Skip to main content

GST: Partial But Welcome Progress

By
GST Council should expedite the rest of it
The Goods and Services Tax (GST) Council has done well to clear a Bill that guarantees to fully compensate states for five years for any revenue loss during transition to the new tax regime. A legal backing provides comfort, but there should be ways to prevent states from slacking off on revenue collections. GST subsumes all indirect levies and avoids cascading of taxes, leading to potential revenue loss for states, but they will gain from being able to tax services. A precise estimate of gain or loss is not possible at this stage. Sensibly , states will be compensated on the basis of revenue projections from 2015-16 -when growth and revenue collections were buoyant.
A protracted slowdown due to demonetisation would hurt their revenues next year. In any case, the Centre will have to bear an extra fiscal burden if states have to be compensated for revenue shortfall. So, the need is to change the approach to sharing taxes with states. There is a compelling case to take the central goods and services tax (CGST) out of the divisible pool of taxes, leaving collections from inco me tax, corporate tax and customs du ties to be shared with states. Such a change in approach will, at least parti ally, safeguard the Centre's revenues.
The tough part -of fixing the tax ra tes for different commodities under the four-tier GST structure, deciding the legalities in the Central GST Act, the Integrated GST Act and the State GST Act, decoding how to settle disputes and prevent taxpayers from having to face multiple levels of the administration to comply with the tax -is reportedly still to be settled. The GST Council should drop the anti-profiteering mechanism to ostensibly keep a check on the pricing policy of producers. It goes against the grain of a non-adversarial tax regime.
The Centre is hopeful of rolling out GST on July 1. We reiterate that it makes sense to fix the launch date three months after the final state and central GST laws are passed and rules notified in order to enable companies to be ready with their accounting systems to meet the requirements of the new tax.
The Economic Times New Delhi,20th February 2017

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