GST set for July 1 roll-out, dual control hurdle over

The Goods and Services Tax (GST) Council on Monday broke a deadlock over issues of administrative control over assessees and broadly agreed to roll out the GST from July 1, instead of the earlier deadline of April 1.

Whether a state or the Centre will assess an entity would be decided by a computer programme. The Council also resolved a logjam over the right to tax economic activities within 12 nautical miles from India’s coasts.

Against the earlier proposals of reserving administration of assessees up to Rs 1.5 crore in annual turnover for states, or of allowing both the Centre and states to jointly administer these, the Council decided to blend the two suggestions. The entire tax base would be shared between the Centre and states in a predetermined ratio, Union Finance Minister Arun Jaitley, the chairman of the Council, said at a press conference after the meeting.

The Centre agreed the states would have the powers to administer 90 per cent of assessees with an annual turnover of up to Rs 1.5 crore. The Centre will have the powers to audit, send notices and scrutinise the remaining 10 per cent. Only West Bengal’s Amit Mitra did not agree, Jaitley said. Mitra later told reporters this agreement pertained to services only.

Assessees with a turnover over Rs 1.5 crore will be administratively controlled by the Centre and states in equal measure. However, Jaitley said no assessee would be controlled by two authorities and there would be computer-based enforcement at both the Centre and the states. Those assessees who fall under the integrated GST (IGST) — for the movement of goods and services between states — will also be administered by the Centre and states, depending on their annual turnover (Rs 1.5 crore, or more).

GST

However, if there is a dispute between states over the place of supply, the Centre will have the power to administer those assessees. In all situations, the Centre will retain the power to collect this tax.

“Revenue will mostly come from entities with turnover of more than Rs 1.5 crore. Under that we get just three per cent revenue,” said a central government official. On whether or not assessees will change every year, he added, “Mostly, they will remain the same over a two- to three-year period. But, we are yet to take a call on that.” Mitra also opposed the power of arrest given to officials under the GST. The proposed structure has an arrest provision for tax evasion of Rs 2 crore and above. The offence is bailable up to Rs 5 crore. Mitra said, “Many of us strongly oppose it… Our officers do not have the right to arrest. It was, of course, watered down but is still there.”

The Centre also gave the right to tax economic activities within 12 nautical miles to coastal states, even as it will be the territory of the Union. At present, these states have the right to tax these activities.

The next meeting of the Council has been convened on February 18. By that time, changes to various Bills will be worked out and these will ready to be passed by Parliament and state Assemblies. Rules and segment-wise GST rates will take till March to finalise, pushing the introduction of the GST to July 1. Jaitley said the tax could be imposed at any time during the year, and trade and industry would get time to prepare for it. M S Mani of Deloitte Haskins & Sells LLP, said, “We hope the subsequent legislative processes are calendarised, so that the final legislation with relevant rules is available to businesses at least three months ahead of the roll-out.” According to Pratik Jain of PwC, uncertainty over the GST was now over and India Inc would be happy.

Business Standard New Delhi,17th January 2017

Household debt up, but India still lags emerging-market economies: RBI

Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...

External spillovers likely to hit India's financial system: RBI report

While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...

CA Online

Search This Blog