Finance Ministry modifies cash management system to include post-GST changes
The finance ministry has modified the cash management system of the Central government to incorporate the change in date of tax receipts arising out of the new indirect tax regime of the Goods and Services Tax (GST). In an office memorandum, the finance ministry has asked all financial advisers of all departments and ministries to send a monthly/quarterly expenditure plan to the Budget division of the ministry within two weeks of passage of their detailed demand for grants in Parliament.
In line with the new dates for GST inflows, the finance ministry has asked other ministries/departments to ensure that big releases of Rs 200-2,000 crore are kept between 21st and 25th of a month to “take advantage of GST inflows”. Earlier, the range of dates for such releases was kept between 8th and 21st of a month.
The finance ministry has also asked other departments/ministries to keep bulk expenditure items of over Rs 2,000 crore to be timed in the last month of each quarter to utilise the direct tax inflows in June, September, December and March. “The releases (more than Rs 2,000 crore) may be kept within 17th and 25th in these months,” the memorandum said. Prior permission from Budget division of finance ministry shall be a prerequisite for any single payment release in excess of Rs 5,000 crore, it said.
The finance ministry said that monthly/quarterly expenditure plan form the basis of cash forecast and preparation of indicative calendar for government borrowings. “Deviations from monthly/quarterly expenditure plan may result into distortions in the cash planning by Government of India with multiple negative implications including increased cost of borrowing and hence would be viewed seriously,” it said.
The monthly expenditure plan would form the basis of quarterly expenditure plan and departments/ministries will not be allowed to release payment beyond quarterly expenditure plan (equal to sum of monthly expenditure plans within that quarter) without prior consent of the Budget division. “Practice of expenditure beyond quarterly expenditure plan without prior approval of Secretary (Expenditure) would be viewed adversely,” it said.
Savings, if any, incurred during quarterly expenditure plan would not be available for automatic carry forward to the next quarter, without revalidation of such savings by the Budget division for the next quarter through modification in quarterly expenditure plan, it said.
Not more than 33 per cent and 15 per cent of expenditure of Budget estimates shall be permissible respectively in the last quarter and last month of the financial year. “The restriction shall be observed both scheme-wise as well as for Demand for Grants as whole,” it said.
Use XaTTaX to file GSTR 3B Returns for free
Source : The Indian Express