States meet GST target as Centre plugs shortfall

New Delhi: The Centre compensated states for a shortfall in their goods and services tax (GST) revenue in April-November, enabling states to meet their target for the period.

But the Centre’s own receipts fell short of target, as taxpayers used outstanding tax credits from the previous indirect tax regime to set off part of their central GST liability, a finance ministry statement said on Monday.

GST revenue in a particular month refers to tax paid on transactions in the previous month.

In November, the central and state governments received Rs83,346 crores of revenue for transactions in October, the ministry said, citing figures available till 27 November.

Revenue to states in the August-November period touched Rs157,442 crore, which includes Rs87,238 crore received as state GST, while the remaining was made up by proceeds from inter-state commerce (integrated GST or IGST) and compensation from the union government, according to the finance ministry statement.

In the same period, the union government collected central GST (CGST) of Rs58,556 crore and IGST of Rs26,378 crore totalling Rs84,934 crore.

State governments’ revenue so far in the GST regime has been fully protected, taking into account a 14% estimated revenue growth over the base year of 2015-16, under the agreed formula for making good states’ revenue loss.

The finance ministry attributed the shortfall in union government’s revenue to the overall reduction in tax burden under the new regime that kicked in from 1 July and suspension of some of the key features of the tax reform meant to ensure compliance.

These include matching of invoices, use of e-way bill for tracking movement of goods across states and the ‘reverse charge mechanism’ that places the responsibility of small assessees’ compliance on the big companies that source goods and services from them.

“Since the overall incidence of taxes on most of the commodities have come down under GST, it would naturally have some implication on the revenues of the government,” said the finance ministry statement.

Although 9.6 million tax payers have registered for GST, out of which 1.5 million require to file returns only on a quarterly basis, monthly returns filed for the July-October period ranged between five to six million.


12% & 18% GST slabs may be merged, 28% for demerit goods: Arvind Subramanian

NEW DELHI: The government may combine the 12 per cent and 18 per cent slabs for goods and services tax (GST) into one in the near future and reserve the 28 per cent rate only for demerit goods, said chief economic adviser Arvind Subramanian.

While India will never move to a single GST rate, over time there would be a “poor man’s” rate (0 per cent and 5 per cent), a “core” rate (the 12 per cent-18 per cent combination), and the demerit rate (28 per cent), Subramanian said during the course of a 90-minute interaction at the ET office.

Cement and white goods are not demerited goods, but the government was deliberately “going slow” on those items due to revenue considerations.

The chief economic adviser, who had last year proposed a revenue-neutral rate of 15.5 per cent, said GST collections were not doing badly and the government would take a call on the overall fiscal situation in a few weeks.

“I think we are certainly heading in the right direction (on the GST structure),” Subramanian said.

Tax Base Expanding
“I never liked the 28 per cent slab, which I think has created some of the transitional challenges. I think we are very close to making 28 per cent just for demerit goods… 0 per cent and 5 per cent has quite a lot of the tax base and there I think we will not be able to make that much progress as we have to protect the poor. But the 12 per cent and 18 per cent, at some point, can be combined in the foreseeable future into one rate,” the chief economic adviser said, outlining the structure.

“In India, we will never get one slab. We have too much of a socialist mindset and for a good reason,” said the IIM-Ahmedabad and Oxford-educated Subramanian, whose tenure as CEA was recently extended by a year. Subramanian said land, real estate and natural gas could soon come within the purview of GST, and added that he supported the early inclusion of electricity as well. “Last time, land and real estate were on the agenda of the GST Council, but we couldn’t discuss it. I think that will happen sooner rather than later. I want electricity to come in very early because it will enhance competitiveness and help meet the ‘Make in India’ objectives,” he said.

GST collections were in line, Subramanian said, adding that everyone would be surprised by how much the tax base would expand.

“I think broadly on GST we are not doing badly. We are doing a growth of 12 per cent-13 per cent. Broadly, we are in line,” he said and added that states would not see a shortfall.

