Products With Pre-GST Prices To Be Confiscated From October 1

Seema Chaudhary


New Delhi, Sept 25: Packaged consumer goods displaying the old maximum retail price (MRP) will be confiscated from October 1 under the new Goods and Services Tax (GST) regime, reported Zee News. After the roll-out of the GST, Food and Consumer Affairs Minister Ram Vilas Paswan had extended a three-month dispensation to all manufacturers and traders till September 30 on old stock they were holding. From October 1, products with pre-GST prices will be confiscated.

The government had earlier allowed companies to print, stamp, or use stickers to show the new MRP on a product package. The guidelines were issued to ensure that companies and retailers have a way of dealing with older (so-called pre-GST) stock, and preventing profiteering in the name of new MRP. The original MRP shall continue to be displayed and the revised or post-GST price shall not overwrite on it, said the guidelines.

There has been ample confusion among both consumers and retailers regarding how the MRP changes will reflect under GST. Under the GST regime, if a price of a product has increased the manufacturer/ importer/ packer will have to give an advertisement in two newspapers about the new MRP and put a revised sticker on the packaging, the government had said in July.

GST, launched at midnight of June 30, has subsumed all value added tax (VAT) and Octroi levied on goods and services. It has four slabs 5, 12, 18 and 28 per cent for different commodities. This is considered Indias most ambitious tax reforms since independence in 1947.

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Different Types Of Indirect Taxes Included In GST And Its Benefits

Seema Chaudhary


A lot of taxes have accumulated in the ambit of Goods and service tax which has been termed as the most ambitious tax regime and holds the capability to fuel the economy of the nation. The main purpose of the GST is to curb various taxes levied currently on goods and service across states and to rebuilt in ‘one tax one nation’ mode. Here we will talk about the indirect taxes that are included in GST and its benefits in the GST regime.'

The taxes which are being included in Central GST are:

  • Additional Customs Duty, commonly known as Countervailing Duty (CVD)
  • Central Excise Duty (CENVAT)
  • The Excise Duty levied under the Medicinal and Toiletries Preparations (Excise Duties) Act 1955
  • Additional Excise Duties
  • Special Additional Duty of Customs 4% (SAD)
  • Service Tax

In State GST, there are various taxes which includes:

  • Luxury tax
  • Octroi and Entry Tax
  • Purchase Tax
  • VAT / Sales tax
  • Entertainment tax (unless it is levied by the local bodies)
  • Taxes on lottery, betting, and gambling
  • State Cesses and Surcharges in so far as they relate to supply of goods and services

Taxes which are not included in GST:

  • Basic Customs Duty
  • Exports Duty
  • Road & Passenger Tax
  • Toll Tax
  • Property Tax
  • Stamp Duty
  • Electricity Duty

Benefits of GST:

In the known perspective, the goods and service tax has the potential to bring lot many benefits to the nation and industries associated within. The goods and service tax has lot many advantages which can be ascertained by given points:

# Time-saving:

A single platform for both SGST and CGST is a great concept to fulfill the taxation process as the taxpayers will be able to return the taxes with a single click which will surely count as productive and feasible.

# Single Tax Rate:

The unity of tax rates has brought a lot of cleanliness into the system and likewise reduced the paperwork. The main advantage of this is that it will definitely narrow down the complexity and in turn will give fast and secured manner of the transaction.

# Reduce cascading effect:

One of the main benefits of the Goods and service tax in India that it will remove the value addition of every product and therefore remove the cascading effect which burdens the final price of the product.

# Control tax evasion:

The online method of tax framework will certainly bring a transparency and will also find out the source of any tax leakage as the transactions can be monitored and will improve in helping overall tax collection.

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Why Should You Consider GST Software For Your Business?

Seema Chaudhary

Consider GST Software For Your Business: Every business owner be it big or small might be aware of new tax regime enrolled in the country. Though GST is 5 months old in the country, business owners are struggling to handle. GST filing be it generating invoices or filing tax returns. This is the juncture where GST software has become very important for the business owners to simplify their tax filing issues. Long time
being spent by the business owners in filing the tax returns can now be utilized for something more productive.

Consider GST Software For Your Business.

