GST Updates (09 Dec 2016)

J&K ready to implement GST but with Constitutional rider

December 9, 2016

JAMMU, Dec 8: In a significant decision, Jammu and Kashmir Government today agreed to implement Goods and Services Tax (GST) in the State and set up high level Committee headed by Principal Secretary, Planning Development and Monitoring Department, BB Vyas to draft the legislation, which would be tabled before the Government, and after clearance, in the Legislature.

Official sources told the Excelsior that the Government has, however, kept the option open of protecting the special Constitution position of the State and tax powers being enjoyed by it while drafting the legislation.

Union Finance Minister Arun Jaitley had been stressing on all States including Jammu and Kashmir, which haven’t passed the GST legislation so far to approve it at the earliest to clear decks for implementation of one tax structure across the country. Jaitley had recently admitted that April 2017 deadline would be difficult to meet due to delay in consensus in the GST Council over some issues including duel control.

Describing as “very significant” the decision for implementation of GST in Jammu and Kashmir, sources said the State Government has asked the high-powered committee headed by BB Vyas to draft the legislation within the next three months but taking into account the special Constitutional position of the State and taxation powers enjoyed by it.

“The legislation drafted by the Committee would go to the State Cabinet, and if approved, to the Legislature for final nod before it becomes an Act,” sources said.

Finance Minister Dr Haseeb Drabu had few days back cited special Constitutional provisions of Jammu and Kashmir for delay in implementation of the GST.

Sources said the State Government has deliberated upon the issue and came to the conclusion that it should implement the GST but with the riders so that it’s Constitutional position and special taxation powers are not affected.

Consequently, the General Administration Department (GAD), headed by Chief Minister Mehbooba Mufti has issued the order setting up the high-powered committee to draft legislation for implementation of the GST in the State.

Headed by Vyas, the Committee has been asked to give its report in the next three months.
Other members of the Committee are Commissioner/Secretary Finance Department, Navin Choudhary as Member Secretary, Secretary Law, Justice and Parliamentary Affairs, Abdul Majid Bhat and Commissioner, Commercial Taxes Department Parvez Iqbal Khateeb as its Members.

The Committee has been authorized to call Advocate General of the State as special invitee in the meetings as and when required.

Sources said the Committee would go into details of the GST bill adopted in Rajya Sabha and some State Governments including Bihar and then draft its own bill by ensuring that its special powers remained intact.

As budget session of the Legislature is beginning on January 3 and will conclude by the first week of February, it will not be possible for the Government to introduce the bill in budget session of the legislature as the high-powered Committee has been given three-months to draft the report, which means that it would submit its report around March 10.

Sources said the Government can call special session as done by some State Governments to pass the GST bill.

The GST is a Value added Tax (VAT) and is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Central and State Governments.

According to sources, GST could miss the previous deadline of April 1, 2017 set by the Central Government for its implementation across the country as the GST Council, which met in the Union capital few days back had failed to reach consensus on the issue of duel control over some times. It was expected to meet again next week in New Delhi to work out a consensus. Source – [09-12-2016]

Traders can get enrolled under GST provisions at govt camps

December 6, 2016

The commercial taxes department (CTD) is to organize mega camps at all the nine divisional headquarters from Tuesday for mass enrolment/registration of traders and heads of business concerns and their units under the provisions of the goods and services tax (GST) regime, which is to be enforced in the country next year. The camps are being organized on the CTD premises in Patna, Gaya, Bhagalpur, Munger, Purnia, Saharsa, Darbhanga, Muzaffarpur and Chhapra. Traders from the districts concerned could also get registered under GST at the camps. A senior CTD official in the rank of joint commissioner said anyone whose business unit’s annual turnover is even Re 1 and carries tax identification number-value added tax (TIN-VAT) and/or TIN central sales tax (TIN-CST) should get registered under GST to reap the benefits of conducting interstate trade as would accrue from the new tax regime in the country.

“The registration done under GST at the camps will be free of cost. The CTD officials and employees will assist them,” said the official, adding that mass registration has already started and would continue till December 15. The camps at the nine divisional headquarters would also continue till December 15. “The mass registration is being organized under mission mode,” he said.

The official said “migration to the GST mode” is mandatory for all traders having the TIN-VAT or TIN-CST and having annual turnover of Rs10 lakh or more. If they fail to avail of the opportunity for migration now, they would have to migrate to GST in April. “Those who do not migrate to the GST mode will not be able to conduct interstate trade. That is, they will not be able to procure any item from outside state for trade within his or her state (read Bihar),” the official said, adding: “Those who do not migrate to the GST mode can trade only within the confines of Bihar.”

Asked as to what about the persons who are about to start any venture or trade or have started it only last month, the CTD official said such persons could “voluntarily register their concerns for TIN-VAT or TIN-CST and then “migrate to the GST mode”. “There is a relevant section, 19(1), of the VAT Act which facilitates voluntary registration under TIN-VAT and TIN-CST. After this, even they could migrate to the GST mode at the mega camps. It would also be free of cost,” he said. Source - [05-12-2016]

GST needs to be deferred

December 9, 2016
Amit Mitra, chairman of the Empowered Committee of Ministers on GST, said the Goods and Services Tax (GST) needs to be deferred so the economy is not hit by another disruption after demonetisation kicked in unexpectedly.

In an interview with Karan Thapar on India Today, Mitra said the compensation to be paid to the states was likely to shoot up in the wake of demonetisation making its implementation unfeasible at the moment.

