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Pawan Khera Criticises GST, Demands Simplification And Reform

January 10, 2025, 1:34 am

On Thursday, Pawan Khera, Chairman of Media and Publicity (Communications Department) for the All India Congress Committee (AICC), sharply criticised the Modi government’s implementation of the Goods and Services Tax (GST), calling it a tool to extort money from the poor and middle class. Launching a scathing attack on the BJP government, he questioned the GST system. He stated that the once-promised “Goods and Simple Tax” has instead turned into a “Gabbar Singh Tax” under the BJP government.

Khera criticised the government for celebrating record-breaking GST collections while giving significant corporate tax cuts. In 2019, the government slashed corporate tax rates from 30% to 22%, costing the exchequer an estimated Rs 2 lakh crore. In contrast, tax collections from GST have been rising steadily, with a 177% increase in the last five years. Khera questioned why the government continues to burden the common people with high GST rates while offering lucrative tax breaks to large corporations. Khera argued that the Modi government’s economic policies are designed to benefit the wealthy, claiming that the GST burden disproportionately affects the poor and middle class. He highlighted that nearly 64% of total GST collections in 2021-22 came from the bottom 50% of the population, while only 3% was contributed by the top 10%. He criticised the current taxation system for its emphasis on consumption taxes, which, according to him, hit the economically disadvantaged the hardest.

GST Hits Farmers Hard

In a scathing criticism, Khera pointed out that even the country’s farmers are not spared by the GST system. According to government data, 36 farm-related items, including tractor tyres, fertilisers, and irrigation equipment, are taxed under GST. Khera lamented that this has increased input costs for farmers, further diminishing their income.

The current GST structure includes nine different tax rates, ranging from 0% on essential items to 28% on luxury and sin goods. The complexity increases further with additional cess rates on certain products, such as vehicles, luxury items, and tobacco. According to Khera, this convoluted tax structure makes it far from the “simple” tax system originally promised by the government. He pointed out that the Congress party had long advocated for rationalising GST rates into a single rate, as practiced in many other countries. GST was originally designed to simplify taxes like VAT and Sales Tax with the idea of “One Nation, One Tax.” Pawan Khera reminded the public that former Prime Minister Dr Manmohan Singh started discussions on GST but stressed it should be carefully planned before implementation. Khera pointed out that in 2017, Dr Singh had expressed concerns about rushing GST without proper preparation. He criticised the BJP for ignoring these warnings, resulting in a GST system that failed to be as simple as promised.

Call For GST 2.0

As part of the Congress party’s manifesto for the 2024 Lok Sabha elections, Khera called for a refreshed and simplified version of GST, which he described as “GST 2.0”. He stressed that this new version should lessen the burden on ordinary citizens and make the tax system truly simple. He urged the Modi government to adopt the ideas proposed by Congress in its manifesto and bring about the much-needed reforms in the upcoming Union Budget.

Rajasthan Mandates Biometric Authentication For GST Registration

January 9, 2025, 1:46 am

To combat tax evasion and fraudulent firms, the Rajasthan Commercial Tax Department has made biometric authentication mandatory for GST registration. This new system, which involves fingerprint and iris scans similar to Aadhaar, aims to ensure authenticity and prevent bogus registrations.

A total of 73 centres have been set up statewide to facilitate the biometric process. The new system will come into effect from January 10, 2025, as per a notification issued on the GST portal.

Process Of Biometric Verification

Under this system, applicants will undergo biometric verification at designated centres, where their iris scans and fingerprints will be matched, followed by physical verification of their address and documents by officials. Only after thorough scrutiny will GST registration be granted.

This initiative mirrors a similar implementation in states like Gujarat, Puducherry, Andhra Pradesh, and Uttarakhand, where biometric authentication has already shown success in controlling tax fraud.

Addressing Issues Of Fraudulent Registrations

Previously, GST registration relied solely on document-based online verification, which left room for misuse, such as obtaining registrations under fake names or unrelated individuals like vendors or rickshaw drivers. The absence of physical verification often resulted in bogus firms evading detection.

Orry Hilariously Breaks Down Popcorn GST Drama | WATCH

December 27, 2024, 4:42 pm

Instagram’s favourite social butterfly, Orhan Awatramani—better known as Orry—is back, bringing his signature humour and drama to the internet. This time, his inspiration? Popcorn, the humble snack now at the centre of India’s GST debate.

Recent tax updates have introduced varying GST rates for popcorn based on its flavour. Salted and spiced unbranded popcorn now carries 5% GST, while caramel-flavoured popcorn attracts a huge 18% tax. It was bound to bring in memes, which Orry could not help but respond to with some of his own.

