Three months after the rollout of the new indirect tax regime, the GST Council today made sweeping changes to give relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items.

Businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings.

Also, the turnover threshold for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities, was raised to Rs 1 crore from current Rs 75 lakh.

&quot;Compliance burden of medium and small taxpayers in GST is being reduced,&quot; Finance Minister Arun Jaitley told reporters after the 22nd meeting of the Council.

Small and medium enterprises had complained of tedious compliance burden under the Goods and Services Tax (GST) that was supposed to be a simple indirect tax regime which replaced over a dozen Central and state taxes.

Jaitley said the Council also decided to cut GST rate on 27 common use items.

GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent.

Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent.

Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent.

Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent. Government contracts involving high amount of labour will be levied 5 per cent GST instead of 12 per cent in order to contain cost of those programmes, he said.

Exporters, who have been facing sluggish growth due to global slowdown, will get refunds for the tax paid by them on exports during July and August by October 18, he said.

For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST, he said, adding from April 1 attempt would be made to launch an e-wallet facility for the exporters to provide liquidity.

Jaitley said big taxpayers, who contribute 94-95 per cent of the total taxes, will continue to file monthly returns and pay taxes on a monthly basis.

Also, a group of ministers has been asked to go into the issue of extending the composition scheme on inter-state sales as well as rationalising taxes on restaurants.

The switchover to quarterly tax filing for small and medium businesses would happen from October 1 and they will have to file monthly returns for the first three months of GST, which was implemented from July 1, he said.

With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give the option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh.

So far, over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme.

The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for suppliers of food or drinks for human consumption (without alcohol).

Service providers cannot opt for the composition scheme.

The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three- stage filing process.

It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities.

The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non- resident taxable person; and businesses which supply goods through an e-commerce operator.

No input tax credit can be claimed by those opting for composition scheme.

Also, the taxpayer can only make intra-state supply (sell in the same state) and cannot undertake inter-state supply of goods. PTI&nbsp;

Small & medium traders, those with annual turnovers of less than Rs 1.5 crore, were earlier expected to file monthly returns

Three months after the rollout of the new indirect tax regime, the GST Council today made sweeping changes to give relief to small and medium businesses on filing and payment of taxes, eased rules for exporters and cut tax rates on more than two dozen items. Businesses with annual turnover of up to Rs 1.5 crore, which constitute 90 per cent of the taxpayer base but pay only 5-6 per cent of total tax, have been allowed to file quarterly income returns and pay tax instead of the current provision of monthly filings. Also, the turnover threshold for businesses to avail of the composition scheme that allows them to pay 1-5 per cent tax without going through tedious formalities, was raised to Rs 1 crore from current Rs 75 lakh. "Compliance burden of medium and small taxpayers in GST is being reduced," Finance Minister Arun Jaitley told reporters after the 22nd meeting of the Council. Small and medium enterprises had complained of tedious compliance burden under the Goods and Services Tax (GST) that was supposed to be a simple indirect tax regime which replaced over a dozen Central and state taxes. Jaitley said the Council also decided to cut GST rate on 27 common use items. GST on unbranded namkeen, unbranded ayurvedic medicine, sliced dried mango and khakra has been cut to 5 per cent from 12 per cent, while the same on man-made yarn used in textile sector has been reduced to 12 per cent from 18 per cent. Tax on stationery items, stones used for flooring (other than marble and granite), diesel engine parts and pump parts has been cut to 18 per cent from 28 per cent. GST on e-waste has been slashed to 5 per cent from 28 per cent. Food packets given to school kids under Integrated Child Development Scheme (ICDS) will attract 5 per cent tax instead of 12 per cent. Job works like zari, imitation, food items and printing items would attract 5 per cent tax instead of 12 per cent. Government contracts involving high amount of labour will be levied 5 per cent GST instead of 12 per cent in order to contain cost of those programmes, he said. Exporters, who have been facing sluggish growth due to global slowdown, will get refunds for the tax paid by them on exports during July and August by October 18, he said. For the remainder of the fiscal, they will operate under an exempted category paying a nominal 0.1 per cent GST, he said, adding from April 1 attempt would be made to launch an e-wallet facility for the exporters to provide liquidity. Jaitley said big taxpayers, who contribute 94-95 per cent of the total taxes, will continue to file monthly returns and pay taxes on a monthly basis. Also, a group of ministers has been asked to go into the issue of extending the composition scheme on inter-state sales as well as rationalising taxes on restaurants. The switchover to quarterly tax filing for small and medium businesses would happen from October 1 and they will have to file monthly returns for the first three months of GST, which was implemented from July 1, he said. With small businesses and traders complaining about the compliance burden the new Goods and Services Tax (GST) regime has put on them, the panel decided to give the option to taxpayers to avail of the so-called Composition Scheme if their turnover is less than Rs 1 crore as against the previous limit of Rs 75 lakh. So far, over 15 lakh out of the 90 lakh registered businesses have opted for the composition scheme. The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for suppliers of food or drinks for human consumption (without alcohol). Service providers cannot opt for the composition scheme. The scheme allows small businesses, including eateries, to pay 1-5 percent tax without having to deal with the three- stage filing process. It allows small taxpayers to pay GST at a fixed rate of turnover and not go through the tedious GST formalities. The scheme cannot be opted by supplier of services other than restaurant related services; manufacturer of ice cream, pan masala, or tobacco; casual taxable person or a non- resident taxable person; and businesses which supply goods through an e-commerce operator. No input tax credit can be claimed by those opting for composition scheme. Also, the taxpayer can only make intra-state supply (sell in the same state) and cannot undertake inter-state supply of goods. PTI

GST rates on 27 items cut, exporters get relief, small & medium traders to file quarterly returns

World Bank President Jim Yong Kim said the recent slowdown in India&#39;s economic growth is an &quot;aberration&quot; caused by temporary disruptions in preparation for the Goods and Service Tax (GST).

He asserted that it will get corrected in the near future.

Kim while responding to questions on the slowdown in India`s growth in the first quarter said GST is going to have a positive impact on the Indian economy.

&quot;There&#39;s been a deceleration in the first quarter, but we think that`s mostly due to temporary disruptions in preparation for the GST, which by the way is going to have a huge&nbsp;positive impact on the economy,&quot; Kim told the media during a conference ahead of the annual meeting of the International Monetary Fund and the World Bank here.

&quot;We think that the recent slowdown is an aberration which will correct in the coming months, and the GDP growth will stabilise during the year. We`ve been watching carefully, as Prime Minister (Narendra) Modi has really worked on improving the business environment, and so, we think all of those efforts will pay off as well,&quot; he added.

Further responding on India and human capital, Kim praised the &quot;commitment&quot; of Prime Minister Narendra Modi to sanitation issues, and said &quot;Swachh Bharat&quot;&nbsp;is one of the most effective programmes anywhere.

&quot;I know that Prime Minister Modi himself personally is very committed to improving opportunities for all of India. But, India has a lot of challenges. We look at some of the educational outcomes, we`ve looked at some of the health outcomes, and India has room to improve, like most other countries,&quot; he said.

&quot;Our job is to take the political will and commitment that Prime Minister Modi has clearly demonstrated and has communicated to everyone, and then bring to India the most effective intervention that will, as quickly as possible, improve the stock of human capital,&quot; Kim said.

Finance Minister Arun Jaitley would be leading a delegation to the annual meeting next week.

India`s GDP grew 5.7 per cent during the April-June period. During the previous quarter (January-March) the GDP had grown by 6.1 per cent.

<a href="http://www.wionews.com/india-news/watch-not-concerned-by-slowdown-in-indian-economy-says-mastercard-ceo-ajay-banga-21060" target="_blank">WATCH: Not concerned by slowdown in Indian economy, says Mastercard CEO Ajay Banga</a>

Also read:&nbsp;<a href="http://www.wionews.com/photos/forbes-list-mukesh-ambani-added-153-billion-last-year-485#photo-26301" target="_blank">Economy slows but India&#39;s richest 100 </a><a href="http://www.wionews.com/photos/forbes-list-mukesh-ambani-added-153-billion-last-year-485#photo-26301" target="_blank">get</a><a href="http://www.wionews.com/photos/forbes-list-mukesh-ambani-added-153-billion-last-year-485#photo-26301" target="_blank"> richer by 26%: Forbes list</a>

World Bank President Jim Yong Kim said the recent slowdown in India's economic growth is an 'aberration' caused by temporary disruptions in preparation for the Goods and Service Tax

World Bank President Jim Yong Kim said the recent slowdown in India's economic growth is an "aberration" caused by temporary disruptions in preparation for the Goods and Service Tax (GST). He asserted that it will get corrected in the near future. Kim while responding to questions on the slowdown in India`s growth in the first quarter said GST is going to have a positive impact on the Indian economy. "There's been a deceleration in the first quarter, but we think that`s mostly due to temporary disruptions in preparation for the GST, which by the way is going to have a huge positive impact on the economy," Kim told the media during a conference ahead of the annual meeting of the International Monetary Fund and the World Bank here. "We think that the recent slowdown is an aberration which will correct in the coming months, and the GDP growth will stabilise during the year. We`ve been watching carefully, as Prime Minister (Narendra) Modi has really worked on improving the business environment, and so, we think all of those efforts will pay off as well," he added. Further responding on India and human capital, Kim praised the "commitment" of Prime Minister Narendra Modi to sanitation issues, and said "Swachh Bharat" is one of the most effective programmes anywhere. "I know that Prime Minister Modi himself personally is very committed to improving opportunities for all of India. But, India has a lot of challenges. We look at some of the educational outcomes, we`ve looked at some of the health outcomes, and India has room to improve, like most other countries," he said. "Our job is to take the political will and commitment that Prime Minister Modi has clearly demonstrated and has communicated to everyone, and then bring to India the most effective intervention that will, as quickly as possible, improve the stock of human capital," Kim said. Finance Minister Arun Jaitley would be leading a delegation to the annual meeting next week. India`s GDP grew 5.7 per cent during the April-June period. During the previous quarter (January-March) the GDP had grown by 6.1 per cent. WATCH: Not concerned by slowdown in Indian economy, says Mastercard CEO Ajay Banga Also read: Economy slows but India's richest 100 get richer by 26%: Forbes list

India's economy will be back on track soon: World Bank

The Nifty rose 0.7 per cent on Monday to close above 10,000 points for the first time in more than a month, as automakers such as Maruti Suzuki Ltd gained after an increase in the goods and services tax was less wide-ranging than expected.

