Skip to main content

Last gasp tasks: GST bills and rate fitment process (Hindu)

After the agreement on all GST bills, the rate fitment process needs to be addressed

At its twelfth meeting last Friday, the Goods and Services Tax (GST) Council cleared all the requisite State and Central-level legislative measures to implement the indirect tax regime. The State and Union Territories’ GST bills were approved along with necessary corrections to the three other GST Bills the Council had cleared previously — for Central GST, Integrated GST and compensation to States through a cess. This paves the way for State Assemblies and Parliament to ratify these laws quickly in order to meet the proposed July 1 rollout date for the system. Finance Minister Arun Jaitley has said the Union Cabinet will soon take up the four laws that the Centre has to steer through Parliament, while the respective State governments will take up the State GST law. Separately, officers from the States and the Centre are expected to finalise, by this weekend, drafts for four pending regulations out of a total of nine, that lay down the administrative procedures and processes to be followed by taxpayers under the GST regime. The Council will meet again on March 31 to consider those drafts. This will give the Centre enough buffer to make the transition to the new system.

Though industry has indicated that it needs at least three months to prepare for the GST once it sees the fine print, one major action will still be pending on April 1. That action — the fitment of thousands of commodities and services into the five GST rate slabs (zero, 5%, 12%, 18% and 28%) — could prove to be among the trickiest for the Council. The rate fitment process, unlike legislative nuances, is more susceptible to lobbying not just from different sections of industry, but also States that would like a favourable tax treatment for products and services they excel in. For instance, the GST Council has now approved a ceiling on the cess that could be imposed over and above the highest GST rate of 28% on pan masala, chewing tobacco and cigarettes, luxury cars and aerated drinks. For all such ‘sin goods’, the cess ceiling has been set higher under the GST than the level necessary to maintain the present level of taxation. But beedis have been kept out of the cess net altogether in order to avoid friction with States that could delay the broader reform. Despite such pulls and pressures, in a best-case scenario the rate-setting process should take at least a fortnight and the Council could meet some time in April to approve the rates. Giving lakhs of enterprises just about two months to switch to the GST regime, with all its implications for supply chains, pricing strategies and accounting systems, could lead to a messy start. The Centre must keep its mind open on pushing forward the rollout by a month or so, while industry should rise above heckling over rates and invest more lobbying energy on bigger worries, such as the GST’s penal anti-profiteering clauses.

Comments

Popular posts from this blog

Cloud seeding

Demonstrating the function of the flare rack that carries silver iodide for cloud-seeding through an aircraft. 
Water is essential for life on the earth. Precipitation from the skies is the only source for it. India and the rest of Asia are dependent on the monsoons for rains. While the South West Monsoon is the main source for India as a whole, Tamil Nadu and coastal areas of South Andhra Pradesh get the benefit of the North East Monsoon, which is just a less dependable beat on the reversal of the South West Monsoon winds.

SC asks Centre to strike a balance on Rohingya issue (.hindu)

Supreme Court orally indicates that the government should not deport Rohingya “now” as the Centre prevails over it to not record any such views in its formal order, citing “international ramifications”.

The Supreme Court on Friday came close to ordering the government not to deport the Rohingya.

It finally settled on merely observing that a balance should be struck between humanitarian concern for the community and the country's national security and economic interests.

The court was hearing a bunch of petitions, one filed by persons within the Rohingya community, against a proposed move to deport over 40,000 Rohingya refugees. A three-judge Bench, led by Chief Justice of India Dipak Misra, began by orally indicating that the government should not deport Rohingya “now”, but the government prevailed on the court to not pass any formal order, citing “international ramifications”. With this, the status quo continues even though the court gave the community liberty to approach it in …

India’s criminal wastage: over 10 million works under MGNREGA incomplete or abandoned (hindu)

In the last three and half years, the rate of work completion under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has drastically declined, leading to wastage of public money and leaving villages more prone to drought. This could also be a reason for people moving out of the programme.

At a time when more than one-third of India’s districts are reeling under a drought-like situation due to deficit rainfall, here comes another bad news. The works started under the MGNREGA—close to 80 per cent related to water conservation, irrigation and land development—are increasingly not being completed or in practice, abandoned.

Going by the data (as on October 12) in the Ministry of Rural Development’s website, which tracks progress of MGNREGA through a comprehensive MIS, 10.4 million works have not been completed since April 2014. In the last three and half years, 39.7 million works were started under the programme. Going by the stipulation under the programme, close to 7…