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GST reduced tax rates, doubled taxpayer base to 1.24 cr: Finance Ministry

GST reduced tax rates, doubled taxpayer base to 1.24 cr: Finance Ministry

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The Finance Ministry on Monday said GST has reduced the rate at which people have to pay tax, helped increase compliance and doubled taxpayer base to 1.24 crore.

In a series of tweets, on the first death anniversary of former Finance Minister Arun Jaitley, the ministry said before goods and services tax ( GST), the combination of value-added tax (VAT), excise, sales tax and their cascading effect resulted in high standard rate of tax up to 31 per cent.

“It is now widely acknowledged that GST is both consumer and taxpayer-friendly. While the high tax rates of the pre- GST era acted as a disincentive to paying tax, the lower rates under GST helped to increase tax compliance,” the ministry said.

The number of assessees covered by the GST at the time of its inception were about 65 lakh. Now the assessee base exceeds 1.24 crore.

GST, which subsumed about 17 local levies, was rolled out on July 1, 2017. Jaitley held the finance portfolio in the first term of the Modi government since 2014.

“As we remember Arun Jaitley today, let us acknowledge the key role he played in the implementation of GST, which will go down in history as one of the most fundamental landmark reforms in Indian taxation,” the Ministry tweeted.

The multiple markets across India, with each state charging a different rate of tax, led to huge inefficiencies and costs of compliance.

“ GST has reduced the rate at which people have to pay tax. The revenue neutral rate as per the RNR (Revenue Neutral Rate) Committee was 15.3 per cent. Compared to this, the weighted GST rate at present, according to the RBI, is only 11.6 per cent,” the ministry said.

Businesses with an annual turnover of up to Rs 40 lakh are GST exempt. Initially, this limit was Rs 20 lakh. Additionally, those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1 per cent tax.

“Once GST was implemented, the tax rate on a large number of items was brought down. As of now, the 28 per cent rate is almost solely restricted to sin and luxury items. Out of a total of about 230 items in the 28 per cent slab, about 200 items have been shifted to lower slabs,” the ministry said.

Also, the housing sector has been placed in the 5 per cent slab, while GST on affordable housing has been reduced to 1 per cent.

“All processes in GST have been fully automated. Till now 50 crore returns have been filed online and 131 crore e-way bill generated,” the Ministry added.

Source: Economic-Times.

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GST’s IT infra firm
Centre planning to come up with lottery scheme for GST paying customers

Centre planning to come up with lottery scheme for GST paying customers

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The Ministry of Finance is planning to come up with a lottery scheme to lure customers to pay Goods and Services Tax (GST). This will be a step to improve compliance and check on tax leakage, a senior Finance Ministry official told ANI.

The lottery scheme plan is to hold daily and monthly lotteries for customers who take a copy of the bill after paying GST for business to consumer transactions, the official said.

The bill will have to be uploaded on a dedicated portal or app which will be made later. The app of the portal will auto-capture phone number, bill number and GST number of the trader through which names of winners will be selected, the official added.

Once the consensus at officers level is reached then it will be put before GST Council meeting.

Monthly reward through lotteries will be ‘high’ to lure customers in paying GST. It will also help to mop up GST collections. A minimum threshold for bills would be decided to participate in the lottery and would exclude water and electricity bills.

The prize for the lottery would come from the consumer welfare fund.

The scheme is on similar lines with the one introduced by Delhi government to reward customers for paying Value Added Tax, the ministry official said.

Delhi Government had introduced ‘Bill Banao, Inaam Pao’ scheme in 2015 during the VAT regime.

As per the scheme introduced by the Delhi government, a customer was eligible for a prize of five times the taxable value subject to a cap of Rs 50,000, if he made a purchase from a registered dealer. The minimum taxable value of goods was Rs 100 and included eateries.

Once the lottery scheme system is introduced it will also help to keep a check on the traders who are collecting GST from people but not depositing the same with the government.

