Parliament’s winter session to begin on November 16 to expedite GST rollout
Winter session of Parliament will start on November 16. It will be a month-long session that will end on December 16, the cabinet committee on parliamentary affairs decided on Thursday.
The winter session usually starts in the third or fourth week of November, but was advanced to achieve the government’s ambitious target of rolling out the goods and services tax — a uniform indirect tax regime that will subsume all central and local levies such as excise, octroi and value added tax — from April 1 next year.
It’s also in keeping with the government’s plan to advance the presentation of the general budget by about a month. The budget is usually presented on the last working day of February, but the government has decided to advance it to start the process of revenue mobilisation and capital expenditures from April 1, the first day of the financial year.
Parliament passed the Constitution (122nd) Amendment Bill for GST in August, but it has to clear the Central GST and Integrated GST bills before its rollout from April 1, 2017, as envisaged by the NDA government.
These two enabling laws, while empowering the Centre to levy the GST on goods and services and collect it on inter-state trade and commerce, are expected to specify the range of GST rates, exempted items and compensation, among others. These issues are being deliberated upon by the GST Council headed by finance minister Arun Jaitley.
The government is likely to give a renewed push to its labour reforms agenda in the winter session of Parliament as well. High on the priority list is the Labour Code on Wages that seeks to empower the Centre to fix minimum wages across all sectors. The code amalgamates four existing laws relating to wages.
The labour ministry also hopes to build political consensus to get parliamentary approval to the Code on Industrial Relations, which aims to make retrenchment easier for firms employing up to 300 workers.
The last monsoon session was relatively smooth and productive — compared to previous sessions that were marred by government-opposition face-offs — but the winter session could witness a fractious debate on India’s September 29 surgical strikes across the de facto border in Pakistan-occupied Kashmir. Opposition parties have accused the BJP of politicising and “profiteering” from the military action, while the ruling party has accused them of “belittling” the sacrifice of the armed forces.
Ahead of elections in Uttar Pradesh, Punjab and three other states in February-March next year, these allegations and counter-allegations could cast a shadow on the legislative agenda of the government in the coming session of Parliament. Source –http://www.hindustantimes.com [14-10-2016]
Centre warns against criticism of GST network
The Centre has warned its employees that they could invite penal action if it is found that they are indulging in criticism of its policies and actions. T his presage came from the Union Finance Ministry amid a sustained campaign by the Indian Revenue Service (Customs and Central Excise) and All India Association of Central Excise Gazetted Executive for changes in the Goods and Services Tax Network (GSTN)-a private company tasked with the creation of Information Technology (IT ) infrastructure and composition of a GST council secretariat for the new tax regime.
“Of late, it has been noticed that some associations or federations have commented adversely about the government and its policies. It may be brought to the notice of all associations or federations that if anyone indulges in criticism of the government and its policies, appropriate action (including disciplinary action) shall be taken,” a memo issued by recently by the Finance Ministry said.
It cited the service rules tinkered in June, covering the social media as well, that bar a government servant from making any adverse criticism of any policy or action of the government.
The Ministry said the primary objective of the service associations is to promote common service interest of its members. T he service rules were amended in June making it clear that disapproval of government policies on social media also amounted to violation of conduct rules. And the threat of disciplinary action extends to caricatures that are uncharitable to the government.
Earlier rule book spoke about criticism made in a radio broadcast, public media (such as television) or documents. It will be applicable to anonymous and pseudonymous posts by officials too.
The recent memo of the Finance Ministry capped weeks of unrest among officers and cadre of the Excise and Revenue Department officials over a number of issues related to roll out of the General Sales Tax regime.
The central government holds 24.5 per cent stake in GSTN while state governments together hold another 24.5 per cent. T he balance 51 per cent equity is with non-government financial institutions, like HDFC Bank, ICICI Bank and LIC Housing Finance.