In a new Instagram video, Orry broke the popcorn GST saga with the unique flair of his presentation style. Displaying two bowls, he quipped, “This is ‘namkeen’ popcorn with 5% GST, and this is ‘non-namkeen’ popcorn with 18% GST. I am also 18% GST.” Yep, you heard that right—Orry declared himself exclusive, explaining in his caption, “It’s because I’m sweet.”

TAKE A LOOK AT THE VIRAL POST:

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The comment section quickly became a riot of reactions. One user joked, “Nirmala Tai got Orry talking about taxes,” while another teased, “That popcorn must cost 25 lakhs now because it’s Orry approved.” Even celebs like Kim Sharma and Sophie Choudry couldn’t resist chiming in with laughing emojis.

Once again, Orry has proved that his charm can turn even tax talk into a social media spectacle, proving that Orry’s charm isn’t just limited to snack talk but transcends all conversations. Fans flooded the comments with playful banter, keeping the drama alive, as always, with Orry at the center.

Proposed Tax Changes Could Impact Cigarettes, Tobacco, and Pan Masala

December 3, 2024, 10:10 am

The Group of Ministers (GoM) on Rate Rationalisation met for the third time yesterday. They proposed a new tax treatment for sin goods such as cigarettes, tobacco, and pan masala. Finance ministry sources confirmed this development. However, the final decision will be made by the council in its meeting in the third week of December in Jaisalmer.

Background and Fitment Committee’s Role

This proposal follows a recommendation from the Fitment Committee in mid-July. The committee suggested referring the matter to the GoM. They had recommended a maximum tax rate of 20% on tobacco products, including cigarettes, bidis, and smokeless tobacco, under the Central GST (CGST) and State GST (SGST) Acts.

What Are Sin Goods?

Sin goods are products considered harmful or undesirable. These typically include cigarettes, tobacco, carbonated drinks, luxury cars, and pan masala. Currently, these items are taxed under the 28% GST slab, with an additional compensation cess ranging from 11% to 290%. The compensation cess is set to expire in March 2026.

Discussion on GST Slabs and Other Changes

The GoM also discussed merging GST slabs. They considered three potential options for a three-slab rate structure. However, sources indicate it was too soon to recommend changes to the current slabs.

Additionally, the GoM suggested increasing GST rates on luxury items such as wristwatches and shoes. At the same time, they proposed reducing GST on essential goods like bicycles, exercise books, and large packs of packaged drinking water to enhance affordability.

The GoM’s Composition

The GoM on Rate Rationalisation is chaired by Bihar Deputy Chief Minister Samrat Choudhary. It includes six other members: Uttar Pradesh Finance Minister Suresh Kumar Khanna, Rajasthan Health Services Minister Gajendra Singh, Karnataka Revenue Minister Krishna Byre Gowda, West Bengal Finance Minister Chandrima Bhattacharya, and Kerala Finance Minister KN Balagopal.

GST Collections Surge in October, Reaching Rs 1.87 Lakh Crore

November 1, 2024, 4:53 pm

Goods and Services Tax (GST) collections in October 2023 witnessed a significant increase, totaling Rs 1.87 lakh crore, marking an 8.9% rise compared to the same month last year, according to data released by the finance ministry on Friday. This is an increase from Rs 1.72 lakh crore collected in October 2022.

Positive Economic Indicators

All components of GST—Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), Integrated Goods and Services Tax (IGST), and cess—showed year-on-year growth in October. For the fiscal year 2024, the cumulative GST collection has reached Rs 12.74 lakh crore, reflecting a 9.4% increase over Rs 11.64 lakh crore collected during the same period last year.

In April 2023, GST collections peaked at a record high of Rs 2.10 lakh crore. For the entire financial year 2023-24, the total gross GST collection was recorded at Rs 20.18 lakh crore, representing an 11.7% increase from the previous fiscal year. The average monthly collection for this fiscal year stands at Rs 1.68 lakh crore, surpassing last year’s average of Rs 1.5 lakh crore.

Impacts on Consumers and Goods

This recent surge in GST collections highlights a positive trend in India’s economic landscape, driven by robust domestic consumption and increasing import activity. These figures suggest a healthy fiscal environment and bolster ongoing economic recovery efforts amid global uncertainties.

Since the introduction of GST on July 1, 2017, the Indian government has provided assurances to states regarding revenue compensation as outlined in the GST (Compensation to States) Act, 2017, for a period of five years. Recently, the GST Council has implemented substantial rate reductions or zero rates on essential items such as hair oil, toothpaste, washing powders, and staple foods like wheat and rice, benefiting consumers across the country.

The GST Council, which includes the Union Finance Minister and Finance Ministers from all states, continues to play a crucial role in shaping the GST framework to support economic growth.