“At the risk of sounding a little over-enthusiastic, I think we would be pleasantly surprised about how much the base can expand. If you look at the number of registrants or if you look at implied tax base in the next six months we are going to look at a bigger tax base than we thought before starting this enterprise,” he added. Responding to a question about the rupee, Subramanian agreed that there was a section of the political class that wanted a strong rupee.

“There are parts of political class which like a strong rupee. I think that’s something that’s true and that’s something we need to deal with,” he said, pointing to how the Asean economies have used the exchange rate tool to grow.

He said India’s excessive focus on foreign capital has meant lesser control on exchange rate, which in turn had implications for export competitiveness.

“One of my pet peeves against all policymakers in India of all stripes is that we just seem to love foreign capital of all sorts. Every time there is a crisis we open the capital account even more and then the more you open the capital account the less able you are to control the exchange rate,” he said, adding that it is not possible to grow at 8 per cent-plus without strong contribution from exports. “If you love foreign capital then you have to pay the price for it. There is no free lunch in this business.”

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Marginal revenue hit due to GST rates cut can be offset by compliance benefits: CEA Subramanian

The cut in tax rates on 178 items by the GST Council recently has got the market worried over the pressure on the exchequer, and uncertainty whether the government will be able to make up enough by way of revenues.

According to Chief Economic Advisor Arvind Subramanian there will be marginal impact of these cuts on the revenue but that will be compensated by compliance benefits. However, drop in prices will also help keep the lid on inflation, he told CNBC-TV18 in an interview.

During the Guwahati meet of the Council, there were expectations that land and real estate will also be brought under the GST ambit.  Subramanian said land, real estate, petroleum products and electricity will now be on the agenda of the next meeting. Real estate will be considered first as a lot of black money is tied in this sector, he said.

The other sector that could get prominence in the next GST rejig will be electricity. “The taxes for electricity is embedded in the supply chain and kind of undermine competitiveness of Indian manufacturing,” said Subramanian. Bringing in electricity will be highly desirable. It will be part of how to make Indian manufacturing competitive, he added.

As for how GST is faring, he said it is too early to get a definitive assessment of how the new tax regime is performing.

On disappointing exports growth numbers reported yesterday, a decline of 1.1 percent to USD 23 billion, Subramanian  noted non-oil exports are a little over 9 percent which is substantially higher than what the country did 8-9 months ago. He said the non-oil export growth has picked up from 2016.

However, he added India is under-performing in comparison to its peers like Bangladesh.

He said it would take few more months to know whether India has put behind the transitional challenges coming after demonetisation and GST and has achieved higher pace of export growth.

Below is the verbatim transcript of the interview.

Q: There are plenty of questions that the market would like clarified from you and the first of these is exactly the fiscal deficit and how does it fare after this giant cut over 200 items of goods and services tax (GST) rates?

A: I think that it is fair to say that underlying fiscal numbers will have to look at as the year progresses, but the marginal impact of the cuts in Guwahati those are going to be manageable and they themselves are not going to have any serious impact on the overall fiscal deficit because there has been a cut, which of course in the first instance will lead to some reduction in revenue. However, I think it can be off-set partially or wholly by compliance benefits and also by progressively as the base expands, so the impact of that is one.

Second of course is that whatever the revenue impact is going to be the flip side is that there is also going to be some reduction in the price level as a result of those cuts. So, it kind of works both ways. So to some extent I think – to the extent that bond markets look at that as well I think that also has to be factored in as a positive development, which will keep a lid on inflation this year going forward.

Q: We got that number from the GST council that Rs 20,000 crore is the impact of the tax cuts. That is an annualised number, right? That is not a four month number or a five month number?

A: That is an annualised number. Also, that is a number that is what we would call in the economics ceteris paribus which is that all else being equal – that doesn’t factor in compliance benefits, expansion of the base, any implied impact on the price level and so on. It is a kind of limited calculation.

Q: If you can just tell me therefore that would the GST council therefore look at cutting the rates for the other just 22 percent of the items in the 28 percent bracket? If the impact is so minimal and if it will come with attendant benefits would cement, paints and other uses of mass consumption also be considered?

