Move comes ahead of GST Council meeting

In front of the GST Council meeting on Wednesday, the Center on Monday looked to alleviate the frayed nerves of states by discharging over Rs 35,000 crore as pending remuneration. “The focal government has discharged GST pay of Rs 35,298 crore to states and association domains today (Monday),” the Central Board of Indirect Taxes and Customs (CBIC) said in a tweet.

This is probably going to give a positive sign to states for the up and coming gathering, which may take up different choices to raise assets to remunerate states. Prior in the day, Union Finance Minister Nirmala Sitharaman guaranteed states that the Center would not “renege” on the guarantee of GST compensation

There was, nonetheless, some disarray over the period for which the paid sum was discharged. States said with this installment they got pay levy till September. “Pay has been discharged to the states for the long periods of August and September. We are cheerful that remuneration for October and November will be discharged before the month’s over,” Bihar Deputy Chief Minister Sushil Modi revealed to Business Standard.

Prior, Parliament’s Standing Committee on Finance had said the Center had paid Rs 45,745 crore as pay to states for the initial four months of the current money related year. The duty was paid in June and August. Be that as it may, as indicated by Sitharaman’s announcement in the Rajya Sabha, the Center had discharged remuneration of Rs 65,250 crore till October this year…

FM Sitharaman guarantees conditions of discharging GST pay contribution soon

Sitharaman on Wednesday said the Center was compelled by a solemn obligation to protect the enthusiasm of states

Association Finance Minister Nirmala Sitharaman on Wednesday guaranteed states that the merchandise and ventures charge (GST) remuneration because of them for August and September will be discharged soon. She, be that as it may, didn’t determine a course of events. Money priests (FMs) of Punjab, Kerala, Delhi, Rajasthan, Chhattisgarh, and Madhya Pradesh had met Sitharaman on Wednesday and encouraged that assets due for four months since August be discharged as quickly as time permits.

The issue could turn into a significant one at the GST Council meeting on December 17-18 in New Delhi. Punjab FM Manpreet Singh Badal said Sitharaman guaranteed them the cash will be discharged soon. “Remuneration for October and November is additionally due,” he included.

The August and September remuneration duty for Rajasthan are Rs 4,400 crore, for Punjab it is Rs 2,100 crore, for Delhi it is Rs 2,355 crore, for Kerala it is Rs 1,600 crore, and for West Bengal it is Rs 1,500 crore. Delhi’s Deputy Chief Minister Manish Sisodia said Nirmala Sitharaman didn’t determine the motivation behind why the pay was being held up. “The Center owes Rs 3,600 crore to Delhi for August, September, and October,” he included.

Cess assortments under the GST to remunerate states for income misfortune have missed the mark regarding prerequisites in the current monetary year by virtue of stoppage popular. Under the law, if the states’ GST income doesn’t develop by at any rate 14 percent, the Center pays them the distinction after at regular intervals.

Madhya Pradesh (MP) Commercial Tax Minister Brajendra Singh Rathore said the Center owes the state Rs 3,000 crore for August to September. The state has fared the most exceedingly terrible in GST assortment in 2019-20 (FY20), rounding up 30 percent of the yearly target. Kerala, Punjab, and Tamil Nadu have gathered around 33 percent, shows the information on the Comptroller and Auditor General of India site…

Why India’s labourers can’t afford to buy a packet of biscuits for Rs 5

Trouble is, the distribution of the Indian economic pie is more lopsided than the aggregate numbers suggest

Economy News: When snack makers start to lament that Indians can’t afford to spend 5 rupees (7 cents) on biscuits, it’s time to stop arguing over how much of the nation’s slowdown is cyclical and what part is structural.

Considering its glaring income, wealth and consumption inequalities, India is a surprisingly calm society. However, when purchasing power dries up to the extent that rural laborers and urban blue-collar workers have to think twice about cheap munchies, then the situation is desperate. The culprit is deep-rooted wage suppression, a long-term issue that needs attention.

Britannia Industries Ltd., the No. 1 Indian biscuit maker, recently sounded alarm bells over the sharp deceleration in its domestic sales volumes. Rival Parle Products Pvt. chimed in and said jobs were at risk for as many as 10,000 of its workers.