GST Authority Rules Softy Ice Cream Not a Milk Product, Imposes 18% Tax

October 22, 2024, 3:32 pm

The GST authority has ruled that softy ice cream does not qualify as a milk product, with the Rajasthan Bench of the Authority for Advance Rulings (AAR) stating that the primary ingredient is sugar rather than milk. As a result, an 18% Goods and Services Tax (GST) will be applicable, rather than the 5% rate typically levied on milk products.

The ruling came in response to an application from VRB Consumer Products, which sought to classify its Vanilla Mix as a product eligible for the lower tax rate. The company argued that its product, made from natural milk components, should fall under the 5% GST category. This mix is used by institutional buyers to create softy ice cream. VRB contended that the product should be classified under heading 0404, which encompasses “products made from natural milk components,” regardless of any added sugar or sweeteners.

AAR rejected this classification

However, the AAR rejected this classification, determining that the Vanilla Mix contains 61.2% sugar and only 34% milk solids. The ruling emphasized that since sugar constitutes the majority of the product, it should be viewed as “milk solids added to sugar,” rather than the other way around.

Additionally, the authority noted that softy ice cream typically includes stabilizers and flavorings, further disqualifying it from being categorized as a “natural” milk product.

This decision adds to ongoing debates regarding the classification of dairy products under GST. For example, AAR previously ruled that lassi, a fermented milk product, is exempt from GST, while flavored milk incurs a 12% tax.

Industry experts, such as Sandeep Sehgal from AKM Global, have highlighted that this ruling contrasts with a Supreme Court decision in the Amrit Foods case, where the court classified both “milkshake mix” and “soft serve mix” for institutional sales as “dairy produce” under Chapter sub-heading 0404.

“Can’t impose GST on something as essential as life insurance,” says Congress MP Shashi Tharoor

August 6, 2024, 2:02 pm

Reacting to the 18% GST implemented on life and medical insurance premiums, Congress MP Shashi Tharoor stated on Tuesday that imposing GST on something as essential as life insurance is unacceptable. He emphasized that India already has the highest out-of-pocket healthcare expenses, and adding an 18% GST is unfair.

“You can’t impose GST on something as essential as life insurance. The government has announced a policy of life and health insurance for all by 2047, yet they are taxing it in a way that makes achieving this goal impossible. We already have the highest out-of-pocket expenses in health, and now imposing an 18% GST is not fair to people. Kerala also needs an AIIMS, which has been promised since 2014, and that was part of our protest,” said Tharoor.

Meanwhile, Congress MP Pramod Tiwari criticized the GST, saying it unfairly burdens struggling individuals. “If a person is unwell or has met with an accident, he is already struggling, and you are taxing such a person. Looting a struggling person like this is wrong. Gadkari himself wrote regarding this and demanded a rollback. We are raising this issue in the interest of the people,” he said.

Notably, leaders from the INDIA alliance held a protest outside the Makar Dwar in Parliament on Tuesday, demanding the rollback of GST on health and life insurance. Leader of the Opposition in the Lok Sabha, Rahul Gandhi, also joined the protest.

Earlier on Friday, West Bengal Chief Minister Mamata Banerjee requested the central government to withdraw the GST on life and health insurance premiums, terming the taxation on such items as “anti-people.” In a letter to Union Finance Minister Nirmala Sitharaman dated August 2, she wrote that the GST on essential items increases the financial burden on common people. Banerjee stated that the additional 18% GST might deter many individuals from taking new policies or continuing their existing insurance coverage, leaving them vulnerable to unforeseen financial distress.

Infosys Granted ₹3,898 Crore GST Relief For 2017-18 Amidst Larger Tax Notice

August 4, 2024, 3:17 pm

Infosys Ltd has been granted a tax relief of ₹3,898 crore for the financial year 2017-18, as detailed in a company filing to the exchanges. The IT giant had previously received a pre-show cause notice from the Directorate General of Goods and Services Tax Intelligence (DGGI) for the period from July 2017 to March 2022.

In the filing, Infosys stated, “The Company had received and responded to a pre-show cause notice issued by DGGI for the period July 2017 to March 2022. The Company has now received a communication from DGGI closing the pre-show cause notice proceedings for the financial year 2017-2018. The GST amount as per the pre-show cause notice for this period was ₹3,898 crore.”

The DGGI serves as the investigative arm for the Goods and Services Tax (GST). This development comes after the Karnataka state GST body withdrew a substantial ₹32,403 crore notice issued to Infosys for unpaid integrated GST (IGST) under the reverse charge mechanism (RCM) for services availed from its overseas branches during 2017-2022.

According to a Business Standard report, notices for the financial years 2018-19, 2019-20, 2020-21, and 2021-22 were not addressed, and the GST demand for 2017-18 is becoming time-barred. The Central Board of Indirect Taxes and Customs (CBIC) is reviewing the situation. If the full input tax credit is available, the deemed market value of imported services is considered NIL, but it is still uncertain if Infosys is eligible for this credit.