Ease of Filing Data

Be it before implementation of GST or after implementation, many business owners rely on accounting software to handling their finances. This earlier accounting system has a few complexities to handle while filing returns. With the introduction of GST software in the market, the business owner will no longer find it difficult to calculate GST taxes. The software facilities registration and filing of the complex data easy in just a few clicks. The new GST regime compels the business owner to file the taxes through government registered vendors only and this GST software makes the job of the business owner easy in filing returns to online government portal.

Invoicing made simple

While business owners are still struggling to understand the tax implications of GST, compiling
the invoices for business can be challenging. GST software can be an effective tool to make
invoicing not only simple but also easy for the industries like restaurants that sell both products
and services. They need not struggle to calculate the taxes for the products and services
differently. Everything happens just in few clicks.


Prior to the implementation of GST, the manual filing of the taxes was prevalent giving a scope
for errors. With the implementation of Goods and service tax regime and using GST software,
all the invoices are automated thereby minimizing the chances of errors. By using the software
for raising invoices and filing taxes, your business will no longer be in the trouble of handling
errors and miscalculations.

Data Security & Easy Retrieval

Security and quick retrieval of the financial data is very important for the business organizations to sustain and survive in the market. Using GST software will enable you to save the data online safely and the best part is you can access the software from anywhere be it a computer, mobile or tablet. All you need to have is good internet connectivity and device to access the same.

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5 Important Features To Have In Your GST Software

Seema Chaudhary

We are at the brink of one of the biggest business changes of our times viz. Goods and Services Tax. So far, most of the big businesses have already identified vendors for implementation of GST software. Many of the large enterprises had floated a Request for Proposal/Request for Information (RFP/RFI) late last year, asking software providers to present them with their solutions. They would have then evaluated these providers, over multiple product demos and extensive question and answer rounds, to reach a stage where they can now begin the implementation process, and undertake business process mapping and solutioning.

If you, too, are looking for a GST software, then here is a list of some of the key features that you must ask for in your software:

1. Security

Needless to say, in today’s digital world security is one of the most critical assurances. A secure software will protect confidential business information and avoid any kind of compromise that may pose threat to your business. We have witnessed how the Wannacry virus has recently hit computer systems across the globe and hackers have asked users for payment in bitcoins against retrieval of data. Hence, you need to ensure that the GST software you buy is robust not only in return filing but also from data security point of view as well.

2. Multi-Platform Adaptability

Under the new regime, every business has to be compliant – there is little choice of an alternative. The concept of invoice matching has been introduced which will ensure that every taxable person in the value chain files his/her GST Returns on time. This will directly affect the compliance rating of businesses. Thus, to keep up with these compliance requirements the GST software your purchase should be enabled on multiple platforms and must be accessible from desktop, tablets or mobile phones at any point in time, increasing the ease of online return filing.

3. Flexibility

Many large companies are already using some version of an Enterprise Resource Planning (ERP) Software to manage their business operations and record or report processes. Even small and medium businesses for that matter have accounting tools for book-keeping. In such an environment, setting up new master data in a new application (GST Software) is not a feasible option. The GST software must be flexible enough to integrate with existing systems and provide a seamless experience. Multiple standalone systems operating in silos will only inflate the operating cost of businesses.

4. Cognizance

Under the GST regime, a normal taxpayer registered in one state will have to file thirty-seven returns during a financial period. If we look into the dynamics of today’s businesses, most brands are pan-India or have a global client base. Taking the example of a single online seller who operates all over the country, we see that he may have to file 37*29 (29 states)= 1073 returns in a single year. That is an average of almost three returns a day! Well, this is why any GST software that you evaluate must have the intelligence to communicate the user of all possible events coming. This will ensure that no deadline is missed and your business remains up and running!

5. User Interface and Reporting

Having discussed all the features above, one key feature which is universally appreciated is a beautiful user interface. For any typical business person, this ‘beauty‘ means informative dashboards and Informative Reports (MIS). This will enable quick decision making and transparent operations. Real-time information may help you avoid over/under stocking and may save on working capital. Also, for many businesses, an evaluation criterion for new software is the number of clicks to perform a particular task. A good GST software must accommodate such requirements as well and operate on a minimum user interface principle.


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5 Basic Things About GST Everyone Should Know

Seema Chaudhary

If you are a business, it is nearly certain you deposit some tax other than income tax. It could be in the form of service tax, excise duty, VAT or some version of custom duty. These taxes are called indirect taxes. Nearly all of these taxes will now be replaced with GST.

