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GST overcomes initial hiccups to log 200 days, future in balance
Lowering GST rate on cement next on agenda: Arun Jaitley

Lowering GST rate on cement next on agenda: Arun Jaitley

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Finance Minister Arun Jaitley on Thursday said the BJP-led NDA will continue with fiscal prudence and lower tax rates if elected back to power.

He further said the GST (Goods and Services Tax) Council has cut tax rates on consumption items to 12 or 18 percent from the highest slab of 28 percent and lowering rate on cement is next on agenda.

“I speak in terms of taxation policies… I’m quite clear in my mind that on two issues at least we had – a lot of good fiscal prudence and we brought the rates down, these are two areas, if we are in power we will continue the same glide path,” Jaitley said while addressing the CII AGM here.

The general elections will be held in phases beginning April 11 and counting of votes will take place on May 23.

Jaitley said India’s growth has stabilized between 7-7.5 percent and irrespective of global trends, domestic consumption is going to increase.

“We have come to 7-7.5 percent (growth rate) range despite the fact that there is no global boom or support of any kind, and we have stabilized at that, you need to graduate further,” he added.

The Reserve Bank of India Thursday cut its GDP growth forecast for the current fiscal by 20 basis points (bps) to 7.2 percent.

The minister said that over the last 5 years the government did not increase tax rates, and in some cases doubled tax base and increased tax collection.

“In the last 20 odd months of the GST except for Cement that is because of affordability, … every item of consumption has come down to 18 percent and 12 percent category from 28 percent. So, it is only a matter of time that the last one also comes down,” Jaitley said.

Asked what steps would be taken if the government comes to power, Jaitley said, “Wait for a couple of days, when our manifesto comes out, you may find some of the views expressed in that”.

The government had revised upwards the fiscal deficit target for 2018-19 fiscal to 3.4 percent from 3.3 percent projected in the budget.

For current fiscal, which began on April 1, the fiscal deficit target has been set at 3.4 percent.


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Source: Money Control
Finance Minister
Arun Jaitley favours GST council-like structure for healthcare, agriculture

Arun Jaitley favours GST council-like structure for healthcare, agriculture

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Finance minister Arun Jaitley argued a case for setting up GST Council-like federal institutions to promote healthcare, rural development and agriculture sectors to allow the Centre and states to supplement each other’s efforts instead of competing.

In the 10th and concluding part of his ‘Agenda 2019’ series titled ‘Why Agriculture, Rural Development and Healthcare Require a GST Council-Type Structure?’ Jaitley urges pooling of resources to avoid overlap and duplication.

“The question, thus, is why can’t this experiment be replicated elsewhere?” Jaitley asked as he flagged these areas where GST Council-type of cooperation was possible.

“The GST Council has become India’s first federal institution. Its working is a role model in other areas where federal institutions are needed in India,” Jaitley said, pointing out that it displays the maturity of India’s democracy and politics.

The GST Council is an “excellent federal institution”, which in its 34 meetings has decided thousands of issues with consensus leading to benefits to traders and people and developing ‘New India’, he said. The GST Council is chaired by the finance minister and comprises finance ministers of all states.

“When larger national interest requires, decision-makers can rise to the occasion. It negates the popular impression that politicians of different shades of opinions will always be divided on party lines,” he said, making a case for the model to be used elsewhere as well.

“Agriculture, rural development and healthcare are areas where, in the larger national interest, the GST Council experience needs to be replicated,” he said, adding that in these areas both central and state governments are spending a lot of money.

“Should they not be pooling their resources and ensure that no overlap or duplication takes place and that the interest of the largest number is protected and enhanced?” he said, questioning why elected governments must compete.

He pointed to the case of West Bengal, Delhi, and Odisha, which have refused to implement Ayushman Bharat where every poor family gets up to Rs 5 lakh of hospitalisation support annually. Similarly, Rajasthan, Madhya Pradesh, Delhi, Karnataka and West Bengal are non-cooperative in PM Kisan scheme where small and marginal farmers get Rs 6,000 income support annually.

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Source: Economic Times
GST Composition scheme GST
FinMin notifies April 1 as date for availing increased GST exemption limit, composition scheme

FinMin notifies April 1 as date for availing increased GST exemption limit, composition scheme

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The government Thursday notified April 1 as the date for the implementation of doubling of GST exemption limit to Rs 40 lakh, which will benefit small and medium enterprises.Besides, the effective date for availing higher turnover cap of Rs 1.5 crore for availing composition scheme by traders has also been fixed as April 1.

Also, service providers and suppliers of both goods and services with a turnover of up to Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6 per cent from the beginning of next fiscal.