An Indian Express report, citing unnamed officials, suggests that notices for the remaining years may also be withdrawn soon.

This partial tax relief is a significant development for Infosys as the situation continues to unfold under the scrutiny of tax authorities.

Modi 3.0’s First Budget Addresses Election Setback To A Great Extent

July 27, 2024, 1:26 am

Modi 3.0’s first budget addressed two concerns of the electorate that pushed the BJP to fall short of majority and ended up as a true coalition government headed by Narendra Modi.
Although the retail CPI inflation on average has been hovering between 5% and 6% in the Modi 2.0 era, the food inflation, which constitutes 50% of the CPI inflation, has been relatively much higher. Although retail inflation affects the broad-based middle- and low-income groups, which constitute about 80% of the income pyramid, Either the significant rise of vegetables, cooking oil, pulses, or other essential food commodities that are in use on a daily basis did not go well with the electorate, especially given the setback in the income increase for two years during the COVID.

Even the pollsters and the senior brass of the BJP believed that the “good image” that the Prime Minister enjoys among more than 50% of the population would allow the BJP to win with more than a simple majority, despite the fact that this was recorded statistically and qualitatively by them. It didn’t take place. The entire 2024–2025 budget now includes a dampener. Unable to control food inflation has been caused by seasonal shortages, which can be attributed to climate-related problems, natural cycles of higher and lower yields, or spatially uneven agricultural production.
Due to a shortage of one or more of the major agricultural commodities, food inflation remained high for the majority of the year. Such a shortage in supply ought to have, at the very least, somewhat helped the farmers. But, in an effort to control inflation, the government banned exports whenever prices surged. This was unpopular with farmers, who had a unique chance to export at higher prices and earn more money. Even while a ban on exports of this kind lowered prices, its effect was quite moderate.

The solution lies in increasing productivity across various production clusters so that transportation and logistics costs remain low. The budget wanted to take a comprehensive review of the agriculture research setup to improve productivity and climate-resilient crops. Although substantial progress has been continuously made in producing seed varieties and increasing productivity with modern agriculture practices, a coherent and cogent approach, thereby bringing synergy across various institutions, would bring transformative solutions. Although the government’s efforts to increase the crop area of oil seeds and pulses have partially succeeded over the last ten years, the shortfall is substantial, requiring major imports. Unless the government increases the Minimum Support Price (MSP) of pulses and oil seeds substantially over grains in the coming years until the inflection point to bring more cultivable area under pulses and oil seeds, it is not possible for the government to rein in the prices of these commodities.

When the agriculture commodities, especially vegetables have been cultivated in one region predominantly as in the case of onions in Nashik, Ahmednagar, Pune, Solapur, and Aurangabad of Maharashtra, whereas the consumption is all across the nation, any climate impact in these districts would have a telling effect on onion prices. Moreover, the transportation and logistics costs would add up to the prices substantially. The decision to create large scale vegetable clusters closer to the consumption centres would go a long way in reducing the cost of vegetables to the end consumers. Extending the Digital Public Infrastructure (DPI) to agriculture that would cover the farmers and their lands in 3 years would also facilitate the initiative on agriculture produce.

According to recent statements made by the prime minister, the administration has created 8 crore employment in the previous three to four years. The significant rise in EPF enrolment supported his claim that, as a result of significant investments in public infrastructure over the past ten years, more employment have been created in the unofficial sector, where workers are paid on a “remuneration for deliverable” basis rather than a monthly pay. The youth, however, are not content since they prioritise government employment above everything else, regardless of grade of employment.
The second choice is to work for an organisation in an official capacity with an appointment letter, regular pay, and benefits like paid time off and gratuity. It would not be fiscally feasible for the federal government or state governments to implement such policies, nor could the DPI offer significantly better services to the populace than ordinary personnel. Neither the central government nor the state governments need to employ such a big workforce.

Creating formal work in the private sector is the answer. The government endeavoured to integrate the informal economy into the formal economy with the GST and encouraged the private sector to create more formal jobs with the three Employment Linked Incentive schemes.
The government’s first initiative, which provides INR 15,000 in three installments to those starting formal work in the private sector, is an attempt to get the private sector to hire more people in formal jobs. It is unclear how the private sector will react to this plan, despite the budget’s assumption that it will generate 210 lakh employment for people entering the workforce for the first time.
The private sector should be encouraged to use their current capacity to manufacture more and create additional manufacturing capacity by the second scheme, which offers 30 lakh youth entering the manufacturing industry an EPF contribution for the first four years of employment from both employers and employees. A large portion of low-skill manufacturing work has been done by contract workers. This program needs to, at the very least, offer formal employment for a workforce with some degree of competence. In the upcoming years, the government may decide to expand the recipients based on how well this program works.