A: The thing is that – recall that the way the GST council has gone about this, I would call this a strategy of pragmatic incrementalism, which is that you have to balance competing concerns.

On the one hand, I think everyone has recognised, the GST council and everyone, that the 28 percent slab was very high. It also led to complications and high prices and so there has been a very consistent movement towards paring down items in that slab and that is what you have seen.

Of course at every point in time you have to also balance, exactly the point that you raised earlier that they are going to be revenue losses from that. So, how do you balance that and that is the way the GST council has gone about it.

I think items like cement and stuff are big revenue earning items. I think the GST council will take a view over the next few months how are revenues faring and then the more there is comfort and reassurance that we can kind of in a sense fiscally afford it, more those decisions will be taken. I think the direction is absolutely clear that the 28 percent slab, eventually you want it to be nothing more than what we call de-merit goods even in the report that I authored. So, that is the destination and I think we are progressing towards that much quicker than many had anticipated.

Q: That report of yours which is I think the intellectual foundation of all these rates was also arguing for fewer slabs. You see that principle being adopted in the months to come?

A: Absolutely, I think these are all decisions further paring down the 28, reducing the number of slabs, these are all going to be on the agenda going forward because I think everyone has recognised I would say for example that in a country like India a tax policy is maybe – I don’t want to exaggerate – a lot of tax administration because the simpler the structure easier the administration. So, the need for simplicity and lack of complexity is well recognised. I think on the 28 percent, we are moving and at some stage we can cut down maybe one more slab, I think then we would be approaching even the structure that I had recommended in that report. So, we are headed in that direction because the principle that there should be few slabs, a simplicity is now absolutely completely embraced.

Q: I take your point and I guess some of the fears also have now realised or are now found to be unfounded if you please for instance the banking sector, the insurance sector, the telecom sector were seriously worried about 30 registrations. It has not been all that complicated at all for them, therefore in that spirit do you think GST council is also on the verge of accepting real estate or petro goods sometime soon within the GST ambit?

A: Before we get to that, I also want to emphasise that in the spirit of simplicity and reducing complexity I think the other major decision that was taken at Guwahati, which perhaps has not received the attention that it deserved was the fact that the compliance burden specifically GSTR-2 and GSTR-3 that compliance burden has been significantly reduced so that for sometime at least those two forms which were creating a lot of problem those have also been temporarily put aside. That is another big improvement in compliance burden that has happened apart from the fact that the composition scheme with the threshold that could go up from Rs 1-1.5 crore that also so the notion of simplicity extends not just to the tax structure but also to the compliance burden.

Now coming to your question, I think that land and real estate was on the agenda at the last meeting but we just could not get to it because of lack of time. It is going to come back on the agenda probably even at the next meeting. I think that the parallel exercise of how do we expand the base land and real estate, electricity and then of course petroleum and natural gas products, I think those are all going to be on the agenda going forward.

Land and real estate is first up and there too there is a kind of lot of positive momentum building that this would be a natural complement to the other actions that the government has taken because a lot of black money is tied up in land and real estate. If we could clean it up bring in more transparency I think that would be a big step forward. So I think there too the general sense is that we are moving in the right direction and that there is a shared understanding, not universal maybe as yet but a wideningly broad shared understanding that we need to expand the base and land and real estate need to be brought in sooner rather than later.

Q: This is perhaps one of the healthiest development, would you expect that within this fiscal since you say it is in the agenda of the next meeting including land into GST?

A: Putting a timing is always very difficult because remember it has to be decided by the GST council whether a lots of competing, sometimes divergent interest, bringing forging a consensus is not easy always. But just as we saw with the 28 percent, we saw with the simplification there is momentum building in that direction on land and real estate. So, it is very difficult to say March, April, May but I think we are moving in that direction. I think that is all one can say at the moment. It is a very positive development.

Q: I did not forget the procedural improvements that were announced in Guwahati. I am coming to that in just a minute but before that you referred to the consumer price index (CPI) as a one of the advantageous, which the bond market ought to take cognisance of what is your own calculation? How much might it bring down, how much might it impact CPI -30 basis points, 40 basis points, 50 basis points?