But the implementation of GST is not merely a change in tax. GST is an overhaul in the way in which indirect taxes will ‘levy’. Currently, excise duty is levied on manufacture, VAT is levied each time goods change hands and value is added to the product. CST (Central Sales Tax) is charged when goods move between states. This way a finished product can have excise duty, VAT, CST added to its cost before reaching its final consumer. All of these have a different ‘point’ of tax levy. These different taxes will now give way to GST.

When is GST Levied?

The most important thing about GST then is its point of levy. Under GST, point of tax levy is ‘supply’. What constitutes a supply has been defined in the GST Act. Supply means sale of goods and services. A supply of goods and services can take place even without an actual sale. Supply will also include, transfer, exchange, and barter, rental, lease and also a supply made to an agent or to a branch. So if you are a business, engaged in any of the above, GST will replace all taxes paid by you on purchases, and mandate you to levy GST on your supply. In this context the government may notify some services & goods, which will not be considered a supply and hence will not attract GST. So the first step would be to identify if your business has made a supply.

Types of GST

Once it has been established that your business has made a supply, the next step is to find out whether it is an intra-state or an inter-state supply. If the origin state is different from the destination State, it is considered an inter-state supply. This is the reason why GST is also called a destination-based tax. Those who make inter-state supplies have to mandatorily register for GST. Most supplies are likely to be taxed at the rate of the destination state. Supplies made outside India would not attract any GST, however GST registration may still be required for these supplies. Intra-state sales will attract Central and State levy, called SGST and CGST. And inter-state sales will attract IGST, which is likely to be a sum total of CGST and SGST. IGST will also be levied on imports.

Who Should Prepare for GST?

If you are an existing registrant under VAT or service tax or excise duty, you should roll over your registration to GST. Those with turnover less than Rs 20 lakh (Rs 10 lakh for North East states) do not have to mandatorily register for GST. This limit, though, is not to be considered if the business is involved in making inter-state transactions. GST registration is mandatory for them.

If you have a website from where supply of goods or services takes place, GST registration will be mandatory for you. GST also applies to an ‘input service distributor’. Input service distributor means a head office that receives billing for services received at branches and later on it sends apportions to branches. Such ISDs also have to mandatorily register for GST.

GST Applicability for Various Businesses

As a trader, you may be already registered under VAT, so you must register for GST. GST will allow you to set off tax paid at earlier stages for payment of GST on supplies you make. Manufactures also stand to benefit by registering, as they can now adjust tax paid on inputs against GST on outputs. So far as service providers are concerned, many of the existing rules will flow to GST. However, GST on services would now be levied by both State and centre. Taxes would flow to the place of consumption and will be received by the consuming state. Service providers will be able to claim set-off of tax paid on input goods, which was earlier restricted to only input services. Some services, such as doctors, para-medical services, and education services earlier exempt from service tax are likely to be exempt under GST as well.

Should You Voluntarily Opt for GST Registration?

Many small businesses that are below the turnover threshold and do not make inter-state supplies have the option to register voluntarily. If your buyers are GST compliant it helps you are too. This way, your buyer will be able to take credit of taxes you pay for your inputs. The GST act has laid down that if registered buyers make purchases from unregistered sellers, they will have to do full GST compliance towards tax payment and return filing on behalf of the unregistered seller. With every buyer and seller on board, GST will create a sort of a club of its own with benefits, but at the same time come with the cost of being compliant as well adapting technology as means to do business. Both bets worth the investment.



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HSIIDC Independent Director Appointed

Seema Chaudhary

Gurugram, Nov 15 : Rashmi Khetrapal has been appointed an Independent Director of the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) for two years, an official said on Wednesday.

“In pursuance of Section 149(10) of the Companies Act of 2013, Rashmi Khetrapal is appointed Independent Director on the Board of Director of HSIIDC, Panchkula, with immediate effect for two years,” Industries and Commerce Department Principal Secretary Sudhir Rajpal said in an official order.
Rashmi Khetrapal is founder of CountMagic.com, a Goods and Services Tax billing software company aimed at making businesses simple in the new tax regime.
She is a chartered accountant, apart from being an entrepreneur.