The third scheme of subsidising the EPF contribution of employers up to INR 3000 per month for up to 2 years to those who are newly added to the workforce within the monthly salary of INR 1 lakh would enable well-equipped youth to get high-quality jobs.
A multifaceted strategy is needed to increase employment chances because the process can be hindered by a mismatch between what the private sector demands and what candidates can offer. The private sector would be able to find suitable employees from the women’s skill development program, the women’s hostel program, the upskilling of ITI students, the Model Skill Loan Scheme, and education loans up to INR 10 lakh at a subsidised interest rate for 1 lakh students who have not benefited from any scheme or policies.

The post-poll, full-fledged budget presented by the Finance Minister addressed the two major reasons for disgruntlement by a section of the electorate against the Modi 2.0 regime. This shows the government is in reboot mode to gain the confidence of the section of the electorate that has voted against Modi 2.0 and who otherwise supports the Modi regime.

The author is a Public Policy Expert

Will Your Foreign Trips Become Cheaper? Big GST Decision on Airlines Likely

June 22, 2024, 1:26 pm

Marking great news for international travellers, flight tickets for foreign countries are likely to get cheaper after Saturday’s GST Council meeting. Several reports suggest that the Goods and Sevices Tax Council is likely to give tax relief to foreign airlines in terms of certain services provided by them. This comes after several foreign airlines with set-ups in India have been sent GST notices over the non-payment of tax on import services by Indian entities over the past few months.

What all will be exempted from taxation?

According to Business Standard, the GST Council is likely to take a call on exempting tax on services like aircraft lease rentals, maintenance, and crew salaries. Notably, maintenance, Repair, and Operations (MRO) services are provided by the head offices of foreign airlines to their Indian operations.

Tax authorities say that since these services were rendered by the headquarters to the local entities in India and from one legal entity to the other, they are liable to tax.

A government official told Moneycontrol, “When airlines import MRO services from their parent company outside India, under GST, the related party transaction is taxable at 18 percent and its compliance is very stringent for foreign companies. For ease of doing business, the fitment committee has suggested giving tax relief, which will be discussed by the GST Council in the June 22 meeting.”

After receiving GST notices, the International Air Transport Association took up the issue with the finance ministry and their respective embassies, warning them that operations in India might get hampered if the issue is not resolved.

They argued that since the place of service is based in both the head office and branch office, airlines should be liable to pay only what is taxable in India.

“It is (whether the service is taxable) required to be determined on the basis of each transaction, which can be a complicated process, especially for these two sectors,” an official told ET.

Meanwhile, the fitment committee that includes revenue officials from the central government as well as from state governments is believed to have taken the issue into consideration. The recommendations of the committee will be made during the GST Council meeting on July 22.

What else is on table?

The GST Council is likely to deliberate on issues including taxation on online gaming and the Parliamentary standing committee’s recommendation for lowering tax on fertilizer.

The 53rd meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising her state counterparts, is also likely to discuss the progress of the Group of Ministers (GoM) on finalizing the report on Goods and Service Tax (GST) rate rationalization and amendments to GST laws based on previous decisions of the council.

The council may also discuss the recommendations made by the Standing Committee on Chemicals and Fertilisers in February to reduce GST on nutrients and raw materials in the interest of fertiliser manufacturing companies and farmers.

Currently, GST at a 5 per cent rate is charged on fertilisers, while raw materials like Sulphuric Acid and Ammonia face a higher GST at 18 per cent.

The issue of further reducing tax on fertilisers was placed before the GST council in its 45th and 47th meetings held in September 2021 and June 2022, though the council did not recommend any change in rates.

Saturday’s Council meeting will be held after a gap of eight months. The 52nd GST Council meeting took place on October 7, 2023.

GST Council Meet: What Will Be The Key Agenda?

June 20, 2024, 1:52 pm

With barely days left for the June 22 GST council meet, and no agenda decided yet. It is expected that state finance ministers might provide suggestions on indirect taxes, which might be included in the upcoming union budget.

Moreover, with GST revenue showing a notable increase, the industry is closely following discussions on the revival of a plan to restructure the complex multiple-rate tax system at council meet.

Further, the industry is also expecting review on 28 per cent levy on online games, horse racing and casinos.

According to the experts, GST council meeting might focus on the resolution of inverted duty structure, which continues to affect various sectors like textiles, footwear, and fertilisers.

As, this structure is imposing a cash flow challenge on businesses, thus leading to the accumulation of Input Tax Credit (ITC), which remains underutilized due to complexities and disputes surrounding refunds related to the inverted duty structure (IDS).

