Skip to main content

GST COUNCIL MEETS TODAY

Image
By
GST COUNCIL MEETS TODAY
The Goods and Services Tax (GST) Council, in its upcoming meeting on Friday, is likely to giveamajor relief to exporters as well as small and medium enterprises (SMEs).These segments have been affected the most by the new indirect tax regime, which has depressed the economic growth numbers in the first quarter of the current financial year because of destocking on account of uncertainties before the GST was introduced on July 1.
The meeting comes after three most powerful persons in the current political dispensation —Prime Minister Narendra Modi, Bharatiya Janata Party (BJP) President Amit Shah, and Finance Minister Arun Jaitley —huddled together to discuss economic and political issues.Shah cut short his visit to Kerala to attend the meeting.Jaitley also skipped a World Economic Forum event in Delhi to attend the meeting.
Growth declined to 5.7 per cent, the lowest in any quarter since the BJP came to power three years ago.The Council is likely to make filing returns for SMEs easier.Those with an annual turnover of up to Rs 1.5 crore will be allowed to file quarterly returns.Also, the composition scheme, which allowsaflat rate and easy compliance, may be relaxed to rope in those with an annual turnover of up to Rs 1 crore against the current Rs 75 lakh.
About 540,000 taxpayers opted for the scheme under the new window of about a for tnight till September 30, compared to one million as of August 16 (the earlier deadline).The number of taxpayers under the composition scheme, at 1.5 million, is about a sixth of the 8.9 million assessees under the GST.Under the scheme,atrader pays the GST at one per cent,a manufacturer at two percent and a restaurant owner at 5 per cent, but they are not allowed input tax credit.They are permitted to file quarterly returns.
The meeting is likely to discuss a report of a committee, headed by Revenue Secretary Hasmukh Adhia, to address the problems of exporters.Based on that the Council is likely to recommend some relaxation for them so that their working capital, locked up in refunds, is released, according to officials.
Also, the Central Board of Excise and Customs will inform the Council that it is ready to release integrated goods and services tax (IGST) refunds to exporters from October 10.The government has allowed exporters to furnish letters of undertaking (LUT) instead of bonds, which will ease the compliance burden and stop the locking up of capital.
Exporters say more than Rs 65,000 crore of capital is stuck because they have to first pay the IGST and then file for reimbursement paid on imports that are accounted for in exports.This was not the case in the earlier tax regime.Two months after the rollout of the GST regime, the order books of exporters are said to have taken a hit, with estimates pegging the impact at up to 15 per cent across industries and product categories.
According to an assessment by the Federation of Indian Export Organisations (FIEO), the large drop was for export orders that were meant to be delivered until October. Beyond October, this may rise to 20 per cent, as exports during Christmas and New Year may be affected.
The share of exports in GDP declined to 18.2 per cent in the first quarter of the current financial year from 19.3 per centayear ago. After growing in single digits in the previous three months, exports in August rose by 10.29 per cent, up from 3.94 per cent in July. But exporters and economists are sure that the coming months would prove to be the real challenge for merchandise exports.
Besides, the Centre is likely to release Rs 8,500 crore to states as compensation for losses incurred by them in the first two months of the GST rollout.This will come up for discussion during the meeting.The cess to be distributed by the Centre to states would be about more than half of the Rs 15,021 crore collected as compensation cess during July and August, Rs 7,198 crore and Rs 7,823 crore, respectively.
“The compensation demand by states is lower than the cess collected.This indicates that the scale of revenue loss feared by states is much lower.However, these are early days. Inafew months, the actual picture will emerge,” said a government official.The government´s overall GST collection stood at close to Rs 95,000 crore in July, and Rs 90,669 crore in August.
Neither BJP sources nor officials were willing to comment on the details of the meeting (attended by Modi, Jaitley, and Shah).However, sources said they discussed GST hassles for exporters and SMEs, besides political issues.Modi is scheduled to be in poll bound Gujarat on October 7 and 8.Meanwhile, traders in Surat met Adhia on Wednesday
The Business Standard, New Delhi, 06th October 2017

Comments

Post a Comment

Popular posts from this blog

RBI rushes in to prop up falling rupee

By
RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…
Post a Comment
Read more

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

By
GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…
2 comments
Read more

Shrinking footprints of foreign banks in India

By
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…
Post a Comment
Read more