Browsed by
Tag: indirect tax

GST
Rs 29,088 cr indirect tax evasion detected during April-Oct.

Rs 29,088 cr indirect tax evasion detected during April-Oct.

Comments 1 comment

The investigation arm of the Finance Ministry has detected tax evasion worth Rs 29,088 crore in 1,835 cases during April-October period of the current financial year, a senior official said Wednesday.

Of this, the Directorate General of GST Intelligence (DGGI), which is enforcement agency for checking indirect tax evasion, has detected evasion of goods and services tax (GST) worth Rs 4,562 crore in 571 cases.

However, the bulk of the evasion was detected in case of service tax. The total number of cases where service tax was evaded stood at 1,145 involving Rs 22,973 crore.

In the case of central excise duty, the DGGI detected 119 cases where tax evaded was worth Rs 1,553 crore.

“DGGI officers have detected total indirect tax evasion of Rs 29,088 crore during April-October,” the official told PTI.

He further said that the total amount of detection was likely to be more as the data does not include detection by field offices of the Central Board of Indirect Taxes and Customs (CBIC)

On recovery of evaded taxes, the official said that a total amount of Rs 5,427 crore was realised during the seven-month period till October.

These, he added, includes recovery from previous cases and those detected during the current financial year.

Of the total recovery, Rs 3,124 crore was from GST evaders, followed by Rs 2,174 crore in case of service tax, and Rs 128 crore from those who had evaded central excise.

The larger chunk of recovery during April-October in GST, the official said, can be attributed to the decision of the CBIC to tighten on evaders.

With a view to focus on checking evasion, the apex indirect tax body had in September set up the Office of Commissioner GST (Investigation), headed by Neeraj Prasad.

Last month, the Finance Ministry had extended the informant reward scheme of central excise and service tax to GST. The scheme was modified to include officers of other government agencies like police, BSF, CISF and coast guard.

As per the reward scheme, informers and government servants were eligible for reward up to 20 per cent of the net sale proceeds of the contraband goods seized and/or amount of duty/ service tax evaded plus amount of penalty levied and recovered.

With respect to cases of detection of drawback frauds or abuse of duty exemption schemes under various Export Promotion Schemes, the informers are eligible for reward up to 20 per cent of recovery of drawback claimed fraudulently and/or recovery of duties evaded.

GST, which subsumed 17 local taxes like excise and service tax, was rolled out on July 1, 2017. In the run up to launch of the new indirect tax regime GST, the ministry had renamed the Directorate General of Central Excise Intelligence (DGCEI), mandated to check service tax and central excise duty evasion, as DGGGI.

 


XaTTaX – World Class Automated eSolution for Return filing and e-Waybill

 

Sources: Economic Times.India Times

 

GST
Spike In Detection Of Indirect Tax Evasion As Scrutiny Resumes After GST Breather

Spike In Detection Of Indirect Tax Evasion As Scrutiny Resumes After GST Breather

Comments 2 comments

Indirect tax evasion detected in the first five months of the financial year more than doubled over the year-ago period, according to official documents reviewed by Sources, as the taxman resumed scrutiny after going slow during the transition to the goods and services tax.

In the previous financial year, the focus was more on the preparation and stability of the new indirect tax regime, said a senior official on the condition of anonymity.

The Directorate General of Goods and Services Tax Intelligence detected indirect tax evasion worth Rs 18,656 crore in April-August 2018 compared with Rs 7,031 crore in the year-ago period.

Generally, tax detection is an ongoing process, but in the last financial year the taxman couldn’t do it as the department transitioned to the GST and efforts were made to stabilise the new process, the official cited earlier said.
Krishan Arora, an indirect tax partner at Grant Thornton India LLP, agreed. The service tax audits initiated by the tax authorities couldn’t possibly be completed before GST implementation in 2017 as the department’s focus was on rolling out the new indirect tax regime, he said. These audits resumed after the GST regime settled and the high detection in service tax could be due to the conclusion of these audits in 2018, according to Arora.
“Parallelly, tax authorities initiated many new audits in the last financial year to check GST evasion as well, which could have resulted in the significant rise in the overall number,” Arora said.