During the course of the previous meetings between several state finance ministers on GST, Mitra said there was consensus that Rs. 55,000 crore would be needed to compensate the states for the revenue loss arising from adopting the GST regime. However, states, which could post a 14% growth, were not to be compensated from the fund.

But with demonetisation, state taxes collected would sharply decline, Mitra said, adding, “That would mean the compensation to the states, who could have made 14% growth in revenue, is going to fall below the 14%, which means, by constitutional amendment, they will also have to be compensated.” The West Bengal finance minister said Rs. 1 lakh crore would most likely be needed to compensate the states.

Since the compensatory fund consists of taxes from sales of luxury cars, aerated drinks, tobacco and other commodities, from where tax collection is likely to decline in wake of demonetisation, the fund itself will come under stress, he explained.

“While the compensation sources are falling, your need for compensation is steeply rising,” he said, questioning if the country’s populace was ready to take another “destabilisation of the economy by another hit called GST”.

Mitra took a swipe at Urjit Patel, saying, the Reserve Bank of India (RBI) governor seemed to have “lost his way”.

Every state, like the Centre, under the GST regime will have to do away with various tax collection departments, which will result in disruption of an enormous scale, he said. “The whole tax architecture will have to change, which is a huge challenge in the form of destabilisation. Can we not move GST a little bit on so that when the economy stabilises (and) people come back to normal living conditions, you bring in another disruption,” he asked.

Criticising Prime Minister Narendra Modi for bringing in a sudden economic disruption in the form of demonetisation, Mitra said, the PM was gradually changing the narrative for the disruption from referring According to Mitra, in the best case scenario, India’s gross domestic product (GDP) was likely to be hit by 2%, implying a scaling down from 7.5% to 5.5%, while in the worst-case scenario, GDP was likely to fall by 3.2% from the current 7.5%.

West Bengal is likely to lose Rs 5,000-6,000 crore as tax collection on account of demonetisation. Source - [09-12-2016]

GST rollout to cost Rs 16,000 crore to take old trucks off roads

December 6, 2016

GST rollout to cost Rs 16,000 crore to take old trucks off roads

NEW DELHI: The roll-out of the Goods & Services Tax (GST) will cost the government up to Rs 16,000 crore to get moving on its ambitious programme to take old, polluting trucks off-road under the Voluntary Vehicle Modernisation Programme (V-VMP).
The earlier plan was to offer excise rebates to incentives owners to junk old vehicles for a new one, but with excise duty coming in under the overarching framework of the new tax system expected to take effect next fiscal year, the government is now looking at doling out cash incentives of Rs 50,000-60,000 per heavy vehicle.
“As per the proposal, cash incentives of Rs 50,000-60,000 per vehicle is planned to be given to owners replacing old polluting trucks. Heavy commercial vehicles constitute 2.5 per cent of the vehicle population but comprise 65 per cent of vehicular pollution and consume 70 per cent of fuel. It is the first category which is being targeted to create maximum impact on pollution,” a senior road transport ministry official said.
The proposal will, however, require approval from a committee of secretaries from roads, steel, finance, heavy industries and environment ministries. The scheme is estimated to affect 2.7 million trucks over 15 years old, vehicle registration data available with the roads ministry showed. To be sure, some of these vehicles may have reached the end of life and be defunct by now.
“The incentives will be given for 2-3 years after which regulations will be put in place to mandatorily scrap end-of-life vehicles,” the official added.
As per the original guidelines, V-VMP policy proposed slashing excise duty by half on the purchase of a new vehicle after scrapping an old one, fair value for the scrap and special discounts from automobile manufacturers.
The incentives were expected to reduce the cost of a new vehicle for the buyer by 8-12 per cent. Further, to encourage commuters to shift to new and high capacity buses to help de-congest roads, the policy also recommends complete excise exemption for state transport buses.
As per current voluntary vehicle modernisation scheme, vehicles bought before March 31, 2005, or those below BS IV emission standards, would be eligible for incentives if those were scrapped and replaced by new ones.
The government estimates the V-VMP programme may take 28 million including commercial and passenger vehicles off the road. It would enable generation of Rs 11,500 crore worth of steel scrap Source – [06-12-2016]

GST to create level-playing field for bigger textile players

December 6, 2016

GST to create level-playing field for bigger textile players

MUMBAI: The introduction of GST will help create a level-playing field for the bigger textile manufacturers as smaller or unorganised sector will not be able to use some of the current practices to keep themselves competitive, a senior industry official said today.

“The introduction of GST may not have any negative or positive impact for the textile industry in general. However, the consolidation of taxes will help create a level-playing field for the bigger textile manufacturers as smaller or unorganised sector will not be able to use some of the current practices to keep themselves competitive,” Sintex Industries Group MD Rahul A Patel told reporters on the sidelines of India ITME 2016 event here.

Sintex aims to install one million spindles and has already become world’s No 1 compact facility with over 3,00,000 spindles installed at their plant at Pipavav in Gujarat, Patel said.

The textile sector is one of the largest contributors to India’s exports, accounting for approximately 11 per cent of the total outbound shipments. India’s overall textile exports during FY 2015-2016 stood at USD 40 billion and the industry size is expected to reach $223 billion by 2021.

The ongoing six-day India ITME 2016 exhibition provides a platform for joint ventures and collaborations between the stakeholders of textile industry in India and overseas. Nearly 1,050 exhibitors from 38 countries are displaying state-of-the-art machines and technologies at the event. Source – [05-12-2016]

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