The BSE Sensex climbed 0.61 per cent to 31,882.16, while the broader NSE Nifty rose 0.72 per cent to 10,006.05, closing above the 10,000 level for the first time since August 7.

Shares of Maruti Suzuki closed 2.15 per cent higher. Meanwhile, IndusInd Bank Ltd rallied 5.6 per cent after saying it had entered into exclusive talks with Bharat Financial Inclusion Ltd for a potential merger.

Automakers such as Maruti Suzuki Ltd gained after an increase in the goods and services tax was less wide-ranging than expected.

The Nifty rose 0.7 per cent on Monday to close above 10,000 points for the first time in more than a month, as automakers such as Maruti Suzuki Ltd gained after an increase in the goods and services tax was less wide-ranging than expected. The BSE Sensex climbed 0.61 per cent to 31,882.16, while the broader NSE Nifty rose 0.72 per cent to 10,006.05, closing above the 10,000 level for the first time since August 7. Shares of Maruti Suzuki closed 2.15 per cent higher. Meanwhile, IndusInd Bank Ltd rallied 5.6 per cent after saying it had entered into exclusive talks with Bharat Financial Inclusion Ltd for a potential merger.

Nifty closes at over one-month high

Former finance minister P Chidambaram has said the Goods and Services Tax -- with its many rates -- is &quot;very, very imperfect&quot;.&nbsp;

And that since it has seven or more rates, it cannot be called &quot;one nation, one tax&quot;.&nbsp;

That has been one of the main criticisms of the GST -- that it has too many rates.&nbsp;

&quot;It is a mockery of the GST. When we have rates such as 0.25, 3, 5, 12, 18, 28 and 40, and possibly more because of the discretion vested with state governments, how can we call this a &#39;one nation, one tax&#39; regime,&quot; said Chidambaram.&nbsp;

The main aim of the GST had been to replace India&#39;s many indirect taxes with one single tax, turning the country into a single market.&nbsp;

A single tax would allow for the seamless and faster flow of goods from one state to another.&nbsp;

Chidambaram also said that both authorities and businesses were &quot;unprepared or under-prepared&quot; for GST and that it should have been put on a trial run.&nbsp;

He also added that experts feared GST might be inflationary in the short run, but that his party would welcome any measure taken to contain inflation. 
&nbsp;

'When we have rates such as 0.25, 3, 5, 12, 18, 28 and 40, and possibly more because of the discretion vested with state governments, how can we call this a 'one nation, one tax' regime,' said Chidambaram

Former finance minister P Chidambaram has said the Goods and Services Tax -- with its many rates -- is "very, very imperfect". And that since it has seven or more rates, it cannot be called "one nation, one tax". That has been one of the main criticisms of the GST -- that it has too many rates. "It is a mockery of the GST. When we have rates such as 0.25, 3, 5, 12, 18, 28 and 40, and possibly more because of the discretion vested with state governments, how can we call this a 'one nation, one tax' regime," said Chidambaram. The main aim of the GST had been to replace India's many indirect taxes with one single tax, turning the country into a single market. A single tax would allow for the seamless and faster flow of goods from one state to another. Chidambaram also said that both authorities and businesses were "unprepared or under-prepared" for GST and that it should have been put on a trial run. He also added that experts feared GST might be inflationary in the short run, but that his party would welcome any measure taken to contain inflation.

Chidambaram: GST, with its many rates, 'very, very imperfect'

Nearly 1,000 cinema halls in Tamil Nadu have cancelled movie screenings to protest the imposition of a 30 per cent local body tax along with an additional levy under the new Goods and Services Tax regime.&nbsp;

<a href="https://www.wionews.com/south-asia/pm-modi-48-hours-before-gst-1-lakh-cos-lost-registration-for-post-demonetisation-irregularities-17513">Also Read: 48 hours before GST, 1 lakh cos lost registration for post-demonetisation irregularities, says PM Modi</a>

This is the first major protest since the rollout of the GST on July 1.&nbsp; 
&nbsp; 
An additional tax of eight per cent under GST over the 30 per cent local body tax has inflated the total taxes&nbsp;to over 60 per cent for a state where ticket prices were capped until now.&nbsp; 
&nbsp; 
The Tamil Nadu government had pegged&nbsp;ticket prices for single-screen halls at Rs 50 and for multiplexes at Rs 120. 
&nbsp; 
The GST council has fixed tax rates for movie tickets at 18 per cent for those priced at less than Rs 100 and 28 per cent for those costing over Rs 100.&nbsp; 
&nbsp; 
&ldquo;Though the Tamil Nadu Film Exhibitors Association had decided on Friday to cancel shows from July 3, many theatres shut down yesterday itself,&rdquo; president of the association, Abirami Ramanathan told PTI.

&ldquo;If we screen movies, we have to pay local body taxes immediately as it came into force from yesterday. We are closing since there is no other way out,&rdquo; he said.

Ramanathan claimed it is only in India that movie halls have no right to fix ticket prices. 
&nbsp; 
&ldquo;We cannot increase prices for big-ticket movies,&rdquo; he said, adding they could not lower it for small budget films. 
&nbsp; 
According to Ramanathan, about 10 lakh persons are dependent on the film industry to make a living. 
&nbsp; 
&nbsp; 
&nbsp;

The Tamil Nadu government had until now pegged?ticket prices for single-screen halls at Rs 50 and for multiplexes at Rs 120

Nearly 1,000 cinema halls in Tamil Nadu have cancelled movie screenings to protest the imposition of a 30 per cent local body tax along with an additional levy under the new Goods and Services Tax regime. Also Read: 48 hours before GST, 1 lakh cos lost registration for post-demonetisation irregularities, says PM Modi This is the first major protest since the rollout of the GST on July 1. An additional tax of eight per cent under GST over the 30 per cent local body tax has inflated the total taxes to over 60 per cent for a state where ticket prices were capped until now. The Tamil Nadu government had pegged ticket prices for single-screen halls at Rs 50 and for multiplexes at Rs 120. The GST council has fixed tax rates for movie tickets at 18 per cent for those priced at less than Rs 100 and 28 per cent for those costing over Rs 100. “Though the Tamil Nadu Film Exhibitors Association had decided on Friday to cancel shows from July 3, many theatres shut down yesterday itself,” president of the association, Abirami Ramanathan told PTI. “If we screen movies, we have to pay local body taxes immediately as it came into force from yesterday. We are closing since there is no other way out,” he said. Ramanathan claimed it is only in India that movie halls have no right to fix ticket prices. “We cannot increase prices for big-ticket movies,” he said, adding they could not lower it for small budget films. According to Ramanathan, about 10 lakh persons are dependent on the film industry to make a living.

GST fallout: Cinema halls shut in Tamil Nadu to protest against taxes on tickets

As many as 22 states have done away with checks post within three days of the implementation of the Goods and Services Tax, PTI reported.&nbsp;

It added that a few states were in the process of doing so.&nbsp;

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<h5>One of the key aims of the GST was to transform India into a single market within which goods and services can flow without hindrance</h5>
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One of the key aims of the GST was to transform India into a single market within which goods and services can flow without hindrance.&nbsp;

The state border check posts check for local tax compliance, but they also lead to delays.&nbsp;

PTI reported that the states which have done away with check posts include Delhi, UP, Bihar, Maharashtra, and Tamil Nadu.

A few states are in the process of doing so

As many as 22 states have done away with checks post within three days of the implementation of the Goods and Services Tax, PTI reported. It added that a few states were in the process of doing so. One of the key aims of the GST was to transform India into a single market within which goods and services can flow without hindrance × One of the key aims of the GST was to transform India into a single market within which goods and services can flow without hindrance. The state border check posts check for local tax compliance, but they also lead to delays. PTI reported that the states which have done away with check posts include Delhi, UP, Bihar, Maharashtra, and Tamil Nadu.

22 states remove check posts after GST

By Sumit Chaturvedi 
 
Starting at midnight tonight, business in India will change forever as the long-awaited and long-debated Good and Services Tax (GST) rolls out.

Claimed to be the biggest and most far-reaching tax reform India has ever seen, the GST will subsume most of the indirect taxes currently levied and simplify taxation.

The GST is a destination-based tax levied on consumption, and it will replace all other indirect taxes. Like the other taxes, the GST will also be levied and paid when a consumer buys something. It will be levied on every transaction in the supply of goods and services, barring certain exempted items.

The tax levied at one stage can be set off or deducted from the tax to be paid at the next stage as well.

