Centre, state tax depts at loggerheads

Even as the Union government strives to build consensus over the constitution amendment Bill for a goods and services tax (GST), a turf war between indirect tax departments of the Centre and states over the assessment and adjudication powers under the proposed regime continues.

The GST committee, set up by the Central Board of Excise and Customs (CBEC), has proposed two options in its report to iron out the administrative differences under the unified indirect tax regime. Although Finance Minister Arun Jaitley will take a final call on the matter, the issue is likely to be discussed on Tuesday at the meeting of state finance ministers’ empowered committee on GST.

States are demanding that they should get sole administrative powers to carry out assessment, scrutiny and passing of orders for entities and traders up to an annual turnover of Rs 1.5 crore and beyond that both states and the Centre should have these powers.

The CBEC committee, headed by its member Ram Tirath, has recommended doing away with the threshold altogether. Or alternatively, it has said that if states get exclusive control over up to Rs 1.5 crore, the Centre should get exclusive control over above that limit.

“The Centre is of view that there should be no administrative threshold at all. Although if the states are keen on exclusive control up to Rs 1.5 crore threshold, then the Centre should have exclusive administrative control over all cases falling above the threshold. The finance minister will take a final call on that matter,” said a senior government official, who did not wish to be quoted.

“This will be a big hassle for the taxpayers too. Even in case of central GST below that threshold, only states will have the power to assess and adjudicate. Over that, Centre does not get exclusive rights,” said the official.

States including Gujarat, Maharashtra, West Bengal, Tamil Nadu and Karnataka are pressing for authority over tax assessments and adjudication for entities with an annual turnover of up to Rs 1.5 crore. According to states, this will help small businesses from being harassed by dual control. CBEC has suggested a ‘cross power’ model, which means if there was no threshold, the Centre could initiate action and carry out scrutiny in case it detects a state GST case and adjudicate and vice versa. “According to the mechanism, the states can also initiate action on detecting a Centre GST (CGST) case, and inform the Centre. So, states will be authorised to initiate action in CGST case while the Centre will be authorised for SGST cases as well,” said another official.

Earlier, the Centre had also pressed for a higher GST exemption threshold of Rs 25 lakh annual turnover, but ceded to states’ demands of a lower one at Rs 10 lakh in the draft model GST law. According to government data captured two years ago, while units lying between Rs 10 lakh and Rs 25 lakh annual gross revenue comprised 60 per cent of the total dealers, they contributed to only two per cent of average national tax revenue.

In fact, Chief Economic Advisor Arvind Subramanian batted for an even higher threshold at Rs 40 lakh in his GST report to ensure compliance and minimising the burden on small taxpayers. Currently, small industries with annual turnover of up to Rs 1.5 crore are exempted from central excise duty, while thresholds for VAT and service tax stand at Rs 10 lakh.

Business Standard New Delhi, 22th July 2016

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said. Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm

Credit card spending growth declines on RBI gaze, stress build-up

Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem. “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and

CA Online

Search This Blog