We expect companies to cooperate. We hope we don’t have to use the weapon”. This was the threat issued by Hasmukh Adhia, India’s revenue secretary (“GST: Hasmukh Adhia warns industry against hiking prices arbitrarily”, The Indian Express, 20 May). Adhia was demanding “cooperation” from corporate India on pricing of their goods and services after the implementation of goods and services tax (GST). In other words, he implied that the pricing of goods and services should be in compliance with the government’s expectations. If companies failed to comply, he warned that the government has a weapon to unleash on them—the “anti profiteering” clause. This new “weapon” in the arsenal of the Union government has been designed and launched as part of the GST Bill. The government can now create a new “Authority” which will decide whether businesses have reduced their prices “enough” when there is a reduction in the GST rate of a particular good or service. Click to read more
India moved a step closer to a new indirect tax system after the GST Council finalized tax rates last week in Srinagar. The best way to understand the grand federal bargain is to consider it a victory of immediate political concerns over the potential economic gains that could have been possible in the future. In other words, political optics have overpowered economic logic.
The tax rates that have been approved by the finance ministers in the GST Council are clearly a reflection of three political economy concerns. First, the impact of the new tax regime on the prices citizens will pay. Second, the impact on government budgets through changes in tax collections. Click to read more
Liquor has been kept outside the goods and services tax (GST) for now as it requires a constitutional amendment to bring it under the ambit of the new tax regime. However, there are expectations that the decision can impact the sector negatively.
Share prices of liquor companies have already plunged up to 6 per cent in the past four sessions with IFB Agro Industries falling the most at 6.4 per cent, followed by Global Spirits (down 5 per cent), Ravikumar Distillaries (down 5 per cent), United Breweries (down 5 per cent), Mount Shivalik (down 2.5 per cent) and Winsome Breweries (down 1.40 per cent). Click to read more
Tax officials have worked out an elaborate preparedness plan to ensure that Goods and Services Tax’s (GST) rollout does not run into unforeseen glitches, amid signs of nervousness among businesses as India readies to implement its most ambitious reform initiative from July 1.
Between the last week of May and third week of June, the CBEC will be holding close to 400 trade awareness and GST outreach programmes across the country. Click to read more
Over the last two months, the centre and over 15 states have passed laws to levy the Goods and Services Tax (GST). Under these laws, tax rates recommended by the GST Council will be notified by the government. The Council met in Srinagar last week to approve rates for various items. Following this decision, the government has indicated that it may invoke provisions under the GST laws to monitor prices of goods and services. This will be done by setting up an anti-profiteering authority to ensure that reduction in tax rates under GST results in a fall in prices of goods and services. In this context, we look at the rates approved by the GST Council, and the role of the proposed authority to ensure that prices of various items do not increase under GST. Click to read more
Yes, there’s a lot of writing about the goods and services tax (GST). But here’s what all experts know about it: nothing. I tried to read some columns about filling out something called GST-1for monthly filing and having the vendor in sync with the supplier. I have to say, I understood more when I saw ancient scriptures in Latin at the Vatican. And I don’t understand Latin.
I read about some movie producers and restaurant owners complaining that they were put in the GST categoryof 28 per cent. This meant their professions would be taxed at the same rate as gambling. Just because it is a gamble to be in these professions, doesn’t mean the government needs to take it so literally. Click to read more
The Centre has decided to keep ayurveda products in the mid-range of the goods and services tax (GST), dampening spirits in the sector. With the emergence of Patanjali Ayurved, consumer goods companies have felt encouraged to focus on this segment and had drawn up plans for expansion. In the pre-GST regime these products were taxed at 6-11.5 per cent, but the GST levies a flat rate of 12 per cent tax.
An analyst said companies like Dabur, which has a 9-12 per cent exposure to ayurvedic products, and Emami, were expecting a tax rate in the lower end.“Emami, which has been trying to grow its Zandu brand, will take a pause now,” the analyst said. Click to read more
The Goods and Services Tax (GST) reform, being touted as India’s biggest reform that will come into effect from July 1, may not boost revenues “significantly” in the next few years, but can work in the medium term, said global rating agency Fitch Ratings.
“We do not expect it will lead to significantly higher government revenues in the coming few years,” Thomas Rookmaaker, Director, Sovereigns and Supranationals Group, Fitch Ratings, told IANS. Click to read more
Watching movies at multiplexes, or even TV at home is likely to get expensive as states prepare to empower local bodies (municipal corporations, municipalities, panchayats, local and district councils) to impose additional entertainment tax outside the ambit of the goods and services tax (GST). The TV services likely to be charged are cable and direct-to-home (DTH).
States such as Maharashtra, Madhya Pradesh, Gujarat and Rajasthan have already said they will levy an additional entertainment tax on cinema, and cable and DTH services, according to several media industry executives and tax experts. Click to read more
The government may offer incentives to exporters to offset potential losses after goods and services tax (GST) kicks in from July, which will do away with a string of exemptions that traders currently enjoy.
“The Directorate General of Foreign Trade (DGFT) is considering allocation of resources or ways to incentivise exporters (after implementation of GST from July 1) in some manner,” a senior government official told Moneycontrol. Click to read more
Passengers will experience a dramatic change in speed and punctuality of Indian trains by 2020, railway minister Suresh Prabhu said in an interview.
Prabhu said that investments and reforms introduced in Indian Railways have already started showing results and the national carrier has no competition from cheaper flights as the railways will remain the preferred mode of transportation for millions of people. Edited excerpts: Click to read more
Flying Economy class will turn cheaper once the new Goods and Services tax (GST) comes into effect on July 1. Post the implementation of GST, those opting for economy tickets will save 1% on their ticket cost as the new tax rate has been fixed at 5% as opposed to the existing 6% tax.
Flying business class will however entail a 3% rise in costs as air tickets in this class will turn dearer as the tax rates will go up to 12% from the existing 9%. Click to read more