The liquidity will move into deficit after advance tax payments and GST outflows. It will rebound in October because of government spending.
With most states on board to raise revenue so that they do not have to depend on Centre for compensation, the GST Council at its meeting next month is likely to consider a proposal to do away with the 5 per cent slab by moving some goods of mass consumption to 3 per cent and the remaining to 8 per cent categories, sources said. Currently, GST is a four-tier structure of 5, 12, 18 and 28 per cent. Besides, gold and gold jewellery attract 3 per cent tax. In addition, there is an exempt list of items like unbranded and unpacked food items which do not attract the levy.
GSTN said those who do not want to give their Aadhaar numbers would have to undergo physical verification.
'Otherwise, how is the government going to make more revenue?' 'The most important thing the GST does is to transfer money from the household consumers who are the most productive users of capital to the most unproductive users of capital, namely the government.'
'So far, the government has sanctioned more than Rs 300 billion as GST refunds,' Ansh Bhargava and Aditya Singhania point out.
The states which achieved "extraordinary growth" in total taxes collected include Kerala (44 per cent), Jharkhand (20 per cent), Rajasthan (14 per cent), Uttarakhand (13 per cent) and Maharashtra (11 per cent), an official statement said.
The government has proposed to implement GST from April 1, 2016, and the new Finance Commission may be set up ahead of its schedule to look into the issues related to the new indirect tax regime.
Mop up grows 10% y-o-y at Rs 1.05 trillion, almost equal to levels in February before a nationwide lockdown to contain the coronavirus pandemic
The video clip shows Sitharaman purportedly giving a bite to the media and terming Goods and Services Tax as the Gopaniya Suchna Tax. It was shared by one Chirag Patel on his X handle.
They've proposed a sub-committee under the proposed GST Council or the Empowered Committee of State Finance Ministers to resolve any disputes in the tax's implementation.
Finance ministry sources have countered CAG audit finding of central government wrongly retaining Rs 47,272 crore of GST compensation cess meant for states, saying temporary retention cannot be termed as diversion.
Banerjee asked Modi not to allow "an insufferable blow to the federalist polity of the nation" by depriving the states of the GST compensation. "I am deeply anguished by the Goods and Services Tax imbroglio which tantamounts to a betrayal of the trust and moral responsibility of the Government of India towards the states, violating the very premise of federalism."
After securing Congress support for a rise in the foreign investment cap in the insurance Bill, this is another key reform Bill where the Centre has managed a broad consensus.
Domestic traders body CAIT on Thursday said that much against the declared spirit of GST as good and simple tax, it has become a "colonial taxation system" not compatible with the ground realities of business in India. Various amendments and introduction of rules under GST in the recent past have made the tax systems system much more complicated and put much compliance burden on the traders, it said in a statement. The Confederation of All India Traders (CAIT) added that it is not alone the centre but largely the state governments are more responsible for distorting the GST taxation system and bringing disparities and anomalies in it which has made it a more complex system and a "big headache" for the traders.
The victory of the Congress and its allies in three out of five states may make it easier for the United Progressive Alliance government to move forward on the Goods and Services Tax.
'The low tax to GDP ratio of the country will go up, helping the government to adhere to fiscal discipline and keep inflation in check.'
Nasscom president said moving from single to multiple points could be a challenge from the point of view of ease of doing business
Lack of visibility on rates makes companies apprehensive.
The gross GST revenue collected in the month of December 2021 is Rs 1,29,780 crore of which CGST is Rs 22,578 crore, SGST is Rs 28,658 crore, IGST is Rs 69,155 crore (including Rs 37,527 crore collected on import of goods) and cess is Rs 9,389 crore (including Rs 614 crore collected on import of goods), informed the ministry of finance on Saturday. The government has settled Rs 25,568 crore to CGST and Rs 21,102 crore to SGST from IGST as regular settlement. The total revenue of the Centre and the states in the month of December 2021 after settlements is Rs 48,146 crore for CGST and Rs 49,760 crore for the SGST.
'If petro products are brought into GST, then there will be minor impact on the incidence of tax... and minor impact on prices. The price of petrol, diesel will continue to be driven by global factors'
Heeding to demands made by several states, the GST Council on Friday put on hold a decision to hike the tax rate on textiles to 12 per cent and referred to a panel of state ministers to recommend rate by February, Union Finance Minister Nirmala Sitharaman said. The panel, the highest decision-making body for indirect taxes, met under emergency provisions after states made a request for deferring the tax rate hike on textiles, from the current 5 per cent, to be effective from January 1, 2022. Currently, the tax rate on manmade fibre (MMF) is 18 per cent, MMF yarn 12 per cent, while fabrics are taxed at 5 per cent.