One tax, one nation

The GST will be a one-tax, one-nation regime where all goods and services will be taxed at 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent wherever they are purchased. &nbsp;

There is higher tax called a &quot;sin&quot; tax on goods like aerated drinks.

GST also reduces the tax burden on the final consumer since it ends the tax-on-tax phenomenon, also known as cascading effect. Now, a tax paid at one stage can be deducted from the tax paid at the next stage, reducing the overall tax incidence on the item.

But not all items will be subject to GST. &nbsp;Alcoholic drinks, electricity and five petroleum products crude, petrol, diesel, natural gas and aviation turbine fuel will not be under GST and will continue to attract Value Added Tax (VAT) and central excise.

Dual GST

India will have a dual GST. This means that the single rate set for a good or service has two components &ndash; Central GST (CGST) and a State GST (SGST). So nine&nbsp;per cent of an 18 per cent GST goes to the centre and the other 9 per cent goes to the state.

There is also an Integrated GST (iGST) on the interstate supply of goods and services, which can be set off against CGST and SGST that is to be paid.

GST will replace all central taxes including central excise and additional duties of excise, service tax, countervailing duty in the case of customs duty, central surcharges and cesses.

Also, GST will replace all state taxes including state vat, central sales tax, luxury tax, all forms of entry tax, entertainment and amusement tax, taxes on advertisements, purchase tax, tax on lotteries, betting and gambling, state surcharges and cesses.

Will GST trigger inflation or bring down prices?

Normally, GST would have pushed up inflation and that is what happened in most countries that switched to GST.

The inflation spike lasted from between six months to two years. But in India, the state and central GST acts have a provision which mandates that manufacturers and service providers have to pass on any benefits from a reduction in tax rate or availing of input tax credit to consumers in the form of lower prices.

This provision was introduced at quite a late stage because of fears that companies may not lower prices even if it is warranted and trigger inflation. there are stiff penalties for companies not passing on the benefits, which includes companies losing their central GST registration. &nbsp;

&nbsp;

Business in India will change forever as the long-awaited and long-debated GST rolls out

By Sumit Chaturvedi Starting at midnight tonight, business in India will change forever as the long-awaited and long-debated Good and Services Tax (GST) rolls out. Claimed to be the biggest and most far-reaching tax reform India has ever seen, the GST will subsume most of the indirect taxes currently levied and simplify taxation. The GST is a destination-based tax levied on consumption, and it will replace all other indirect taxes. Like the other taxes, the GST will also be levied and paid when a consumer buys something. It will be levied on every transaction in the supply of goods and services, barring certain exempted items. The tax levied at one stage can be set off or deducted from the tax to be paid at the next stage as well. One tax, one nation The GST will be a one-tax, one-nation regime where all goods and services will be taxed at 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent wherever they are purchased. There is higher tax called a "sin" tax on goods like aerated drinks. GST also reduces the tax burden on the final consumer since it ends the tax-on-tax phenomenon, also known as cascading effect. Now, a tax paid at one stage can be deducted from the tax paid at the next stage, reducing the overall tax incidence on the item. But not all items will be subject to GST. Alcoholic drinks, electricity and five petroleum products crude, petrol, diesel, natural gas and aviation turbine fuel will not be under GST and will continue to attract Value Added Tax (VAT) and central excise. Dual GST India will have a dual GST. This means that the single rate set for a good or service has two components – Central GST (CGST) and a State GST (SGST). So nine per cent of an 18 per cent GST goes to the centre and the other 9 per cent goes to the state. There is also an Integrated GST (iGST) on the interstate supply of goods and services, which can be set off against CGST and SGST that is to be paid. GST will replace all central taxes including central excise and additional duties of excise, service tax, countervailing duty in the case of customs duty, central surcharges and cesses. Also, GST will replace all state taxes including state vat, central sales tax, luxury tax, all forms of entry tax, entertainment and amusement tax, taxes on advertisements, purchase tax, tax on lotteries, betting and gambling, state surcharges and cesses. Will GST trigger inflation or bring down prices? Normally, GST would have pushed up inflation and that is what happened in most countries that switched to GST. The inflation spike lasted from between six months to two years. But in India, the state and central GST acts have a provision which mandates that manufacturers and service providers have to pass on any benefits from a reduction in tax rate or availing of input tax credit to consumers in the form of lower prices. This provision was introduced at quite a late stage because of fears that companies may not lower prices even if it is warranted and trigger inflation. there are stiff penalties for companies not passing on the benefits, which includes companies losing their central GST registration.

Goods and Services Tax: India's 'biggest' tax reform explained

The Centre on Friday questioned the Congress Party and the Trinamool Congress&#39;s (TMC) over its U-turn on the Goods and Service Tax (GST) and asked why they weren&#39;t supporting the government now when they backed the uniform tax regime in the Parliament.

Opposition parties, led by the Congress, have dismissed the event as a &quot;publicity gimmick&quot;.&nbsp;

The exceptions are the Sharad Pawar-led Nationalist Congress Party and former PM HD Dewe Gowda&#39;s Janata Dal Secular, who have said they will attend the event, which will also be attended by celebrities including actor Amitabh Bachchan and industrialist Ratan Tata.

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&quot;GST is the most important economic change after India&#39;s Independence. It is a historic day and after the rolling out of GST it will be easy to do business. Through this people will gain from the indirect benefits. In Lok Sabha and Rajya Sabha Congress and TMC supported this. They should support in even now,&quot; Minister of State for Finance and Corporate Affairs Arjun Ram Meghwal said.

The minister was reiterating Finance Minister Arun Jaitley&#39;s statement yesterday that the GST had been formed with the consensus of the states and a consideration of their suggestions.

Minister of State (Development Ministry) Jitendra Singh said GST would be a &quot;gamechanger in India&#39;s economic road map for the future.&quot;

&quot;It is not a mere economic reform, but it is a game changer in India&#39;s economic road map for the future. But at the same time it is also going to be a new values addition to the character of India Republic. It is an occasion of celebration and rededicating ourselves to the service of nation by each and every citizen of India,&quot; he said.

Earlier on Friday, Union Information and Broadcasting Minister M Venkaiah Naidu urged the Congress Party to &quot;realise and rethink&quot; their stand and join the government for the midnight Parliament session.

&quot;It&#39;s really unfortunate because they are distancing themselves from the process of reformation in the country. I hope they (Congress) realise by evening and re-think and join us in the Central Hall,&quot; Naidu said.

&quot;I still appeal to the Congress and other parties boycotting GST event to reconsider. It&#39;s not a party function,&quot; he added.

The Congress Party yesterday said that it would boycott the midnight meeting on the GST roll-out, dismissing it as a publicity stunt.

Congress leader Mallikarjun Kharge pointed out that previous governments had not celebrated landmark the passing of landmark reforms in Parliament including the Right to Information Act, the Food Security Act and the MNREGA.

&quot;We are boycotting this midnight celebration. In UPA government; Right to Information (RTI) Act, Food Security Act, MNREGA, Right to Education laws were passed which were beneficial for people. But, we never made celebration for such things in central hall. The BJP is doing publicity only in which they are master,&quot; Mallikarjun Kharge said.

Apart from the Congress, the Trinamool Congress (TMC), the Rashtriya Janata Dal (RJD), Samajwadi Party, the Left, and the DMK have also decided to boycott&nbsp;a special sitting of the two parliament chambers -- to be held by Prime Minister Narendra Modi when the tax takes effect at midnight on Friday.

Bihar Chief Minister Nitish Kumar will not attend the event. State minister Vijendra Yadav will represent the Janata Dal (United) on his behalf.

The GST, which rolls out at midnight today, will bring the Indian economy under a single tax bracket.&nbsp;

There have only been three previous midnight sittings in India&#39;s history, to mark India&#39;s independence in 1947 and the 25th and 50th anniversaries.&nbsp;

Congress said the nationalist government was &quot;insulting the very memory of India&#39;s freedom struggle and the sacrifices associated with it&quot;.

Rashtriya Janata Dal party spokesman Manoj Kumar Jha said the party would &quot;boycott this mega spectacle of optical illusion&quot;.

&quot;Though we have been in favour of GST, we believe there are pressing concerns, particularly among the small- and medium-level traders and manufacturing units, which remain unaddressed,&quot; he said.

The Nationalist Congress Party (NCP) on Friday backed the GST and questioned, why political parties were creating a fuss over its launch when they unanimously passed the tax reform in the Parliament. 
 
The GST is to be rolled out Saturday even as businesses complain they are ill-prepared for the massive changes about to ripple through India&#39;s unwieldy economy.