A: I haven’t done the exact calculation but I have seen estimates between 20 and 40 basis points for that. It sounds plausible. I think the other sector which I think is very important to bring into the ambit of the GST is electricity because I do think that electricity taxes get embedded in the supply chain and kind of undermine the competitiveness of Indian manufacturing. So from a competitiveness stand point giving Make in India boost, I think bringing in electricity would also be something that would be highly desirable. So, land and real estate has a virtue that it is part of the cleaning up, transparency, corruption agenda, I think electricity would be part of how do we make Indian industry more competitive part of that agenda.

Q: And there is a buy in for that from the council?

A: We will move slowly in that direction as well over the next few months.

Q: Let me just complete the other fiscal deficit worries that pushed the bond yields up. There are couple of things that the market was obviously worried about crude going to USD 65 though it is off that level now as well the way in which the market borrowing program has been arranged after mid-January there is only Rs 5,000 crore that has been apportioned for the next five weeks giving the feeling that more borrowing will be put in those weeks what is your sense will the government need to borrow more?

A: Let us first understand why bond yields have been rising. I think at least a two or three factors have come into the play I think first of all oil prices have gone up. That is one important factor that you mentioned. I think also that for example US treasuries have also gone up by 20-25 basis points and this sense that now if you do get a tax cut in United Stated I think that would also lead to higher interest rates and so there are external factors in play.

I think there is also to be fair that the sense in the markets perhaps rightly or wrongly that the direction of the monetary policy is now going to be in one direction and not kind of evenly balanced maybe there is that perception as well.

So all of those are factors affecting bond yields and then of course over and above that will be the fiscal situation. I think on the fiscal situation as I said, it is a bit early to get a sense of where – because remember it is not just what is going to happen on revenues and expenditures, it is also going to depend on capitalisation and how government structures that recapitalisation as well.

There are lots of issues there how should these be recapitalised in a way that doesn’t crowd out other borrowing. So these are all decisions that will be made over the next few months and it is too early to say will borrowing go up or come down. Let us take stock once the data come in and once big decisions have been made on recapitalisation and so on.

Q: Since you allude to recapitalisation, can you give us some update on how it is designed. It is going to be via a recapitalisation bond, is that right and will there be a special SUUTI kind of undertaking setup which will issue any updates at all on the structuring of the bond, SLR, non-SLR, held-to-maturity (HTM), non-HTM?

A: Nothing has been decided as yet. I think the government is having intense discussions on this, consulting widely and I think these are decisions that will be made over the course of the next weeks and months perhaps. However, government is aware of all the factors that go into decisions on how to structure these recapitalisation bonds and I think that at the end of the day I think some very measured, calculated decisions will be taken.

One important consideration will be how not to unsettle bond markets as well. So, the principal and the objective is well recognised. I think the details will have to be worked out, are being worked out and over the course of the next few weeks and months.

I was also saying, the financials have to come in for the state banks and so on, so, let us see. A lot of more data is also required in terms of how exactly to structure the recapitalisation, how should we allocate it across the banks, and the issues that you raised – SLR, whatever tradeable, etc. all the stuff that have been talked about in financial markets, I think government is acutely sensitive to those factors and they will be incorporated in a very kind of measured manner as government takes these decisions.

Q: In that case, can the market at least assume that it is going to be a recapitalisation bond because repeatedly news reports surface that the Reserve Bank of India (RBI) will be asked to help in capitalising some of the banks. Is that also a conversation that is happening, asking RBI to give an interim dividend?

A: I think government is having serious internal discussions. These are all things that may or may not come into play, but the government has certainly made its own plans based on its own assessment of how much money to put in and how to put that in and so at this stage, I think these discussions are underway and all these things will be taken into account.

Q: Just to finally end the fiscal deficit discussion part, there are some who believe that even now the GST collections are a little more than what they were expecting. What is your final assessment of fiscal deficit? We were starting with a bit of a disadvantage in terms of the RBI dividend being lower, in terms of spectrum revenues being lower, and in terms of some of the cess’s been given up by the government though of course it may come back in the form of GST. So are we even on fiscal deficit or is there a very good chance that it is a little more than 3.2 percent?

