Skip to main content

India Inc to lobby against imposition of cess

By
India Inc may prefer a higher rate at the top end of the goods and services tax (GST) bracket, rather than have a cess that is non-creditable by nature, with a cascading effect on the indirect tax system.
"Industry is not going to welcome the idea of a cess. In fact, industry may prefer a higher tax rate so that the input tax credit chain is not broken, and the whole indirect system remains less complicated," said Harishanker Subramaniam, national leader, indirect tax, EY India.
Tax experts say imposing a cess is a bad idea as it complicates the structure of GST. Pratik Jain, leader indirect tax, PwC India, agrees that cesses, if imposed, will lead to cascading of taxes and complicate the overall GST structure. "Increasing the rate of GST slightly might be a better solution," he adds.
Tax experts and corporate lawyers say the government in all its communications on GST highlighted that all cesses and surcharges would be subsumed under the new indirect tax regime. This was also reflected in all official documents till date.
A cess will increase the compliance hurdle for businesses, say experts. "It will add to challenges for companies when it comes to record keeping and making changes in their IT system," said Sachin Menon, partner and head of indirect tax, KPMG.
Another school of thought among tax experts feels the impact and scope of the proposed cess should be limited, if it has to be imposed. According to Rajeev Dimri, leader, indirect tax, BMR & Associate, the cess is workable only if it is limited to only two or three items in the business-to-consumer space. "It will still be a distraction, but could be overlooked," he adds. The quantum of the cess and the stages of transaction where it is imposed will be a key determinant of their impact on the indirect tax system, say experts.
Over the next two weeks, tax experts and industry players are expected to intensify lobbying to do away with the proposed cess. "One hopes that government will reconsider the decision on cess," said an expert.
Business Standard New Delhi,20th October 2016

Comments

Post a Comment

Popular posts from this blog

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

By
  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...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more