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Corporate India Advisors LLP
31 March 2015
GST
Newsletter
While the constitution Amendment Bill has been placed in the parliament and we all are waiting for it to be
passed to enable the Government to proceed for further course of action to make GST a reality, related
developments on day to day basis in terms of recommendations of 14th Finance Commission, expectations of
industries, experts and the States, representations made by them in this regard, efforts made by the Central
Government and views of the states as expressed by them during the month of March 2015 have been captured
in this newsletter.
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India hopes to pass a national Goods and Services Tax (GST) in the second half
of parliament's budget session. Indian parliament's budget session is currently
under recess and will resume on April 20. The FM said that, “I hope that the
Constitution Amendment Bill that was cleared by the standing committee,
will be considered by Parliament in the second part of the Budget session. We
may need to have another meeting for further consultations on these issues
because a large number of state finance ministers are busy with their
own Budget sessions”.
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Government hopes to pass
GST in second part of
Budget session
Government
positive
about GST rollout from
2016
Centre working hard on
CST compensation issue
The government is confident of rolling out the much-awaited Goods and
Services Tax (GST). Revenue Secretary Shaktikanta Das told in an interview
that “There are process related issues which are being worked out. On the
major issues, all states are on board... That’s our effort (of implementation of
GST from April 1, 2016), we are optimistic about it. We are reasonably
confident about it. Finance minister Arun Jaitley said at an event that after
the passage of the bill, the government will work on the GST legislation with
the empowered committee.
The Centre has paid Rs 32,800 crore to states as compensation for phasing
out of Central Sales Tax in the run-up to roll-out of Goods and Services Tax. To
ensure a smooth introduction to the Goods & Services Tax (GST), the Centre
Government has sought Parliament approval to release about Rs 11,000 crore
to states and union territories to compensate them for revenue loss on
account of phasing out of CST.
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Kerala Finance Minister
KM Mani new chairman of
GST
Empowered
committee
Kerala finance minister KM Mani has been appointed chairman of the
empowered committee of state finance ministers on Goods & Services Tax
(GST). After wide consultations with all states and Union Territories, the
general consensus was that Mani may take over as the new chairman of the
committee, the finance ministry said. The chairman of the committee has
generally been from an opposition ruled state. Mani represents the Kerala
Congress (M) and is also a senior finance minister. His appointment could
help the government garner support from the opposition.
Kerala Finance Minister K. M. Mani, who has just been appointed Chairman
of the Empowered Committee of State FMs on GST, exudes confidence of
getting all states on board and meeting the roll-out deadline for the new
indirect taxes regime. He also feels that producing states’ concerns could be
addressed during the course of the year. When asked about the opposition
from some large states ruled by the BJP like Gujarat, Maharashtra and
Madhya Pradesh, citing larger revenue losses to them as producing states,
Mani said he is confident of getting them on board as in the long-run, they
too will benefit immensely.
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Mani is Confident of
getting GST opposing
States on Board
GST
Newsletter
GST
Newsletter
Textile Industry demands
lower tax slab of GST
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Business representatives pressed for putting proposed draft on the Goods
and Services Tax (GST) laws in the public domain and asked the finance
ministry to engage with it more regularly to prepare businesses for the new
indirect tax regime, targeted to be rolled out from April 1, 2016. The Revenue
Secretary said that the Government recognizes Industry's concern is that it
needs to understand these laws so that introduction of GST don't give them
any surprises. He said public interaction with industry and trade on GST is
actually taking place at various centres. But we probably need much more
interaction. We will have a greater level of interaction with industry and
trade, he said.
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Industry
wants
the
Government to Place draft
of GST laws in public
domain
The chairman of Indo Rama Synthetics Limited (IRISL), along with vicechairman and managing director of Filatex India Limited Madhu Bhageria,
have demanded that textiles should be kept in the lowest tax slab when
goods and services tax (GST) comes into effect. They said the industry is
going through a tough phase and needs a boost. Both of them recently met
minister of state for textile Santosh Kumar Gangwar, who was briefed about
the demands.
The industry represented that man-made fibre sector needs major attention
from government. If enough focus is not given at this time, other countries
like Vietnam, Bangladesh, Indonesia and Pakistan can overtake India. It was
stressed that government should take steps to boost production capabilities
of this industry.