A: I think the point that you raised on the GST, I think it is important to underline that we have only had three months of data so far and it is not enough at this stage to come to a definitive assessment of how GST is faring. For example, the IGST collections, not all of that has been settled. So we won’t know how they will be settled until the whole refund mechanism, the transitional credits, all play out. So it is too early to get a considered, definitive, assessment of how GST is performing. So, we need at least another two to three months of data before we make a considered assessment.

The same thing holds for the other items of revenue, both tax revenue and non-tax revenue as well. These are early days, there is a lot of seasonality, and there is also in terms of the non-tax revenue, these things become clearer as you approach the end of the fiscal year. So let us wait and see before we come to an assessment. I think it is too early to say, but let us see. Then there is the whole recapitalisation agenda as well. So, it has to be a kind of considered assessment, taking all the new factors that have come into play as well.

Q: So you won’t put an upward risk to the fiscal deficit number of 3.2 percent?

A: At this stage it is premature to do upward or downward at this stage.

Q: Let me come to that procedural parts that you were saying. One will expect that of course to play out in the months to come, but for the moment, the export numbers, we were running at a USD 22-23 billion export number for a better part of 2017. We did not seem to be participating in the global recovery probably because of the demonetisation and then the GST disruption. September was a pleasant surprise but again we are down in October. So is there some niggling GST worry that is keeping our exports down? What is keeping exports down?

A: First of all I think if you look at the non-oil export growth, if you kind of do the seasonal adjustment in all of that, I think for the last few months, we have been running at about — I think my estimate is about 9 percent non-oil export growth seasonally adjusted three month, not moving average kind of thing, which is substantially greater than what we were doing eight-nine months ago. So the trend in terms of non-oil export growth has picked up relative to where we were for much of 2016 for example.

Q: Is that average after yesterday’s numbers because garments have fallen by 40 percent almost, so, looking worrisome?

A: I did do the numbers after yesterday’s numbers, so these are moving averages. If we do the moving averages, we are running at about little over 9 percent on non-oil exports which is much higher than the 1-3 percent we were doing for much of 2016. So there has been a shift up, but as I said, the question is are we picking up commensurate with what we know other Asian economies are picking up. They are doing gangbuster export growth; Bangladesh, Vietnam, South Korea, are also doing much. So the question is whether we are doing as well as they are or not. We need to look at that a little bit more carefully.

Also, I think we need to see when we stabilise after the early stages of the GST implementation. So I think towards the end of the year, early next year, we will get a better sense of, having put the teething whatever transitional challenges behind that, are we at a significantly higher pace of export growth or not. Also then we will get the data on GDP at the end of the month. We did see that the IIP for the second quarter was not spectacular but it was better than the first quarter. So, where we are going to stabilise, is the momentum back in the right direction, we will also get to know when the GDP data for the second quarter comes out.

Q: As you say, we are underperforming the region and several of our peers in terms of export growth. Would you visit that on the GST transition, therefore any sops on the way for exporters in terms of not having to pay the taxes and then claim it back, any procedural ease on the cards?

A: Remember that on the export, we changed, in fact not this but a more than a month ago, exporters, we gave them relief by saying that they would not have to pay the IGST on imports. I think there was that procedural benefit that was given. We also allowed them to use the old drawback until the end of September. So, I think the government is very acutely aware of the problems of the exporters. We are going to be monitoring constantly.

However, remember that just in order not to overburden and blame the GST, our export performance also is affected by a lot of other factors. I think that the general state of the economy, the twin balance sheet problem, the level of interest rates in exchange rates, all of these play into export performance. I think that one should not just attribute all these just to the GST, although the GST, the transition, may have some impact as well.

Q: Usually the health of destination countries overpowers all this. But at this point in time, it is not.

A: You are right, but at this stage you are right about the state of demand in international markets, but that has been turning favourably for all exporters. So, your point is a very valid one.

