GST Updates (24th Oct 2016)

Huge challenges for CAs after GST implementation

October 24, 2016
Addressing the ICAI International Conference ‘Jnana Yagna’ here, the Urban Development Minister said Chartered Accountants should play a vital role in addressing issues such as curbing black money.

“Introduction of GST (Goods and Services Tax), which is round the corner is one of the pioneering and game changing transformative initiatives taking shape in our country. GST introduction is a huge challenge and opportunity for the Chartered Accountants and you need to get ready for enabling this change in a smooth and seamless manner,” Venkaiah added.

“This is a huge opportunity for all of you to be partners in the progress of our nation,” the Minister said.

He further said, it is a matter of pride that in none of the scandals or scams any Indian CA firm is reported to have been involved and it is the international accounting firms which were reportedly involved in different frauds and scams in India.  Source – [24-10-2016]

GST law to boost domestic demand, drive job creation

October 24, 2016
GST law to boost domestic demand, drive job creation: PM Narendra Modi

The Goods and Services Tax law will boost domestic demand, create more opportunities for domestic business and drive job creation, Prime Minister Narendra Modi said today.

He said so far the domestic market has been fragmented and different taxes across different states have made goods and services more expensive.

“This has hampered growth in inter-state commerce. We are enacting a Goods and Services Tax law, to create an integrated national market. This will further boost domestic demand, create more opportunities for Indian business and drive job creation,” he said.

India today, Modi said, is the fastest growing major economy, and one of the most attractive destinations for FDI.

“Indeed, we stand out as a bright spot in the global economy. This is the result of India’s fundamental strengths — democracy, demographic dividend and demand. We need to fully harness these strengths. This can happen only if businesses make long-term investments that create jobs and sustain economic growth,” he said.

Addressing the valedictory function of an international conference on arbitration, the Prime Minister said India is experiencing a digital revolution which is bridging the digital and economic divide in the society in general and rural society in particular.

“A boost to the rural economy through this revolution will make the Indian economy even more robust,” he said.

Innovative business models and app-based start-ups have instilled a spirit of enterprise among Indians, he noted, adding that yesterday’s job seekers are becoming today’s job creators.

“The legal profession is also opening up to the promises of the digital world. From cause-lists to case-laws, the lawyer’s library is now just a click away on your mobile phone,” he said.  Source – [24-10-2016]

GST Will Lead to Mergers, Rise of World Class Cos, Says Mobius

October 22, 2016
In an exclusive interview with ET Now’s Tanvir Gill, Mark Mobius, executive chairman, Templeton EM, says GST is unlikely to be fully implemented before end of next year. Edited excerpts:

The GST council has proposed a structure of levying cess on ultra-luxury and sin goods, a departure from original GST concept. The sound bites that you are getting as of now, do they convince you that they could perhaps make it at 11th hour 59th minute?

No I do not think that is possible because there are so many different forces at work that you cannot expect a clean immediate implementation of this system.

So what would be a reasonable time line according to you?

I think the end of next year.

So it gets pushed back by eight-nine months?

For complete implementation. In the mean time, there will be incremental changes taking place which will be very beneficial. But to be realistic, we have to take longer term in consideration. I would be happy to be surprised. It will be wonderful if they are able to do it before that, but I think it will be a little longer than we expect.

The reason I ask you this is because you had told me that with GST passage, you would look at doubling your India investments. Even in your last interview, you said that your India allocation stands at 7.5-8%, the EM fund can go up to 14%, even 20% plus. So when would you start increasing your allocation? What would you want to see to make that decision?

A lot of it will depend on what happens to pricing of the securities. When I say that I do not mean just this absolute stock price but also the earnings. If earnings surge, then we can justify doubling, tripling our allocation; and of course, when we talk about GST, we talk about what impact that has on the earnings of the companies. We have to be flexible and look at each company on an individual basis and determine what they are going to be and what impact the GST is going to have on those earnings. In some cases, it will be as much as 10% increase in earnings and that can be very significant.

Yes I want to talk about that because even S&P has put out a note that if GST goes through as per plan, then India’s potential of 8%-plus would very much come to the fore. Do you agree with that?

I agree. Yes. Full implementation. This is very important. – [22-10-2016]

CAG gearing up for audit changes in view of GST rollout

October 22, 2016
As the government goes full throttle to roll out Goods and Services Tax (GST) from April 1, the CAG today said it is ready for the new challenges and will take steps to enhance effectiveness of revenue audit.

Comptroller and Auditor General (CAG) Shashi Kant Sharma said the department has been alert to the emerging new challenges in the area of revenue administration, including the GST and various other reform measures taken by the government to improve tax collection and combat tax avoidance.

In the coming days, the CAG will take measures that would enhance the effectiveness of revenue audit such that it contributes more effectively to the fiscal sustainability of the governments, he added.

During the valedictory function of the two-day event of CAG, Sharma said reforms undertaken by the government are likely to improve budgetary process and tax administration in a big way.

“Amalgamation of the Railways and General budgets has brought the 92-year-old practice to an end. The government proposes to advance the budget presentation date from the last week of February. Further, plan and non-plan expenditure are proposed to be merged.

“Many more sectors have been opened up to foreign direct investment. Debt recovery is being made easier by amending the SARFAESI Act. And the most significant reform is introduction of GST,” he said.

Observing that CAG has taken due cognizance of these new challenges, Sharma said the department has taken note of the changing paradigm in revenue administration, including the challenges posed by shadow economy and black money, transfer pricing, accommodation bills etc and the need to manage large volumes of digital information that will emerge from increasing automation of tax filing.

“Notwithstanding the fact that the revenue audit has led to identification and recovery of thousands of crore of tax amounts every year, the audit department has faced challenges in accessing the data and information of taxpayers, which significantly limits the potential and effectiveness of audit,” he said.

He further said the urban local bodies and Panchayati Raj Institutions that constitute the third tier of government have come to occupy a very important place.

These bodies receive significant flows of funds, now close to Rs 14 lakh crore annually, but suffer from poor governance, weak financial management and poor accountability, he said.  Source – [22-10-2016]

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