The 70th year since Independence will go down in Indian history since the country switched over to the Goods and Services Tax (GST) regime, realising, thereby, the vision of a unified market in a federal system that guided the nationalist bourgeoisie in joining Mahatma Gandhis struggle to liberate India from the British.
Of course, the structural reform came accompanied with pain for trade and industry caught off-guard by the rigours of new compliance procedures. Queried by corporate leaders at industry chamber Ficci’s 90th AGM here earlier this month on how GST was impacting through lower tax collections, Finance Minister Arun Jaitley put the onus on them. Click to read more
Experience is the name the wise give to their mistakes. Through lessons learned from Modvat and later from VAT (which are also based on the same concept of tax credit, as in GST), it would be simple, even now, to gauge what GST would bring about.
CAG audits on Modvat revealed huge evasion, while one of the Collectorates had listed 13 ways that companies were taking wrong credits. The CII had also reported about the failure of Modvat. The VAT generated rampant evasion to the extent of even 50% in 11 of the 23 States, where audits were carried out in 2010. Other undetected wrongdoings and many unrevealed cases of harassment would add further to this sorry state of affairs. Click to read more
Nine Indian states and one Union territory are likely to have the e-way bill system under the goods and services tax (GST) in place by the new year in preparation for an all-India rollout by February despite concerns expressed by industry about potential harassment by tax officials.
Industry executives are concerned that the e-way bill system, an electronic way of tracking the movement of goods, may give tax authorities in the states powers to harass businesses in case of small instances of non-compliance even though it was designed to eliminate state-wise documentation and ensure faster transit of goods by doing away with checkposts at state borders. Click to read more
In a move to sustain India’s 7 per cent growth in the country, the Government is focusing on increased investments in infrastructure such as INR 8.5 lakh crore in Railways and INR 8 lakh crore under the Sagarmala project and, the recently announced INR 7 lakh crore in Bharatmala projects.
Currently, almost all these projects are being executed by either private players or Government corporations. In the pre-GST era most of these contracts were categorised as ‘works contracts’ which were overlapping between supply of services and supply of goods, and a combination of service tax and value added taxes (VATs) were applicable. Hence, there was a dichotomy in the applicable indirect tax regime relevant to infrastructure. Click to read more
It literally took the country by storm six months back when dozens of taxes and levies were rolled into one, but as the new goods and services tax (GST) stabilises, its ambit is now likely to be increased by including natural gas in next couple of months.
On July 1, when the new national sales tax was implemented, it was decried as technologically tedious and expensive and had potential to torpedo political prospects of the ruling BJP. Click to read more
Several companies may face challenges on product categorisation under the goods and services tax (GST), experts said. This could revolve around possible questions such as whether Pepsi’s Nimbooz is lemonade or pulp juice, Appy Fizz is an aerated or juicebased drink, and Red Bull is an aerated or energy drink, they said.
That’s due to lack of clarity on how to tax some products and a backlog of cases regarding classification ambiguities, the experts said. The answers to those questions will determine the tax rate. For instance, lemonade is taxed at 28% but pulp juice at 12%. Click to read more
The non-refund of Goods and Services Tax (GST) is taking a toll on jewellery makers with exports taking a hit in West Bengal, both in terms of export value and jobs.
“Even I am forced to decline orders for January due to lack of working capital. Situation is no different for other exporters and manufacturers. Till now, an amount totalling Rs 60 crore is stuck with the government as GST refund, that too interest-free for the jewellery exporters,” Indian Bullion and Jewellers Association state president Pankaj Parekh told PTI. Click to read more