Q: I want to end this conversation by asking you about the general state of growth itself. The argument has been made even by the RBI and people in government that Indian economy had slowed even before demonetisation and GST. Now is that niggling slowdown still a worry? Look at the October numbers, look at the PMI, look at the auto sales numbers and exports now. Is there a niggling worry that slowdown is still there and therefore, the number we will get for November 30 as well as the overall GDP number for the year could be a disappointment?

A: I think that I am completely waiting for the November numbers because you are getting indicators in all directions because certainly the IIP improved in the second quarter relative to the first quarter. Export growth, notwithstanding yesterday, has been, as I said, if you look on a more long-term basis, growth has been higher than in the past. But, there are also other factors weighing on the economy. So I, at this stage, will reserve judgement until the November numbers come out and see whether both the level and directionally where we are headed. I want to wait for that.

Q: What is your working number though on GDP for the current year and for the November quarter, if you have?

A: We had a number in the survey in July, August, when we brought out the survey. We made clear what our thing was. We said that we expected it not to be in the higher end of the range that we had originally forecast, maybe more towards the middle or the lower end of that range which is close in line with what the consensus is for the year as a whole. So let us just wait and see whether the November numbers are in line with those forecasts or not.


CAIT Secy General Praveen Khandelwal nominated for GST Panel

Traders body CAIT today said its Secretary General Praveen Khandelwal has been nominated to be a part of the government’s GST panel.

The panel — which has been constituted with approval of Union Finance Minister Arun Jaitley — includes other members like Araghya Sen Gupta (Research Director, Centre for Legal Policy), Vinod Jain (CA), Ajay (rpt) Ajay Sahai (CEO of Federation of Indian Exporters Organisation) and Laghu Udyog Bharti President Om Prakash Mittal, CAIT said in a statement.

Gautam Ray, retired chief commissioner of Central Board of Direct Taxes, has been named as the convenor.

The group will discus possible changes in GST law and its rules and will submit its recommendations to Law Review Committee by November 30, the statement said.

The first meeting of the group has been convened on November 8 to discuss in-depth the GST law and rules and amendments needed to make compliance easier, Khandelwal said.


GST a better tax regime: Nitish Kumar

Bihar Chief Minister Nitish Kumar today praised the GST as a better tax system and said there is a need to give more and detailed information about the new indirect tax regime (GST) to the people.

Kumar said this at a review meeting convened to discuss about the work of Commercial Taxes department and GST at his official residence here.

Officials should be involved in spreading and disseminating information among the people about GST, Kumar said adding that people should not pay heed to disinformation and misinformation regarding the GST, a government release said.

During the meeting, Commercial Taxes Department’s principal secretary Sujata Chaturvedi gave a detailed presentation on various issues relating to GST.

It was discussed at length as what is being done in GST and what will have its impact on the revenue of the state government, the release said.

It was informed during the meeting that efforts have been made to resolve the issues plaguing the traders at GST Council meetings and some of the complex problems have been resolved too, the release said.
Deputy Chief Minister Sushil Kumar Modi, who also holds charge of Finance and Commercial Taxes departments, said people have now begun to understand GST which is evident from the fact that the quantum of complaints vis-a-vis GST has reduced to only 10 per cent.

It was also discussed to take measures as how to improve the number of filings of returns that have reduced, he said.

The possibility of getting Khadi Udyog included in the tax-slab was also discussed at the meeting, it said adding that the CM gave necessary directions to the officials concerned in this regard.

Chief Secretary Anjani Kumar Singh, development commissioner Shishir Sinha, CM’s Principal Secretary Chanchal Kumar, CM’s secretaries Atish Chandra and Manish Kumar Verma and other senior officials were also present at the review meeting.

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Party demands white paper on demonetisation, GST

New Delhi: At a time when the UP civic polls and Gujarat elections are approaching, Aam Aadmi Party’s sixth national council meeting on Thursday passed a resolution saying that the Narendra Modi-led NDA government should present a white paper on demonetisation and GST.