Total evasion detected by the directorate stood at Rs 21,869 crore as on Sept. 14, 2018, according to the documents. Nearly Rs 3,000 crore of that was attributed to GST cases. The comparative year-ago numbers were not available. The detection in the first half ended September also reflects scrutiny made in the previous financial year ended March 2018.For the full financial year 2017-18, the taxman detected an indirect tax evasion of Rs 25,677 crore compared with Rs 15,048 crore in 2016-17, according to the documents.

Tax Recoveries Jump

Recoveries from those evading indirect taxes in India has jumped over fivefold to Rs 4,015 crore in April-September 2018 as compared with about Rs 700 crore in the corresponding period last year, a government official told Sources citing official data. Recovery figures for the years ended March 2018 and March 2017 were not available.

Although recoveries in the first half of the year may seem to have increased significantly due to increased detection, the gap between detection and actual recoveries could be due to taxpayers disputing demands raised by the taxman by approaching higher appellate fora, said Arora.

Abhishek Jain, an indirect tax partner at EY India, said: “With the introduction of e-way bills and concerted efforts by the government in data analytics, more cases of GST evasion are getting detected and corresponding recoveries are also going up.”


XaTTaX – World Class Automated eSolution for Return filing and e-Waybill

Sources: BloombergQuint
GST likely to get centralised AAR for uniform rulings

GST likely to get centralised AAR for uniform rulings

Comments 1 comment

India is looking at creating a centralised Authority for Advance Rulings (AAR) for the goods and services tax (GST) after divergent rulings on identical issues fuelled confusion over applicability and the rate of tax. A recent case in point being the divergent rulings by Karnataka and Maharashtra AARs on the issue of solar projects.

“We are looking at an issuebased central authority with officials from states and the Centre,” a top government official told ET. “If more than one appeal is filed on the same issue in different jurisdictions it can be taken up by this body.”

The AAR is a quasi-judicial body that allows assessees to get guidance on their potential tax liabilities relating to any transaction beforehand. The rulings by the AAR are case-specific, but they have a persuasive impact on tax assessment in cases of other firms under similar circumstances.

This is the key reason behind the government contemplating such a move. “AAR decisions are specific to the case, but they do have some precedence value,” the official said. The previous indirect tax regime had a centralised body ensuring consistency in orders.

Government Wary of Variations 

Maharashtra AAR ruled in a recent case that solar project contracts are “works contracts”, taxable at 18% as a deemed supply of service, instead of a “composite supply” that would have attracted 5%.

Karnataka AAR, on the other hand, reaffirmed in a case that engineering and procurement contracts are composite contracts and taxable at a concessional rate of 5%.

GST: Government Wary of Variations - AAR

The government is wary of such variation in rulings that could sow further confusion.

The structure of the proposed centralised authority will be decided once a decision is taken to set it up, the official said.

It may require a change in the GST laws and all the states would need to come on board.

Experts said the initial experience of the AAR mechanism in the case of GST has not been very encouraging for businesses and backed a centralised body for consistency. “On aspects like taxability of solar power plants, liquidated damages, exemption on sale by dutyfree shops at airports, etc, the authorities have taken a view which is not in line with the industry practice, globally accepted principles or government’s own intention while framing the laws,” said Pratik Jain, indirect taxes leader, PwC. “Further, there is likelihood of different states taking a divergent view on the same issue.”

Jain said there is an immediate need to have a centralised mechanism, either by changing the structure itself and bringing it at par with earlier central taxes or by building a control system under the GST Council’s aegis to ensure consistency and quality.

“Given that each AAR can potentially decide differently on an issue, it makes sense to create a central AAR which will take up issues where more than one AAR has been approached on a similar issue,” said Bipin Sapra, partner, EY.