Watch WION&#39;s Kartikeya Sharma on GST rollout:&nbsp;

<iframe allowfullscreen="true" allowtransparency="true" frameborder="0" height="400" scrolling="no" src="https://www.facebook.com/plugins/video.php?href=https%3A%2F%2Fwww.facebook.com%2FWIONews%2Fvideos%2F679071652303473%2F&amp;show_text=0&amp;width=300" style="border:none;overflow:hidden" width="300"></iframe>

 
&nbsp;

Union Information and Broadcasting Minister M Venkaiah Naidu urged the Congress Party to 'realise and rethink' their stand and join the government for the midnight Parliament session

The Centre on Friday questioned the Congress Party and the Trinamool Congress's (TMC) over its U-turn on the Goods and Service Tax (GST) and asked why they weren't supporting the government now when they backed the uniform tax regime in the Parliament. Opposition parties, led by the Congress, have dismissed the event as a "publicity gimmick". The exceptions are the Sharad Pawar-led Nationalist Congress Party and former PM HD Dewe Gowda's Janata Dal Secular, who have said they will attend the event, which will also be attended by celebrities including actor Amitabh Bachchan and industrialist Ratan Tata. India deserves a #GST rollout that does not put crores of its ordinary citizens, small businesses & traders through tremendous pain &anxiety — Office of RG (@OfficeOfRG) June 30, 2017 × "GST is the most important economic change after India's Independence. It is a historic day and after the rolling out of GST it will be easy to do business. Through this people will gain from the indirect benefits. In Lok Sabha and Rajya Sabha Congress and TMC supported this. They should support in even now," Minister of State for Finance and Corporate Affairs Arjun Ram Meghwal said. The minister was reiterating Finance Minister Arun Jaitley's statement yesterday that the GST had been formed with the consensus of the states and a consideration of their suggestions. Minister of State (Development Ministry) Jitendra Singh said GST would be a "gamechanger in India's economic road map for the future." "It is not a mere economic reform, but it is a game changer in India's economic road map for the future. But at the same time it is also going to be a new values addition to the character of India Republic. It is an occasion of celebration and rededicating ourselves to the service of nation by each and every citizen of India," he said. Earlier on Friday, Union Information and Broadcasting Minister M Venkaiah Naidu urged the Congress Party to "realise and rethink" their stand and join the government for the midnight Parliament session. "It's really unfortunate because they are distancing themselves from the process of reformation in the country. I hope they (Congress) realise by evening and re-think and join us in the Central Hall," Naidu said. "I still appeal to the Congress and other parties boycotting GST event to reconsider. It's not a party function," he added. The Congress Party yesterday said that it would boycott the midnight meeting on the GST roll-out, dismissing it as a publicity stunt. Congress leader Mallikarjun Kharge pointed out that previous governments had not celebrated landmark the passing of landmark reforms in Parliament including the Right to Information Act, the Food Security Act and the MNREGA. "We are boycotting this midnight celebration. In UPA government; Right to Information (RTI) Act, Food Security Act, MNREGA, Right to Education laws were passed which were beneficial for people. But, we never made celebration for such things in central hall. The BJP is doing publicity only in which they are master," Mallikarjun Kharge said. Apart from the Congress, the Trinamool Congress (TMC), the Rashtriya Janata Dal (RJD), Samajwadi Party, the Left, and the DMK have also decided to boycott a special sitting of the two parliament chambers -- to be held by Prime Minister Narendra Modi when the tax takes effect at midnight on Friday. Bihar Chief Minister Nitish Kumar will not attend the event. State minister Vijendra Yadav will represent the Janata Dal (United) on his behalf. The GST, which rolls out at midnight today, will bring the Indian economy under a single tax bracket. There have only been three previous midnight sittings in India's history, to mark India's independence in 1947 and the 25th and 50th anniversaries. Congress said the nationalist government was "insulting the very memory of India's freedom struggle and the sacrifices associated with it". Rashtriya Janata Dal party spokesman Manoj Kumar Jha said the party would "boycott this mega spectacle of optical illusion". "Though we have been in favour of GST, we believe there are pressing concerns, particularly among the small- and medium-level traders and manufacturing units, which remain unaddressed," he said. The Nationalist Congress Party (NCP) on Friday backed the GST and questioned, why political parties were creating a fuss over its launch when they unanimously passed the tax reform in the Parliament. The GST is to be rolled out Saturday even as businesses complain they are ill-prepared for the massive changes about to ripple through India's unwieldy economy. Watch WION's Kartikeya Sharma on GST rollout:

As midnight launch boycotts increase, government questions U-turn on GST

As the Goods and Services Tax (GST) becomes a reality in India after a long wait of 17 years, laptops and desktops are set to become costlier when the landmark tax reform comes into effect.&nbsp;

The GST council has kept laptops and desktops in the 18 per cent slab, compared to the current levy of 14-15%. However, products such as monitors and printers will be taxed at 28%.

Mobile phones, which fall in the 12 per cent&nbsp;slab, may get costlier by four to five per cent. Basic phone prices may increase while&nbsp;imported smart phones are likely to get cheaper.

Though taxes have been simplified with service tax, excise duty and VAT subsumed under a single tax bracket of 12 per cent, the domestic industry (Make in India) can be an area of concern.

To counter this, a 10 per cent differential customs duty may be levied on imported phones. A final decision in this regard is yet to be taken.

&quot;The prices of desktops or laptops are going to be fairly neutral. Currently India has an excise duty which is nearly 12% of the retail prices, 5% VAT and 2% central sales tax which applies on transaction between importer and distributor. The total tax comes to roughly about 17% on laptops and desktops, the government has made it 18%. However, taxes on the multi functional printer and monitor will go up to around 28% which is currently 24%.&quot; says Priyajit Ghosh, partner at KPMG, India.

Priya Suman owns two electronic stores in Nehru Place (Asia&#39;s second largest IT market). She explains, &quot;The fear in the mind is unknown because it is happening for 
the first time and the fact that some people anticipate that the prices might go up. It&#39;s lack of knowledge I would say, especially about products such as laptop and mobile phones.&quot;

These reforms will also provide a level playing field to online and offline retailers of products. Till now, the brick and mortar stores incur a lot of services and end up 
paying VAT and service tax which they couldn&#39;t cut off earlier.

Many consumers are participating in pre-GST sales as they believe the prices would go up after GST is rolled out in the country. &ldquo;I have not been able to understand the whole concept of GST so far, everybody explains it differently. However, most of the shops and online retaliers are claiming that they are providing upto 50% discount on laptops so I am here to buy one before July 1.&rdquo;

Indian industry is concerned that the inverted duty structure that made it cheaper to import than manufacture domestically may return post GST regime.

Clarity is awaited on GST in services and treatment of area-based exemptions. Clarity is also required on differential duty on imports and local manufacturing to see the full impact of GST.

&nbsp;

Computers will be taxed at 18% under GST. Peripherals such as monitors and printers will be taxed at 28%

As the Goods and Services Tax (GST) becomes a reality in India after a long wait of 17 years, laptops and desktops are set to become costlier when the landmark tax reform comes into effect. The GST council has kept laptops and desktops in the 18 per cent slab, compared to the current levy of 14-15%. However, products such as monitors and printers will be taxed at 28%. Mobile phones, which fall in the 12 per cent slab, may get costlier by four to five per cent. Basic phone prices may increase while imported smart phones are likely to get cheaper. Though taxes have been simplified with service tax, excise duty and VAT subsumed under a single tax bracket of 12 per cent, the domestic industry (Make in India) can be an area of concern. To counter this, a 10 per cent differential customs duty may be levied on imported phones. A final decision in this regard is yet to be taken. "The prices of desktops or laptops are going to be fairly neutral. Currently India has an excise duty which is nearly 12% of the retail prices, 5% VAT and 2% central sales tax which applies on transaction between importer and distributor. The total tax comes to roughly about 17% on laptops and desktops, the government has made it 18%. However, taxes on the multi functional printer and monitor will go up to around 28% which is currently 24%." says Priyajit Ghosh, partner at KPMG, India. Priya Suman owns two electronic stores in Nehru Place (Asia's second largest IT market). She explains, "The fear in the mind is unknown because it is happening for the first time and the fact that some people anticipate that the prices might go up. It's lack of knowledge I would say, especially about products such as laptop and mobile phones." These reforms will also provide a level playing field to online and offline retailers of products. Till now, the brick and mortar stores incur a lot of services and end up paying VAT and service tax which they couldn't cut off earlier. Many consumers are participating in pre-GST sales as they believe the prices would go up after GST is rolled out in the country. “I have not been able to understand the whole concept of GST so far, everybody explains it differently. However, most of the shops and online retaliers are claiming that they are providing upto 50% discount on laptops so I am here to buy one before July 1.” Indian industry is concerned that the inverted duty structure that made it cheaper to import than manufacture domestically may return post GST regime. Clarity is awaited on GST in services and treatment of area-based exemptions. Clarity is also required on differential duty on imports and local manufacturing to see the full impact of GST.

GST fall-out: Laptops, computers set to become costlier

India is bracing for upheaval as it storms ahead with its most ambitious reform in decades -- transforming the world&#39;s fastest growing major economy into a single market for the first time.

The long-awaited goods and services tax (GST) rolls out Saturday even as businesses complain they are ill-prepared for the massive changes about to ripple through India&#39;s unwieldy, $2 trillion economy.

The government promises the new regime will not just simplify trade by replacing more than a dozen levies with one tax, but combat corruption and enrichen state coffers by bringing the informal economy into the digital era.

Most economists agree the reform -- first proposed in 2006 -- is necessary and long overdue, but warn the initial shock to the economy is likely to drag, rather than stoke, growth in the short term as businesses adjust.

There are already signs the transition could be rocky.&nbsp;

Industries are on strike, others are facing an avalanche of paperwork, while some retailers remain unclear about what to charge just days before the taxes take effect.

&quot;There are different rates for a mobile set, charger and headphones -- all of which come in one box,&quot; said Praveen Khandelwal, secretary general of Confederation of All India Traders, pointing to one such example.

&quot;What tax rate will be applicable in such a scenario? We don&#39;t know yet.&quot;

It took more than a decade to get the GST through parliament and political bickering over the particulars now means there are four tax rates instead of one as originally envisioned.

A slew of basic staples like fresh vegetables and milk are exempted, along with less obvious items like temple offerings, the national flag and human hair.

So-called &quot;sin&quot; goods like tobacco will be slapped with extra levies, while states will still be allowed to separately tax some products including alcohol, petrol and aviation fuel.

