Economic activity in the country lost some pace amid GST related disruptions but underlying growth momentum remains strong and the country may clock 6.7 per cent growth this fiscal, says a Morgan Stanley report.
India’s economic growth slipped to a three-year low of 5.7 per cent in April-June, underscoring the disruptions caused by uncertainty related to the GST rollout amid slowdown in manufacturing activities. Click to read more
It was well known that the real test of GST would be when companies and taxpayers start filing their returns and the initial feedback show it has been frustrating and messy for millions. From the GST portal crashing under load, to a very complicated process of filing returns, taxpayers across the country are facing major hurdles when it comes to filing GSTR-1.
The government on Monday extended the date of filing GSTR 1 to September 10, but the taxpayers are still facing issues uploading their returns, which they have filled in offline utility mode. Click to read more
Activity in the country’s key services sector contracted for the second consecutive month in August as anxiety over the Goods & Services Tax (GST) took toll, a survey showed on Tuesday.
However, the seasonally adjusted Nikkei India Services PMI Business Activity Index registered 47.5 in August, rising from 45.9 in July. The latest figure was indicative of a softer rate of reduction that was moderate overall. The 50 point mark separates expansion from contraction. Click to read more
India has one of the lowest direct tax to GDP (gross domestic product) ratios in the world. This was documented in last year’s Economic Survey. When it comes to taxing income, we have a very generous threshold for exemption. As Praveen Chakravarty pointed out in a BloombergQuint column, India is the second-most generous country, among 20 major countries, when it comes to granting exemption from income tax. Tax liability kicks in only when your income exceeds 2.4 times the national per capita income. So, a lot of income earners legitimately escape the income-tax net. For instance, if the income exemption limit had been kept at Rs1.5 lakh in in 2012-13, then tax collection would have increased by Rs31,500 crore and we would have had 16.5 million new taxpayers. Click to read more
With a series of amendments and notifications almost on weekly basis to the GST Act, commercial tax officials are trying hard to understand and explain details to traders.
Notwithstanding 120 awareness programmes conducted by the commercial department in Nellore region, there is no clarity on the new tax system because of a chain of notifications.
In addition to this, bugs in the GST network software are also causing countless problems to both officials and traders. Click to read more
The State Government appears to be at loggerheads with the contractors executing works contracts projects, including the construction of irrigation projects, over the impact of the Goods and Services Tax (GST) over the sector.
The contractors have been expressing concern over the high slab under which the key ingredient cement has been placed. At 28% GST, the cost of cement is expected to increase further thus impacting the calculations of the contractors. Click to read more
The introduction of goods and services tax (GST) has led to an 80% drop in home delivery orders, claim hotel owners in Mumbai, who have passed on the increase in tax to the consumers despite a state government advisory not to do so.
Food parcel and home delivery account for 30% of their business, say hotel owners. While earlier 5% value added tax used to be levied, since July 1, customers have been paying GST even for home delivery orders. The GST for non-AC hotels is 12%, while for AC hotels is 18%. Of the 18% GST, the state and Centre get 9% each. Click to read more
The government has readied a draft proposal to increase the quantum of the three key “social pensions” but all eyes are on the state of revenues post-GST, with the revamp now hinging on whether the Centre will have resources to fund the revision.
According to estimates, restructuring the ‘National Social Assistance Programme (NSAP)’ — old-age pension, widow pension and disability pension — will incur an additional expenditure of Rs 10,000-12,000 crore over the present annual budget of Rs 9,500 crore. Click to read more
Technology troubles notwithstanding, a key challenge that small and medium enterprises (SMEs) are faced with in the goods and services tax (GST) era is the need for increased working capital.
Ambiguous GST filing processes have caused temporary disruption for SMEs as their clients are delaying payments seeking clarity on invoice-matching process, resulting in stretched working capital requirements. Click to read more
The government is considering to re-open the composition scheme window that allows small taxpayers to pay levies at a lower rate by foregoing the benefit of input tax credit under the Goods and Services Tax, a senior government official told BloombergQuint.
The proposal is likely to be tabled in GST Council’s next meeting on September 9, the official said requesting anonymity. According to the scheme, traders, manufacturers and restaurant owners with annual turnover up to Rs 75 lakh in the preceding financial year, can pay tax at 1 percent, 2 percent and 5 percent, respectively. Those availing the scheme will not get the benefit of input tax credit. Click to read more