This article has also been published in Yahoo
This article has also been published in Suryaa,
This article has also been published in ThePeoplePost 
This article has also been published in DailyWorld 
This article has also been published in Business-Standard


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Government Plans Phase-2 Of Digital Payment Push From January

Seema Chaudhary

Since the demonetisation of high value currency in November last year, the government has been pushing for digital payments to move towards a less-cash economy as well as enhance tax base.

The government is working on launching the second phase of promoting digital payments from January, according to an official source.

"A committee under DAVP (Directorate of Advertising and Visual Publicity) is working on plans to start promotion of digital payments from January onward," an official source told PTI.

"Information and Broadcasting ministry along with Meity (IT ministry) are involved in firming up this plan," he said.

The logo and jingle are being prepared and the next meeting of the DAVP panel is expected to be held within a week to submit the plans, he said.

"There is a proposal that every ministry should come up with its plan to promote digital payments," he added.

Since the demonetisation of high value currency in November last year, the government has been pushing for digital payments to move towards a less-cash economy as well as enhance tax base.

There was sudden spike in number of digital transaction with participation from private sector firms.

As per RBI data, 933 crore electronic transactions have taken place in the country, amounting to Rs 12.13 lakh crore, between November 2016 and September 2017.

The electronic transaction volume peaked in December 2016 to 95.75 crore. In value terms it peaked to Rs 1.49 lakh crore in March 2017. As per the official data, there were 87.7 crore electronic transaction in September 2017, involving total amount of over Rs 1.24 lakh crore.

The RBI data shows increasing trend in UPI (unique payment interface) based transactions. The volume of transactions on UPI increased to over 3 crore, involving Rs 5,290 crore, in September this year, from 3 lakh volume and Rs 90 crore in November last year.

Mobile banking volume reached all time high in September to 8.6 crore from 7.23 crore transactions. The value declined marginally to Rs 1.12 lakh crore Rs 1.24 lakh crore in November 2016.

There was fluctuating trend in transaction volume and value on pre-paid instruments like mobile wallet. The transaction value was all-time high in September at Rs 2,760 crore. Fluctuation has also been there in internet banking and USSD based transactions, as per the RBI data.

Talking about the impact of demonetisation, i2i Funding Co-Founder Raghvendra Pratap Singh said due to increasing digitalisation of businesses and improved accountability, cash-flow based lending models received a shot in the arm.

Video advertising solutions provider Adomantra CEO Vikas Katoch said that in spite of its initial hiccups, demonetisation boosted the digital advertising eco-system.

Puneet Chandra, CEO, Skootr said: "I feel this has turned a lot of businesses internationally very positive about India; as a result, we see a lot of traction in the commercial real estate industry".

IT solutions provider Count Magic Founder Rshmi Khetrapal said that this decision has helped the business grow at a much faster pace in the last one year.

This article has also been published in The News18.com
This article has also been published in The News Now
This article has also been published in The OutLookindia
This article has also been published in The Indiatoday

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Industry Honchos Give Thumbs Up To Demonetisation Ahead Of Its First Anniversary

Seema Chaudhary

While the first quarter of demonetisation created initial disruption in the Indian economy, industry as well as consumers eventually witnessed the positive impact of demonetisation within the first year of its implementation.
Some industry experts now claim that, this indeed, was a master stroke for the industry. According to them, though the growth slowed down for a quarter but eventually it proved be a boon to the economy.

Sharing the success story of demonetisation for the commercial real estate industry, Puneet Chandra- Founder and CEO, Skootr said, “Demonetisation and efforts from the government to restrict black money and its digital policy has boosted the confidence of legitimate businesses. Economic stability and a consistent political environment are directly proportional to business sentiments in the country. I feel this has turned a lot of businesses internationally very positive about India; as a result, we see a lot of traction in the commercial real estate industry. With the perception of existing government growing better in the eyes of the world, commercial real estate is going to be on its high during the next 3 to 4 years. We estimate a total requirement of 4 million desks in 3 years considering only the co-working space industry which is a subset of commercial real estate industry.”
“Initially, primary and secondary players in the value chain of resale market in housing realty faced a huge business crunch; but commercial real estate benefitted from it. Given that cash components do not play a huge role in commercial real estate transactions, a bulk of the leasing is done through white money by registered companies. Hence, demonetisation did not have any slowdown impact on the commercial real estate segment. Adding to this, due to the liquid cash crunch, a lot of start-ups and even MNCs in India started opting for co-working and managed office working space so that they could protect themselves from the capital lock-ins which used to be very hefty”, Mr. Chandra further added.