What Businesses Expect Out of This Meeting?

Speaking about upcoming GST council, executive partner of Lakshmikumaran & Sridharan Attorneys Shivam Mehta said,

‘The entire industry is counting on the new coalition Government for relief owing to the hardships faced post the introduction of new rule for valuation of corporate guarantee. The industry is hoping for an amendment/clarification to fix the value of supply basis, the actual loan amount disbursed and the non-applicability of the rule where full ITC is available to recipients. As hinted by the finance minister recently, spirited discussions regarding inclusion of petrol, diesel, ATF, natural gas, and selected petroleum products within the ambit of GST have been taking place not just within the corridors of power but also within the industry. How far these requests will be met, however, will depend on the Centre taking on board the states.’

Meanwhile, the council had started the discussions on ‘perspective plan,’ which will involve imposition of cess or surcharge on top of GST levies after March 2026. To further talk about this issue, the council might discuss replacement levy for the cess and how it can be used.

According to Tax Partner Saurabh Agarwal, businesses are also demanding GST council, to implement an amnesty scheme to resolve tax disputes stemming from the Goods and Services Tax (GST) rollout. Delays in initiating this scheme are contributing to a backlog of legal disputes.

Besides Tax reform, the business are also asking for rationalization of rates. Speaking about this issue, Smita Singh-the partner of S&A Law Offices said,

‘The next issue is a persistent demand for rationalization of rates. There is a huge expectation in the industry of an overhaul of the existing four-tiered GST rate structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent during the current financial year’

In addition, the industry is also urging review on various issues like the taxation of ESOPs, corporate guarantees, and various rate-related matters due to a rise in recent litigations concerning these issues.

Additionally, the businesses are also anticipating new regulations on Input Service Distribution (ISD) and its implementation timeline.

GST Council Likely To Remove Retro Tax On Online Gaming Companies

June 19, 2024, 5:22 pm

Providing a potential relief to gaming companies, the GST Council might consider amending the Central Goods and Services Tax (CGST) Act, 2017, likely removing retro tax on gaming companies.

Introduced by the law committee, this proposal aims to deal with tax notices, where low taxes are paid due to issues with interpretation or unclear provisions in the law.

According to ET report, the law committee has suggested inclusion of new Section 11A to the CGST Act. This section will refrain government from taking GST that was not charged or was undercharged due to prevailing common practices.

But notably, this amendment doesn’t deal with the matter of overpaid taxes.

However, the GST council might have a discussion on these recommendations in their upcoming meeting, scheduled on June 22.

If the recommendation is accepted, it will allow authorities to remove tax demands, that are raised retrospectively, thus providing a huge relief to gaming industry.

Meanwhile, Directorate General of Goods and Services Tax Intelligence (DGGI) has dealt with 6,323 cases of tax evasion in the financial year 2023-24. Among them, online gaming sector has faced most number of tax evasion notices, which amounts to over Rs 1 lakh crore.

53rd Meeting Of GST Council To Be Held On June 22 In Delhi

June 13, 2024, 4:01 pm

The 53rd GST Council meeting will be conducted on June 22, 2024, at the national capital New Delhi.

‘The 53rd meeting of the GST Council will be held on 22nd June 2024 at New Delhi’ announced GST council on Thursday.

The 53rd meeting of the GST Council will be held on 22nd June, 2024 at New Delhi.

— GST Council (@GST_Council) June 13, 2024

This will be the first meeting conducted since the Lok Sabha elections and Nirmala Sitharaman assuming charge as the finance minister.

But the agenda of the meeting is not yet public amongst council members, but as per News18, the council might discuss various topics like rate rationalization, compliance rules and measures and ITC reforms etc.

Meanwhile, the previous 52nd meeting of GST council was held on October 7, 2023. In the meeting, 28 percent of GST rate was levied on casinos, horse racing and online gaming.

Parliament Special Session: Article 370, GST, One Rank One Pension, PM Modi remembers key bills

September 18, 2023, 2:11 pm

Prime Minister Narendra Modi hailed “historic decisions” – referring to his government’s contentious initiatives on Article 370, the GST, and the ‘One Rank-One Pension’ laws – in his opening remarks on the first day of a special session that would see Parliament relocate to a new facility.

The Prime Minister recounted “bitter-sweet memories” associated with the old building, including the 2001 terror attack, in a lengthy speech that featured barbs at the opposition.

“The House will always say proudly that (the abrogation of) Article 370 became possible due to it… GST was also passed here… ‘One Rank-One Pension’ was witnessed (and) 10 per cent reservation for Economically Weaker Sections was successfully allowed for the first time without dispute,” he said.

