Skip to main content

Birthday Wishes: Industry Wants It Simpler and All-Encompassing

Next Growth Level Industry associations CII and Ficci call for a single central registration process against the current procedure at both the Centre and state levels.
Indian industry bodies have pitched for a GST 2.0 with fewer slabs and more sectors including oil and gas, electricity and real estate with simpler registration and filing processes on the two-year anniversary of the introduction of the goods and services tax."GST 2.0 will take the Indian economy to the next growth level,” said Confederation of Indian Industry (CII) President Vikram Kirloskar. The industry also pressed to bring in all sectors under GST. “The most critical action would be to ensure ‘one nation, one tax’ by including all sectors under the ambit of GST,” said the Federation of Indian Chambers of Commerce and Industry (FICCI) .

The CII also echoed this calling for the inclusion of electricity, oil and gas, real estate and alcohol under GST “at the earliest” to allow for seamless availability of input tax credit across sectors. FICCI pointed out the need to include the healthcare sector at “zero GST rating” as healthcare providers are not able to claim input tax credits on inputs that have seen tax hikes adding to overall input costs.
 
The CII wanted a reduction of the number of GST slabs to "two or three" as well as make keep the 28% slab to only include “de-merit goods.” De-merit goods are goods such as cigarettes, the consumption of which is considered negative for the consumer.
Both industry associations have also called for single central registration process for GST. Currently, businesses are required to register both with the centre and the states where they operate.

Industry also asked the government to create a central body to deal with advance rulings on the provisions of the GST law to deal with ambiguity caused by divergent ruling from revenue officers in different states. “In just two years, GST has consolidated and is delivering notable outcomes for smoother business, lower logistics costs and easier payment of taxes in digital mode. We believe goods and services tax will be a forceful instrument for driving economic growth for India in years to come,” said Adi Godrej, past president of CII. Sandeep Somany, president, FICCI, also praised the government for it’s “proactive response” to deal with the challenges of implementing the landmark GST reform. Experts highlighted the importance of using the data collected from filings and the ease of use of the new GST return system to be made mandatory from October 1.

“The next phase of GST should involve using the return data to detect abnormal patterns and focus on audits of non-compliant entities, as these would also help in boosting collections,” said M S Mani, partner, Deloitte. "Businesses now, from a GST perspective, have been awaiting the modalities of the new return system to evaluate changes they would need to make to their business processes, IT systems," said Abhishek Jain, tax partner, EY India.

The Economics Times, 1st July 2019

Comments

Popular posts from this blog

April GST collections at new high despite rate rationalisation in December

Goods and services tax (GST) collection touched a record high in April, exceeding Rs 1 trillion for the third time in four months. The mop-up was 10 per cent higher over the previous year. Gross collection for the month was Rs 1.13 trillion, said the finance ministry. Despite the recent rate rationalisation in December, a rise in collection was reported. Of the total collected, the CGST (central GST) contributed Rs 21,163 crore, the SGST (state GST) Rs 28,801 crore, the IGST (integrated GST) Rs 54,733 crore (including Rs 23,289 crore on import) and cess Rs 9,168 crore (including Rs 1,053 crore on import). After settlement of the IGST and the balance IGST in a 50:50 ratio between the Centre and states on a provisional basis, the CGST stood at Rs 47,533 crore and SGST at Rs 50,776 crore. The CGST target in the Union Budget for 2019-20 is Rs 6.1 trillion. “The April collection indicates the tax base is increasing gradually, with GST getting stabilised with measures such as e-way bills and…

Defaults are Costly: Bankruptcy Law Gives Lenders More Teeth

Lenders can bargain strongly on asset recovery, defaulting borrowers can lose control of co With the Bankruptcy Act in place, banks can breathe easy, at least in the medium term, as corporate borrowers will now intensify their efforts to avoid loan defaults and the likely loss of management control of business, said Moody's Investors Service. This will empower lenders to bargain strongly in matters of asset recovery, while borrowers can gain with lower borrowing costs after three-four quarters. “The (defaulting) borrowers will lose control of the company as soon as the process is initiated,“ Srikanth Vadlamani, vicepresident, Financial Institutions Group, Moody's Investors Service, told ET from Singapore.“This, in itself, should act as a key incentive for them not to default in the first place.“ A few weeks ago, the government passed the Bankruptcy Bill, introducing a time-bound settlement process against loan default. With the Bankruptcy Act, the resolution process-from the date …

SC order on RBI circular: More options for banks to tackle defaulting firms

Lenders also have the option of restructuring the loans Lenders to companies which are under stress could now have three options to deal with them if they default on loans: take a haircut as part of a one-time settlement, restructure the loans for a longer tenure as they did when corporate debt restructuring schemes were allowed, or go to the Insolvency and Bankruptcy Code (IBC) for redress. These changes in the options available to lenders come, according to PE funds and bank lawyers who are involved in the IBC process, in the wake of the Supreme Court on Tuesday setting aside the 12 February RBI circular, which allowed a 180-day window to banks to resolve a company default.But they can still find a resolution. According to a Reserve Bank of India circular, a loan becomes a non-performing asset when banks cannot find a way of recovering their money in 90 days. In short, banks still have a window to resolve the default. Lenders can take a haircut as part of a one -time settlement of du…