Some industries have suddenly discovered their products elevated to a higher tax bracket.&nbsp;

Fireworks manufacturers are protesting over crackers being taxed at the maximum of 28 per cent, while garment and textile workers are crying foul over heightened imposts.

Ayushi Gudwani, who runs online fashion startup Fable Street, supports the creation of a common market but was shocked to learn her taxes had more than doubled.

&quot;Our profitability will be hit,&quot; she told told AFP.

Costs are also mounting at India&#39;s largest logistics firm Safexpress, which has hired 40 new staff to process a mountain of new paperwork.

Under the new regime, companies must file a tax return in every state they pass through -- a nightmare for a trucking company shipping goods nationwide. 
For Safexpress, that means instead of filing two annual tax returns they must submit 1,400, said managing director Rubal Jain.

&quot;It&#39;s going to be a lot of confusion and chaos and back and forth for the next three months, because no one knows what will happen,&quot; he told AFP.

&quot;It&#39;ll be great in the long run, but transition will be a pain.&quot;

All but the smallest businesses will now be required to declare their earnings online, an effort to broaden India&#39;s woefully small tax base, digitise the economy and flush out cash hoarders.

But training employers to log tax information online presents immense challenges in India, where most small and informal businesses don`t own computers, let alone access the internet, the trade association said.

Safexpress cannot file its own returns until drivers upload their monthly invoices -- a huge ask for truckers used to delivering goods, not paperwork, Jain said. 
Gudwani meanwhile worries her suppliers -- mostly tiny businesses -- will struggle to get the hang of issuing receipts and wind up losing contracts.

India has one of the lowest tax-to-GDP ratios in the world and these changes, though initially painful, will have a &quot;significant impact&quot; on compliance, said Neelkanth Mishra, managing director at Credit Suisse.

&quot;India is like a house under renovation. While the new parts are being built, no one will be happy,&quot; he told AFP.

The sweeping reforms comes less than a year after Prime Minister Narendra Modi devalued India`s largest banknotes in a sudden move designed to outmanoeuvre tax cheats, but was blamed for a crippling cash shortage and slowing growth.

To avoid a similarly rough landing, the government has trained 60,000 tax bureaucrats and run sessions with private accountants to ensure everyone is up to speed on the finer points of the GST.

A GST Council has spent months thrashing out the final legislation, which was blocked in parliament for a year until an amended version was approved. 
&quot;This is a tax reform that was needed,&quot; said Sunil Sinha, principal economist at Fitch India.

&quot;We came into existence as a nation in 1947 but never had a common Indian market. GST will make India one.&quot;

 
&nbsp;

Industries are on strike, others are facing an avalanche of paperwork, while some retailers remain unclear about what to charge just days before the Goods and Services Tax rolls out on July 1

India is bracing for upheaval as it storms ahead with its most ambitious reform in decades -- transforming the world's fastest growing major economy into a single market for the first time. The long-awaited goods and services tax (GST) rolls out Saturday even as businesses complain they are ill-prepared for the massive changes about to ripple through India's unwieldy, $2 trillion economy. The government promises the new regime will not just simplify trade by replacing more than a dozen levies with one tax, but combat corruption and enrichen state coffers by bringing the informal economy into the digital era. Most economists agree the reform -- first proposed in 2006 -- is necessary and long overdue, but warn the initial shock to the economy is likely to drag, rather than stoke, growth in the short term as businesses adjust. There are already signs the transition could be rocky. Industries are on strike, others are facing an avalanche of paperwork, while some retailers remain unclear about what to charge just days before the taxes take effect. "There are different rates for a mobile set, charger and headphones -- all of which come in one box," said Praveen Khandelwal, secretary general of Confederation of All India Traders, pointing to one such example. "What tax rate will be applicable in such a scenario? We don't know yet." It took more than a decade to get the GST through parliament and political bickering over the particulars now means there are four tax rates instead of one as originally envisioned. A slew of basic staples like fresh vegetables and milk are exempted, along with less obvious items like temple offerings, the national flag and human hair. So-called "sin" goods like tobacco will be slapped with extra levies, while states will still be allowed to separately tax some products including alcohol, petrol and aviation fuel. Some industries have suddenly discovered their products elevated to a higher tax bracket. Fireworks manufacturers are protesting over crackers being taxed at the maximum of 28 per cent, while garment and textile workers are crying foul over heightened imposts. Ayushi Gudwani, who runs online fashion startup Fable Street, supports the creation of a common market but was shocked to learn her taxes had more than doubled. "Our profitability will be hit," she told told AFP. Costs are also mounting at India's largest logistics firm Safexpress, which has hired 40 new staff to process a mountain of new paperwork. Under the new regime, companies must file a tax return in every state they pass through -- a nightmare for a trucking company shipping goods nationwide. For Safexpress, that means instead of filing two annual tax returns they must submit 1,400, said managing director Rubal Jain. "It's going to be a lot of confusion and chaos and back and forth for the next three months, because no one knows what will happen," he told AFP. "It'll be great in the long run, but transition will be a pain." All but the smallest businesses will now be required to declare their earnings online, an effort to broaden India's woefully small tax base, digitise the economy and flush out cash hoarders. But training employers to log tax information online presents immense challenges in India, where most small and informal businesses don`t own computers, let alone access the internet, the trade association said. Safexpress cannot file its own returns until drivers upload their monthly invoices -- a huge ask for truckers used to delivering goods, not paperwork, Jain said. Gudwani meanwhile worries her suppliers -- mostly tiny businesses -- will struggle to get the hang of issuing receipts and wind up losing contracts. India has one of the lowest tax-to-GDP ratios in the world and these changes, though initially painful, will have a "significant impact" on compliance, said Neelkanth Mishra, managing director at Credit Suisse. "India is like a house under renovation. While the new parts are being built, no one will be happy," he told AFP. The sweeping reforms comes less than a year after Prime Minister Narendra Modi devalued India`s largest banknotes in a sudden move designed to outmanoeuvre tax cheats, but was blamed for a crippling cash shortage and slowing growth. To avoid a similarly rough landing, the government has trained 60,000 tax bureaucrats and run sessions with private accountants to ensure everyone is up to speed on the finer points of the GST. A GST Council has spent months thrashing out the final legislation, which was blocked in parliament for a year until an amended version was approved. "This is a tax reform that was needed," said Sunil Sinha, principal economist at Fitch India. "We came into existence as a nation in 1947 but never had a common Indian market. GST will make India one."

Indian business braces for disruption ahead of GST

Businessman Pankaj Jain is so worried about the impending launch of a new sales tax in India that he is thinking of shutting down his tiny textile factory for a month to give himself time to adjust.

Jain is one of millions of small business owners who face wrenching change from India&#39;s biggest tax reform since independence that will unify the country&#39;s $2 trillion economy and 1.3 billion people into a common market.

But he is simply not ready for a regime that from July 1 will for the first time tax the bed linen his 10 workers make, and require him to file his taxes every month online.

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On the desk in his tiny office in Meerut, two hours drive northeast of New Delhi, lay two calculators. Turning to open a metal cabinet, he pulled out a hand-written ledger to show how he keeps his books.

&quot;We will have to hire an accountant - and get a computer,&quot; the thickset 52-year-old told Reuters, as a dozen ancient power looms clattered away in the ramshackle workshop next door.

Prime Minister Narendra Modi&#39;s government says that by replacing several federal and state taxes, the new Goods and Services Tax (GST) will make life simpler for business.

To drive home the point, Bollywood superstar Amitabh Bachchan has appeared in a promotional video in which he weaves a cat&#39;s cradle between the fingers of his hands - symbolising India&#39;s thicket of old taxes.

With a flourish, the tangle is gone and Bachchan proclaims: &quot;One nation, one tax, one market!&quot; (http://bit.ly/2sch8ou)

NOT SO SIMPLE

By tearing down barriers between India&#39;s 29 states, the GST should deliver efficiency gains to larger businesses. HSBC estimates the reform could add 0.4 percent to economic growth.

Yet at the local chapter of the Indian Industries Association, which groups 6,500 smaller enterprises nationwide, the talk is about how to cope in the aftermath of the GST rollout.

&quot;In the initial months, there may be utter confusion,&quot; said chairman Ashok Malhotra, who runs one firm that manufactures voltage stabilisers and a second that makes timing equipment for boxing contests.

A big concern is the Indian GST&#39;s sheer complexity - with rates of 5, 12, 18 and 28 percent, and myriad exceptions, it contrasts with simpler, flatter and broader sales taxes in other countries.

The official schedule of GST rates runs to 213 pages and has undergone repeated last-minute changes.

&quot;Rubber goods are taxed at 12 percent; sporting goods at 18 percent. I make rubber sporting goods &ndash; so what tax am I supposed to pay?&quot; asks Anurag Agarwal, the local IIA secretary.

GRACE PERIOD?

The top government official responsible for coordinating the GST rollout rebuts complaints from bosses that the tax is too complex, adding that the IT back-end that will drive it - crunching up to 5 billion invoices a month - is robust.

&quot;It is a technological marvel, as well as a fiscal marvel,&quot; Revenue Secretary Hasmukh Adhia told Reuters in an interview.

The government will, however, allow firms to file simplified returns for July and August. From September they must file a total of 37 online returns annually - three each month and one at the year&#39;s end - for each state they operate in.

One particular concern is how a new feature of the GST, the input tax credit, will work. This allows a company to claim refunds on its inputs and means it should only pay tax on the value it adds.