“In such a scenario, a mechanism needs to be created where all AARs should be listed on the GST portal and in case of similar applications, the state AAR should refer it to the central AAR.”

India implemented GST on July 1 last year as to turn the country into a common market and erase interstate barriers.

XaTTaX: Your automated E-Way bill compliance is just a click away!

Source :  The Economic Times
Digital copy of E-way bill enough to give transporters right of way

Digital copy of E-way bill enough to give transporters right of way

Comments 1 comment

Tax authorities cannot seize goods just because they’re not accompanied by a physical copy of the e-way bill (electronic way bill), the Allahabad High Court said in the first ruling on documents required to transport goods under the goods and services tax (GST) regime, thus setting a precedent. E-way bills can also be stored in electronic form on a mobile phone or other devices.

Under GST, which was put in place on July 1 last year, goods being transported across state lines above a threshold value and beyond a minimum distance within a state need to have e-way bills.

The system was implemented nationally for interstate movement on April 1. Intrastate e-way bills are being rolled out in phases, with some states having adopted them on April 15.

Industry Raises Concerns

The court said in a recent ruling that goods cannot be seized if an e-way bill has been generated and a hard copy isn’t available. The ruling will ensure that tax authorities don’t penalize transporters not carrying printouts and make sure that e-way bills stored in electronic format are recognized.

Industry has raised concerns that eway bill inspections could lead to frequent checking and delays in cargo movement, defeating the purpose behind GST. The high court was disposing of a case in which tax authorities had seized goods of the assessee (seller) on the grounds that they were being transported without an e-way bill and the tax invoice was kept in a sealed envelope. However, the invoice indicated tax had been charged and that the eway bill had been downloaded much before the seizure. Bhumika Enterprises had filed the petition against the seizure of goods by UP authorities.

E-way Bill - Go Digital

“This is perhaps the first decision after the introduction of e-way bills,” said Pratik Jain, indirect tax leader, PwC.

“While businesses need to ensure that an e-way bill is generated before the movement of goods commences, the authorities also need to see all the facts before goods are seized which is really an extreme step.”

Read More: All you need to know about EWay Bill System

EARLY DAYS

The GST Council introduced e-way bills to address evasion concerns emanating from the movement of goods without invoices.

An e-way bill is required for movement of goods worth more than Rs 50,000 across state borders. Trucks caught without e-way bills can be levied a penalty of up to Rs 10,000 besides which the cargo can be inspected to ascertain tax evasion. A penalty to the tune of 100% of the tax being evaded can be levied along with the tax itself.

Both the vehicle and the goods can be impounded as well.
A simpler GST filing regime: Here are the proposed modifications

A simpler GST filing regime: Here are the proposed modifications

Comments 0 Comment

25th Gst Council Meeting

In its last meeting, the GST Council deliberated changes in the filing regime for the new tax. The simplified system is expected to be approved by the  GST Council in its next meeting. ET explains the likely scenario:

CURRENT SCENARIO
1. Seller to upload invoice level details in GSTR 1 within prescribed due dates

2. Buyer to download invoice details uploaded by seller (in Form GSTR 2A)

3. Buyer to reconcile the GSTR 2A details with ERP purchase register

4. Buyer to take action (Accept/reject/modify) on GSTR 2A invoices. Buyer also has option to upload invoices if not uploaded by vendor – this activity is done by buyer through filing of monthly GSTR 2 within prescribed due dates

5. Seller and buyer to file monthly GSTR 3/3B to disclose liability, credits and pay taxes

6. GSTN to perform reconciliation of data uploaded by buyer and share mismatch report

7. Seller and buyer to take relevant action on the mismatches

Also read: 25th GST Council Meet:Rates revised for 29 goods, 53 services, says Arun Jaitley

PROPOSED SCENARIO (AS UNDERSTOOD NOW)
1. Seller has option to upload invoices on real time basis