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Industrial bodies want
state to abolish local taxes
Pune civic Bodies to get
some GST revenue
The industrial bodies in Nashik are expecting a statement from the state
during the budget presentation for the financial year 2015-16 on abolition of
local taxes like local body tax (LBT) and octroi while implementing the Goods
and Services Tax (GST) as proposed by the Centre from 2016-17.
The state government's decision to scrap the Local Body Tax (LBT) from
August 1, 2015, had not gone down well with civic officials. They had raised
concerns about the revenue loss municipal corporations will have to sustain.
Pune and Pimpri Chinchwad corporations wanted to know if the government
would share GST revenue with them. Pune municipal Corporation (PMC) joint
commissioner and LBT chief Vilas Kanade said the civic body was waiting for
details from the state and the Centre. "We have asked for details of how the
government plans to compensate the PMC and other civic bodies," said
Kanade.
Union Urban Development Minister M. Venkaiah Naidu has suggested
sharing GST (Goods and Services Tax) revenue with municipalities across the
country to ensure predictable and guaranteed flow of funds to enable them
take up urban reconstruction initiatives. Mr. Naidu said the country’s
municipalities are the “weakest” in the world in terms of access to resources,
financial autonomy and revenue raising capability.
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Venkaiah calls for sharing
GST
revenue
with
municipalities
GST Newsletter
Indirect Tax Newsletter
West Bengal - GST
implementation should not
be at the cost of State’s
revenue
Uttar Pradesh - seeks
safeguards for financial
independence in GST Bill
In a pre-budget address, the State Finance Minister Amit Mitra said that, “we
stick to our stand. In principle we are not against the GST. But it should not
be at the cost of losing out on our revenues”. Responding to a specific query
Mitra said the objection to GST arises only when the State has to forgo
revenues. A senior State official pointed out that the State was likely to fall
short of its revenue collection targets. The projected revenue collection for
FY-15 was pegged at Rs. 45,000 crore. Till January 2015, the State’s tax
collections stood at Rs. 35,000 crore. “There’s likely to be some shortfall,”
the official said adding that a major hit would be in entry tax collections.
Uttar Pradesh Chief Minister Akhilesh Yadav on Thursday sought safeguards
in the proposed GST bill, noting states presently have the constitutional right
to levy taxes on purchase or sale of any commodity but the new system will
affect their financial independence. In a letter written to Prime Minister
Narendra Modi, the chief minister said with the adoption of the new GST
regime, the existent system will come to an end. He also requested the prime
minister to adopt a positive stand in the spirit of cooperative and
collaborative federalism and make necessary provisions in the bill.
GST
Newsletter
GST
Newsletter
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Industrial bodies in the district have demanded the central government to
implement Goods and Services Tax (GST) from the next financial year. They
have demanded abolition of taxes such as LBT, service, professional tax and
others. Ravi Verma, president of Nashik, Industries & Manufacturers'
Association (NIMA), said, "The central government needs to implement GST
in the state from the next fiscal. Moreover, it should also give directives to
the state government to abolish LBT, VAT and other small taxes. This will help
simplify the tax system in the country. Digvijay Kapadia, president of All India
Federation of Cloth Retailers' Association, said, "The central government is
yet to introduce the much-awaited GST. It should not take more time and
introduce it from the next financial year. LBT, service tax, professional tax
and other taxes should be abolished or merged while introducing GST. There
should not be other taxes barring GST, income tax and excise."
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Industry bats for GST from
next financial year
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GST
Newsletter
Indirect
Tax Newsletter
Corporate India Advisors LLP
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DELHI
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RohiniAggarawal
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PUNE
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About CIA
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CIA is an indirect tax specialist firm. CIA is run by eminent professionals having a niche experience in all realms of indirect
taxes in leading multinational consulting firms. The services comprises of Service tax, Central Excise, Foreign Trade Policy,
Customs, Value Added Tax, Central Sales Tax, Anti-dumping / Subsidy Measures and Goods and Services Tax. CIA has Wide
spectrum of network on PAN India basis and provides best value for money proposition. CIA leverages upon its strong
knowledge base, research and professionals with distinguished background
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