A Parle executive blamed India’s 2017 goods and services tax, or GST. While the consumption tax may indeed have been an additional burden in an economy slowing under a disastrous November 2016 currency ban, the funk has its roots in insufficient wages. In recent years, only about a third of the economy’s income has gone to labor, with providers of debt and equity capital taking the rest, according to India Ratings and Research Pvt., a unit of Fitch Ratings…

Read More: Indian Economy

After big rate cuts by GST Council, only 35 goods left in 28% tax bracket

After the latest rounds of rate cuts by the GST Council on July 21, only 35 items are left in the 28% tax slab

The GST Council has pruned the 28 per cent slab by cutting tax rates on 191 goods over the last one year, leaving just 35 items, including AC, digital camera, video recorders, dishwashing machine and automobiles, in the highest tax bracket.

There were around 226 goods in the 28 per cent category when Goods and Services Tax (GST) was implemented on July 1, 2017.

Over the last one year, the Council, chaired by Union Finance Minister and comprising state ministers, has slashed rates in 191 items.

ALSO READ : Here’s everything that will get cheaper as new GST rates come into effect

The 35 goods, which will be left in highest slab once the new GST rates are implemented from July 27, also include cement, automobile parts, tyres, automobile equipments, motor vehicles. yachts, aircrafts, aerated drinks, betting and demerit items like tobacco, cigarette and pan masala.

Experts said going forward as the revenues stabilise, the Council may look at further rationalisation of the 28 per cent slab, to restrict the highest tax slab to super luxury and sin goods.

Deloitte India Partner M S Mani said it would be logical to expect that once the GST collections after the recent reductions stabilise, the remaining items such as televisions of all sizes, dishwashers, digital cameras, air conditioners could be considered for an 18 per cent rate…READ FULL SOURCE

Milk, Mercedes can’t be taxed at single GST rate, says PM Narendra Modi

To criticism that the GST was ‘hurriedly implemented’, the PM said the government had been responsive, with issues identified and redressed in real time

 

Prime Minister (PM) Narendra Modi on Sunday ruled out a single slab for the goods and services tax (GST), stating that milk and the Mercedes could not have the same rate.

The GST regime was rolled out on July 1 last year. The central government on Sunday marked its first anniversary with an event in New Delhi, while Modi took to social media to showcase its advantages.

In an interview to Swarajya, a news website, Modi responded to criticism of his government’s version of the GST. He ruled out a single tax slab, pointed at the gains of the past one year, and admitted to teething troubles having plagued the regime in its first year.

To the Congress party’s criticism that there should be a single tax rate, he said: “It would have been very simple to have just one slab but it would have meant we could not have food items at 0 per cent tax rate. Can we have milk and Mercedes at the same rate?”

“So, when our friends in the Congress say that they will have just one GST rate, they are effectively saying they will tax food items and commodities, which are currently at 0 or 5 per cent, at 18 per cent,” Modi said.

To criticism that the GST was “hurriedly implemented”, the PM said the government had been responsive, with issues identified and redressed in real time.

The PM did not rule out the possibility that tax rates could come down further on some items. He said the government had reduced taxes on nearly 400 groups of items, and around 150 groups have a 0 per cent tax rate.

Modi also responded to the Opposition’s charge that the GST was “anti-people” by sharing on Twitter and the NaMo app the advantages the tax reform had brought for the common people. With the assembly elections scheduled in three key North Indian states in the next five months, and the Lok Sabha elections due in less than nine months, the PM tweeted that “decreasing prices”, because of the GST, were “helping poor and middle class”.

He also reached out to small businesses, a key support base of the Bharatiya Janata Party (BJP), and said the tax reform had provided “increasing opportunities for small and medium entrepreneurs”. With the hashtag “GST for New India”, the PM tweeted that the GST had brought growth, simplicity, and transparency. He said it had boosted formalisation, enhanced productivity, and furthered “ease of doing business”.

The PM said the GST had been designed to “eliminate inspector raj with the help of information technology”, and suggested that the GST roll-out was consistent with his vision of “minimum governance”.

The PM in his last radio broadcast had said the tax reform was an example of cooperative federalism with decisions in all 27 GST Council meetings having been reached by consensus.

Modi said the number of enterprises registered since Independence until June 30, 2017, was 6.6 million. He said in just one year after the introduction of the GST, the number of new enterprises registered was 4.8 million. He said around 3.5 billion invoices were processed, 110 million returns were filed, and 100 million e-way bills generated. “Would we be looking at such numbers, if GST were indeed very complex?” Modi asked.