2. Buyer can view the invoices uploaded by multiple sellers on the portal

3. Buyer to accept the invoices to claim credits

4. Seller to disclose output liabilities in GSTR 3B based on invoices uploaded

5. Credit to be restricted for the buyer in GSTR 3B to the extent of invoices accepted

6. Buyer to claim credit/ report transaction w.r.t unregistered suppliers/RCM in GSTR 3B

7. Buyer would not have option to claim credit for any invoice not uploaded by seller

8. GSTN would not perform any reconciliation for the data uploaded as credit restricted to invoices accepted

benifit of new GST system
Concept of invoice matching continues but at the end of buyers and sellers, without it being part of the return process and work flow based system envisaged earlier. This would effectively mean greater onus on businesses to ensure compliance of vendors. It needs to be ensured the new system does not entail more physical scrutiny at the time of assessment or audit and dilute the concept of ‘faceless’ tax administration that we were all hoping for: Pratik Jain, Leader – Indirect Tax, PwC.
Source: Economic Times

 

Scope for reducing GST slabs with more revenue, says Arun Jaitley

Scope for reducing GST slabs with more revenue, says Arun Jaitley

Comments 0 Comment

Arun Jaitley : GST

Finance minister Arun Jaitley says there’s scope to reduce slabs for Goods and Services Tax (GST). Reducing the tax slabs does make perfect sense. It would simplify the tax system: make it transparent, efficient and tax payer-friendly.

We currently have four slabs fixed for GST, a low rate of 5 per cent, two standard rates of 12 per cent and 18 per cent, and a high rate of 28 per cent. It would make sense to drop middling 12 per cent and 18 per cent rates and opt for 16 per cent as the standard rate to be levied on most items. It would also be desirable to reduce the peak rate.

Note that apart from the four-rate slab structure in the GST regime, we also have 0 per cent on certain items of mass consumption, 3 per cent on gold and jewellery, and additional cess on high-end consumption items like automobiles.

The government needs to put out a discussion paper on how it proposes to go about reducing the GST slabs and lowering the rates. The way forward is to have three slabs in the GST structure, and prune the rates at either end. We need to boost tax buoyancy, but also make sure that there is revenue neutrality.


GST Ready Invoicing Software – Generate GST Compliant Invoice

Tax revenue must of course not be adversely affected in the changeover to the new indirect tax regime.

The way ahead is to have 16 per cent as the standard GST rate, by fusing the two rates of 12 per cent and 18 per cent. It would reduce classification disputes and put paid to lobbying for reduced tax rates. It would also be as per international norms.

A couple of years ago, an expert committee report on the revenue neutral GST rate noted that the standard rate in the high-income economies was estimated at 16.8 per cent. A standard rate of 16 per cent would also be in line with the rates of taxation in ancient India.

As per Kautilya’s Arthashastra, the median tax rate mentioned in the treatise was 16.33 per cent. So a standard rate of 16 per cent would be in line with current history and also reflect the going rates from over two thousand years ago!

The low GST rate of 5 per cent may also need to be pruned to 4 per cent. That on gold can well be nudged to 4 per cent (instead of 3 per cent at present), so that most products are covered under the two rates of 4 per cent and 16 per cent. In tandem, there’s the need to have somewhat lower tax on luxury goods and high-end consumption items.

The peak GST rate of 28 per cent needs to be purposefully reduced. Given that the peak direct tax is proposed to be reduced to 25 per cent, it would make sense to likewise reduce the highest indirect tax slab from 28 per cent to 24 per cent. So the three tax GST slabs can be structured as follows, 4 per cent, 16 per cent and 24 per cent.

In parallel, we need to modernise the indirect tax structure for petroleum products. Such products provide bountiful tax revenue of about Rs 5 lakh crore to the exchequer, and for the most part, remain outside the GST regime. Instead of taxing petro-products to the hilt, the tax base clearly needs to be widened. We must not depend heavily and disproportionately on just one revenue item: oil.

