-A:Changes in constitution of Disciolinary Committees:- Whenever in respect of any proceedings under Section 35 or section 36, a Disciplinary committee of the State Bar Council or a Disciplinary committee of the  Bar Council of India

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ceases to exercise jurisdiction and is succeeded by another committee which has and exercises jurisdiction ,the Disciplinary committee of the State Bar Council  or the Disciplinary committee of the Bar Council  of India, as the case may be so succeeding may continue the proceedings from the stage at which the proceedings were so left by its predecessor committee.

Section 36-B : Disposal of disciplinary proceedings:-

  • The Disciplinary committee of a State Bar Council shall dispose of the complaint received by it under Section 35 expeditiously and in each case the proceedings shall be concluded within a period of one year from the date of the receipt of the complaint or the date of initiation of the proceeding at the instance of the State Bar Council , as the case may be failing which such proceedings shall stand transferred to the Bar Council of India which may dispose the same as if it were a proceeding withdrawn for inquiry under sub-section(2) of Section 36.
  • Notwithstanding anything contained in sub-secrtion (1) where on the Commencement of the Advocate (Amendment) Act,193, any proceedings in respect of any Disciplinary matter against an advocate is pending before the Disciplinary committee of a State Bar Council that Disciplinary committee of a State Bar Council shall dispose of the same within a period of six months from the date of such commencement or within a period of one year from the date of the receipt of the complaint or, as the case may be, the date of initiation of initiation of the proceedings at the instance of the State Bar Council, whichever is later, failing which such proceedings shall stand transferred to the Bar Council of India for disposal under sub-section(1).

The names of places and streets in Hyderabad

How many of us know the History behind the names of places and streets in Hyderabad? Here are some interesting facts from history —

1) Nampally:
Raza Ali Khan, was the Dewan of Nizam’s State in 1670 AD. His Title was ‘Nekh Nam Khan’ A jagir was granted to him, which came to be called nekh-Nampally. This became ‘Nampally’.

Nampally Hyderabad

2) Begumpet:
Basheerunnissa Begum, daughter of Nizam II was married to a Paigah noble. She received lands in dowry. The village came to be known as Begumpet.

Image result for Begumpet Hyderabad

3) Khairatabad:
The jagir granted to Khairunnisa Begum daughrer of Ibrahim Qutub Shah, came to be known as Khairatabad.

4) Begum Bazar:
Land gifted by Humda Begum ( the wife of Nizam Ali Khan Nizamul Mulk) to the merchants of Hyderabad for trade and commerce, finally developed as Begum Bazar.

Image result for Begum Bazar Hyderabad

5) Sultan Bazar:
After 1933, the Residency bazar was renamed Sultan Bazar, when these areas were returned to the Nizam, by the British (Residency).

6) Afzal Gunj:
The Vth Nizam (Afzalud Dawlah) gifted land to the grain merchants for trade and commerce. The place was named Afzal Gunj.

7) Secunderabad:
Named after Sikander Jha (1806) (IIIrd Nizam). The Village where British troops were stationed.

Image result for Secunderabad Hyderabad

8) Ma Saheba Ka Talab:
Hayat Bakshi Begum, wife of Quli Qutub Shah-VI, was called Ma Saheba. The tank constructed by her to irrigate lands of Mallepally village, was called Masaheba ka Talab. Finally it came to be called Masab Tank.

9) Kadve Saheb Ki Galli (lane):
After a person, who was always angry-faced and talked ill of others. This lane is in the old city.

10) Himayat Nagar:
New locality named after Himayat Ali Khan – Azam Jha – eldest son of VIIth Nizam – Osman Ali Khan (in 1933). His name was Himayat Ali Khan.

11) Hyderguda:
New locality named after Hyder Ali, who was 1st Talukhdar (District Collector) and owned lands in the village formerly the Jagir of Vaheed Unnisa Begum, wife of Nizam. The locality is called after him, as Hyderguda.

12) Basheer Bagh:
The garden of Sir Asman Jha, Basirud-dulah – a Paigah Noble, who had a palace at the Garden.

13) Somajiguda:
A revenue department employee, named Sonaji, who owned lands and resided in this village. Sonaji became Somaji and the hamlet came to be called ‘Somajiguda’. (Guda is from Godem a hamlet).

14) Malakpet:
Named after Malik Yakoob, a servant of Abdulah Qutub Shah Golconda King where he resided had a market, hence the name Malakpet.

15) Saidabad:
A Jagir village of Sayed Meer Momin, Dewan of Golconda (1591).

16) Abid’s Shop:
A Valet and steward of Nizam (VI) Mahboob Ali Khan. This man had his first shop here.

Image result for Abid's Shop Hyderabad

17) Saroornagar:
Named after Sarwari Afzal Bai, mistress of Arasthu Jha. Dewan of Hyderabad, who granted a Jagir,and constructed a palace and Garden for her.

18) Debirpura:
The village named after Abdul Samad with the titles; Dabir-ul Mulk, a noble man.

19) Noor Khan Bazar:
A market developed by Noor Khan, who came from Lucknow, during the time of the II Nizam.

20) A.C.Guards:
A locality to the West of Lakdi-ka-pul. The barracks of Abyssinian Cavalry Guards of Raja of Wanaparthy (1910) (Abyssinia is the old name of Ethiopia, an East African country).

Have a nice stroll of the Twin Cities !

Image result for Hyderabad

CONDUCT OF ADVOCATES

SECTION 35: Punishment of Advocates for misconduct:-(1) where

on receipt of a complaint or otherwise a state Bar council has

reason(1) to believe that any advocate on its roll has been guily of

professional or other misconduct ,it shall refer the case for

disciplinary committee.

(1 A) The State Bar Council may, either of its own motion or on

application made to it by any person interested,withdraw a

proceeding pending before its Disciplinary Committee and direct

the enquiry to be made by any other Disciplinary Committee of

that State Bar Council.

(2) The Disciplinary Committee of a State Bar Council shall fix a

date for the hearing of the case and shall cause a notice there of to

be given to the advocate concerned and to the Advocate-General

of the State.

(3) The Disciplinary Committee of a State Bar Council after giving

the advocate concerned and the Advocate-General an opportunity

of being heard,may make any of the following orders,namely:-

(a) dismiss the complaint or,where the proceedings were initiated

at the instance of State Bar Council , direct that the proceedings

be filed;

(b) reprimand the advocate;

(c) suspend the advocate from practice for such period as it may

deemfit;

(d) remove the name of the advocate from the state roll of

advocates.

(4) Where an advocate is suspended from practice under clauce

(c) of sub-section (3), he shall, during the period of suspension be

debarred from practising in any court or before any authority or

person in India.

(5) where any notice is issued to the Advocate-General under sub –

section (2), the Advocate-General may appear before the

Disciplinary Committee of the State Bar Council either in person or

through any advocate appearing on his behalf.

Explanation:- In this section 37 and the section 38,the

expressions “Advocate-General” and “Advocate-General of the

State” shall ,in relation to the Union Territotry of Delhi mean the

Additional Solicitor General of India.