“Bidding goodbye to this building is an emotional moment…many bitter-sweet memories associated with it. We had differences and disputes but we witnessed ‘parivaar bhaav’ (‘feeling of family’),” he continued as MPs from the ruling Bharatiya Janata Party thumped their desks in agreement.

“There was a terror attack (on Parliament). This was not an attack on a building…. in a way, it was an attack on the ‘Mother of Democracy’… on our living soul. The country can never forget that incident,” he said as he paid tribute to security personnel who were killed in that attack.

The reference to India as the “Mother of Democracy” was a repeat of what was expressed earlier this month during the G20 conference in Delhi to G20 leaders and foreign diplomats.

The portrayal of India as such caused eyebrows at the time, with many pointing out that it was an accolade normally held for Greece; most historians think the concept (and even the name) of democracy originated around 500 BC in the ancient city-state of Athens, now the Greek capital.

In a nostalgic speech, the Prime Minister remembered his first memories of the old Parliament building.

Punjab CM Mann presents 249 candidates from various departments with appointment letters

September 12, 2023, 1:59 pm

On Tuesday, 249 candidates from various departments received appointment letters from Punjab Chief Minister Bhagwant Mann. In the process, he made fun of previous administrations and former Punjab Chief Minister Captain Amarinder Singh, questioning whether or not the latter was “really a captain.” The former finance minister, according to Bhagwant Mann, consistently claimed that the treasury was empty for nine years.

Mann said, “The government should give hope to the people. I never said that the treasury was empty but I would definitely say that there were a lot of leakages in the treasury. Currently, the revenue of GST is huge and the treasury of Punjab is increasing in many ways.”

Here’s what Nitin Gadkari says on additional 10% GST on diesel vehicles

September 12, 2023, 1:28 pm

Union Transport and Highways Minister Nitin Gadkari has proposed a 10% increase in diesel car prices in order to discourage polluting automobiles.

“Today evening, I am meeting the Union finance minister (Nirmala Sitharaman). I have already prepared a letter where I proposed an additional 10 per cent GST,” Gadkari said in an event organized by the industry body Society of Indian Automobile Manufacturers in Delhi focused on sustainable mobility.

In a positive indicator, he stated that diesel vehicle sales had decreased from 52% in 2014 to 18% presently. India wants to achieve 50% of its energy demands through renewable sources by 2030, and the increased GST may deter new buyers.

GST revenues clock 13% year on year growth in March 2023

April 3, 2023, 12:37 pm

India’s gross Goods and Services Tax collection for the month of March 2023 grew 13 per cent year-on-year at ₹1,60,122 crore, from the GST revenues in the same month last year. This is the fourth time in the current financial year that the gross GST collection has crossed ₹1.5 lakh crore mark, registering second highest collection since implementation of GST, according to finance ministry data.

Of the ₹1,60,122 crore, Central GST is ₹29,546 crore, State GST is ₹37,314 crore, and IGST (Integrated Goods and Services Tax) levied on all interstate supplies of goods and/or services or across two or more states/Union Territories is ₹ 82,907 crore (including ₹42,503 crore collected on import of goods) and cess of ₹10,355 crore (including ₹960 crore collected on import of goods).

The total gross collection for 2022-23 stands at ₹18.10 lakh crore and the average gross monthly collection for the full year is ₹1.51 lakh crore. The gross revenues in 2022-23 were 22 per cent higher than that last year. The average monthly gross GST collection for the last quarter of the FY 2022-23 has been ₹1.55 lakh crore against the average monthly collection of ₹1.51 lakh crore, ₹1.46 lakh crore and ₹1.49 lakh crore in the first, second and third quarters respectively.

A recent Crisil Market Intelligence report says “improved compliance led by streamlining of GST contributed to increase in tax buoyancy of GST,” and expects the economy to continue seeing efficiency gains from reforms such as GST. It suggests “standardisation and rationalisation of taxes could further aid the ease of doing business in the country”.

The government has settled ₹33,408 crore to CGST and ₹28,187 crore to SGST from IGST as regular settlement. The total revenue of Centre and the States in the month of March 2023 after IGST settlement stands at ₹62,954 crore for CGST and ₹65,501 crore for the SGST.

During the month, revenues from import of goods was 8 per cent higher and the revenues from domestic transaction (including import of services) are 14 per cent higher than the revenues from these sources during the same month last year. The return filing during March 2023 has been highest ever with 93.2 per cent of statement of invoices (in GSTR-1) and 91.4 per cent of returns (in GSTR-3B) of February filed till March 2023 as compared to 83.1 per cent and 84.7 per cent, respectively same month last year.

Odisha CM urges Nirmala Sitharaman to eliminate GST on Kendu leaf

November 27, 2022, 1:43 pm

The chief minister of Odisha, Naveen Patnaik, on Saturday urged the union finance minister, Nirmala Sitharaman, to take into consideration eliminating the center-levied goods and services tax (GST) on Kendu leaf in the state because it was negatively impacting trade and the livelihoods of locals who depended on it.