Sumit Peer, Founder and CEO, Aurelius Corporate Solutions said, “Demonetisation was a move which hardly any other leader in the world could dare to take, it reinvented the formula of political will and determination of an honest politician. This not only helped clean black money but also helped restore the image of Indians and Indian politics which had taken a serious beating in the past. A parallel thriving black money economy is halted and has helped check the price rise and inflation, making life and resources available to common man at a sustainable and affordable price. Our business has improved a lot as training opportunity on ERP customization and automation of home grown CRM solutions came in. We have seen a good demand on programs like SAP- GST from all segments for the market.”

Rshmi Khetrapal, Founder Count Magic said demonetisation has controlled the parallel economy by curbing the flow of black money in the Indian economy. Appreciating the government’s decision on curbing the illegal money, Ms. Khetrapal said, “Post analysing the state of Indian Economy, demonetisation was the need of the hour. I personally feel that demonetisation was one of the major reforms that any government could have undertaken. It has been instrumental in injecting cash back in the banking system. It helped in creating a transparency in the economy, helping the government expand tax base and revenues. Numbers of taxpayers have considerably increased and a large number of shell companies have been identified. This has helped our business grow at a much faster pace in the last one year. India was largely a cash driven economy but post this reform, majority of the population has now opted for digital mode of transactions.”

This article has also been published in The ABPLive
This article has also been published in The Business Standard
This article has also been published in The India
This article has also been published in The New Kerala.com

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Consultancy Firms See Silver Lining: Impact Of Demonetisation And GST

Seema Chaudhary

Digital push provides more training opportunities demonetisatio he consultancy sector is one area where demonetisation of high-value notes and implementation of the Goods and Services Tax (GST) seem to have had a positive effect.

Consultancy firms have seen an increase in demand, say industry members.

Sumit Peer, founder and CEO of Aurelius Corporate Solutions, a leading knowledge solutions integrator, said, “Our business has improved a lot, with more training opportunities on Enterprise Resource Planning (ERP) customisation and automation of homegrown Customer Relationship Management (CRM) solutions. We have seen good demand on programmes like SAP-GST from all segments of the market.”

Rshmi Khetrapal, founder of Count Magic, a GST software company, said demonetisation and GST has helped create transparency and increase tax base and revenue. “A large number of shell companies have been identified. This has helped our business grow much faster. India was a largely cash-driven economy, but a large part of the country’s population has now opted for digital transactions,” Ms. Khetrapal said.

This article has also been published in The Hindu

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How To Convert GSTR2 Report To Excel Format ?

Seema Chaudhary

Today all the tax payers are taking lot of the time for reconciling the GSTR2 report with Purchase Invoice by checking one by using the offline utility software provided by the GST Portal, but here I am introducing the new utility created in the Microsoft Excel Format which will helps us to convert the Json File which is created by the GST Portal to Microsoft Excel Format and it will helps us to reconcile the data by using Vlookup formula in the less time and you can relax in the GSTR2 filing process.


Download the GSTR2A Report from the GST Portal


Download the Offline Utility software of the Json file convertor to Excel using the below link

(It will work only above version of Microsoft Excel 2010 and above)


Convert the Json file to CSV Format by uploading the file to site


Convert this to CSV Format


Copy and Paste  the data in  the CSV File to the Excel Utility and pasting same using Paste Special  values

Convert the same and generate the file , you can view the excel data in the Output folder


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GST Council Meeting-The Items On Which The GST Rates Have Been Reduced & Include

Seema Chaudhary

The third GST Council meeting since the implementation of Goods and Services Tax in India brought a spate of good news for exporters and small businesses, but also had something to offer to consumers as well, albeit less than what was widely expected. The GST Council, headed by Finance Minister Arun Jaitley, reviewed the rate of tax under GST on as many as 27 goods and services, mostly lowering the tax on these items of common use. However, the number of items discussed for a review of rates in Friday’s meeting in New Delhi was far lower than the 60 items under review, on which the government was expected to cut taxes.

