The GST Council had given the option to real estate companies to either opt for old rates of 12% (for residential) and 8 per cent (affordable housing) with ITC benefits or the new tax rates of 5% for residential units and 1% for affordable housing without the benefit of adjusting the credit on inputs used during construction.
This will violate the time-honoured convention that a government elected for a five-year tenure presents only five full Budgets, but the NDA government will no doubt present it as yet another initiative of Mr Modi.
Modi campaigned on the issue of national security, which cannot be ensured without a strong economy.
The GST Council, headed by Jaitley and comprising representatives of all the states, is scheduled to meet in Srinagar on May 18-19 to finalise tax rates on different goods and services after unifying at least 10 indirect taxes into the Goods and Services Tax.
The government introduced the 122nd Constitution amendment Bill.
Introduction of GST would make Indian products competitive in the domestic and international markets.
The Congress, however, said it wanted to see the final print on the wording of the dispute resolution mechanism before committing its support to the Bill
All goods and services have been put in slabs of 5%, 12%, 18% and 28%
Retaining the GST rate assumes importance since states are under pressure to increase their revenues, hit hard by lockdown. Also, the Centre has not fully compensated states for their revenue losses on account of GST for 2019-20.
"At present, there are two main rate slabs under which sa majority of goods are covered -- five per cent and 12.5 per cent -- which will now increase to three (five per cent, 12 per cent and 18 per cent).Will this result in multiple litigations is anybody's guess."
Union Finance Minister Nirmala Sitharaman on Friday said the Indian economy is on a sustained path of revival and cited rise in GST collections and direct taxes to support her assertion. She further said that the confidence in the Indian stock market is growing as retail and small investors are keenly investing money in the share market. She was addressing the media in New Delhi.
"This rationalisation is 3-4 month exercise," he said, adding that the GST Council decided on the rate cut on the recommendation of a Fitment Committee.
BJP leader Sushil Kumar Modi on Wednesday said it is not possible to bring petrol and diesel under the GST regime for the next eight to 10 years as it would cause an annual revenue loss of Rs 2 lakh crore to all states. Centre and states collectively collect over Rs 5 lakh crore tax on petroleum products, Modi told the Rajya Sabha while participating in a discussion on the Finance Bill 2021. The statement assumes significance in view of the rise in petrol price for the past over one year which even touched Rs 100 per litre in some states. In the first reduction in rates in over a year, petrol price on Wednesday was cut by 18 paise per litre and diesel by 17 paise a litre as international oil prices tumbled to the lowest since early February.
With less than five months left for the report of the Fifteenth Finance Commission to be submitted, its chairman N K Singh said the report will have fiscal road map for states, depending on their current situation.
"Of the structural reforms, the GST has been the most historic in our country. Its chief architect is not with us today. I pay homage to the visionary leader late Arun Jaitely. GST has been gradually maturing into a tax that has integrated the country economically," she said during her budget speech.
The cess collected on cars as also tobacco and coal will be used to compensate the revenue loss of states by implementing GST.
The GST Council last year imposed a cess of 15 per cent on hybrid vehicles, in addition to the 28 per cent GST, leading to a total tax burden of 43 per cent against a previous tax rate of 28 per cent.
"The Congress in a way is in the grip of urban Naxals. That is why its thought has become negative," Modi alleged in his 90-minute speech.
GST rate for petrol and diesel cars and hybrid vehicles is already at the highest bracket of 28 per cent plus cess.
Since its rollout 13 months ago, the new indirect tax has yielded Rs 1 trillion only in in April 2018
Aditi Phadnis predicts frequent stand-offs between the Centre and states in the future.
The stock was the worst hit among Sensex and Nifty components.
GST council may propose a faster refund procedure, deferment of electronic way bill, further simplification of composition scheme
The Centre and states are looking to further tighten the GST registration process and legal measures to deal with the rising cases of fake invoicing. A meeting of the law committee of the GST Council has been convened on Wednesday to discuss these issues, finance ministry sources said. The committee, comprising senior central and state tax officers, would also discuss the GST fake invoice frauds, further tightening of the GST registration process and work out other legal measures including necessary law amendment required in the GST Act to curb the menace of fake invoicing, they added. Also the provisions related to deemed registration under Goods and Services Tax (GST) law may be tightened to prevent the misuse of such provisions by fake dealers and the provisions related to suspension of registration may also be streamlined to make the procedure of suspension and cancellation of registration more efficient and faster, so that such fraud operators can be prevented in time from continuing to pass on fake credit down the chain.
States are planning to pass resolutions in their legislative assemblies; however, such tactics will be used as the last resort if the Centre continues to stall allocations.
Experts said the rate hike would improve working capital position of the manufactures as it would correct the inverted duty structure but may lead to increase in price of the finished goods.
Common use products like hair oil, soaps and toothpaste will be charged with a single national sales tax or GST of 18 per cent instead of present 22-24 per cent
However, the government is readying a relief package and it could include a cut in the licence fee to 5 per cent, two years' moratorium on paying spectrum charges with interest, and referring the GST tax refund issue to the Council.
Kejriwal's centralised way of governance might work in Delhi, but Punjab will call for delegation, observes Sanjeev Nayyar.
Experts said the builders will now factor in their losses arising from the removal of input tax credit when they pass on the benefits to end users while the latter may want the entire GST cut to be given to them.
The passage of the bill will pave the way for setting up of a GST council that will decide the tax rate, cess and surcharges.
The prime minister is aware that whatever be its consequences, a new taxation regime cannot be launched closer to the general elections in 2019. Thus, any date after April 2017 for the launch of GST is risky, says A K Bhattacharya.
This provision is a very smart rule against fraudster and would not affect any genuine business entities or Ease of Doing Business in any manner, said a source.
The NSE 50-share after reclaiming the crucial 10,000-mark slipped back to close up 9.05 points, or 0.09 per cent, at 9,988.75.
This is the third time in current fiscal that GST collections have crossed the Rs one lakh crore-mark.
Unlike the first two stimulus packages, this time the focus would be on boosting demand.
Following passage of the Constitution Bill, 2014, Dass and Finance Minister Himanta Biswa Sarma, who introduced it in the House, exchanged sweets.
Only luxury and 'sin' items could be left in highest slab. 12 and 18 per cent slabs could be merged in the future
The finance ministry has asked Infosys to provide within 15 days a plan for quick resolution of glitches on the GSTN portal, as it took strong note of the "unresolved" problems and "tardy" progress made over the last two years on multiple issues faced by taxpayers in filing returns. On Saturday, the revenue secretary A B P Pandey held a meeting with top Infosys officials on the persistent glitches seen on the GST network, and decided to ask Infosys chairman Nandan Nilekani to make an urgent presentation before the GST Council on March 14.
Market benchmarks Sensex and Nifty soared to new peaks on Tuesday, driven by gains mainly in metal, financial and IT stocks amid firm global cues and sustained foreign fund inflows. Tata Steel was the top gainer in the Sensex pack, surging 4.38 per cent, followed by Bharti Airtel 4.37 per cent, Vedanta 3.50 per cent, Tata Motors 3.03 per cent, HDFC 2.46 per cent and Bajaj Finance 2.39 per cent.After surging to its record intra-day peak of 41,401.65, the 30-share BSE barometer settled 413.45 points, or 1.01 per cent, higher at its all-time high of 41,352.17. Similarly, the broader NSE Nifty rallied 111.05 points, or 0.92 per cent, to its record closing high of 12,165.
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