The GST Council’s meeting on February 18 at Udaipur will decide tax rate on gold. Gold is at present attracting a sales tax of 1% and an excise duty rate of 1%. Reports indicate that states are arguing for a rate of 4%. At this rate, the centre and state may divide the tax revenues equally among them. Effectively, the proposed rate doubles the existing cumulative rate of 2%. Besides the excise duty and VAT (state sales tax), gold is having an import duty of 10%. A high rate may encourage smuggling and tax evasion. indirectly, such a rate will bring frictions between the dealers and tax officials. The 4% tax rate for gold is a rate outside the prescribed GST rates of 5%, 1
The budget presented by Finance Minister Arun Jaitely in the background of demonetisation and the shift towards a digital economy wonderfully combines several beautiful measures. Budgets’ slogan – the TEC or “Transform, Energise and Clean India”, is well reflected in the initiatives and allocations announced in the budget. Extending from the restriction of Rs 3 lakh on physical transaction of money to galloping MGNREGA allocation to Rs 48000 crore, a dedicated programme for the safety of Railway passengers, partnering digital India steps to ‘clean India’, doubling Mudra scheme allocation, a resolution regime for financial institutions, etc. the b
Fighting black money, providing inclusion, enhancing the delivery of public services etc. the digital economy got top priority in the new budget. There is no tax at all for the manufacturing of certain types of digital economy equipments. All taxes – the customs duties (BCD, CVD, SVD) and excise duties were abolished for domestic manufacturing of digital economy equipments like POS machines and Micro ATMs. Digital economy is one of the ten distinct themes of the budget. Some of the other themes farmers, rural population, youth etc. “Promotion of a digital economy is an integral part of Government’s strategy to clean the system and weed out corruption and black mo
Government is thinking about shifting the delivery of public welfare services. The new idea is for providing Universal Basic Income to the poor people so that they can obtain the public goods. The Economic Survey, presented in the Parliament makes an exhaustive analysis about the feasibility of launching Universal Basic Income in India. UBI is an old welfare idea aimed at providing basic income to all citizens. Finland has launched a UBI for their citizens. Several other small countries are thinking about its launch. According to the Wall Street Journal, Switzerland voters have rejected the programme. Advantage of UBI in the present context is that once the UBI is provided, gove
The transformative indirect tax regime -GST is all set to be implemented from July 1st, 2017 as the Centre and states settled all of their remaining areas of divergence. At the end of the ninth meeting of the GST Council Monday, the Finance Minister Arun Jaitely hoped that implementing the accord from July will give time to the industry to make the necessary arrangement for the roll out. Commenting about the implementation from mid-way of a financial year, Finance Minister observed that there is no problem in doing it so as GST is a transactional tax. Of the areas of conflict between the centre and states, the most important one was the tax right on low value assesses. Here, as pe
The cash crunch that is engulfing the economy is expected to faded out only slowly. According to the RBI data, the system has only one third of the total value of required currency notes right now. As against a monetary base of Rs 15.6 lakh crore currency supply, including the small denomination notes, only Rs 5.92 crore is in circulation. This includes the new Rs 2000 and Rs 500 notes and smaller denominations. This means that the physical cash dominated transaction economy may be reactivated only by the second half of this calendar year. The phasing out of currency crunch depends upon the pace of Rs 500 note printing On the timeline date for taking the next step on liquidity r
Initiating the chat on the new budget, the Finance Minister Arun Jaitely made positives of a lower tax regime. According to him, India need a transition to lower level of taxation to make the economy globally competitive. The Finance Minister was speaking at the inauguration of IRS officers training at Faridabad. In the last budget Jaitely made his plan to reduce corporate income tax rate to 25% from the current 34.6%. India is supposed to be a median tax rate country with corporate income tax rate placed at middle levels. The new tax rate is reduction and exemption free as all such leakages are expected to be phased out with the reduction of rates to 25%. Speaking about the ne
The government has clarified that Rs 500 and Rs 1000 note deposits by political parties in their accounts will be tax exempt. Tax exemption implies that political parities’ as the only entities whose accounts are exempt from any scrutiny. Revenue Secretary Hasmukh Adhia who is supposed to be the chief architect of the demonetisation drive said that bank accounts of political parties will be exempt as they are eligible for exemption from different types of taxes. As per Section 13A of the Income Tax Act, 1961, income from house property and other sources, capital gains taxes etc. will not be applicable to political parties. Similarly, voluntary contributions to political par
UPA government’s super hit - Aadhaar identification project’s man in charge and technocrat Nandan Nilekani was called into service by the government to head a 13-member committee. The committee will suggest ways to encourage people to adopt digital payment systems. Government is now in a hurry to maximize and showcase the returns from demonetization. New forecasts from experts and rating agencies rates demonetization as a GDP dampener. So far attempts are concentrating to exhibit the high achievements on two fronts- black money and cashless transaction. On the cashless transaction front, the huge number of illiterates, rural orientation, weak penetration of smart phon
The fifth meeting of the GST Council has ended without agreeing on critical legislations required to rollout the tax reform on April 1, 2017. Practically, the fifth meeting of the Council was influenced by demonetization and both sides failed to agree on all the supporting legislations. Especially, decision about the sharing of administrative powers between the centre and the states remained unsolved. The Council has decided to conduct its next meeting between 11-12 of this month. If the tax reform is to be implemented with the next budget, the next Council meeting became very crucial as the general budget is pre-scheduled to early February. “Nine chapters each of the Cent
Dictionary on Indian Economy
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- Japan’s first trade deficit in 30 years is part of the Global Shift
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