“Once we make system traders forging entries will fear being caught,” said another official from the ministry.

Source: Economic-Times-Retail

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About 1,800 businesses apply for migration from VAT to GST regime

About 1,800 businesses apply for migration from VAT to GST regime

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About 1,800 businesses that were registered under the earlier VAT and service tax regime have applied for migrating to the GST regime.

1,800 businesses apply for VAT to GST regime

The GST Council, in its meeting in July, had allowed businesses with provisional GST ID to migrate to the new GST regime.

The Central Board of Indirect Taxes and Customs (CBIC) had then asked these taxpayers to approach the jurisdictional nodal officer of the Central or state government on or before the August 31, 2018, along with provisional ID, registration number under the earlier law, reason for not migrating in the system, along with the contact details.

“About 1,800 businesses have migrated to GST regime availing the latest migration window. The number could go up as the state tax officers are still compiling data,” an official told PTI.

Currently, over 11.5 million businesses are registered under the GST regime, of which 6.37 million have migrated from the erstwhile service tax and VAT regime, and over 5.1 million are new registrants.

ALSO READ – CBIC to weed out a million assessees from GST tax net

“The migration window since November 2016 and closed after roll out of GST on July, 2017. Many taxpayers would have migrated when the window was open initially before GST roll-out. Hence the turnout for migration would have been less this time,” the official added.

The process of migration of existing assessees to the GSTN had started in a phased manner from November 2016.

Once a business migrates to the GST regime, it is given a provisional ID. After that, in the second stage, the business has to log in to the GSTN portal and give details of its business, such as the main place of business, additional place of business, directors and bank account details.

Thereafter, the business has to verify its registration through digital signature, or by generating an electronic verification code (EVC).

Many businesses, who were earlier registered with excise, service tax, VAT regime, had not completed the second stage of the migration process.

In the VAT regime, businesses with turnover upto Rs 500,000 were exempt. However, in Goods and Services Tax (GST) regime, the exemption threshold has gone up to Rs 20 lakh. Hence, all businesses who were registered under the erstwhile Indirect tax regime, need not migrate to the GST regime.


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Source: Business Standard
How will GST impact state revenues?

How will GST impact state revenues?

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state revenues

The GST will be implemented soon. This is a value-added tax (VAT) system that subsumes a number of central and state taxes. How would GST impact state governments? We look at the finances of 12 large states.

Does VAT improve revenue growth?

In a VAT system, each person in the value chain gets input credit on the tax paid by the previous persons. This acts as an incentive to ensure that the previous person has paid tax. When VAT was introduced for sales tax a decade ago, states saw an increase in the tax growth rate (though there could be other factors such as higher nominal gross domestic product growth). While excise, service tax and sales tax allow for tax credits within their silos, GST integrates these and enables tax credit across these taxes.

Less than 46% of states’ own tax revenue to be subsumed into GST

GST subsumes various taxes levied by states, including sales tax, entertainment tax and entry tax, except the revenue from excise on alcohol and sale of alcohol and petroleum products. We do not have disaggregated data on sales tax on alcohol.

Tax revenue to be subsumed (plus revenue on sale of alcohol) was 46% of states’ own tax revenue in 2015-16. Excluding sales tax on alcohol, which will continue to be taxed separately by states, revenue subsumed would be lower than 46% of own tax revenue.

Few states seem to benefit from the compensation

States will be compensated for any shortfall in revenue collection due to implementation of GST in the rst ve years. The baseline is assumed to be a growth of 14% compounded from 2015-16. On average, the growth in revenue from the subsumed taxes for these states grew 14% between 2010-11 and 2015-16. This is not adjusted for sales tax on alcohol and petroleum products. However, as GST subsumes some central taxes too (such as excise and service tax) and states get half the share, there may be a difference in the tax base and tax growth.

 

Source : http://www.livemint.com/Politics/WsrPmJyRGTTWeuUhxEDuoO/How-will-GST-impact-state-revenues.html