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.
5 commodities namely crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) were kept out of GST's purview given the revenue dependence of state governments on these sectors.
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."
The stalemate over compensating states for the shortfall in GST collections continued on Monday with a meeting of the GST Council ending without reaching any consensus. The panel, which is the highest decision-making body on indirect taxes, for the second time in a week failed to reach a consensus on the Centre's proposal of states borrowing against future GST collections to make up for the shortfall.
The GST Council also decided that a committee of officers will be constituted to examine the simplification of forms for annual return and reconciliation statement.
Other decisions piled up include rationalisation of GST rate slabs, correction of inverted duty on certain items and inclusion of petroleum products.
Industry body CII has pitched for a reduction in personal income tax rates, decriminalisation of the goods and services tax and a relook at the capital gains tax rates as part of its agenda presented to the government for the forthcoming Budget. Arguing that the GST law already contains adequate penal provisions for deterrence against evasion of taxes, CII has suggested decriminalisation of GST law. Also, the applicability of prosecution provisions should not be based on the absolute amount of tax evasion but should be based on real intent to evade the taxes and a certain percentage of the tax payable, it stated.
While Union Finance Minister Nirmala Sitharaman reiterated her stand that the central government was committed to cooperative federalism, finance ministers of non-BJP ruled states such as Punjab and Kerala said she refused to give a categorical assurance that states will be paid compensation on time.
'Spend, but create assets, spend but make sure that people benefit from it.' 'This has been a beautiful guiding principle. And I think as a finance minister I owe so much to the prime minister for keeping this path clear before us.'
Headline growth was quite weak heading into the Covid period but averaged 6.4 per cent and 6.7 per cent in the five years between FY16 and FY20 for GVA and GDP respectively, points out Abhishek Upadhyay.
A well-functioning GST will enhance tax compliance and boost growth: IMF
GST collections in March slipped below the psychological Rs 1-lakh crore mark for the first time in four months to Rs 97,597 crore as the COVID-19 lockdown that shut most businesses compounded tax collections in an already sluggish economy.
Petrol price can go down to Rs 75 a litre across the country if brought under the ambit of the Goods and Services Tax (GST), but there is a lack of political will, which is keeping Indian oil product prices at one of the highest in the world, economists at SBI said on Thursday.
The GST Council, headed by Finance Minister Nirmala Sitharaman and comprising representatives of all states and Union territories, will have its 37th meeting in Goa against the backdrop of economic growth hitting a six-year low of 5 per cent in the first quarter of the current fiscal.
For the sake of transparency, and to reduce undesirable bond market volatility, clarity on these would be welcome, preferably before the budgets for the next fiscal year get finalised, says Neelkanth Mishra.
Revenue buoyancy of GST will be key to improve the resource position of both central and state governments.
A future road map could be to work towards a single standard rate instead of two standard rates of 12 per cent and 18 per cent, he said.
Telecom services providers have urged the Ministry of Finance to suspend the universal service obligation (USOF) till the existing corpus is exhausted. In their Budget recommendations, they have also pressed for an exemption from the service tax on "assignment of right to use natural resources" and the slashing of Customs duty on telecom equipment to zero. The Cellular Operators Association of India (Coai), which represents private sector telecom operators Reliance Jio, Bharti Airtel, and Vodafone Idea, called for abolishment of USOF levy.
'There are obvious concerns regarding revenue leakage which is understandable, but there are also concerns about whether or not well accepted, judicially tested, fair and proper procedures are being followed during such arrests.'
It is likely to be a stormy affair with divergent views on market borrowing. Centre will likely press states to borrow to make up for the shortfall, but states want either the Centre or the GST Council to do so.
The central government's fiscal deficit during 2023-24 at 5.6 per cent of the GDP was better than previous estimates of 5.8 per cent on account of higher revenue realisation and lower expenditure, according to official data released on Friday. In actual terms, the fiscal deficit -- or gap between expenditure and revenue -- was Rs 16.53 lakh crore, or 5.63 per cent of the GDP, which grew 8.2 per cent in 2023-24.