 


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source :  The Economic Times
History of Indian Tax Structure

History of Indian Tax Structure

Comments 0 Comment

Introduction – (History)

The Income Tax was added in India for the first time in 1860 by using British rulers following the mutiny of 1857. The duration between 1860 and 1886 turned into a length of experiments inside the context of Income Tax. This duration led to 1886 whilst first Income Tax Act came into lifestyles. The pattern laid down in it for the levying of Tax maintains to perform even today although in some modified shape. In 1918, another Act- Income Tax Act, 1918 changed into surpassed, but it became quick lived and become changed by way of Income Tax Act, 1922 and it remained in lifestyles and operation until thirty first. March, 1961.

The previous Taxation Structure of the us of a played a completely vital function inside the running of our economy. Some time again the emphasis become on better charges of Tax and more incentives. While designing the Taxation shape it must be seen that it is in conformity with our financial and social objectives. It needs to know not impair the incentives to non-public financial savings and investment float and on the other hand, it ought to not result in lower in sales for the State.

In our beyond day, financial system structure Income Tax played a critical function as a source of Revenue and a degree of removal economic disparity. Our Taxation shape affords for Two forms of Taxes: – DIRECT and INDIRECT.

indian tax structure

There are one of a kind varieties of taxes; they’re as follows:

Direct Tax

  • Income Tax: This is one of the most not unusual sorts of tax and maximum of you will be familiar with it. This tax is deducted immediately from your income in case yornings exceed the taxable limit.
  • Capital Gains Tax: This tax is levied if you sell your house, bonds, stocks, rings, or something that gives you earnings. The profit can be calculated by way of deducting the entire quy you get through selling your asset and the quantity you paid for it. You must pay tax on the income.
  • Securities Transactions Tax: When you purchase or promote an inventory form the percentage market, you need to pay the Securities Transaction Tax. This tax is imposed by means of the Government because the general public who earn their income from the share market do no longer declare their property. As a result, they can avoid paying capital advantage tax, as the government can levy tax simplest on the inchey earn if these are not declared. Securities Transactions Tax or STT is levied on derivative gadgets, fairness stocks, fairness orientated mutual budget and many others.
  • Perquisite Tax: Perquisite Tax (in advance Fringe Benefits Tax or FBT) is levied to employees for the non-monetary blessings given to them by mea their employers. For instance, in case your organization offers you non-monetary advantages life a rented condo, an automobile with a driver, you’ll need to pay tax for it. This tax turned into in advance borne with the aid of the employers
  • Corporate Tax: These taxes are paid by the businesses to the Government of India and it’s far levied on the earnings of the corporation. Apart shape the company tax, additionally, they ought to pay different types of taxes.

Indirect Tax

  • Sales Tax: When you buy any commodity, you have to pay its cost price plus the sales tax. The manufacturer then pays the tax to the Government. In India this kind of tax is paid to both the state government (Sales Tax) and the central government (Central Sales Tax). The Sales Tax is levied only on the intra-sale of commodities (sale within one state). The Central Tax is levied for interstate sales (sales within states). Apart from the Sales Tax, there may be additional tax that can be levied on the sale of a commodity.
  • Service Tax: When you avail offerings you have to pay tax on it and that is known as Service Tax. This tax becomes brought in 1994 and is now relevant on every kind of services, besides the bad listing of services and is applicable in all of the states, except Jammu and Kashmir. Some of the services for which you have to pay taxes consist of, marketing, splendor saloon, fitness care, monetary services, and so forth.
  • Customs Duty and Octroi: This tax is levied on the goods imported into the u. S. A. In addition to the goods which might be exported to some other overseas use. It is charged atthe access point of the united states like airport, docks and many others. The Octroi Tax is levied for goods which might be transported from one municipality to another.
  • Excise Duty: The Excise Tax or the Central Value Added Tax (CEVAT) sort of assessment is collected on the products that are created inside the nation.
  • Anti Dumping Duty: When goods are exported from one use to any other at a price this is decrease than the real charge of that commodity, then the authorities charge anti-dumping duty tax on it.