These decisions were taken by the GST Council, chaired by Finance Minister Arun Jaitley and comprising his state counterparts, on January 10. These decisions would come into effect from April 1, a finance ministry statement said.

“There would be two threshold limits for exemption from registration and payment of GST for the Suppliers of Goods i.e. Rs 40 lakhs and Rs 20 lakhs. States would have an option to decide about one of the limits.

“The Threshold for Registration for service providers would continue to be Rs 20 lakhs and in case of Special Category States Rs 10 lakhs,” it said.

Also 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.

EY India Tax Partner Abhishek Jain said implementation of these proposals with specifically the higher turnover limit for composition schemes, would aid enhancing the ease of doing business for MSMEs.

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Source: Money Control
GST House
GST Council meet inconclusive; real estate to be taken up at meeting on Feb 24

GST Council meet inconclusive; real estate to be taken up at meeting on Feb 24

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The Goods and Services Tax (GST) Council meeting on February 20 remained inconclusive after some state finance ministers sought a physical meeting as they felt an issue as crucial as a special scheme for real estate sector should not be discussed through a video conference. The meeting will now take place in Delhi on February 24.

“I have always followed the approach of moving as per consensus and some of the states wanted meeting where members are physically present, keeping the idea of consensus in mind, I adjourn the meeting to Sunday (February 24),” Finance Minister Arun Jaitley said after the meeting.

Moneycontrol had on Tuesday reported that as many as six states, including Delhi, Kerala, and Punjab have requested Finance Minister and the head of the GST Council Arun Jaitley to postpone the 33rd Council meeting via video conference and call for a physical meeting.

“I have always followed the approach of moving as per consensus and some of the states wanted meeting where members are physically present, keeping the idea of consensus in mind, I adjourn the meeting to Sunday (February 24),” Finance Minister Arun Jaitley said after the meeting.

Moneycontrol had on Tuesday reported that as many as six states, including Delhi, Kerala, and Punjab have requested Finance Minister and the head of the GST Council Arun Jaitley to postpone the 33rd Council meeting via video conference and call for a physical meeting.

The meeting was also expected to address another issue– a single rate of tax on the lottery — that some states believe should be taken up in the presence of each and every member of the Council.

Currently, the GST Council has 33 members, including Jaitley and state finance ministers or any other representative from every state.

The Council met today to consider the reports of two ministerial panels pertaining to real estate and lottery.

One of the panels, headed by Gujarat Deputy Chief Minister Nitin Patel has recommended 5 percent GST on under-construction properties and 3 percent tax in case of affordable housing category. However, in both cases, input tax credit (ITC) cannot be claimed.

Currently, GST is levied at an effective rate of 12 percent (standard rate of 18 percent less a deduction of six percent as land value) on premium housing and effective rate of eight percent (concessional rate of 12 percent less a deduction of four percent as land value) on affordable housing on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.

The panel headed by Maharashtra Finance Minister Sudhir Mungantiwar has uniformity of taxation on lottery under GST and has recommended 18 or 28 percent tax rate. The final called will be taken by the Council.

Under GST, state-organized lottery falls under the 12 percent tax slab while state-authorized lottery attracts 28 percent tax.

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Source: Money Control
GST Council meet
Jaitley likely to chair GST Council meet next week; lower levy for housing on the cards

Jaitley likely to chair GST Council meet next week; lower levy for housing on the cards

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Union Minister Arun Jaitley is likely to chair the 33rd meeting of the GST (Goods and Services Tax) Council on February 20, which among other things will consider slashing tax on under-construction flats.

The meeting could be the last one before the code of conduct for the general elections comes into effect.

Jaitley, who has just returned from the US after treatment, is expected to resume work soon.

Meanwhile, officials in the Finance Ministry said the agenda for February 20 meeting will include a proposal to lower GST on under-construction flats and affordable housing. A Group of States’ Finance Ministers (GoFMs) has favored lowering GST rates on residential houses to 5 percent without input tax credit and to 3 percent for those under affordable housing. Both the rates will be without input tax credit and one condition for 5 percent is to source at least 80 percent of materials from a GST-registered supplier.

The proposal to lower the GST rate was discussed in the 32nd meeting of the GST council, held on January 10. As there was no consensus, the matter was referred to a GoFMs.

Three-tier structure

At present, there is a three-tier structure for housing projects — there is no GST on the sale of a complex/building and ready to move-in flats where a sale takes place after an issue of completion certificate by the competent authority. GST is applicable on sale of under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale. Card rate for such flats is 18 percent, but the effective rate is 12 percent after abatement of 33 percent (cost of land). And, in the affordable housing category, the effective rate is 8 percent. Both these rates are with a full input tax credit (ITC).