It also demanded that the Lokpal Bill, which Delhi assembly had approved, should be cleared at the earliest so that Delhi can implement it.

The council dwelt on the current national political environment, economic situation, farmer distress, unemployment and both central and state Lokpal.

Other resolutions adopted at the meet related to “restrictions on free speech and expression” under the Modi government and the “undeclared emergency” by the Centre.

The council, attended by over 350 party members from across the country, demanded that VVPAT should be used in all upcoming elections and EVMs with paper trail should be made compulsory in 25% of the booths.

Touching on its major grouse against the Centre, it alleged that with the help of the lieutenant-governor, it was stopping the elected government of Delhi from working for people. “The Centre should pass the Jan Lokpal Bill passed by the Delhi assembly and implement it,” AAP functionary Sanjay Singh said at a press conference after the meeting.

“For consecutive quarters, the GDP growth of the country has been falling. It has fallen to 5.7% because of the anti-people policies of the government. Interest rates were reduced to benefit big-ticket defaulters and it hurt the small investors very badly,” said one of the resolutions. Calling GST and demonetisation foul plays, the resolution demanded a public apology from the government. It also said that all big-ticket loan defaulters should be identified, their names made public and their assets attached.

Speaking at the national council, Singh said the economy was in good health when Narendra Modi became PM. “The GDP was close to 8.7 per cent but now it has come down to 5.7 per cent,” he said.

“Religious passion is being used to divert attention from such issues,” Singh said, largely blaming demonetisation and GST for it. “Though the tax slabs were hiked under GST, Narendra Modi presented it as a celebration for the country.”

 The council also spoke up for farmers. “The farmers are in distress and that has forced many to commit suicide. They are getting a pittance in the name of loan waiver while the government is waiving loans of corporate houses worth lakhs of crores,” another resolution said.
The council demanded waiver of farmers’ loans, implementation of the recommendations of the Swaminathan committee report and fixing minimum support price at a margin of 50% profit on the investment by the farmers. It also demanded suitable compensation and jobs for the farmers’ families whose member have committed suicide.

A resolution on youth dwelt on unemployment and demanded that government should focus on higher education and employment with skill development. It demanded higher budget allocation for quality education and loan without collateral for students and young entrepreneurs.

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MRP should include GST, suggests Sushil Modi

Bihar deputy chief Minister Sushil Kumar Modi, who also heads a five-member panel on Goods and Services Tax Network, today suggested that the maximum retail price (MRP) of a product should always be inclusive of tax for the convenience of the consumers.

The deputy CM was interacting with businessmen at a function organised by Bihar Chamber of Commerce and Industries in association with a leading Hindi daily ‘Hindustan’.

“We (GoM) have suggested the inclusion of GST in maximum retail price. It has been seen across the globe that consumers react when they have to pay tax in addition to a product’s price but they usually do not mind paying the MRP when it is inclusive of tax,” he said.

Sharing his experiences abroad, he said the situation was no different in Canada, Australia and Singapore.

“Even in Canada, Australia and Singapore, consumers’ perception changed when they had to pay tax in addition to a product’s price. The same consumers react differently when they were asked to pay a particular percentage of tax that had already been included in the price tag,” he said.

GST is a gigantic reform and people may face teething problems for the first five to six months but things will get smoother in due course of time, he said.

Stating that a firm having turnover of Rs 1.5 crore would now have to file quarterly returns instead of monthly, he said, “We are making efforts to implement this process of quarterly returns for the businessmen. They will have to deposit tax every month but returns can be filed quarterly.”

He said that he also wanted the form for filing returns to be simplified further.

Making it clear that no state was entitled to take a decision on its own regarding taxes, Sushil Modi said that he wanted the quantum of fee for filing returns late -Rs 200 per day with a maximum cap of Rs 5,000 -to be reduced.

He also heard suggestions and grievances of the traders, in the presence of Bihar Chamber of Commerce and Industries president P K Agrawal, central GST commissioner of Patna Ranjit Kumar, and appealed to the lawyers and the chartered accountants to rationally charge them.