The structure will encourage companies to buy from suppliers that are GST-compliant, so that tax credits can flow down a supply chain.

That spells bad news for small firms hesitating to shift into the formal economy. The government estimates smaller companies account for 45 percent of manufacturing and employ more than 117 million people.

Adhia played down the risk of job losses, however, saying this would be offset by new service sector jobs.

DEMONETISATION 2.0

The prospect of disruption is drawing comparisons with Modi&#39;s decision last November to scrap high-value bank notes that made up 86 percent of the cash in circulation, in a bid to purge illicit &quot;black money&quot; from the system.

The note ban caused severe disruption to India&#39;s cash-driven economy and slammed the brakes on growth, which slowed to a two-year low in the quarter to March.

&quot;It could throw the business out of gear - it can affect your volumes by at least 30 percent,&quot; said the head of one large cement company in the Delhi region.

Back in Meerut, Pankaj Jain worries that hiring an accountant and charging 5 percent GST on his bedsheets could eat up to two-thirds of his annual profits of 400,000-500,000 rupees ($6,210-$7,760).

&quot;I know my costs will go up, but I don&#39;t know about my income,&quot; he said. &quot;I might even have to shut up shop completely and go into trading.&quot;

Many businesses are just not ready for the July 1 launch

Businessman Pankaj Jain is so worried about the impending launch of a new sales tax in India that he is thinking of shutting down his tiny textile factory for a month to give himself time to adjust. Jain is one of millions of small business owners who face wrenching change from India's biggest tax reform since independence that will unify the country's $2 trillion economy and 1.3 billion people into a common market. But he is simply not ready for a regime that from July 1 will for the first time tax the bed linen his 10 workers make, and require him to file his taxes every month online. The prospect of disruption is drawing comparisons with demonetisation × On the desk in his tiny office in Meerut, two hours drive northeast of New Delhi, lay two calculators. Turning to open a metal cabinet, he pulled out a hand-written ledger to show how he keeps his books. "We will have to hire an accountant - and get a computer," the thickset 52-year-old told Reuters, as a dozen ancient power looms clattered away in the ramshackle workshop next door. Prime Minister Narendra Modi's government says that by replacing several federal and state taxes, the new Goods and Services Tax (GST) will make life simpler for business. To drive home the point, Bollywood superstar Amitabh Bachchan has appeared in a promotional video in which he weaves a cat's cradle between the fingers of his hands - symbolising India's thicket of old taxes. With a flourish, the tangle is gone and Bachchan proclaims: "One nation, one tax, one market!" (http://bit.ly/2sch8ou) NOT SO SIMPLE By tearing down barriers between India's 29 states, the GST should deliver efficiency gains to larger businesses. HSBC estimates the reform could add 0.4 percent to economic growth. Yet at the local chapter of the Indian Industries Association, which groups 6,500 smaller enterprises nationwide, the talk is about how to cope in the aftermath of the GST rollout. "In the initial months, there may be utter confusion," said chairman Ashok Malhotra, who runs one firm that manufactures voltage stabilisers and a second that makes timing equipment for boxing contests. A big concern is the Indian GST's sheer complexity - with rates of 5, 12, 18 and 28 percent, and myriad exceptions, it contrasts with simpler, flatter and broader sales taxes in other countries. The official schedule of GST rates runs to 213 pages and has undergone repeated last-minute changes. "Rubber goods are taxed at 12 percent; sporting goods at 18 percent. I make rubber sporting goods – so what tax am I supposed to pay?" asks Anurag Agarwal, the local IIA secretary. GRACE PERIOD? The top government official responsible for coordinating the GST rollout rebuts complaints from bosses that the tax is too complex, adding that the IT back-end that will drive it - crunching up to 5 billion invoices a month - is robust. "It is a technological marvel, as well as a fiscal marvel," Revenue Secretary Hasmukh Adhia told Reuters in an interview. The government will, however, allow firms to file simplified returns for July and August. From September they must file a total of 37 online returns annually - three each month and one at the year's end - for each state they operate in. One particular concern is how a new feature of the GST, the input tax credit, will work. This allows a company to claim refunds on its inputs and means it should only pay tax on the value it adds. The structure will encourage companies to buy from suppliers that are GST-compliant, so that tax credits can flow down a supply chain. That spells bad news for small firms hesitating to shift into the formal economy. The government estimates smaller companies account for 45 percent of manufacturing and employ more than 117 million people. Adhia played down the risk of job losses, however, saying this would be offset by new service sector jobs. DEMONETISATION 2.0 The prospect of disruption is drawing comparisons with Modi's decision last November to scrap high-value bank notes that made up 86 percent of the cash in circulation, in a bid to purge illicit "black money" from the system. The note ban caused severe disruption to India's cash-driven economy and slammed the brakes on growth, which slowed to a two-year low in the quarter to March. "It could throw the business out of gear - it can affect your volumes by at least 30 percent," said the head of one large cement company in the Delhi region. Back in Meerut, Pankaj Jain worries that hiring an accountant and charging 5 percent GST on his bedsheets could eat up to two-thirds of his annual profits of 400,000-500,000 rupees ($6,210-$7,760). "I know my costs will go up, but I don't know about my income," he said. "I might even have to shut up shop completely and go into trading."

GST: Ready or not, Indian businesses brace for biggest-ever tax reform

The Goods and Services Tax, to come into effect&nbsp;on&nbsp;July 1, is bound to create a burdensome increase in legal proceedings, some of India&#39;s top lawyers can foresee, <a href="http://economictimes.indiatimes.com/news/economy/policy/lawyers-are-smiling-as-gst-set-to-fuel-litigation-wave/articleshow/59331775.cms" target="_blank">Blooomberg </a>reports.&nbsp;

The GST bill divides all goods and services into four brackets which will varyingly levy&nbsp;either 5, 12, 18, or 28 per cent taxes. It combines more than a dozen taxes levied on various products and facilities in the market, although most staples and fresh vegetables are spared.&nbsp;

Many lawyers believe that this move will have multiple (if not all) industries knocking on the doors of the courts to try and get their goods or services into a lower tax bracket.

&quot;I absolutely expect more litigation, so we are increasing our team,&quot; Bloomberg reported Sandeep Chilana, a partner at Shardul Amarchand Mangaldas &amp; Co, as saying. &quot;The most impacted industry by GST is my industry. And we are obviously impacted positively.&quot;&nbsp;

&quot;When there are different tax rates, there is always a possibility that someone will want to be in the lower slab,&quot; Chilana added.&nbsp;

An example of such a case, Bloomberg reported, was McDonald&#39;s 12-year conflict with the Indian tax authorities.

McDonald&#39;s was trying to get its soft-serve ice cream cones&nbsp;exempted from taxes, with the corporation saying the cones were a dairy product and hence should not be charged the 16 per cent duty they were being. The case went up to the Supreme Court,&nbsp;which ruled in favour of the tax authorities.&nbsp;

The prediction, if&nbsp;true, suggests&nbsp;a great deal of pressure will fall on India&#39;s judicial services, which was already choking with over 100,000 indirect tax appeals at end&nbsp;of March, 2015. The cases had locked away $23 billion in potential government revenue, according&nbsp;to a government report, Bloomberg reported.&nbsp;

GST will probably result in companies filing more legal suits, wanting their goods and services placed under a lower tax bracket

The Goods and Services Tax, to come into effect on July 1, is bound to create a burdensome increase in legal proceedings, some of India's top lawyers can foresee, Blooomberg reports. The GST bill divides all goods and services into four brackets which will varyingly levy either 5, 12, 18, or 28 per cent taxes. It combines more than a dozen taxes levied on various products and facilities in the market, although most staples and fresh vegetables are spared. Many lawyers believe that this move will have multiple (if not all) industries knocking on the doors of the courts to try and get their goods or services into a lower tax bracket. "I absolutely expect more litigation, so we are increasing our team," Bloomberg reported Sandeep Chilana, a partner at Shardul Amarchand Mangaldas & Co, as saying. "The most impacted industry by GST is my industry. And we are obviously impacted positively." "When there are different tax rates, there is always a possibility that someone will want to be in the lower slab," Chilana added. An example of such a case, Bloomberg reported, was McDonald's 12-year conflict with the Indian tax authorities. McDonald's was trying to get its soft-serve ice cream cones exempted from taxes, with the corporation saying the cones were a dairy product and hence should not be charged the 16 per cent duty they were being. The case went up to the Supreme Court, which ruled in favour of the tax authorities. The prediction, if true, suggests a great deal of pressure will fall on India's judicial services, which was already choking with over 100,000 indirect tax appeals at end of March, 2015. The cases had locked away $23 billion in potential government revenue, according to a government report, Bloomberg reported.