To boost sentiment

Experts feel that lower duty will boost the sentiment in the real estate market. Suresh Nandlal Rohira, Partner at Grant Thornton India LLP, said home buyers will get their due benefits under GST with the decision of GoFMs to recommend lower tax rate. “It is a welcome move as in most cases the buyers always felt that the builders were not passing on the ITC benefits to consumers under 12 percent levy and the ultimate burden was to be borne by the consumers. This will really change the sentiments and may bring some boost in the real estate sector,” he said.

Another issue likely to be taken up at the meeting is some relief for the exporters. As of now, exporters get a refund of basic Customs duty and no compensation for other levies which makes it difficult for them to be competitive. Now an effort is being made to provide duty-drawback kind of scheme where benefits will be provided through e-wallet. Such a mechanism will help exporters deal with the issue of working capital.

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Source: The Hindu Business line.
GST Registration
Consensus builds up for ₹40 lakh sales threshold for GST registration in all states

Consensus builds up for ₹40 lakh sales threshold for GST registration in all states

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All states, barring hill states, are moving towards a uniform sales threshold of ₹40 lakh for businesses to register for goods and services tax (GST) despite the federal indirect tax body, the GST Council, giving them the choice to retain the current limit of ₹20 lakh.

Kerala, which was so far insisting on GST registration for traders and businesses with ₹20 lakh or more in annual sales, is veering towards raising it to ₹40 lakh. Last week, the state had informed the Council that it was taking a fresh look at its earlier position, one person familiar with the discussions said on condition of anonymity.

Punjab, which has been recording revenue loss in the GST regime and was compensated by the Union government under a Constitutional guarantee, too, has decided to go for the ₹40 lakh threshold, said a second person, who also requested anonymity. Punjab had serious concerns about raising the threshold considering the possibility of a further decline in tax collections, which could pose a fiscal crisis when the central government compensation comes to an end in 2022. In spite of that, the state decided to go for the higher threshold limit as there is still time to step up revenue collection, the person added.

Punjab had received compensation of over ₹4,600 crore in FY18, the second highest after Karnataka, which got ₹7,500 crore during the period, as per official data. States are betting on a boost in revenue when the lenient approach to tax administration in the initial two years of the tax reform gives way to stricter enforcement thereafter.

All states are expected to inform the Council about their decision on the registration criteria sometime this week. The fact that states, which had earlier preferred a lower threshold limit, coming on board for the higher limit imply that finally, a consensus is set to prevail in resetting a key feature of the GST architecture.

The proposal for a liberal registration requirement had threatened to necessitate voting at the 10 January meeting of the Council, in which chairman Arun Jaitley had allowed states to opt for a suitable threshold to avoid a vote. So far, all decisions in the Council have been taken by consensus and Jaitley did not want to break that tradition.

The latest development indicates that even if states have the liberty to set the appropriate indirect tax base depending on the number and size of local taxpayers, it is practically difficult for them to move away from the rest of the Union. “If a state retains a tighter registration requirement compared to its neighbor, it is likely that there will be a flow of trade to that neighboring state,” explained R. Muralidharan, senior director, Deloitte India. This will adversely affect tax receipts and economic activity in the state that has a lower sales threshold for GST registration. A uniform GST architecture prevents distortions in economic activity caused by the policy choices of individual states.

The idea of liberalizing the registration requirement was aimed at easing the compliance burden of small taxpayers, but it comes with trade-offs. “Now, the chances of both suppliers and buyers going out of the tax net are higher. This could affect revenue receipts,” explained a third official, who also spoke on the condition of anonymity. Field officers see the possibility of big businesses organizing their operations as smaller units with less than ₹40 lakh sales to avoid registration. Such splitting of operations was harder at a lower sales threshold.


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Source: live mint
GST Council meeting witnesses heated exchanges

GST Council meeting witnesses heated exchanges

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The effect of BJP’s loss in three States in the Hindi heartland was visible at the GST Council meeting held on Saturday in New Delhi, with the famous accord of the Council across party lines disrupted by a heated exchange among members.

As the meeting got under way, Ministers representing various States ruled by the Congress and other Opposition parties led by Puducherry Chief Minister V. Narayanasamy said the failure of an upward trend in revenue collection under GST should be taken into account before suggesting rate cuts.

This was contradictory to the political stance taken by the Congress party which has batted for rates to be capped at 18%.