The deputy CM said that he would hold sector-specific meetings with the businessmen before the next GST council meeting.


HC directs PMO to file counter in GST case

The Madurai Bench of the Madras High Court has directed the Prime Minister’s Office and the Ministry of Finance to file a counter to a petition seeking e-way bill for GST.

Activist K. K. Ramesh, in his petition filed before the Bench, claimed that there was a lot of confusion in the levy and collection of GST for goods in transit.

Irregularities were committed by traders, particularly by hotels and restaurants, by collecting more than the prescribed rate, he said. The common man was put to a lot of hardship as there were no regulations and no separate officer to monitor the traders, the petitioner said and contended that such irregularities could be controlled if e-way bill (online bill) was made compulsory for goods of value above ₹5,000.

He said that there should be a flying squad at the State, district and zone levels to monitor the movement of goods and the e-way bills.

A division bench of Justices M. Venugopal and Abdul Quddhose on Monday directed the Prime Minister’s Office, represented by Principal Secretary to the Prime Minister, and the Ministry of Finance, represented by its Principal Secretary, to file a counter. The court had earlier sent notices to the respondents, following which they were asked to file counters.

The case has been posted for further hearing to November 14.


Govt. extends GST sops to road works contractors

Extra GST burden, changes in prices of fuel, labour, materials to be compensated

Mumbai: In a bid to ease the GST pressure, the State government has announced sops for private contractors working on government projects. Following protests, the government said any additional burden on the contractors due to GST will be compensated, as will price adjustments for petrol, diesel, cement, steel and labour. The changes will apply first to all old and new roads works by the Public Works Department (PWD).

Senior government officials told The Hindu that the decision came after a representation by the contractors’ association last month. While several changes have been made for contractors with regard to GST, contractors remain confused and have been raising queries, especially in relation to road works. The last round of changes were announced on September 19.

As per rules, compensation will be given only if the contractor is able to produce proof of being burdened by GST. “Chief Engineers are authorised to device a procedure for settlement of ‘Net GST’ claims under the guidance of the GST commissioners. They can accordingly issue instructions,” Sachin Chivate, Under Secretary, government of Maharashtra.

In September, the government had clarified that differences between contractors’ purchase price and standardised rates shall be recoverable from contractors or payable to them. However, contractors had demanded price adjustment due to fluctuating prices of diesel and petrol. Now, price adjustment will be compensated for fluctuation in the prices of petrol, oil, lubricants (POL), labour, cement and steel. “The modified price variation clause will be incorporated in tenders soon,” an official said.

The State government has set itself a target of developing 3.37 lakh km. of roads by the end of 2021. It has already awarded contracts for nearly 3.01 lakh km. of these roads, maintained by the PWD. The government has sanctioned an outlay of ₹4,770 crore for road works in 2015-16 and spent ₹4,030 crore on major works, officials said.

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GST Network launches an offline tool to file a form detailing inputs or capital goods sent to job workers and received back

GST Network today said it has launched an offline tool for businesses to quarterly file a form detailing inputs or capital goods sent to job workers and received back from them.

The excel-based offline tool has been made available for preparing and uploading the statement in form GST ITC-04. The tool can be accessed at Download section of GST portal, GSTN said in a statement.

As per GST (Goods and Services Tax) Rule 45, details of inputs or capital goods sent to job worker and received back from them need to be furnished on a quarterly basis in ITC-04.

“All the details can be added in offline mode and thereafter uploaded on GST portal to furnish the form for the quarter July-September 2017,” GSTN CEO Prakash Kumar said.

With the offline tool, internet connection is not required at the time of filling up details. After the details are fed into the excel tool, it can be uploaded on the GST portal.

Also since most of the data entry and business validations are in-built in the offline tool, it reduces chances of errors at the time of upload to the GST portal.

Also the data uploaded will be available for editing or for making new additions.

After the file is uploaded, the system will show the summary of data uploaded, which needs to be digitally signed or verified through EVC (electronic verification code) for successful filing of the same.

A principal manufacturer sends semi-furnished goods to job workers to further process the product.

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