GST good for lawyers, will increase legal proceedings

Finance minister Arun Jaitley has said the GST will be launched exactly at midnight on June 30.&nbsp;

He said a programme would be organised late on June 30 in the Central Hall of Parliament, and the GST launch would take place after that exactly at midnight. &nbsp;

GST or the Goods and Services Tax will replace India&#39;s many different indirect taxes with one single tax.&nbsp;

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Jaitley said that revenues would grow once GST is introduced because it is a more efficient system which helps check evasion.&nbsp;

An increase in revenues, said Jaitley, would increase the spending capacity of the central and state governments.&nbsp;

A number of economies that have moved to GST have seen a 1-2 per cent&nbsp;increase in their GDPs.&nbsp;

Jaitley added that the president, prime minister, vice president, state chief ministers and opposition leaders have been invited to be part of the GST launch. &nbsp;

Finance minister Arun Jaitley made the announcement on Tuesday

Finance minister Arun Jaitley has said the GST will be launched exactly at midnight on June 30. He said a programme would be organised late on June 30 in the Central Hall of Parliament, and the GST launch would take place after that exactly at midnight. GST or the Goods and Services Tax will replace India's many different indirect taxes with one single tax. #WATCH : Finance Minister Arun Jaitley addresses the media in Delhi https://t.co/GgDfYxEIoO — ANI (@ANI_news) June 20, 2017 × Jaitley said that revenues would grow once GST is introduced because it is a more efficient system which helps check evasion. An increase in revenues, said Jaitley, would increase the spending capacity of the central and state governments. A number of economies that have moved to GST have seen a 1-2 per cent increase in their GDPs. Jaitley added that the president, prime minister, vice president, state chief ministers and opposition leaders have been invited to be part of the GST launch.

GST to launch exactly at midnight, June 30

India has finalised four tax rates that will apply to services including telecoms, insurance, hotels and restaurants under the new Goods and Services Tax (GST) which should be rolled out on July 1, Finance Minister Arun Jaitley said on Friday.

The tax rates for services will be 5, 12, 18 and 28 percent - in line with those applying to goods.

Telecoms and financial services will be taxed at a standard rate of 18 percent while transport services will be taxed at 5 percent, Jaitley said.

&quot;The net effect of Goods and Services Tax will not be inflationary,&quot; Jaitley told reporters after a meeting of the GST Council in Srinagar, summer capital of Jammu and Kashmir state.

The council, comprising federal and state finance ministers, fixed rates on Thursday for more than 1,200 items under the GST, amid demands by some states to keep essential items under the lower tax category.

The new tax is likely to be non-inflationary as the government has kept a majority of food items, with a combined weighting of nearly 50 percent in the consumer price index, out of the tax net.

Basic food items like cereals, eggs and meat will attract zero tax while processed food items will be charged between 12 and 28 percent.&nbsp;

The long-awaited Goods and Services Tax has been hailed as India&#39;s biggest tax overhaul since independence in 1947. It will replace a slew of federal and state levies, transforming Asia&#39;s third largest economy into a single market.

&quot;GST regime will usher in lower taxes, seamless input tax credit, logistics savings and market share swings from unorganised to organised players,&quot; said Aditya Narain, Research head at Edelweiss Securities Ltd.&nbsp;

Prime Minister Narendra Modi, who completes three years of his term this month, had said the new tax will not cause price rises, while aiming to bring down tax leakages in the complex tax system.

(Reuters)

India's finance minister said the new rates should be implemented from July 1

India has finalised four tax rates that will apply to services including telecoms, insurance, hotels and restaurants under the new Goods and Services Tax (GST) which should be rolled out on July 1, Finance Minister Arun Jaitley said on Friday. The tax rates for services will be 5, 12, 18 and 28 percent - in line with those applying to goods. Telecoms and financial services will be taxed at a standard rate of 18 percent while transport services will be taxed at 5 percent, Jaitley said. "The net effect of Goods and Services Tax will not be inflationary," Jaitley told reporters after a meeting of the GST Council in Srinagar, summer capital of Jammu and Kashmir state. The council, comprising federal and state finance ministers, fixed rates on Thursday for more than 1,200 items under the GST, amid demands by some states to keep essential items under the lower tax category. The new tax is likely to be non-inflationary as the government has kept a majority of food items, with a combined weighting of nearly 50 percent in the consumer price index, out of the tax net. Basic food items like cereals, eggs and meat will attract zero tax while processed food items will be charged between 12 and 28 percent. The long-awaited Goods and Services Tax has been hailed as India's biggest tax overhaul since independence in 1947. It will replace a slew of federal and state levies, transforming Asia's third largest economy into a single market. "GST regime will usher in lower taxes, seamless input tax credit, logistics savings and market share swings from unorganised to organised players," said Aditya Narain, Research head at Edelweiss Securities Ltd. Prime Minister Narendra Modi, who completes three years of his term this month, had said the new tax will not cause price rises, while aiming to bring down tax leakages in the complex tax system. (Reuters)

India finalises four GST rates

Union Finance Minister Arun Jaitley on Monday tabled the Central Goods and Services Tax (GST) Bill 2017 in the Lok Sabha.

Looking forward to a consensus on GST Bill, Union Parliamentary Affairs Minister Ananth Kumar earlier in the day expressed hope that the above legislation is passed in the ongoing Budget Session of Parliament.

Kumar told the media here that all parties have been consulted on the GST.

&quot;Hope everyone will support the government on it. The government is committed to ensure the passage of GST in the ongoing Budget Session,&quot; he added.

The GST Council and Union Cabinet have already given their nod to the Central GST, Integrated GST, Union Territory GST and Compensation Bill.Along with these four bills, amendments to the Excise and Customs Act to abolish various cess as well as furnishing bills for exports and imports under the new GST regime will be placed before the Parliament.

The Business Advisory Committee of the Lok Sabha is likely to meet on Monday to decide on the duration of discussion on the Bills. States cabinet too will need to approve the State GST and then need the same to be passed by respective state assemblies to roll out the new tax regime.&nbsp;

(ANI)

Parliamentary affairs minister Ananth Kumar told reporters that all parties had been consulted on the bill

Union Finance Minister Arun Jaitley on Monday tabled the Central Goods and Services Tax (GST) Bill 2017 in the Lok Sabha. Looking forward to a consensus on GST Bill, Union Parliamentary Affairs Minister Ananth Kumar earlier in the day expressed hope that the above legislation is passed in the ongoing Budget Session of Parliament. Kumar told the media here that all parties have been consulted on the GST. "Hope everyone will support the government on it. The government is committed to ensure the passage of GST in the ongoing Budget Session," he added. The GST Council and Union Cabinet have already given their nod to the Central GST, Integrated GST, Union Territory GST and Compensation Bill.Along with these four bills, amendments to the Excise and Customs Act to abolish various cess as well as furnishing bills for exports and imports under the new GST regime will be placed before the Parliament. The Business Advisory Committee of the Lok Sabha is likely to meet on Monday to decide on the duration of discussion on the Bills. States cabinet too will need to approve the State GST and then need the same to be passed by respective state assemblies to roll out the new tax regime. (ANI)

GST bill tabled in Parliament by finance minister Arun Jaitley

The Indian Parliament passed the 122nd Constitutional Amendment Bill, ushering in the regime of goods and services tax (GST) in the country. This tax regime seeks to introduce a uniform rate of taxation for all goods and services that are being bought and sold in India. It is supposed to be designed in such a way that, irrespective of the location of the point of sale for any particular goods or services, the buyer will be&nbsp;paying the tax at the same rate.&nbsp;

Currently, the picture is just the opposite. Different kinds of state and local taxes make the rate of taxes vary across regions. Often locally produced goods enjoy favourable tax treatment compared to goods brought from other states. The proposed GST regime is supposed to wither away that kind of differential treatment. Therefore, no doubt, passing of this bill marks a milestone in India&#39;s fiscal history.&nbsp;

The concept of value-added tax (VAT), also known as the GST, was first floated in 1918 by a German industrialist Wilhelm von Siemens. However, it was first implemented as a comprehensive tax regime in France in 1954. Great Britain and Australia introduced the VAT in the 1970s. Canada introduced it in 1991. All countries in the Organisation for Economic Cooperation and Development (OECD) and in the European Union have imposed VAT on money spent by people for consumption purposes. Now almost 160 countries have embraced VAT/GST as the preferred mode of consumption tax. The latest one to board the bandwagon is Malaysia who introduced the GST in 2015. India is expected to join them from April 1, 2017. However, the USA has not shown much enthusiasm to join the league yet.

In the theoretical economic literature, the VAT/GST regime is generally commended because it brings fewer distortions compared to its close competitor sales tax or turnover tax. The VAT seeks to collect taxes at every stage of value addition in the production cycle of the goods or rendering of services. Thus, if a seller buys a shirt at Rs 500 and sells it to the ultimate buyer at Rs. 600, the tax liability for the seller would be calculated on the basis of the difference of Rs. 100 instead of the entire sum of Rs. 600. Therefore, it avoids the worst vice of the sales tax, namely, the cascading effect. In preventing the cascading-effect, the VAT/GST regime causes less distortion in the economy. If&nbsp;the concept of VAT was not introduced, every person involved in the trade would have paid taxes on selling price without having taken credit of tax paid earlier by them;&nbsp;this results in double payment of tax.

