Fiscal Policy 08 Aug 2017 by Tojo Jose

Tax filings and advance tax payments goes up on demonetisation impact

Tax filings and advance tax payments goes up on demonetisation impact

Trends on tax filings indicate they have gone up significantly during the post-demonetisation. While the tax filings increased by nearly 25%, advance tax payments increased by a whopping 42%. According to the Ministry Finance estimate, the number of income tax returns filing increased by nearly 25 % this fiscal. The ITR filing increased by 24.7% pushing the total return filings to 2.82 crores from 2.26 crores during the corresponding period in 2016-17. The number of filings by individuals reached 2.79 crores, registering an increase of 2.22 crores. “As a result of demonetisation and ‘Operation Clean Money,’ there is a substantial increase in the number of Income

Read More »
Fiscal Policy 05 Jul 2017 by Tojo Jose

Government warns companies on profiteering while making price adjustment with GST

Government warns companies on profiteering while making price adjustment with GST

Government today warned the retailors and manufactures against any profiteering during the GST transition phase. Companies should reduce the price for goods where the GST rates have come down. Only goods that ware manufactured before July 1 can be sold at the GST impacted higher price according to the Revenue Secretary Hasmukh Adhia. Profiteering means retailors are not transferrin the reduced tax in the form of a reduced price to the consumers. Manipulation of prices on stocks is the route for profiteering. Government has decided to create an anti-profiteering authority during the transitional period. A five-member National Anti-Profiteering Authority, headed by a secretary-level

Read More »
Fiscal Policy 03 Jul 2017 by Tojo Jose

GST’s customization: India’s own version may test businesses’ adaptability

GST’s customization: India’s own version may test businesses’ adaptability

The GST is considered to be the ultimate tax reform in indirect taxes globally. Several countries have adopted it and those who have unitary financial structure or where there is only one central government, GST launch is rather simple. But in India’s case, the situation is much different. Merging of central and state taxes needed constitutional arrangements and political consensus. Indian conditions are also much different with the business communities consists of largely small and medium enterprises that have several hurdles to establish and manage the GST infrastructure. It doesn’t mean GST is a higher order reform given the capability of the business community. Ra

Read More »
Fiscal Policy 02 Jul 2017 by Tojo Jose

GST on the first day: biggies get ready; small firms struggles

GST on the first day: biggies get ready; small firms struggles

The first day of GST indicates difficulties for small firms as most of them report lack of idea about tax implications on inputs and components they are selling. Customers on the other hand, have started to adjust with the higher rates on some of the popular items like movie tickets where the tax rate gone to the peak 28%. Several small firms and sellers issued multiple bills to the same customer as the commodity they have bought have different tax outgo. Lack of proper idea about the exact tax implication were reflected across businesses. Bigger entities and that selling high value consumer durables like car and electronics adjusted to the new tax system quickly. Reports from va

Read More »
Fiscal Policy 30 Jun 2017 by Tojo Jose

India enters the GST era

India enters the GST era

The Goods and Services Tax (GST)’s life starts on July first as the centre and states decided to merge more than a dozen of their small and big taxes under it.  Now, nearly 70% of the country’s indirect tax revenues are covered under the GST. Importance of the event is well reflected as the Parliament is going to hold a midnight function on its launch. The rare gesture shows the pain and effort taken by the centre and the states to give away their pet taxes since independence while creating the GST. GST is rightly one of the biggest reforms since 1991 New Industrial Policy and the biggest tax reform since independence. It had the conceptual launch in 2000. But it

Read More »
Fiscal Policy 12 Jun 2017 by Tojo Jose

GST: tax rate on 66 items reduced and relief to small enterprises enhanced

GST: tax rate on 66 items reduced and relief to small enterprises enhanced

The GST Council’s 16th meeting on Sunday has brought down tax rate on 66 items in a fine-tuning exercise. The Finance Minister after the meeting also raised the exemption limit for the concessional composition scheme from Rs 50 lakh to Rs 75 lakh. Revision of other deserved items including that on hybrid cars are expected in the next meeting Items for rate cut Finance Minister Arun Jaitely who chaired meeting revealed the 66 items whose rate has been brought down. These include insulin, cashew nuts, pickles, ketchup, agarbattis, children’s drawing books, tractor components and others etc. Tax rate on children’s books were brought down from 12% to nil. For cine

Read More »
Fiscal Policy 07 Jun 2017 by Tojo Jose

Anti-profiteering body is the next big work for the GST Council

Anti-profiteering body is the next big work for the GST Council

When the government is targeting on an anti-inflationary GST system, it is necessary to ensure that tax reduction on several commodities should brought down prices as well. Here, tax administers fear that when cost cascading effect and input tax credits are allowed, tax burden will come down. As a result, businesses may not bring down prices rather they may convert the tax reduction into profits. The situation is called profiteering. Checking this profiteering through anti-profiteering mechanisms is the task in front of the government. The GST Council proposed formation of an anti-profiteering body using the tax administrators to make sure that businesses are transferring tax redu

Read More »
Fiscal Policy 20 May 2017 by Tojo

GST Council sets four tier rate structure for services; standard rate at 18%

GST Council sets four tier rate structure for services; standard rate at 18%

The GST Council has finalized its prime work on services front by selecting 18% rate as the standard rate for the new GST network. As a result, bulk of the services will come under this rate including financial services, high end hotels, liquor licenses etc. There is a four-tier service tax slab with education and healthcare coming under exempted category as now. The four rates under the GST for services are 5%, 12%, 18% and 28%. Besides this, there is an exempted list that has zero tax incidence. Currently, services are taxed at 15% with a negative list comprising few sectors including education. Migration to a higher tax rate of 18% will not be inflationary as several services

Read More »
Fiscal Policy 14 Apr 2017 by Tojo Jose

GST’s rate on real estate sector is keenly awaited

GST’s rate on real estate sector is keenly awaited

Can GST save the real estate sector from its status of being the country’s largest destination for black money? Real estate players are worried that if the GST rate on the sector goes high and if the stamp duty continues in its current form, the sector cannot be saved. Chances are that 18% tax slab will be applied on real estate sector. If this happens, dealers may go for inventions to evade taxes. Any high rate is an invitation to evade than to pay the tax. The Parliament has cleared the GST during the budget session, and the tax regime is expected to be launched on 1 July. As per the legislation, land leasing, renting of commercial properties and purchase of under-constru

Read More »
Fiscal Policy 03 Mar 2017 by Tojo Jose

GST’s upper rate may go up to 40%

GST’s upper rate may go up to 40%

The Goods and Service Tax Council may raise the upward ceiling of the tax rate to 40% so that certain high rate inviting commodities can be taxed. Effectively, the new ceiling will raise the peak rate of centre and state rates individually to 20%. Under GST, both centre and states have equal ceiling rates. As per the original scheme, the maximum rate was 28% implying a peak rate of 14% for both the centre and states. The rate structure of GST will remain the same with four rates – 5%, 12%, 18% and 28%. Now in the next meeting of the GST Council, the 28 % rate will be replaced by 40%. A change in a clause of the model GST Bill inserting “not exceeding 14%” with &

Read More »