The largest challenge for the gigantic exercise between the Centre and the 29 states was to keep the latter interested over the years.
States may face a GST compensation shortfall of Rs 3 lakh crore in the next financial year, a situation that will force them to borrow more from the markets, says a report. The states may face a shortfall of Rs 2.7-3 lakh crore as Goods and Services Tax (GST) compensation from the Centre next fiscal. Out of that amount, the shortfall from cess collections will be at Rs 1.6-2 lakh crore, according to an Icra report released on Monday. In FY21, the states were facing a shortfall of Rs 1.1 lakh crore in GST compensation from the Centre but over 90 per cent of that amount has been cleared now.
In the year-long crackdown on tax evasion, the GST authorities have unearthed over Rs 35,000 crore of tax fraud committed by misuse of input tax credit provision under the Goods and Services Tax (GST) regime. During the 2020-21 financial year, the CGST zones and the Directorate General of GST Intelligence (DGGI) booked about 8,000 cases involving fake ITC of over Rs 35,000 crore, a statement from CBIC said. Under the GST regime, at the time of paying tax on output, entities can reduce the tax they have already paid on inputs.
Here's everything you need to know about the Goods and Services Tax Bill.
Though GST could mean complications in the short run, it will bring in undeclared revenues and streamline taxation across the value chain, the benefits should be worth the pain.
The GST Council is scheduled to meet next on November 10 and may consider lowering tax rates on a host of goods such as handmade furniture, plastic products and daily use items like shampoo.
The Centre is likely to introduce the Central GST and integrated GST bills in late November or early December in the ongoing session in the form of money Bills.
The impact of Trump's announcement of increasing import tariffs will have negligible benefit for India not because of companies trying to shift from China to other countries or their supply chains being affected due to their Chinese operations but because of our faulty policies, explains Mudit Jain.
By doing away with the 1 per cent inter-state tax over and above the GST rate, the government has met one of the three key demands over which Opposition Congress has been blocking the Bill in the Upper House
At the sector level, commodity linked sectors (energy, materials and utilities) and industrials reported the strongest revenue growth, while telecom, consumer discretionary saw the most decline in net profits.
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.
The discussions are at a very critical stage
Consensus seems a problem before the current session of Parliament ends.
The current draft of the Goods and Services Tax could kill any hope of economic revival - and you should blame the Congress if it rolls over and lets it pass, says Mihir S Sharma.
There is much work to be done to design a good GST.
Every option before the finance minister comes with a price tag, observes T N Ninan.
Thomas Isaac has been in and out of the national news in his role as Kerala's finance minister since 2018 for various path-breaking tax initiatives. But it is 2020 that he has become more prominent, principally in the GST council.
The fiscal gains from implementing the GST and demonetisation, while almost certain to occur, will probably take time to be fully realised
The revised structure will help to keep airfares down, when airlines already face a triple challenge of rising crude oil prices, rupee depreciation and constrained airport capacity.
GST reform has been hanging fire since 2006-07.
GST compensation law allows for imposition of cess on certain luxury goods like tobacco, high-end cars and aereated drinks to create a corpus for compensating states for any loss of revenue in the first five years
The rising goods and services tax (GST) and personal income-tax collections may bolster the Narendra Modi government's ability to announce new schemes or enhance existing ones.
The governments of Karnataka, Uttar Pradesh and Rajasthan want a lower limit of Rs 100,00,00 gross annual turnover.
Jaitley said the GST Composition Scheme, under which small traders and businesses pay a 1 per cent tax based on turnover, can be availed by businesses with a turnover of Rs 1.5 crore, against the earlier Rs 1 crore, with effect from April 1.
To meet the yearly target, each of the next five months has to yield Rs 1.107 trillion GST collections.
As many as 30 sub-groups and committees worked tirelessly to devise rules and laws as well as fix tax rates for over 1,200 goods and services.
The gross tax revenues have touched 65 per cent of the Budget estimates at Rs 17.81 lakh crore during the first eight months of the current fiscal till November, propelled by corporate and personal income tax mop-up, according to the Economic Survey 2022-23 presented in Parliament on Tuesday. The survey, authored by Chief Economic Advisor V Anantha Nageswaran, said the 'substantial reforms' in India's taxation ecosystem post-2014 and policy reforms have removed the distortionary incentives from the economy. Reforms like GST, reduction in corporate taxes, exemption of sovereign wealth funds and pension funds from taxes, and removing Dividend Distribution tax have reduced the tax burden on individuals and businesses.
The government will find it difficult to pass the Bill without the Congress's help
With audits and greater emphasis on anti-evasion measures, more tax demands will lead to more litigation. So, it is a bit early to start celebrating. GST is still work in progress.
The new tax rates will come into effect from January 1, 2019.
Under the GST regime, most manufactured goods will turn cheaper.
The constitution amendment Bill on a national GST is likely to be tabled in the current session of Parliament. However, the government is not confident of passing the Bill this session.
Reform ideas do not occur overnight and evolve over the years.
With a view to keeping inflation under check, essential items including food, which presently constitute roughly half of the consumer inflation basket, will be taxed at zero rate.
The finance minister continues to be backed by the same policy team in charting out the broad strategy as in the few earlier Budgets.
Net profit at M&M and Mahindra Vehicle Manufacturing Ltd contracted to Rs 918 crore from Rs 1,238 crore a year ago while revenue and other income decreased to Rs 12,997 crore from Rs 13,551 crore a year ago.
"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."
Fiscal deficit, the gap between government's expenditure and revenue, stood at 4.5 per cent in FY14, lower than 4.9 per cent in FY13.
Businesses that are engaged in both taxable and non-GST supply have re-structured themselves into separate entities to avoid elaborate compliance, says Sudipto Dey.
Preparing legal framework to protect states from revenue loss.