Other Taxes

  • Professional Tax: If you are a running in a personal corporation, you need to pay this tax and it’d be deducted by your employer from your profits. The fee of this tax may also range from one nation to another.
  • Municipal Tax: You should pay this tax to the municipal enterprise in case you own a belonging.
  • Entertainment Tax: When you purchase tickets to watch a motion picture or a show, display, you have to pay Entertainment Tax for it.
  • Stamp Duty, Registration: When you purchase a property, you have to pay this expense notwithstanding the value consistent by the dealer, on the off chance that you need the advantages exchanged at your call.
  • Gift Tax: If you get a present that is additional than Rs 50,000 out of a year, you’ll must pay exhibit to assess for it.
  • Toll Tax: You should pay this duty in the event that you utilize the framework simply like the streets, thruways and numerous others. To save them eventually.

Some different types of expenses comprise of preparing charge, profit circulation assessment and riches impose. Different sorts of duties have developed as an imperative a piece of change of a kingdom. These expenses help in the execution of various fiscal approaches to advance the development of a nation. So they help in giving monetary soundness and ffurthermore,for the most part, ave a tendency to diminish the joblessness rate in a natural. In spite of the fact that people whine roughly paying expenses, a very much arranged tax assessment gadget is very basic for a vocal specialist.

GST Impact: Monthly GST returns to burden professionals

GST Impact: Monthly GST returns to burden professionals

Comments 0 Comment

GST impacts almost all types of industries, and professional are no exception. Until recently, professionals enjoyed the benefit of centralised service tax registration for all their offices located across India. However, with advent of GST, professionals operating from multilocation office will have to obtain state-wise registrations.

The compliance and report ing requirements for professionals will also increase under GST. Under the erstwhile service tax regime, professionals could file half-yearly service tax returns requiring disclosure of the revenue and eligible input tax credit on an aggregate basis.

However, under GST they need to file monthly GST returns with disclosure of invoice level details for all their sales and purchase. Also, for professionals operating as individuals and partnership firms doing away with the option of quarterly tax payment, it increases the need for additional working capital.

While the government has provided a composition scheme for small manufacturers/traders up to an annual turnover of Rs 75 lakh, however, such an option is not extended to the professional service providers.


XatTaX: India’s most trusted GST compliance software – 100% accurate GST filing

Though the tax rate under GST has increased from 15% to 18%, there’s good news for professionals, as they will now be entitled to higher input tax credit due to withdrawal of non-creditable state taxes such as VAT/CST/entry tax/octroi on procurement of goods and certain cesses levied by central government.

The place of supply was not too relevant for professional s under service tax law (except for import and export), but they will now be required to change their IT system to map the place of supply for each supply of services (intra-state and interstate) and set up the reporting requirement accordingly. Besides the above compliances, professionals will also have to comply with reverse charge provision in case of purchases from unregistered dealers.

Overall, it appears that GST has a mixed impact on professionals with both positives and negatives.


XaTTaX: Cloud and On-Premises Based GST Filing Software For India

Source: ET
GST to be ‘biggest achievement’ of Modi government: Assocham

GST to be ‘biggest achievement’ of Modi government: Assocham

Comments 0 Comment

assocham

The Goods and Services Tax (GST) will feature on the top of the government’s list of achievements in the last three years that also saw some other credible measures on taxation and financial inclusion fronts, according to an Assocham report.

As the Narendra Modi-led NDA government completes three years in office, the chamber drew a charter of measures on the economic front undertaken by the Centre.

The industry body perceives financial inclusion, digitisation and public investment on infrastructure like railways and power distribution among the many credible steps for structural changes in the economy.

The GST is being billed as India’s biggest tax overhaul since independence, as it is likely to improve ease of doing business by simplifying the tax structure and compliance. The indirect tax reform is slated for implementation from July 1.

Based on the feedback received from its members, Assocham noted that benign inflation both at the retail and wholesale levels is among the other positives for the government.

