Browsed by
Tag: Tax Revenue

GST trouble: Assessees told to explain mismatch of ITC claimed in GSTR-3B, GSTR-2A
FM Nirmala Sitharaman tells traders GST will be ‘simplified’ further

FM Nirmala Sitharaman tells traders GST will be ‘simplified’ further

Comments 0 Comment

Finance Minister Nirmala Sitharaman on Tuesday said that the government will resolve issues concerning traders and that GST would be further simplified.

Speaking at the second day of the National Traders Convention of the Confederation of All India Traders (CAIT), Sitharaman assured them that the government is making all attempts to simplify and rationalise the GST tax structure to the extent that even an ordinary trader can comply with the Goods and Services Tax (GST) provisions.

“Under the chairmanship of the Revenue Secretary, a committee has been constituted, which is working day and night to explore the ways and means to simplify GST”, she said.

Traders from across the country are attending the three-day convention.

Sitharaman lauded the role of the trading community for increasing the GST tax data.

CAIT Secretary General Praveen Khandelwal said the body has set itself a target of enhancing the number of traders registered under GST to 2 crore.

Sitharaman said that Prime Minister Narendra Modi has placed the trading community as his priority and in line with this, various announcements have been made by the government to facilitate traders on growing their businesses.

The Finance Ministry is seized of the problems being faced by traders in the taxation system and the government would do its utmost for providing maximum relief to traders, she said.

According to Sitharaman, while traders bring in tax revenue earners and no prudent government would like to annoy them, they, however, also need to bring their businesses into system and modernise their existing business formats.

The government plans to hold big shopping festivals across the country and will involve CAIT so that traders may get more opportunities to showcase their products, she added.

Source: The-News-Minute

Get Your GST Returns Filed Easily and
Effortlessly!!!

Our GST software enables you to file your GST returns free of any hassle. Get more details by writing to us at gst@xattax.in.

GST Compensation
Five state finance ministers lash out at Centre over delay in GST compensation

Five state finance ministers lash out at Centre over delay in GST compensation

Comments 0 Comment

Five opposition-ruled states on November hit out at the Centre over delays in releasing GST compensation saying their finances are in dire strait due to delays. AAP-ruled Delhi, TMC-run West Bengal, Congress-ruled Punjab and Rajasthan and Left-run Kerala in a joint statement said compensation since August is pending, making running administration difficult in the states.

When the Goods and Service Tax (GST) subsumed 17 different central and state levies from July 1, 2017, states were promised that they will be compensated for any loss of tax revenues for five years due to the introduction of the new levy. The compensation was to be paid on a monthly basis but the same has not bee released so far for the months of August and September and that of October would be due soon.

In all, some Rs 10,000 crore is due to the five states, the finance ministers of the opposition ruled states said.

BJP-ruled states too would not have got compensation but they haven’t yet spoken about it.

The central government has so far commented on the issue nor has it given out reason for the delay.

Speaking to reporters, West Bengal Finance Minister Amit Mitra said, “We thought we will make an appeal to Union Finance Minister (Nirmala Sitharaman) saying that she must personally look into this and not violate the constitutional provisions as passed by Parliament of India.”

All the states are in distress if this compensation which is due to them is not given, he said.

“It is a dangerous situation, there is no precedence before,” he said, adding this is the first time in history that there has been a delay.

“States have not received GST compensation for August and September which is against constitutional amendment where it was stated clearly that states when they fall below 14 per cent rate of growth of their GST (revenue), they will get compensation by the Centre. So far we have been receiving compensation,” he said.

As far as West Bengal is concerned, the pending amount stands at Rs 1,500 crore, he said.

Kerala Finance Minister Thomas Isaac said the state was supposed to get Rs 1,600 crore.

“Kerala (is) under overdraft for almost one week now. This is Centre-engineered crisis in the state finance. It has never happened in the history of India. Something drastic has to be done,” Issac said.

Punjab is also under threat of overdraft if the dues are not released immediately, state Finance Minister Manpreet Singh Badal said.

Punjab is awaiting Rs 2,100 crore as compensation while arrears stand at Rs 2,000 crore, Badal said.

Echoing similar concerns, Delhi Deputy Chief Minister Manish Sisodia said due to delay in payment, finances of states are under pressure. The GST compensation due to Delhi is Rs 2,355 crore.

In their joint statement, the ministers said no explanation whatsoever has been furnished for this delay and as a result, states are facing acute pressure on fiscal health and some are already resorting to overdrafts.

“GST comprises nearly 60 per cent of the tax revenues of states. Many states are already facing deficits up to 50 per cent of the total GST. Such huge deficits have the potential to disrupt the budget and planning processes in a host of areas literally bringing activities of the States to a grinding halt,” it said.

It was recalled that the assurance of GST compensation was a necessary enabler in states agreeing to subsume their fiscal sovereignty into GST. This was preceded by long deliberations within the Empowered Committee where many states had apprehensions about being able to obtain uninterrupted compensation, it added.

“It was only after the required provisions for compensation were incorporated in the Constitution that States agreed to join the GST. The current delay has shaken the confidence of the States who have so far supported GST in a spirit of rare bonhomie. Despite many challenges from time-to-time States have extended their support to all major decisions of the GST Council,” the statement said.

They also suggested that the matter should be placed on the agenda of the next meeting of the GST Council and a healthy mechanism be evolved to provide compensation in future with due urgency and judiciousness.

Source: Money-Control

XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.