The council responded favourably to the the call by small businesses to lower the compliance burden by allowing them to file returns only once in a quarter instead of once every month as is required at present. Further, for exporters reeling under tight liquidity conditions due to tax refund claims aggregating to Rs 65,000 crore stuck with the government, the GST Council took steps to provide them relief by allowing pre-GST exemptions for them till March 2018. Instead, the council chose to focus on straightening out administrative and procedural difficulties in implementation of GST, which have brought the businesses of exporters and SMEs to near grinding halt, and make the reform smoother and simpler.
As for reducing the tax burden on consumers itself, here’s a list of the items on which the government cut rates today:

GST Council Meeting- major decisions taken today:

The items on which the GST rates have been reduced include:

1. Tax on Clothes reduced to 5% from 12%... a massive relief to Clothing industry.

2. 60 items tax reduced to 5% from 12%....a massive relief to Traders & Consumers both.

3. Restaurant Tax reduced to 12% from 18% GST... a big relief  to consumers.

4. Return to be field once in quarter not monthly basis... ..a massive relief to Businessmen.

5. Turnover for composition scheme raised from RS.75 Lakhs to RS. 1 crore..... a huge relief for traders.

6. E-way bill provisions deferred till April 2018... a breather for trades. :)

7. Reverse charge to be abolished till 31.03.2018...... another breather for traders.

8. Quarterly returns for taxpayers with annual turnover less than Rs1.5 crores. Tax to be paid on monthly basis......a good step indeed.

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How GST Will Impact Your Wallet Of The Common Man Budget

Seema Chaudhary

Since the passing of the GST Constitutional Bill by the Rajya Sabha in August last year, the country has been preparing itself for the new tax regime. The new GST law is India’s biggest tax reform initiative which is expected to improve compliance levels, increase government revenue, and create a common playing field for the businesses by amalgamating a host of central and local taxes.

On the face of it, GST seems to be a mixed bag with some of the necessities becoming cheaper, while the others might get more expensive. While in the longer run the Goods and Service Tax might have a favorable effect on most of the sectors of the economy, in the short run, as with the most of the reforms, the benefits seem to be limited. Based on the experience of GST implementation in other countries, India could observe an inflationary impact at the onset of the reform, which might fade away once the legislation sinks in.

Things that might get costlier:

The present rate of service tax is 15 percent and is applicable to most of the services excluding essential ones like cultural activities, ambulance services, and certain pilgrimages and sports events. Under Goods and Service Tax, this rate would increase to 18 percent making the services more costly. For some goods like edible oil, textiles, etc. the excise duty is nil and the VAT in several states is 5 percent. Hence, the total cost of such goods is close to 8%-9%. With GST, the cost of such goods is likely to increase and this might put a hole in the budget of a common man.

The Government has a negative outlook towards sin goods which includes cigarettes, tobacco products, and aerated drinks. These goods are going to be taxed at higher rates than normal, which is good for you if you have been planning to cut down on your consumption of these products. Some of the things which could get costlier once GST comes into play include:

  • Restaurant and hotel bills
  • Mobile bills and internet packs
  • Transportation services including railways, air travel, and cab services
  • Jewelry and precious metals
  • Luxury cars
  • Cigarettes and other tobacco related products
  • Aerated drinks
  • Courier and DTH services

Things that might get cheaper:

The cost of the indirect tax on goods is presently at the higher levels. This is because most of the goods such as consumer electronics, beauty products, non-luxury automobiles, etc. draw an excise duty of 12.5 percent and state VAT around 12.5%-15%. Moreover, there are several cascading taxes due to CST, input tax credit retention under the VAT regulations, levy of octroi, entry tax and other taxes imposed by the local body, during the entire value chain till the product reaches the customer.

For the manufactured consumer goods, the present tax regime implies that the consumer has to pay nearly 25%-26% in excess of the production cost of the goods due to excise duty and VAT. So, with the rollout of the Goods and Service Tax where the rate is expected to be 18 percent for most of the goods, these are likely to get cheaper. Some of the products which could get cheaper once GST comes into play include:

  • Wood articles and Plyboards
  • Online Shopping
  • Fast moving consumer goods (FMCG) goods like processed foods, shampoos, chocolates, etc.
  • Pharma products
  • Branded apparel
  • Movie tickets
  • Paint, cement and several construction materials
  • Air coolers, fans, water heaters, TVs, and other electronic items
  • Solar panels, and fingerprint scanners

The Bottom Line

Goods and Services Tax, hailed as one of the most powerful tax reforms which India has ever seen, purports to do away with the multiple tax regulations on most of the goods and services. GST would change the current tax regime of production-based taxation to a consumption-based system.  There is no doubt that the corporates would benefit once the GST has been rolled out; however, the advantages to the common man are still speculative. We hope that the end consumer would also reap the benefits of the new tax regime, once the business houses have transitioned completely to the new tax structure and start to pass on the benefits to the average Indian.