Proposals from the Centre's side include raising the 5 per cent slab to anywhere between 6 and 8 per cent, and doing away with the 12 per cent slab. A few states may oppose such a move because it involves hiking tax on items consumed by the poor. They have instead proposed raising the 18 per cent slab.
Kharge's remarks came after Modi on Friday said the Congress stands "badly exposed" in front of people for promising to them what the party knows it will never be able to deliver.
Reaching a consensus might also get tougher, as already seen with issues like inclusion of natural gas in GST and imposition of a sugar cess, both central proposals being resisted.
Income tax officials on Monday conducted surveys at offices of engineering major Larsen & Toubro and media firm Zee Group for alleged GST evasion, an official of the tax department said. When contacted, L&T neither confirmed nor denied the development, while the media group has confirmed the tax survey. The tax official said surveys have been carried out at many L&T premises in the city, and in case of Zee, the surveys are underway at all its offices across the country since morning.
'At the end of the day, we want to see maximum items out and only few items remaining in the 28 per cent slab.'
The government is going all out to spread awareness about the new indirect tax regime, and training lawmakers is being seen as a necessary first step.
Buoyed by regulatory overhaul and infrastructure boom, engineering conglomerate Larsen & Toubro (L&T) has identified realty business as one of its growth engines for the next 10 years and plans to acquire land parcels while expanding pre-sales, said a senior company executive. L&T Realty has started looking out to acquire land parcels and grab partnership development opportunities across markets to scale up its business. "We are making some strides in that direction, albeit cautiously.
The Securities and Exchange Board of India (Sebi) has intervened in the matter concerning alleged irregularities by Trafiksol ITS Technologies, which had come out with a Rs 45 crore initial public offering (IPO) last month. In an ex-parte order, the market regulator has said it will undertake a detailed examination into the disclosures made by the small and medium enterprise (SME) company in its draft offer document. BSE had halted the listing of Trafiksol, a software provider for traffic systems, amid complaints around use of the issue proceeds and wrongful disclosures.
'Compare the new slabs with the previous years to understand if your tax liability will increase or decrease after the Budget.'
Indian Oil Corporation (IOC), the nation's biggest oil firm, on Tuesday reported a 31.4 per cent drop in the fourth quarter net profit as record refining margins were wiped away by a margin squeeze in petrochemicals and losses on auto fuel sales. Standalone net profit of Rs 6,021.88 crore, or Rs 6.56 a share, in January-March, compared with Rs 8,781.30 crore, or Rs 9.56 per share, in the same period a year back, the company said in a stock exchange filing. Sequentially, the profit was higher than Rs 5,860.80 crore in the previous quarter.
Any residual amount left in the Compensation Fund after five year compensation period shall be shared equally between the Centre and the states.
Penning a Facebook post on the second anniversary of GST rollout, Jaitley said as many as 20 states are already showing more than a 14 per cent increase in their revenues and do not require the Centre to compensate them for revenue loss arising out of GST implementation.
Rates may be raised from 5 per cent to 8 per cent and 12 per cent to 15 per cent. The Council can explore possibility of merger of slabs to bring down the number of slabs to three. The Central GST collection fell short of the Budget Estimate by nearly 40 per cent during the April-November period of 2019-20
The panel might also decide on a new chairman.
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.
To improve compliance, govt may introduce lottery reward for filing GST. The Consumer Welfare Fund, where anti-profiteering proceeds are deposited, will be used to reward the lucky winners on monthly and annual bases. The prize money, yet to be fixed, may run into several lakhs of rupees for the annual draw, and about Rs 50,000 for monthly draws.
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.
'Challenge is basically near-term growth as the outlook has turned a bit adverse.'
Leading FMCG maker HUL said that it has received a demand notice of Rs 962.75 crore from the Income Tax Department and will go in for an appeal against the order. The notice relates to non-deduction of TDS on payment of Rs 3,045 crore to GlaxoSmithKline Consumer Healthcare (GSKCH) for the acquisition of Intellectual Property Rights of the Health Foods Drinks (HFD) business consisting of brands as Horlicks, Boost, Maltova, and Viva, according to a recent exchange filing.