As the meeting got under way, Ministers representing various States ruled by the Congress and other Opposition parties led by Puducherry Chief Minister V. Narayanasamy said the failure of an upward trend in revenue collection under GST should be taken into account before suggesting rate cuts.

This was contradictory to the political stance taken by the Congress party which has batted for rates to be capped at 18%.

Two-hour debate

There was a nearly two-hour debate on the issue with other State governments led by Opposition parties supporting this view. Union Finance Minister Arun Jaitley has time and again remarked that the strength of the decisions taken by the GST Council over its numerous meetings was that none of the items came to a vote and that all were agreed to unanimously.

At one point on Saturday, according to sources, West Bengal Finance Minister Amit Mitra also pointed out that Prime Minister Narendra Modi’s recent declaration at an event that most goods and services would be removed from the 28% bracket to 18%, and that 99% of the items would be placed at 18% or lower, was unseemly and that Mr. Modi had no locus standi to make such an announcement without the Council’s concurrence.

Call to order

At this, Assam Finance Minister Himanta Biswa Sarma intervened and said that in such a scenario it would be better if the remarks were minuted and members be allowed to brief the press fully. This ended the discussion and both sides backed off.

Finally, the GST Council decided to cut rates on 17 items and six services. This left only one common use item, cement, in the 28% category.

Mr. Jaitley said the revenue impact of cutting the tax rate on cement was such that the Council decided to take a call on it only once revenues showed stronger growth.

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Source: The Hindu
GST: Collections increase to Rs 95,610 crore in May

GST: Collections increase to Rs 95,610 crore in May

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Revenue collections for May from the goods and services tax (GST) have come in at Rs 95,610 crore, of which Rs 31,645 crore will flow into central kitty and Rs 36,683 crore will go to the states.

Collections for April were Rs 94,016 crore while theGST mopup edges closer to Rs 1 lakh crore average for the last fiscal stood at just below Rs 90,000 crore.

The higher-than-average mop-up has been attributed to the effectiveness of the e-way bill system and other enforcement action. Nonetheless, finance secretary Hasmukh Adhia cautioned that the trend was still below Rs 1 lakh crore. Responding to the industry request that the list of items in the 28% list be pruned, Adhia pointed out it was lower than the Rs 50,000 crore per month required to meet the 2018-19 budgetary target.

Speaking at the one-year-of-GST celebrations via video conferencing, Arun Jaitley, who ushered in GST as finance minister, said GST’s impact was already visible in direct tax collections; gross advance tax collections for personal income tax had grown by 44% y-o-y for the April-June period while the corresponding rise for corporate income tax was 17%. “Indirect tax collections for the GST basket of commodities have grown by 11.2% while the buoyancy is at 1.2, which is unheard of for indirect taxes,” he said.

He recounted the trajectory of the GST Council and its decision-making in 27 meetings over the last year. Jaitley said GST had ensured that consumers could now see all the taxes levied on any item unlike earlier when excise tax and applicable cess were always hidden. “The items currently in the 28% slab used to be taxes at 31% pre-GST due to cascading effect but the same was not apparent to consumers,” he said.

Speaking at the celebrations, finance minister Piyush Goyal said the April tax collections of Rs 94,016 crore was music to his ears as historically only about 7% of annual revenues were collected in the first month of the fiscal. “The total collections for the Centre and states could go up to Rs 13 lakh crore for FY 19,” Goyal said. He currently holds charge of the finance ministry in the absence of Arun Jaitley.

Goyal also said GST could be further simplified by allowing composition dealers to file annual return instead of every quarter as is the current practice. Businesses involved in manufacturing and trade with an annual revenue of less than `1.5 crore can opt for a low-compliance regime under GST, which requires payment of only 1% of sales as tax and filing returns quarterly.

Goyal reiterated the need to report businesses that were not issuing bills to consumers and said the government will set up a system for lodging such complaints. “While the majority of traders want to conduct business honestly, some indulge in evading taxes. This gives the dishonest taxpayers a cost advantage which pushes otherwise honest taxpayers to also adopt corrupt practices to remain competitive,” he said.

Representing the businesses, industry association representatives said they hoped that the items currently outside GST — alcohol, real estate, petroleum product and electricity — would be brought in soon as it would rein in inflation. PHD Chambers president Anil Khitai appealed to the industry to shun the practice of using fake invoices for claiming input tax credit. He also urged the finance ministry to remove applicability of GST on exporters as exporters didn’t pay excise in the pre-GST era.

Source :  Financial Express
CAIT demands extension of closing date for GST return

CAIT demands extension of closing date for GST return

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The deadline for filing GSTR-1 for July-November, 2017, will end tomorrow. The Finance Ministry had last month extended the due date for filing GSTR-1 from December 31 to January 10.