This article has also been published in The Financial Express

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12 Smart Ways To Lower Taxes On Salary

Seema Chaudhary

The financial year is going to end soon and you may be busy planning last minute tax saving for FY 2016-17. But no matter what time of the year it is, understanding how to save taxes on salary can be very helpful.

Changes announced in Budget 2017, have lowered taxes for all in FY 2017-18 (unless you earn more than Rs 50L).

Take a look here to check how much tax you will save in FY 2017-18. You can also use our calculator here.

If you are looking for information on how to lower taxes on SALARY INCOME, this article explains how.

This article will help you to

  • Save tax legally on salary income
  • Change your salary structure


There are various allowances and perks which are exempt from tax and you can easily claim them provided that they are a part of your salary structure. So by restructuring your salary, and including these allowances, you can reduce your taxes in a big way. You will have to rework your salary structure with your Employer.

What you can do to 

  • Ask your employer/HR/Payroll department to restructure your salary
  • Make sure you submit all bills/receipts on time. Most of these allowances can only be claimed via the employer (and not at the time of filing your income tax return)

With the help of these allowances/perks, your taxable income will be lower and your take home will be higher.


Here is the list of such 12 benefits that can lower your tax outgo significantly

 Allowance/Perks/Tax Benefits

Name of the Tax Benefit Purpose of Allowance/perks Max Exemption
Medical reimbursement Medical expenditure of employee or dependants  Rs 15,000 per year
Conveyance Allowance Commute between office and place of residence Rs 1600 per month.
Leave Travel Allowance Fare expenses for travel in India Actual travel  expenditure or amount provided in the CTC whichever is lower
House Rent Allowance (HRA) For rent of a house near the place of work. Minimum of the following :

1)      Actual HRA(Given in CTC)

2)      50% of (basic + dearness allowance)if metro city otherwise 40% if non-metro

3)      Total rent – 10% of Basic salary


Use HRA calculator

Mobile reimbursement and residential telephone bill reimbursement Telephone expenses for official use Actual bill amount or amount provided in CTC whichever is lower
Uniform allowance Expenses for purchase and maintenance of official uniform Minimum of actual expenses and allowance received
Children education allowance Education expenses of children Rs 100/month per child(up to two children)
Children  hostel allowance Hostel expenses of children Rs 300/month per child(up to two children)
Books & Periodicals Expenses on books, newspaper & magazines. Actual expenses.
Food coupons Company provides food coupons Rs13,200/year ( Rs 50 per meal considered for 22 working days in a month, which works out to Rs 1100 per month)
Fuel reimbursement Expenses of fuel, driver’s salary Rs 1800/month. in case cubic capacity of engine is 1.6 litres OR

else 2400 /month along with Rs900/month for driver’s salary

(Note: This exemption depends on whether car is owned by employee or employer)

Club facility Expenses incurred towards payment of fees to acquire corporate membership. Actual expenses

Example to understand salary restructuring to lower your tax outgo in FY 2017-18

Below we have explained how you can change the structure of your salary to reduce your taxes. In this example Basic Salary has not been changed. This is because change in Basic Salary can impact EPF contribution that you and your employer make. Lowering EPF may not be a good thing for building a retirement corpus. We have considered LTA taxable before and after CTC tweak, as LTA can only be claimed twice in a block of 4 years. HRA has been claimed after tweak assuming that rent paid per month is Rs 12,000 and the employee is living in one of the metros. Do remember that whoever you are paying rent to (say parents) must include this income in their income tax return.

You can talk to your HR or Payroll department to restructure your salary components to enjoy these tax benefits.