In a letter to the finance minister, who also heads the GST council, Patnaik requested that the 18% GST on Kendu leaf be rolled back in the greater interest of the state of Odisha as lakhs of people associated with the trade are getting affected.

“The tribal people collect the leaves as part of their right defined under Scheduled Tribes (ST) and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006. They have the right to procure and sell these products,” said Patnaik.

“The imposition of GST of 18% on Kendu leaves is adversely affecting the trade. This in turn affects the livelihoods of Kendu leaves pluckers, binders & seasonal workers and the implementation of the social security and welfare schemes for them. In the interest of the livelihoods of the community it is urged upon to withdraw the imposition of GST on Kendu leaves for the greater interest of the state of Odisha,” wrote Patnaik.

Patnaik said as Kendu, a minor forest produce, is the financial backbone of about 8 lakh leaf pluckers, binders and seasonal workers, most of whom belong to the tribal community and poorest sections of Odisha, the imposition of GST on the item has a negative impact on the implementation of welfare schemes.

Kendu leaves were subject to a 5% VAT in Odisha prior to the introduction of the GST. Following the introduction of the GST in July 2017, Kendu leaves are now subject to an 18% GST, comprised of 9% central GST and 9% state GST. Due to the hefty tariff, the traders who win the bid from the Odisha Forest Development Corporation to gather Kendu leaves pay the tribals who are harvesting the leaves even less.

On Wednesday, the chief minister of Odisha announced a special package for the welfare of the 8 lakh people who pick Kendu leaves and other members of the trade.

This development follows the approaching assembly by-election in the Bargarh district’s Padampur next month.

Patnaik said ₹1,000 will be given to each plucker and ₹1,500 to each seasonal staff and binders in the first phase.

Delhi’s GST collection increased by 32% in September: Centre

October 4, 2022, 1:39 pm

The Goods and Services Tax (GST) revenue collected in the national Capital in September was Rs 4,741 crore, a 32% increase over the same period last year, according to data released by the Delhi government on Tuesday.

With a GST collection of 4,349 crore in August, the monthly revenue increased by 21% over the same period last year.These figures include both the central GST and the state GST. Because GST is a consumption-based tax, the growth reflects that business activity and consumption in the capital have remained strong despite high inflation.

The total GST collection in the first two quarters of fiscal year 2022-23 is 27,741 crore, up from 21,505 crore in the corresponding period of fiscal year 2021-22.

According to Delhi government documents, 4,327 crore was collected in July, 4,313 crore in June, 4,113 crore in May, and 5,871 crore in April.

The experts attributed the increase in GST collection to increased consumer demand (particularly in pandemic-affected sectors), improved compliance systems, and overall inflation.

In September, the country recorded a record GST collection of Rs.1.48 lakh crore, indicating that collections were robust across several states.

The total GST collection in August 2021 was 3,605 crore, which increased to 4,349 crore in August 2022. Year on year growth was also strong in July 2022, with 4,327 crore GST revenue collected in comparison to 3,815 crore in 2021.

The total collection in June 2022 was 4,313 crore, up from 2,656 crore in June 2021.

The total GST collection from Delhi in May 2022 was 4,113 crore, up from 2,771 crore in May 2021.

According to a Delhi government official, the city is using data analytics to broaden the tax base by identifying cases of fraud and critically examining tax filing by organisations against related variables.

Suyash Rai, fellow at Carnegie India, said, “Since GST rates change from one year to another, it is difficult to interpret year-on-year growth in collection in terms of what they indicate about the underlying economic activity unless item-wise information is available.”

Rai went on to say that, in recent quarters, the growth in GST collection has largely tracked the growth in nominal private consumption.

“If we assume that the association persists, then the GST collection indicates continued consumption growth. However, since inflation also accelerated in August, the deflator would be high, and the real growth may be modest,” he added.

GST revenue increases 26% to over Rs 1.47 lakh

October 1, 2022, 3:12 pm

The amount of GST collected in September increased by 26% to over Rs. 1.47 lakh crore, the finance ministry reported on Saturday

The mop-up for the Goods and Services Tax (GST) has exceeded 1.40 lakh crore for seven consecutive months.

According to a statement from the ministry, the total gross GST revenue collected in the month of September 2022 was Rs. 1,47,686 crore, of which Central GST was worth Rs. 25,271 crore, State GST was worth Rs. 31,813 crore, Integrated GST was worth Rs. 80,464 crore (including Rs. 41,215 crore collected on import of goods), and Cess was worth Rs. 10,137 crore (including Rs. 856 crore collected on import of goods).