As the inflation remained within the target of 4 per cent set by the RBI, the central bank has also been able to keep the interest rates low, although credit off-take in the private sector still remains a challenge, it said.

“The implementation of Goods and Services Tax (GST) in the next few weeks would cap other major initiatives of the government. The focus on improving ease of doing business through measures like GST and other taxation reforms has also been noted as one of the major achievements of the NDA government,” Assocham President Sandeep Jajodia said.

The clean-up of the subsidy disbursal, which had reached the proportion of bottomless pit, is yet another big plus of the government which is pursuing linkages of Aadhar ID with every bank account holder, the industry body said.

“Taking a look at other macros, it goes to the credit of the government that India’s foreign exchange reserves have touched an impressive high of USD 372 billion, giving a muscle to the rupee. While exporters have shown some concerns, strong rupee is helping tame inflation further,” Assocham opined.

However, it said, the high level of non-performing assets remains an area of concern, even as the government has taken some decisive measures like empowering RBI to set up Oversight Committees and refer the toxic assets for insolvency and all these should help resolution of the nagging problem.

Going forward, other priority areas for the government should be focus on some of the stressed sectors like metals, construction and real estate, telecom and power generation while allocations for health and education needs to be lifted, Assocham suggested.

Moreover, it said there should be increased focus on agriculture with enough allocations for rural and agri infrastructure like irrigation.

Source : ET

India’s growth to accelerate further due to GST: Arun Jaitley

India’s growth to accelerate further due to GST: Arun Jaitley

Comments 0 Comment

US-INDIA-ECONOMY-JAITLEY

India continues to be the fastest growing major economy in the world and its growth will accelerate further due to factors like implementation of GST, Finance Minister Arun Jaitley said.

The minister also said the scrapping of old Rs 500 and Rs 1,000 notes will increase tax compliance and reduce threat of counterfeit currency.

“India continues to be the fastest growing major economy in the world.The currency reform initiative will move the Indian economy to a less cash trajectory, increase tax compliance and reduce the threats from counterfeit currency which acts as a source of terror funding,” Jaitley said.

He was speaking at the International Monetary and Financial Committee (IMFC) meeting here yesterday.

The minister said growth is expected to gain strength in the coming years due to externalities derived from deep structural reforms implemented by the government and robust aggregate demand.

 Talking about the new indirect tax regime, Jaitley said the government is “fully on course to implement the Goods and Services Tax (GST)” by July 1.

“The GST will deliver significant externalities by way of improved taxation efficiency and ease of doing business and will convert India into one common market,” Jaitley said.

As per provisional estimates, real GDP grew by 7.9 per cent in 2015-16 compared with 7.2 per cent in 2014-15.

The second advance estimate for GDP growth for 2016-17 is placed at 7.1 per cent.

The delivery of AADHAR-based Direct Benefit Transfers (DBT) has succeeded in plugging unwarranted leakages, resulting in substantial savings to the government, he said.

For the current financial year, the Union Budget 2017-18 has significantly increased resource allocation for infrastructure as well as rural, agricultural and allied sectors, Jaitley said, adding that the allocation for the rural employment guarantee scheme has also been increased substantially.

“The government would continue to increase fiscal resilience through greater focus on the quality of expenditure and higher tax realisations including those that would accrue from large cash deposits made in banks due to demonetisation,” he added.

According to the minister, the wide-ranging liberalisation of the FDI policy in recent years is expected to provide major impetus to employment and job creation.

Most of the sectors, except a small negative list, are now under the automatic approval route, he said.

“India is now the most open economy in the world for FDI,” Jaitley said.Net FDI inflows during April-December 2016-17 increased to USD 31.18 billion from USD 27.22 billion during the same period in the previous year. The increasing strength of economic fundamentals have made India the most sought after destination for investments, he said.

The Indian government in November last year scrapped Rs 500 and Rs 1000 notes to curb blackmoney and terror funding as well as to promote digital transactions.

Source : Economic Times