GST, which will replace almost all central and state taxes, could have two components of 8 per cent each -- one will go to the Centre and the other to the states, according to sources familiar with the talks between the Centre and the states. However, it will not cover tax on petroleum products and Customs duty.
The proposed exemption in customs duty on import of lithium, cobalt and other rare minerals in the Union Budget 2024-25 is likely to lower the battery production cost and help in making electric vehicles more affordable for the buyers, auto industry leaders said on Tuesday.
The finance ministry has set up two committees of state finance ministers which would rework rate slabs, review GST exempt items and identify potential evasion sources. Four years after the roll out of the national Goods and Services Tax (GST), which replaced the complex indirect tax structure, the centre and states have started work on moving towards a "simpler rate structure in GST" by reviewing the current rate slabs, including special rates and merger of rate slabs. The Group of Ministers (GoM) on rate rationalisation would also review items under inverted duty structure to help minimise refund payout, and review the supply of goods and services exempt under GST with an objective to expand the tax base and eliminate breaking of input tax credit (ITC) chain.
The GST Council on Friday left taxes on COVID-19 vaccines and medical supplies unchanged after the BJP- and Opposition-ruled states sparred over whether tax cut benefits will reach the common man. Congress and other Opposition ruled states have been demanding a reduction in taxes but the central government felt the move may not result in tangible gains for people. "It is one thing to rush to say - do this, it will benefit the common man. But when the technical, fitment and law committees go into the details, you realise that that could have collateral impact on many others," Finance Minister Nirmala Sitharaman said. "I am not talking about the revenue generation aspect, but how many other items will get included in it as a result of which how you are going to implement it," she added.
The United Progressive Alliance government in 2011 introduced a Constitution Amendment Bill in the Lok Sabha to pave the way for the GST regime which aims at subsuming most of the indirect taxes at the central as well as the state levels.
Jaitley says govt is open to scrapping 1% additional tax on GST
The October 5 meeting assumes significance as the Centre and states are at loggerheads over the issue of funding Rs 2.35 lakh crore GST collection shortfall.
Fresh plans of privatisation or divestment in central public sector enterprises and public sector banks might take a back seat this financial year because these may require a large consensus among coalition partners.
FM said a Constitution Amendment Bill for introduction of GST will be passed soon.
Finance Minister Nirmala Sitharaman on Thursday said taxpayer base has almost doubled to 1.28 crore in four years of rollout of the historic tax reform and the enhanced GST mop up in the recent months should now be the "new normal". In a written message to tax officers on the fourth anniversary of GST rollout, she said implementing any reform of this scale in a large and diverse country like India can be highly challenging, but GST has brought about ease in taxpayer compliance and reduced common man's tax burden.
The Centre and the state governments have agreed not to unilaterally change the tax rate on goods and services, once the Goods and Services Tax (GST) is implemented from April 2010.
A 5 per cent GST rate kicked in on Monday on pre-packed and labelled food items such as cereals, pulses and flour weighing less than 25 kg.
Congress preparing a dissent note on the issue
Kerala Finance Minister K N Balagopal has sought systemic changes in the GST structure, saying every state and consumer has lost because of its basically flawed architecture that has also led to rampant revenue leakage for the states. The Goods and Services Tax (GST) regime came into force in July 2017. Even though the framework is focused on having a one-nation-one-tax model, quite a few items, including petroleum products and liquor are still out of the GST purview.
The revenue collection in the same month a year ago stood at Rs 94,442 crore.
The GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on December 31 and discuss, among other things, report of the panel of state ministers on rate rationalisation. This will be a physical meeting, which will also discuss correction in duty inversion in certain goods. The 46th GST Council meeting will be held on December 31 in Delhi, an official said, adding that it will be an extension to the pre-budget meeting with state finance ministers on December 30. The Group of Ministers (GoM) on rate rationalisation will submit report to the Council.
If the company A is located in a non-GST state, it would pay a total tax of Rs 300 (Rs 200 on finished product and Rs 100 on input), compared to Rs 200 paid by other producers in a GST state. The Centre is hoping that in such a scenario companies in GST states would lobby for introduction of the pan-India tax, which will subsume most state and Centre-level taxes.
The CAG has found that the Union government in the very first two years of the GST implementation wrongly retained Rs 47,272 crore of GST compensation cess that was meant to be used specifically to compensate states for loss of revenue.
Here's everything you need to know about the Goods and Services Tax Bill.
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