Click Here : PM Narendra Modi

India's GST rates are highest in the world: Manpreet Singh Badal

Congress will strongly raise the issue of compliance and reduction in tax rates at the GST Council meeting in Guwahati: Badal

 

 

 

Exclusion of energy, real estate, and power are leading to cascading of taxes, and need to be brought under the goods and services tax (GST), said Punjab Finance Minister Manpreet Singh Badal. He told Dilasha Seth that the Congress will strongly raise the issue of compliance and reduction in tax rates at the Council meeting in Guwahati on Friday. Edited excerpts:

What are the key concerns that you have raised with the Centre on the GST?

We were told once the GST was implemented, India’s gross domestic product would go up by two per cent, but the opposite has happened. There is something fundamentally wrong with the GST — whether be it the rates, compliance, or the GST Network (GSTN) itself. We have gone in for a reform measure that is half-baked. The Indian GST rate is the highest in the world. Most countries start with a uniform GST rate of a single digit — at best, below 15 per cent; at worst, 18-20 per cent. The GST rates of 40 per cent are unheard of anywhere in the world.(economy policy)

Most of the issues on rates and compliance may get addressed in the Council meeting on Friday. Why is the Congress raising them now?

It has been five months since the GST roll-out. It is now that the government has woken up to the issues we have been talking about. It is too little, too late. It is not a question of the Congress or the BJP, but a question of the livelihood of millions. There has been a change of heart at the Centre. I do not know whether it has to do with the elections, but it needs to be done in the interest of the nation.

You also spoke about including real estate, petrol, and electricity under the GST. Will you effectively raise it in the meeting on Friday?

One has to bring petroleum, real estate, and electricity under the GST. This has, in fact, led to a lot of cascading of taxes across the board. For GST to be effective, all items must be subsumed. At least 50 per cent revenue has been kept out of the GST. There needs to be a discussion on this.

Compliance is another issue you have strongly raised. What is the big demand?

The requirement of matching nearly 3,500 million invoices every month with a possible 20 per cent mismatch will require additional working capital of close to Rs 1 lakh crore. Companies are not getting their input credit on time. Compliance should be made easier. The GSTN needs to be strengthened. The invoice matching glitches should be rectified. We hope to find a solution to that in today’s (Friday’s) meeting.

GST: hotels, eateries overcharging you? How to get the math right

Food served at restaurants attract tax at two rates under GST - 12 per cent and 18 per cent

As consumers, we are hardly aware of the components included in the restaurant bills. Next time do check your bill to see if the proper GST or goods or services tax rate has been levied. The Central Board of Direct Taxes (CBDT) on Tuesday clarified on rates of GST for restaurants.(economy news)

Food served at restaurants attract tax at two rates under GST - 12 per cent and 18 per cent (including both CGST (Central GST) and SGST (State GST)) - depending on whether it is an AC restaurant or whether the restaurant has the licence to serve alcohol.

Understanding your restaurant bill

If you revisit your food bill from the pre-GST fine-dine experience, you’ll find Service Tax, Service Charge, VAT being added over and above the food value.

VAT: This was the tax charged on the food portion of your bill.

Service tax: This was the tax charged on the services provided by the restaurant.

Service Charge: This is a charge applied by the restaurants and not by the government. It is not mandatory to pay the service charge, as per government rules.

However, the rates under GST are vastly different than what you would find before the tax policy change. Let us look at these changed rates below.

GST Rates on Eating Out

* Non-AC roadside eateries (non-alcohol) will charge tax at 12%. This also includes your local delivery restaurants.

* AC restaurants (both those that serve alcohol and those that don’t) will charge tax at 18%

* Non-AC eateries serving alcohol will charge 18%.

* Pre-packed food: The rate of tax on a parcel of pre-packed and pre-cooked namkin sold from restaurants will attract tax at 12 per cent. Also, in case of food parcel cooked as per order, GST rates will be applicable according to service of such food in the restaurant.

* Restaurants up to an aggregate turnover of Rs 75 lakh that opt for the composition scheme will charge GST at the rate of 5 per cent.

* Potable alcohol does not come under GST.

*Upender Gupta, GST Commissioner, explained that if food bill in a restaurant is Rs 500, Rs 1,000 is the alcohol bill, then GST should be levied only on Rs 500

The tax department has reiterated that no restaurant can charge GST at 28 per cent.