  • Automate Invoicing and get Paid Faster
  • Integration with all popular accounting software
  • Manage your GST and E-WayBill Software anytime anywhere using multiple devices

Get Our GST Software DEMO and E-WAY BILL DEMO for FREE

GST: higher liquidity needs may weigh on SMEs’ credit ratings
Sitharaman says tax targets achievable, GST collections could rise: Report

Sitharaman says tax targets achievable, GST collections could rise: Report

Comments 1 comment

India has given itself achievable targets for its tax collections, Finance Minister Nirmala Sitharaman said in an interview to news daily Hindustan Times, adding that goods and services tax (GST) collections could “absolutely” move higher.

India expects to rake in Rs 24.6 trillion ($358.97 billion) in gross tax revenue in 2019/20. Sitharaman, in her maiden budget last week, raised taxes on the super rich and gold imports in a bid to revive sagging growth.

GST collections fell below Rs 1 trillion ($14.59 billion) for the first time in the current fiscal year in June, projecting weak consumer demand.

“Everyone who thinks we have set stiff targets is probably only looking at GST collections, which slowed down during the elections, for whatever reason,” Sitharaman told Hindustan Times.

“I think we have given ourselves absolutely achievable targets, and after taking everyone on board.”.

Ease Your GST Retrun Filing & Invoice with XaTTaX- GST Software

Source: Business-Standard.
Decision on bringing petroleum under GST after considering revenue impact: MP minister

Decision on bringing petroleum under GST after considering revenue impact: MP minister

Comments 0 Comment

Decision on bringing petroleum under GST after considering revenue impact: MP minister

The Madhya Pradesh Government today said it would decide on bringing petroleum products under the Goods and Services Tax  (GST) after considering its impact on the revenue.

Speaking to reporters after a cabinet meeting here, Finance Minister Jayant Malaiya said, “The government will take the revenue outcome in consideration before reaching consensus on bringing petroleum products under the GST regime.

“Discussions are going on about bringing petroleum products under the GST’s purview. We will take appropriate decision whenever the proposal is brought before the GST Council,” he added.

To a question, Malaiya admitted that there is a shortfall in tax collection following the introduction of the GST, but added that the situation has been improving.

He, however, parried the questions about the quantum of shortfall.

On October 13, the state government reduced the value added tax (VAT) on petrol and diesel by three and five percent, respectively. Besides, the additional cess of Rs 1.5 per litre on diesel was also withdrawn.

Malaiya had then claimed that diesel had become cheaper in MP compared to neighbouring Rajasthan, Gujarat and Chhattisgarh, while also mentioning that about 34 per cent of the commercial tax revenue comes from VAT and other taxes on petroleum products.


Ease Your GST Filing & Invoice with XaTTaX GST Software

Source : The Economic Times

Next step in GST recast: Lower end of tax slabs

Next step in GST recast: Lower end of tax slabs

Comments 0 Comment

Next step in GST

The next rejig of goods and services tax  (GST) will likely focus on the lower end of the rate slabs, as the country seeks to further streamline the structure by converging multiple rates into two or three. It will happen after the regime settles down and there is more clarity on revenue following the recast last week.

implification of laws, rules and procedures in line with industry’s feedback is also likely to top the GST Council’s agenda in the next few meetings.

The rates on some items such as cement and paint, still left at the highest rate of 28%, could be brought down if tax revenue remains robust.

A top official with a state government said the focus would now be to recast the lower 12% and 5% rate slabs.

Other issues to be considered by the council are inclusion of real estate and petroleum products under GST.

The government has set up a group with industry representation to review the tax regime, which has since its July 1 launch been criticised for having too many rates and being burdensome to comply with.

Also Read: Six Things You Must Know About the New GST Rates 

The latest recast, decided at a GST Council meeting in Guwahati last week, has seen the 18% rate emerging as the dominant slab with nearly half the goods, apart from most of the services, now taxed at that rate.

GST Councile meet towards better gst

The Guwahati meeting decided to move 178 items to the 18% rate from 28% and cut the GST on eating at restaurants to 5% from Monday, in a decision that would reduce tax revenue by Rs 20,000 crore.

It may have been possible to move some more goods to the 18% slab from 28%, but that would have resulted a bigger revenue loss. Officials said cement and paint alone would have cost the government more than Rs 20,000 crore had the two been moved a slab lower.

“We need revenue as well,” said the state government official.

But eventually, the 28% slab would be left with very few items, mostly in the luxury and sin-goods category.

Also Read: GST Council prunes list of goods to be taxed at 28% to 50

Other increasingly common-use items that are still in the 28% slab include air conditioners, refrigerators, washing machines, vacuum cleaners and digital cameras. In all, more than 50 items still remain on the 28% list.

A committee headed by chief economic adviser Arvind Subramanian had suggested a revenue-neutral rate of 15-15.5%, with a strong preference for the lower end of that range. It had recommended a standard rate — for services and most goods — of 17-18%, high or non-GST excise rate of 40% for items such as luxury goods and tobacco, and a low rate of 12% for essential goods.

With the latest recast, the rates have moved closer to this structure.

further recast of the 5% rate, moving some up to 12% and scrapping the tax on others will further simplify the GST structure.

Lesser rates will bring stability to the overall tax regime, said experts.

“GST needs to be a simple, transparent and stable tax system. Multiple rate slabs result in classification disputes as businesses attempt to classify their products in lower slabs,” said Pratik Jain, indirect taxes leader, PwC.

In most countries, including Australia, Malaysia and Singapore, there is one standard rate, or at best a lower rate in addition to a standard rate. “Single rate will remove complexity from the structure as also alleviate revenue concerns,” said Bipin Sapra, partner, EY.

CONGRESS RAISES PRESSURE 

Congress vice-president Rahul Gandhi in a tweet demanded that petroleum products and LPG cylinders be brought under GST.

He said the government should have a single rate that should not be more than 18%, and remove GST on products that the common man uses.

A day ahead of the council meeting in Guwahati, Congress-ruled states had demanded complete revamp of the GST structure.

Source :  The 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