Months after its launch on July 1, the Goods and Services Tax (GST) has undergone a big overhaul. The GST Council last week reduced rates on 210 items of which 180 were in the top 28% bracket.
What brought about such a sudden overhaul and that too so soon? Well, it was neither sudden nor too soon. The rates in the top bracket of 28% were being discussed by the Centre and the states for long. What nudged the government was the surplus it earned during August. According to a report , the states had expected a shortfall of Rs 17,000 crore in July, but by August it came down to Rs 7,000 crore. Nearly Rs 8,000 crore were also collected from the compensation cess levied on automobiles, aerated drinks and tobacco. Click to read more
The GST Council in its 23rd meeting on Friday made big changes to the tax framework, pruning the tax rates on over 200 items. The GST Council also eased the compliance burden for SMEs. The reduction in taxes is estimated to have an impact on government revenue to the tune of Rs. 20,000 crore. “We believe the reduction in duties will benefit sectors like consumer, light electrical and home building. This, in our view, should benefit companies like HUL, GSK Consumer, Gillette, Nestle, Havells, Crompton Consumer, Finolex Cables, Kajaria Ceramics, Somany Ceramics, Century Ply, Vip Industries, Interglobe Aviation and Jet Airways among others,” brokerage Motilal Oswal said in a note. Click to read more
The Goods and Services Tax Council took a slew of decisions during its 23rd meeting in Guwahati on Friday to benefit consumers and businesses alike. While consumers will stand to benefit from a number of rate cuts, including the tax on restaurants, businesses stand to benefit from a significant easing of compliance norms to do with filing returns.
What has changed with the forms?
Up to November 15, when the decisions take effect, the GST system requires businesses to submit at least three forms to file their returns. The GSTR-1 dealt with the invoice-wise details of supply, GSTR-2 dealt with the receipts of goods, and GSTR-3 was an overall summary derived from the two previous forms. Click to read more
Prices of a large variety of consumer goods are expected to come down after the goods and services tax (GST) Council decided to move 178 items from the highest tax bracket of 28% to 18% on Friday. However, restaurants are expected to increase menu prices since, despite a lower rate of 5%, they won’t be able to claim input tax credits.
Items that will now be taxed less include liquid soaps, detergents, razors and after-shave products. The changes will come into effect by 15 November. Click to read more
This usually happens because of three reasons. First, that certain things are politically sensitive, like khakra in Gujarat, which can attract negative headlines.
Second, because the government feels that having become more expensive, these items will decline in sales and affect the economy.
And third that it is felt that the items were wrongly classified in the first place. All indirect taxes are bad because they tax rich and poor alike. My driver and I pay the same tax for Coca Cola. It is on the issue of direct taxes, like income tax, where the state must be effective. Click to read more
The initial revenue shock following the rollout of the goods and services tax (GST) seems to have abated, with states steadily improving collections aided by relaxations in deadline, waiver of late payment fee and steps to encourage compliance, showed data from the GST Council.
Average shortfall in GST revenue collected by states narrowed to 24% in September and further to 17.6% in October from a high of 28.4% in August, supporting the optimism of state finance ministers that revenues will stabilize further in coming months. Monthly GST receipts of states relate to sales in the previous month. Click to read more
The Centre slashed GST rates to avoid a drubbing in the Gujarat polls, the Shiv Sena claimed today while dubbing the BJP an “expert in gaining political mileage and publicity” from any issue.
In the biggest Goods and Services Tax rejig yet, tax rates on over 200 items were cut on November 10 to provide relief to consumers and businesses. As many as 178 items of daily use were shifted from the top tax bracket of 28 per cent to 18 per cent, while a uniform 5 per cent tax was prescribed for all restaurants. Click to read more
After its muted performance in the June quarter due to the transition to GST, India Inc is getting back to form, going by the September quarter results of 700-odd companies.
Net profit (adjusted) for these companies grew 13.45 per cent in the three months ended September 2017, over the September 2016 quarter (year-on-year). The disruptions caused in the run-up to GST resulted in only 1.08 per cent year-on-year growth in net profit for these companies in the June 2017 quarter. Click to read more
The famous wood carving craft of Saharanpur in Uttar Pradesh had barely started recovering from the severe problems created by demonetisation when it was plunged into a second crisis created by the high rates of GST and the various uncertainties and confusions involving the new tax regime.
Mohammad Shahid is a middle-aged entrepreneur. He says that the trade and the related craft had been based on a system of credits which has been disrupted by the new tax regime and there is a lot of confusion and uncertainty. Click to read more