The tax department has also clarified that "the actual GST incidence will be lesser due to increased availability of input tax credit." Many input credits which were hitherto not available would be available now to be utilised against GST liability, says Sandeep Sehgal, director-tax and regulatory at Ashok Maheshwary & Associates LLP. (Read more)

Trinamool to boycott midnight GST function, Congress and others might too

The June 30 midnight event is a function and therefore not mandatory for members to attend

Several Opposition parties are likely to boycott the June 30 midnight function in Parliament to mark the rolling out of the Goods and Services Tax (GST) regime. West Bengal Chief Minister Mamata Banerjee today said that her party Members of Parliament will not attend the event in protest.

While the government has invited former prime minister Manmohan Singh to share the dais with President Pranab Mukherjee and Prime Minister Narendra Modi, the Congress party is also mulling a boycott.

The June 30 midnight event is a function and not a session of parliament, and therefore not mandatory for members to attend.|economy policy 

Banerjee today said her party was deeply concerned about GST implementation. "After demonetisation, this unnecessary disastrous hurry is another epic blunder of the Centre," she said.

The West Bengal CM said her party supports GST but it required more preparation. She said the entire business community, especially the small and medium ones, are scared and confused.

"Essential commodities such as medicines are not available in many places and prices of various commodities are rising for lack of clarity and mismanagement," Banerjee said, cautioning of chaos in the wake of hurried implementation of GST.

Banerjee said her parliamentary party will stay away from the function, but advised the government to take six months more for proper implementation of GST related rules and regulations.| economy news

Meanwhile, voices are growing within the Congress favouring a boycott. There are concerns, including from the former prime minister, that the event is designed to demean first prime minister Jawaharlal Nehru's "tryst with destiny" speech at the midnight session of Parliament on the eve of the Indian Independence on 15 August,1947.

A final decision is likely to be taken in the evening by the Congress.

Full GST rate list: Here are the tax rates for all goods and services

Foodgrains are slated to cost less from July 1

Economy news| Foodgrains will cost less from July 1 when the nation-wide Goods and Service Tax (GST) is rolled out as the GST Council today decided to exempt the daily-use commodities from the levy.

Here's a complete  GST rate  list of all 1,211 items but six were finalised at the first day of the two-day meeting in Srinagar of the GST Council, headed by Union Finance Minister Arun Jaitley and comprising state representatives.

Also, here's a complete list of all the items that the GST Council has broadly approved as the rates of GST Compensation Cess to be levied on certain goods.

Read our full coverage on GST

GST on gold: Buying and making jewellery to get expensive for customers

It can be said that those who are not computerised and internet savvy have to be out of business

The Goods and Service Tax (GST) Council has been kind enough to provide a special 3 per cent GST to gems and jewellery sector ( the exception being rough diamonds at 0.25 per cent).

Going by the economic survey of India and the hype which was created in the run-up to this meeting, a much higher rate was feared. However, the rate of GST for jewellery is in line with what it was under the old tax regime.|economy news

GST has increased paperwork and lot of compliance. Only time will tell if we as a country or an industry are ready for it.

The immediate impact would be on the investment buying of gold by consumers as the resale value will be down by three per cent. Here' an example:

Mr A bought gold worth Rs 100
Paid GST                                Rs 3
                                         —————
Total cost                            Rs 103

Now, after 6 months he wants to sell this gold and presuming that the gold price remains constant, he will get Rs 100 and the GST amount would be lost at the consumer level.

The transaction impact cost has increased from about one per cent to three per cent.

From the government's point of view, this is in line with their thinking/ planning — don’t invest in physical gold, rather invest in gold sovereign bonds. The consumer will also be better of as there is an interest coupon attached to bonds and it tracks local gold prices.

The exchange business of old jewellery for new ones will also be affected as the cost of 3 per cent will affect the transaction.| economy & policy

Another area which will affect the industry and the consumer is making of gold jewellery out of gold/scrap supplied by the customer. At present, there was no tax impact on the making of jewellery. Labour or making charges of jewellery were exempt from service tax (similar exemption was also under excise rules ). Under GST no such exemptions exist and making charges will be subject to 18 per cent GST. This is an undesired result.

Export from domestic tariff area (other than SEZ ) will be hit on two counts:

One, there is no exemption from GST for gold procured for export purposes. This would mean a higher blockage of working capital.