GST Bill ready to be tabled after Cabinet approval |
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New Delhi, 17 December After a prolonged wait, the Cabinet on Wednesday approved the Constitutional Amendment Bill on the Goods and Service Tax (GST), paving the way for the legislation to be introduced in the current winter session of Parliament, which will end on December 23. The Bill is learnt to have sought to include petroleum within GST, but the Centre would be allowed to impose excise duty on it and the states value- added tax ( VAT) for initial years. Petroleum was one of the contentious issues between the Centre and the states and had delayed the Bill. States wanted petroleum products excluded from GST as they earn over 50 per cent of their revenues from this head. However, the Centre wanted to keep it within GST so that the chain of providing reimbursement for input taxes is not broken. The other contentious issue was compensation to states for revenue loss after GST is introduced. Wary after the Centre's unkept promises on compensation for a cut in the Central Sales Tax ( CST) rate, the states wanted to include GST compensation within the Bill. They also asked the Centre to promise that GST compensation would be provided for five years. The Bill, it is learnt, contains the compensation for five years, but on a tapering basis. Turn to Page 18 > CENTRE- STATE BALANCE |Petroleum will be included in GST but Centre and states will be allowed to impose their current taxes on it |GST compensation to states for five years will be part of the Bill. Centre will provide full compensation for three years and then progressively reduce it |Entry tax levied by local bodies to be subsumed within GST User fee likely for filing > |
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| User fee likely for filing GST returns |
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New Delhi, 17 December In a first for the Indian tax- filing system, the country's 6.5 million dealers might have to pay a nominal user charge when they file their returns on a unified portal once the unified Goods and Service Tax ( GST) comes into force. This concept is being considered by Goods and Service Tax Network ( GSTN), the quasigovernment company that has been mandated to build and operationalise the GST Common Portal, to pay for the exceptionally heavy technology infrastructure involved in setting up an integrated network for India's most ambitious indirect tax reform. The central and state governments are yet to take a call on the issue or on whether the states will subsidise the cost. However, a Cabinet note ahead of the formation of GSTN had approved of a self- sustaining revenue model under which the company could charge both taxpayers and the tax authorities, that is, the states and the Central Board of Excise and Customs (CBEC). "We don't know whether state governments will agree to this suggestion and how taxpayers will react because at present people don't pay for filing returns. But if we can charge a user fee upfront, that would be best," said Navin Kumar, chairman, GSTN, in a joint interview with CEO Prakash Kumar. The case for user charges gained momentum after a meeting between senior GSTN executives and leading multinational and Indian information technology service providers under the aegis of industry body Nasscom to invite applications for potential managed service providers (MSPs). Most infotech companies expressed reservations about participating on account of the lack of clarity on their own revenue streams from a project that could stretch over five years. In the past year or so, infotech majors have stayed away from major e- governance projects because of uncertainties over payment. "I know states are ready to pay for the portal, but what we want is to levy user charges upfront because it is the most efficient route and will give the MSP confidence and assurance that they will get their money quickly whereas the government takes time to release funds," Navin Kumar said, adding that the portal would offer many other services beyond registration, filing and payments. The fee charged could be ₹ 20 or less. The background work on setting up the portal has begun. Prakash Kumar, CEO, said a request for proposals ( RFP) was being designed and the contract would be finalised by next month. The company appointed PricewaterhouseCoopers the main consultants to the project last month to assess a pilot that was created by the CBEC and National Securities Depository Ltd ( NSDL) before GSTN was set up. The pilot has tested the concept by building applications that have enabled both registration and return filing. While the government has indicated a deadline of April 1, 2016, for rolling out the project, GSTN has already started working closely with state authorities to authentic PAN information. Prakash Kumar said 70 per cent of this data was already "cleaned" and he hoped to finish the process by April. "Meanwhile, we expect that by September- October our MSP will be able to roll out the registration so that we port and test data," he added. The final testing of the systems is expected to begin from January 2016 through March. However, the project is looking at ambitious timelines. The biggest concern of GSTN executives right now is a constitutional amendment bill to be passed and ratified by twothirds of the states, and for the states to pass their own GST laws. And before that, said Navin Kumar, basics like " the GST Business Rules and Process, which includes the rate of tax, have to be frozen at the earliest for us to begin work on the network." The Union finance ministry assured business chambers on Wednesday that the intent was not to have a high rate for the proposed national goods and services tax ( GST). These would be set after consulting them. "The intent is to have a stable regime," revenue secretary Shaktikanta Das said at a function organised by the Confederation of Indian Industry ( CII). He said the GST Council, headed by the Union finance minister, would finalise the rates after consulting business representatives. The Council will also have states representatives. Earlier, a sub- panel of the Empowered Committee of State Finance Ministers had suggested a revenue- neutral rate of 12.77 per cent for a central GST and 13.99 per cent for state GST, totalling 26.5 per cent. This has fuelled fear of ahigh rate. Combining excise duty with state- level value added tax ( VAT), the current combined rate for goods comes to about 24.5 per cent. However, many states have imposed a higher VAT than the agreed 12.5 per cent. Besides, GST will have input credit. In services, only the Centre currently imposes tax at 12 per cent. After GST, both Centre and states will impose the tax. BS REPORTER FinMin assurance on GST rates The central and state governments are yet to take a call on the issue or on whether the states will subsidise the cost |
| LS clears Companies |
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New Delhi, 17 December The Lok Sabha on Wednesday cleared the Companies (Amendment) Bill, which seeks to ease related- party transaction norms and ensure severe punishment for those raising illegal deposits from the public. The amendments also propose restricting hearings by special courts to serious offences. The Bill, containing 14 amendments, was passed by voice vote. This followed the Congress raising objections to the Bill, demanding it be referred to a standing committee. The demand was, however, turned down. Replying to a debate on the Bill, Corporate Affairs Minister Arun Jaitley said the amendments spanned four types of changes — increasing the ease of doing business, correcting drafting errors, fixing oversight and changing clauses that were " harmful to doing business". The current Act provides for special courts taking up offences under the Companies Act. " Are we trying to induce or scare investors," Jaitley asked, adding henceforth, only severe offences would be tried in special courts. He said " oppressive provisions" had been removed from the Companies Act 2013, as it was felt " nobody will come here to set up business if such an environment persists". He added the United Progressive Alliance government had repealed the Prevention of Terrorism Act, brought about by the Atal Bihari Vajpayeeled National Democratic Alliance, alleging its bail provisions were draconian. But these stringent provisions, Jaitley said, were included in the Companies Act, 2013. "A terrorist can get bail, but acompany official cannot," he said. The Bill also amends provisions pertaining to relatedparty transactions. |
Practising Company Secretary
Chennai
Mobile 93810 11200
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