  CTC CTC Tweaked
Basic Salary          2,22,000             2,22,000
HRA          1,80,000             1,50,000
Special Allowance              80,000                 44,200
LTA            18,000                 10,000
Conveyance allowance                   19,200
Medical reimbursement                   15,000
Mobile reimbursement                   14,400
Food coupons                   13,200
Residential phone bills                   12,000
CTC          5,00,000             5,00,000


Taxable Salary CTC CTC Tweaked
Basic Salary          2,22,000             2,22,000
HRA          1,80,000                 69,000
Special Allowance              80,000                 44,200
LTA              18,000                 10,000
Total taxable salary          5,00,000             3,45,200


Tax outgo CTC CTC Tweaked
Tax outgo              12,500                         –
(FY 2017-18)    
Cess 3%                   375                         –
Total Tax             12,875                         


As you can see earlier tax payable was Rs 12,875. It has been brought down to 0 after restructuring.

You can use any of the components mentioned in the table above to restructure your CTC and reduce the tax paid by you. You must also try to claim 80C deduction so that your tax outgo is minimum. Your contribution to EPF is eligible for deduction under section 80C.

You can read our detailed guide on salary income – here.

Hope you found this useful – do ask us if you have any questions or need help. Write to us support@countmagic.com

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GST: 8 Things You Must Know About GST Bill

Seema Chaudhary

The GST bill has been passed in Lok Sabha. The bill is now waiting to be approved in the Rajya Sabha.

Here are 8 things you must know about GST Bill –

What is GST? GST or the Goods and Services Tax will replace all the existing taxes of VAT, Sales Tax, Excise Duty, Customs Duty, Central Sales Tax and Octroi. Some goods are also taxed differently based on whether they move inter-state or intra-state. With the introduction of GST there will be a single levy on goods and all the taxes mentioned above will go away.

Why are so many rates an issue? The several rates which are in force increase the compliance burden for businesses. Besides this some goods may invite more than one type of tax and there are no clear mechanisms for taking credit where some taxes are already paid. This increases the overall burden on the goods and for businesses who manufacture them.

What is the approval timeline for GST? Since the implementation of GST requires an amendment in the constitution is has to be approved by 2/3rd majority in the Lok Sabha as well as 2/3rd majority in Rajya Sabha. It has to be also approved by atleast ½ of the Legislatures in States. And then finally receive President’s assent.

What is the GST Rate? The GST Rate is expected to be around 24% – 27%.

Will GST make goods expensive? The introduction of GST will lead to reduction in cascading effect of taxes – which means a good will attract only one single type of tax rather than multiple taxes at multiple points. Also, as businesses will not be subject to multiple levies and compliances – this is bound to increase the overall efficiency. Though experts have been saying that our GST rate is much higher than the rates around the world.

When will GST be implemented? Our FM Arun Jaitley has committed to implement GST from 1st April 2016.

Why are some states opposing it? Since this tax will involve going away of some of the state levies it shall impact revenue collections of the states and therefore there is opposition from the states. The Centre has mentioned that they will try to compensate the states in a way that their revenues don’t go down significantly.

Does it cover all Goods? Not exactly, the government has chosen to keep liquor out of the GST regime. Also petrol and diesel and tobacco have been kept out of the GST route. This has invited criticism since these products attract a lot of levies and keeping some goods exempt from GST is bound to displace the GST roll out efforts where states may request some more products to be made exempt.

Hope this list helps you understand what GST is about. We’ll also bring quick check on what the Undisclosed Foreign Assets & Income Bill is in our next post. Meanwhile, do comment with your feedback or write to us support@countmagic.com if you have any questions. Visit our website:https://www.countmagic.com, Just Call on : 1800-120-4741

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7 Ways Your Personal Finances Changed In 3 Years Of The Modi Government

Seema Chaudhary

Narendra Modi took oath as the Prime Minister of India on 26 May 2014. A lot has happened in these past three years, not only on the political front, but in the world of personal finances as well. Has it been Achche Din for your money? Let’s take a look at how the Modi Government has affected your personal finances.

1) We’re now holding debt funds for longer because the long-term period was increased from 12 months to 36 months

2) With money lying idle in our bank accounts after demonetisation, we have started investing in mutual funds a lot more

3) Fixed income investments have become less attractive after interest rates went down

4) Home loan interest rates have come down to make it easier to own a home, especially with additional tax benefits also made available

5) We’ll now be paying less income tax after the tax rate on the 10% slab was reduced to 5%

6) Freelancers, professionals and consultants can pay income tax on only half of their income under the Presumptive Taxation Scheme

7) The equity markets have gone up to newer heights and made equity fund investments actually gainful

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