“Management of GSTN be entrusted to Directorate General, Systems of Central Board of Excise and Customs, as GSTN is a newly created Special Purpose Vehicle, which does not have any experience in implementing any IT project or domain knowledge in Indirect T ax laws,” the IRS association had said in a statement.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, Narendra Modi, had recently approved ‘Project Saksham’ — a new indirect tax network (systems integration) of the Central Board of Excise and Customs (CBEC). T he total project cost involved is Rs 2,256 crore which will be incurred over a period of seven years.
Three days later in a letter to the Union Finance Minister Arun Jaitley Steering Committee of Associations in the Central Board of Excise and Customs representing the IRS and seven other bodies wrote on the subject of GST .
It said their main concern was that `unity of purpose’ is being compromised at the expense of the growth of tax base and revenue. T he Committee said a resolution on the GST at their meeting believes that service Tax (services above threshold level falling within GST ) Administration should be in the exclusive domain of Centre and dual Control of the Centre and the States (for Goods) across the spectrum.
“Sir, we feel that the benefits of pan-India foot prints of the central indirect taxes would be lost if the tax payer base is handed over to the states without proper evaluation, and we expect that our understanding would get due recognition and initiate a positive response”, it said. Source – http://www.thehindu.com [14-10-2016]
GST Impact on E-commerce sector
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Introduction
1. E-commerce, an unheard of term a few years back has now become people’s “gharkidukaan”and the most desired shopping platform where articles from a sewing needle to one’s dream home are available for sale. On one side it is one-click shopping platform for consumers and on the other side its business model as well as tax structure are very complex. E-commerce operators (hereinafter referred as e-com’s) which are ordinarily newspaper headlines as regards levy of entry tax have also gathered attraction in GST.
Business models in E-Commerce sector & its impact on GST
2. There are two models of e-commerce, transactions i.e., aggregator model and e-commerce operator model.
A summarised understanding of these models and its GST impact have been drafted below:-
Following is the brief understanding and its impact on GST of these sub-models:-
Now, in GST the reframing of business models could be done based on various relevant business factors instead of tax structure.
Entry tax subsumed in GST
3. Many State governments (Uttarakhand, Bihar, Assam, Odisha, Gujarat, Jharkhand and Himachal Pradesh) have already levied entry tax on the goods entering the States through e-commerce portals for safeguarding the interest of local dealers. Many representations have been made by the traders challenging validity of entry tax on such inter-State e-commerce transactions, contending that entry tax is levied on the goods acquired in the course of businessand not on the goods purchased for personal use.
Since GST involves free flow of goods, services and Input tax credit, all the taxable persons become nation-wide players for supplying their goods and services all over India without any barriers. Therefore, the very intent (to safeguard local dealer’s interest) behind levying entry tax by various States has no more relevance in GST. From State government’s revenue viewpoint, since GST is a destination based consumption tax where the consuming State would get the tax revenue, the State governments which have levied entry tax on these e-commerce transactions would promote such inter-State supplies, so as to enhance their State’s revenue.
Tax rate impact on GST
4. In GST, such e-com’s have to pay higher rate of tax, i.e., 18% (proposed) as against 15% (Service Tax or VAT), but an uninterrupted credit-flow would be helpful in paying such extra output liability.
GST Dealer: a nation-wide player
5. GST will open new markets for online commerce, because in pre-GST regime the customers in some States cannot order everything from online shopping destinations due to entry tax and other process complexities.
Introduction of TCS concept for E-Commerce sector in GST
6. Inspite of various positive aspects of GST for e-commerce companies, the introduction of TCS for e-commerce operators only has put unnecessary compliance burden on them. As per section 43C of the Model GST Law, the e-commerce operator shall collect an amount (….%) at the time of credit of any amount in vendor’s account or payment in cash, whichever is earlier.
Such companies have thousands of vendors listed with them. Now they have to maintain the data of all such vendor’s account and payment in detail so as to collect tax. The amount collected shall have to be deposited by 10th of next month to the credit of appropriate government.
While GST undeniably comes as a relief to the e-commerce sector, it is also expected to pose challenges in respect of TCS, which the industry is hopeful would not be finally introduced.
(Article: N.K. Gupta Executive Director, S.S. Kothari Mehta & Co.)
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Business So Simple 