Skip to main content

On GST eve, govt tells India Inc not to hike prices


Finance Minister Arun Jaitley meets industry bigwigs; officials on standby

Finance Minister Arun Jaitley met industry representatives on Thursday, a day before the roll-out of the goods and services tax (GST), and urged them against increasing prices.

Executives of Hindustan Unilever, Procter & Gamble, Airtel, DLF, Amazon, Grofers, Wipro, Mondelez, Johnson & Johnson and Liberty, along with industry chamber members, met Jaitley in North Block late in the evening. The FM took stock of industry preparedness for the GST and pitched for price reductions after the tax was imposed.

“The finance minister asked the industry representatives to pass on the benefit of the GST to the end user. The broad message was that the GST should not be inflationary and that prices should either remain stable or come down,” said an official on condition of anonymity.

Calculation by different players during the hour-long meeting showed the effective rate on shampoos, chocolates, and aerated waters will marginally increase, but that for coffee, soaps, biscuits, and juices will marginally go down.

E-commerce giant Amazon said it was happy with the deferment of the 1 per cent tax collected at source, but slow registration for the GST was a problem. “Amazon said the registration process should be expedited,” said a source.

On area-based exemptions for the Northeast and hilly states, the government told industry that the Department of Industrial Policy and Promotion (DIPP) was drafting a policy. It was suggested that the central GST (CGST) of 58 per cent of value addition be given as reimbursement.

Industry representatives also raised concerns over the GST Network not allowing multiple registrations in the case of different business verticals on one Permanent Account Number or PAN.

The broad message from industry was they were ready, but expressed concern with regard to the preparedness of small dealers and traders.“Industry said while they were ready, the small players were not,” said another official. Industry said they would be in a marginally better position with the GST, but prices would be left untouched at this point.

“Industry was gearing up and appeared to be ready for the July 1 roll-out. Though there might be minor teething issues, these would be addressed in time. The government is very supportive and it is a joint endeavour to move to a better tax regime,” said Saloni Roy, senior director, Deloitte. Scenes from the war room Revenue Secretary Hasmukh Adhia also conducted a video conference with central and state government officials on Wednesday to hear their concerns and questions.

“The revenue secretary heard officers on problems they anticipated over the next few days,” Central Board of Excise and Customs Chairperson Vanaja Sarna told Business Standard.

Sarna herself conducted a video conference with officials from all states. Most of the officials asked for speedier notifications for a smooth rollout of the GST.“We told them that some notifications were with the law ministry for vetting and would be issued shortly,” she said.

The CBEC was also apprised of any strikes or protests against the GST. “We discussed how to go about these protests,” Sarna added. Customs officials shared concerns over the integrated goods and services tax for goods that had duty paid on the midnight of June 30. “The customs department will issue guidelines for that,” Sarna said.

The CBEC will be renamed the Central Board of Indirect Taxes and Customs (CBIC) from July 1.On the political front, Union ministers and Bharatiya Janata Party leaders have been asked to fan out across the country to reach out to traders’ bodies and SME associations. Party leaders will visit state capitals and trading centres between July 2 and July 7 and have been provided material related to the GST.

The CBEC feedback and action room with 10 officials is handling queries from various departments of the states and the Centre and directing them to the department concerned.

More than 50 information officials will be on duty in Parliament for most of the night on June 30. Officials said there would be a dedicated team for social media out reach while others would issue releases in all languages. That apart, information will also be sent out on happenings in Parliament.

Officials said a team had been set up to coordinate with the Prime Minister’s Office (PMO), which will closely monitor the roll-out.A war-room meeting of information officials has been scheduled just hours before the event. Ministers and department heads, particularly those who have large financial or public dealings, have held meetings with their staff to oversee preparedness.

Business Standard New Delhi, 30th June 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

New money laundering norms stump jewellery sector

New money laundering norms stump jewellery sector Dealers with turnover of Rs 2 crore and above covered; industry says threshold too low The central government has notified the money laundering rules for the gems and jewellery sector with immediate effect. Now, any entity deals in precious metals, precious stones, or other high-value goods and has a turnover of Rs 2 crore or more in a financial year will be covered under the Prevention of Money Laundering Act, 2002 (PMLA, 2002). The limit of Rs 2 crore would be calculated on the basis of the previous year’s turnover, said the notification. The directorate general of goods and service tax intelligence has been appointed under the Act. Sources said the government’s move to apply the PMLA to the jewellery sector was a fallout of income-tax raids on jewellers soon after demonetisation last November, when it was found that they sold gold and jewellery at a huge premium and accepted old currency notes as payment. The notification, issued on Augus…

Confusion over branded food GST

Confusion over branded food GST The GST Council's statement over the weekend on applying tax on branded food items has left most of the trade confused.

Even though the Council has not changed the rates on food -0 per cent on unbranded stuff and 5 per cent on brands -many small traders who didn't levy GST earlier said they could come under the 5 per cent slab after the clarification.

While they predicted some increase in consumer prices, large players said they can absorb GST in many ways and keep prices steady.

"Trade is confused and hence on behalf of our chamber, we have asked our members to go ahead and charge 5 per cent GST," said Sushil Sureka, general secretary of the Ahilya Chamber of Commerce and Industry in Indore.

The statement clarifying the application of GST came after some businesses were found deregistering their brands and selling under corporate brand name without paying tax, after the Council exempted unbranded food from the new all-encompassing indirec…