Skip to main content

Budget to get slimmer after GST rollout

By
GST Council To Fix Rates, Govt To Focus On Policy
The Union budget is set to get thinner once the Goods and Services Tax (GST), a vital indirect tax reforms that aims to develop a common domestic market and cut out multiple levies, rolls out in the months ahead.
 
Experts say Part B of the budget, which is the most awaited section, will in all probability sport a very trimmed look after GST becomes a reality.
 
And, after the announcement of Direct Tax Code (DTC), length of the budget will be further trimmed, prompting the government to focus on policy announcements and detail outcomes of various proposals. The changes on account of GST are expected to reflect from the 201819 budget.
 
“Part two of the budget where you have the tax rates will be reduced by more than 50% and you will only have direct tax rates,“ said Dhirendra Swarup, a former expenditure secretary .
 
“I don't know in what form DTC will come. And the GST rate will be recommended by the GST Council which will be then be fixed by Parliament because under the Constitution, only Parliament has the power to decide on taxation,“ he said.
 
He said the GST rate maybe fixed for two or three years and it may just be mentioned in the budget. “There will be no need to specify individual rates for small items and therefore the part 2 of the budget will be reduced,“ said Swarup.
 
“The relevance of the budget will not go but degree of secrecy may come down as the recommendations of the council on rates will be in the public domain,“ said C M Vasudev, former economic affairs secretary . He said power on taxation rests with Parliament and the part two of the budget will still have to specify the products and services which will fall under the standard rate, merit and demerits rates.
 
“In an emerging market it is more important to focus on policy. Individual tinkering of tax rates should be minimized and with GST, the domestic indirect tax rates will be streamlined. Direct tax rates are already streamlined and they are not changed every year,“ said Rathin Roy, director at the National Institute of Public Finance and Policy.
 
The Times of India, New Delhi, 19 August 2016

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more