CAIT demands extension of deadline for GST return

Traders body CAIT today demanded an extension of the deadline for filing final sales returns under the GST regime till month end citing glitches on the GSTN portal.

The deadline for filing GSTR-1 for July-November, 2017, will end tomorrow. The Finance Ministry had last month extended the due date for filing GSTR-1 from December 31 to January 10.

Also read: Trial Launch Of GST E-Way Bill Scheduled In 🗓️ January 2018

Sources in GSTN, however, refuted the charge that the GST portal was not working.

The Confederation of All India Traders (CAIT) in a statement claimed that the “GST portal remain hanged most of the time” today which made the filing of return difficult for businesses.

“In view of the same, the CAIT has demanded Finance Minister Arun Jaitley to extend the date of filing of returns to at least January 30 and in the meantime has also demanded a thorough technology audit of the portal and ensure its normal functioning,” it said.

Sources said the due date for filing GSTR-1 is unlikely to be extended beyond tomorrow.

Goods and Services Tax Network (GSTN) is providing the technology backbone for the implementation of the new indirect tax regime. GST, which subsumed over a dozen local taxes, and transformed India into a single market was rolled out from July 2017.

Businesses with a turnover of up to Rs 1.5 crore have to file GSTR-1 for July-September by tomorrow.

For those with a turnover of more than Rs 1.5 crore, GSTR-1 for the months of July till November has to be filed by January 10.

The GST Council had in November last year allowed businesses with a turnover of up to Rs 1.5 crore to file final returns GSTR-1 quarterly.

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Source :  Money Control
GST Council set to ease refund procedures for exporters in Jan meet

GST Council set to ease refund procedures for exporters in Jan meet

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While 2017 was a year of transition for businesses as India switched to a new indirect tax regime, 2018 may alleviate the struggles of exporters grappling with liquidity crunch, as the government plans ease the refund-claiming process.

In its next meeting, GST Council—the apex decision making body of the new indirect tax system—may relax rules to claim Goods and Services Tax (GST) refunds from the Centre and states, a senior government official told Moneycontrol.

“Exporters are facing challenges claiming IGST (integrated GST) and input tax credit refunds, as the process is cumbersome. We are looking at easing these rules,” the official said.

The Council will meet on January 18 in New Delhi.

Exporters complain that procedural hurdles, coupled with new rules and regulations have made claiming export refunds difficult. The relaxation in norms should bring cheer for exporters who have been complaining about technical issues, locked up tax refunds affecting working capital availability and hurting operations.

The Council, headed by Finance Minister Arun Jaitley will also look at the provisions and specific rules pertaining to the e-wallet facility to facilitate speedy refund.

In October, the Council had approved a plan to operationalise up an e-wallet from April 1, 2018 that could be used by each exporter. A notional amount will be given as an advance amount in this wallet, which will enable GST credit against which the exporters’ refund will be offset.

Apart from easing rules related to refunds, the apex body is unlikely to continue with further rationalisation of GST rates.

“Considering the decline in monthly revenue collection from GST, there may not be further rate cuts announcements next month,” the official said.

Revenue collection from GST for the month of November slipped further to Rs 80,808 crore, lowest since the implementation of the indirect tax system from July 1.

Also read: GGovernment extends deadline for filing final GST returns till 10 January

The dip in revenue collection was mainly due to a decline in overall incidence of taxes on most commodities, especially after the apex decision making body of the new tax system–GST Council–cut rates of more than 200 items in its 23rd meeting in Guwahati. According to estimates, the government will face revenue loss of Rs 20,000 cr annually owing to the rate cut.

While only 50 items remain in the 28 percent tax slab, the industry, has been pushing for bringing down rates for some more items such as cement, paints, and white goods.

Sources said that rate cut at this juncture is unlikely as items such as cement constitute a major chunk of revenue.

According to experts, revenue may fall down further in the next two-three months as the government has to look at other aspects such as refund, and utilisation of credit.

The GST Council’s 25th meeting will be crucial as the government may propose significant changes in the laws and rules, to simplify procedures and ease rules for the business.

The changes may include simplifying the tax return filing process and the composition scheme, apart from the decision on whether to continue with reverse charge mechanism (RCM), tax deducted at source (TDS) and tax collected at source (TCS).

The Council will deliberate on the recommendations of the law advisory group that will finalise its report on January 5. The committee will propose key recommendations pertaining to amendments in laws and rules to make the new tax system simple.


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Source :  Money Control