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THE FINANCIAL EXPRESS: Will GST see the
light of day next fiscal वित्त वर्ष ?
The Goods and
Services Tax (GST), the most criticalमहत्वपूर्ण
tax reform that India has been longing for के लिए तरस रहा है, is stalledठप in the Rajya Sabha,
where the ruling political party lacks majority. Despite all its efforts, the
government failed to get the Opposition’s nod विपक्ष की मंजूरी in the Winter
session of Parliament which ended in December. Nonetheless बहरहाल, the government
seems undeterred व्याकुल and continues to
hold a positive demeanour आचरण . The release of
multiple process reports—including the CAG report and the Goods and Services
Tax Network (GSTN) report—stands testament प्रतिबद्धता to the government’s commitment to
introduce GST as soon as possible.
While the original
time-line of April 2016 is now far from being a reality, the
government is likely
to make serious attempts to push for the clearance of the Bill in the Budget
session, beginning later this month. Even after the successful passage of the
Constitutional Amendment Bill in the Rajya Sabha, the actual roll-out of
nationwide राष्ट्रव्यापी GST will take its
time, considering other critical steps required such as the formation of the
GST Council, the approval of the CGST Bill through a simple majority in both
the houses of Parliament, and the approval of SGST Bills in respective state
assemblies.
During the third Union
Budget of the NDA-led government, the industry expects significant amendmentsसंशोधन under the current
indirect tax regime, which will pave the way सुचारु करने की दिशा में towards a smooth transition to GST from the
next fiscal year.
Increase in service
tax rate and threshold limit सीमा
In December, a key
panel on GST headed by the Chief Economic Advisor released its report,
suggesting the revenue neutral rate (RNR) to be in the range of 15% to 15.5%,
and to be converted to structured rates. The lower rate of GST on goods of
special importance has been proposed at 12% and the standard rate at 18%. In
addition, a higher rate of 40% has been proposed for sin/demeritपाप / अवगुण goods such as luxury
cars, tobacco products, aeratedगैस से भरा हुआ drinks, etc, and a
special rate of 2-6% has been suggested for precious metals.
In line with the
recommended GST rate structure, there is a possibility that the government
increases the service tax rate from the current level of 14.5%.
The increase in the
service tax rate will put additional burden on the taxpayers, especially in
view of the uncertainty surrounding the time-lines on actual implementation of
GST. In order to ensure that the taxpayers are not overburdened अधिक बोझ डाल and to give respiteमोहलत to smaller
taxpayers, it is expected that the government will increase the thresholdशुरूआत exemption of service
tax from the current level of R10 lakh. On one hand, an increase in the
threshold exemption limit will keep small businesses outside the purviewपरिधि of service tax net,
and on the other hand this increase will substantiallyकाफी हद तक ease the complianceअनुपालन burden on the tax
authorities, permitting them to focus on larger taxpayers.
The government should
also consider reducing the rate of Central Sales Tax (CST) from the current 2%
to 1%, and reduce the tax cost on inter-state sale of goods.
Rationalising current
tax concessions/exemptions रियायतें / छूट
The proposed GST
regime व्यवस्था, which will subsume सम्मिलित हो most central and
state-level taxes, is expected to have a single unified list of
concessions/exemptions as against the current mammothविशाल exemptions and
concessions available across goods and services under the tax regime.
Therefore, it is expected that the government will prune downनीचे काटना or withdraw some of
the existing set of exemptions or concessions to take a step closer towards
GST.
Amendments in CENVAT
credit rules
The GST regime
eventuallyअंततः seeksचाहता है to have a single
rate of tax both for goods and services, with seamlessनिर्बाध credit mechanism
without any distinction between goods credit and services credit. The current
CENVAT credit rules are restrictive and ambiguousअस्पष्ट; even the
eligibility criteria for availment of credit vastlyबेहद differs for
manufacturers and service providers. It is expected that the government brings
necessary legislativeविधायी changes in CENVAT
credit rules such as allowing credit on all expenses related to business
without any corresponding nexusबंधन with output service/goods, and aligning the provisions
for admissibility of credit on inputs/capital goods/input services so as to
bring parityसमानता in credit availment across goods and
services.
In addition, one of
the industry expectations is that the recently introduced Swachh Bharat Cess
(SBC), which is currently a cost in the hands of taxpayers, should be made
CENVAT-able to maintain seamlessअखंड credit chain.
Such a move will
reduce the current level of litigationsमुकदमों and provide a boost to the Make-in-India
campaign, while also neutralisingउदासीन the effect of any increase in tax/duty
rates.
IT preparednessतत्परता for successful
implementationअमल of GST
IT infrastructure
will be one of the basic requirements for successful implementation of GST.
Based on the state government’s experience under VAT, it is evident that
without an efficient e-governance, it is not possible to administer VAT regime
effectively. The input tax credit, which is an important aspect पहलू under VAT, is
difficult to monitor without a fully development computer system. A closer look
at the proposed GST model suggests facilitationसुगमता of a robust मजबूत IT system with all
necessary information for availment of credits available on the IT platform. In
the upcoming Budget, the government should run a pilot project wherein the
dealers can choose to avail credits based on the details uploaded by their
vendors on the government tax portal.
It is now well
accepted that due to logjamगतिरोध in Parliament regarding the passage of the Constitution
Amendment Bill, uncertainty continues to hover inमें उड़ना the minds of taxpayers and global investors.
Having said this, it is highly probable that the government will make
amendments in existing regulations to prepare enough to face the biggest
transformationपरिवर्तन in the history of indirect taxation of India.
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