GST in India has reached its culmination through a series of reform measures aimed at rationalizing the indirect tax structure in the country. In 1976 the Indirect Taxation Enquiry Committee was constituted under the chairmanship of Dr. L.K. Jha. Its report hinted at the GST. In 1985-86 budget, the then Finance Minister Mr. V.P. Singh proposed to introduce modified value added tax (MODVAT), which became effective from April 1, 1986. Dr. Raja J. Chelliah, the&nbsp;chairman of the Tax Reforms Committee, strongly advocated for VAT &nbsp;at the manufacturing level covering all goods. The Indian government partially honoured the proposal in its 1993-94 budget.&nbsp;

In 1999, the then Finance Minister Mr. Yashwant Sinha took the initiative for the introduction of VAT in all the states of India. An Empowered Committee of State Finance Ministers was formed to deliberate on state- level VAT under the chairmanship of Dr. Asim Dasgupta, the then finance minister of the Indian state of West Bengal. Subsequently, a task force was formed with Dr. Vijay Kelker at its head which recommended GST as the indirect tax system in India.&nbsp;

In 2006, the then Finance Minister P. Chidambaram made the case for GST in his budget speech. He said, &ldquo;The world over, goods and services attract the same rate of tax. That is the foundation of a GST.&rdquo; However, in 2009 the Empowered Committee of State Finance Ministers called for a two-tier GST as the ideal solution for a country like India with a strong federal structure. Fearing revenue loss, the India states were not agreeing to a single GST&nbsp;levied by the centre alone. Now there will be the central GST as well as goods and service taxes imposed by various states. The present draft legislation has this provision.&nbsp;

It is quite clear that the GST is going to put in place an indirect tax system with greater transparency and rationality. This is in tune with best global practices. This destination based tax regime would integrate markets all over the country. The consumers will benefit from less uncertainty as there will be no need to search for places with low taxes and, hence, low prices.&nbsp;

Is there any criticism against the GST? Of course, there are. The GST, like any indirect tax regime, is regressive. Critics of the goods and services tax&nbsp;argue that under this system, the poor &nbsp;pay more, as a percentage of their income, than the rich. &nbsp;Also, there is the fear that GST may add a newly modified virus of inflation to the Indian economy.

 
&nbsp;

&nbsp;

&nbsp;&nbsp;&nbsp;

&nbsp;

&nbsp;

GST prevents double payment of tax. However, the poor may end up?paying more

The Indian Parliament passed the 122nd Constitutional Amendment Bill, ushering in the regime of goods and services tax (GST) in the country. This tax regime seeks to introduce a uniform rate of taxation for all goods and services that are being bought and sold in India. It is supposed to be designed in such a way that, irrespective of the location of the point of sale for any particular goods or services, the buyer will be paying the tax at the same rate. Currently, the picture is just the opposite. Different kinds of state and local taxes make the rate of taxes vary across regions. Often locally produced goods enjoy favourable tax treatment compared to goods brought from other states. The proposed GST regime is supposed to wither away that kind of differential treatment. Therefore, no doubt, passing of this bill marks a milestone in India's fiscal history. The concept of value-added tax (VAT), also known as the GST, was first floated in 1918 by a German industrialist Wilhelm von Siemens. However, it was first implemented as a comprehensive tax regime in France in 1954. Great Britain and Australia introduced the VAT in the 1970s. Canada introduced it in 1991. All countries in the Organisation for Economic Cooperation and Development (OECD) and in the European Union have imposed VAT on money spent by people for consumption purposes. Now almost 160 countries have embraced VAT/GST as the preferred mode of consumption tax. The latest one to board the bandwagon is Malaysia who introduced the GST in 2015. India is expected to join them from April 1, 2017. However, the USA has not shown much enthusiasm to join the league yet. In the theoretical economic literature, the VAT/GST regime is generally commended because it brings fewer distortions compared to its close competitor sales tax or turnover tax. The VAT seeks to collect taxes at every stage of value addition in the production cycle of the goods or rendering of services. Thus, if a seller buys a shirt at Rs 500 and sells it to the ultimate buyer at Rs. 600, the tax liability for the seller would be calculated on the basis of the difference of Rs. 100 instead of the entire sum of Rs. 600. Therefore, it avoids the worst vice of the sales tax, namely, the cascading effect. In preventing the cascading-effect, the VAT/GST regime causes less distortion in the economy. If the concept of VAT was not introduced, every person involved in the trade would have paid taxes on selling price without having taken credit of tax paid earlier by them; this results in double payment of tax. GST in India has reached its culmination through a series of reform measures aimed at rationalizing the indirect tax structure in the country. In 1976 the Indirect Taxation Enquiry Committee was constituted under the chairmanship of Dr. L.K. Jha. Its report hinted at the GST. In 1985-86 budget, the then Finance Minister Mr. V.P. Singh proposed to introduce modified value added tax (MODVAT), which became effective from April 1, 1986. Dr. Raja J. Chelliah, the chairman of the Tax Reforms Committee, strongly advocated for VAT at the manufacturing level covering all goods. The Indian government partially honoured the proposal in its 1993-94 budget. In 1999, the then Finance Minister Mr. Yashwant Sinha took the initiative for the introduction of VAT in all the states of India. An Empowered Committee of State Finance Ministers was formed to deliberate on state- level VAT under the chairmanship of Dr. Asim Dasgupta, the then finance minister of the Indian state of West Bengal. Subsequently, a task force was formed with Dr. Vijay Kelker at its head which recommended GST as the indirect tax system in India. In 2006, the then Finance Minister P. Chidambaram made the case for GST in his budget speech. He said, “The world over, goods and services attract the same rate of tax. That is the foundation of a GST.” However, in 2009 the Empowered Committee of State Finance Ministers called for a two-tier GST as the ideal solution for a country like India with a strong federal structure. Fearing revenue loss, the India states were not agreeing to a single GST levied by the centre alone. Now there will be the central GST as well as goods and service taxes imposed by various states. The present draft legislation has this provision. It is quite clear that the GST is going to put in place an indirect tax system with greater transparency and rationality. This is in tune with best global practices. This destination based tax regime would integrate markets all over the country. The consumers will benefit from less uncertainty as there will be no need to search for places with low taxes and, hence, low prices. Is there any criticism against the GST? Of course, there are. The GST, like any indirect tax regime, is regressive. Critics of the goods and services tax argue that under this system, the poor pay more, as a percentage of their income, than the rich. Also, there is the fear that GST may add a newly modified virus of inflation to the Indian economy.

GST in India: An indirect tax system with greater transparency and rationality

India&#39;s finance minister Arun Jaitley said on Saturday that the Goods and Services Tax (GST) Council has cleared the draft compensation law -- which compensates states for any revenue losses they may suffer once the GST comes into force.

&quot;The GST&#39;s compensation law states that if any state suffers loss it will be covered in first five years. Its legally vetted draft came before the Council and was the first law formally passed,&quot; Arun Jaitley told the press.

The compensation law is one of the four enabling laws under the GST constitutional amendment. The finance minister hoped the remaining ones -- iGST (integrated GST), sGST (state GST) and cGST (central GST) -- will be cleared in the next meeting ahead of the second half of Parliament&#39;s Budget Session.

Jaitley said he hoped the drafts of the remaining laws will be passed in the Council&#39;s next meeting slated for March 4-5 in the national capital.

&quot;Once all drafts are approved, we will place them in Parliament. In Budget Session&#39;s second half (that begins on March 9), all enabling laws under GST constitutional amendment should get approved,&quot; he said.

&quot;Today GST&#39;s legal committee sought explanation on these and the Council gave its opinion. These now have to be incorporated in the draft laws. March 4-5 the legally vetted drafts of these laws will come before the Council, which it will try to approve,&quot; Jaitley said.

The draft laws once passed by the GST Council, will have to be passed by Parliament. The sGST will have to be passed by state legislative bodies.

Jaitley said after that the next step will be to slot commodities under the GST tax slabs.&nbsp;

&quot;Each item has to be fitted under a particular slab. After the March 4-5 meeting, officers will start slotting the commodities and we will require another major meeting to give approval to the specific items in each of the slabs,&quot; the finance minister said.

(WION)

The law will compensate states for revenue losses for the first five years once the GST comes into force

India's finance minister Arun Jaitley said on Saturday that the Goods and Services Tax (GST) Council has cleared the draft compensation law -- which compensates states for any revenue losses they may suffer once the GST comes into force. "The GST's compensation law states that if any state suffers loss it will be covered in first five years. Its legally vetted draft came before the Council and was the first law formally passed," Arun Jaitley told the press. The compensation law is one of the four enabling laws under the GST constitutional amendment. The finance minister hoped the remaining ones -- iGST (integrated GST), sGST (state GST) and cGST (central GST) -- will be cleared in the next meeting ahead of the second half of Parliament's Budget Session. Jaitley said he hoped the drafts of the remaining laws will be passed in the Council's next meeting slated for March 4-5 in the national capital. "Once all drafts are approved, we will place them in Parliament. In Budget Session's second half (that begins on March 9), all enabling laws under GST constitutional amendment should get approved," he said. "Today GST's legal committee sought explanation on these and the Council gave its opinion. These now have to be incorporated in the draft laws. March 4-5 the legally vetted drafts of these laws will come before the Council, which it will try to approve," Jaitley said. The draft laws once passed by the GST Council, will have to be passed by Parliament. The sGST will have to be passed by state legislative bodies. Jaitley said after that the next step will be to slot commodities under the GST tax slabs. "Each item has to be fitted under a particular slab. After the March 4-5 meeting, officers will start slotting the commodities and we will require another major meeting to give approval to the specific items in each of the slabs," the finance minister said. (WION)

India's GST Council clears law compensating states for revenue losses

By Praveena Sharma&nbsp;

Budget 2017 is likely to offer some tax reliefs to individuals and corporate houses to boost consumption, savings and investment and some levies like Bank Cash Transaction Tax (BCTT), and differential service tax rates in the run-up to the implementation of Goods and Services Tax (GST) in July, according to a source.

The minimum threshold for income-tax (I-T), which is currently Rs 2.5 lakh, could increase to Rs 3 lakh. However, the I-T rate slabs may remain the same.

This means that personal income between Rs 3 lakh and Rs 5 lakh could attract a 10 per cent tax, between Rs 5 and 10 lakh could attract 20 per cent and incomes above Rs 10 lakh could get taxed at 30 per cent.

Besides raising the threshold for I-T, sources said the government could also increase the investment amount for which tax relief could be availed under Section 80 C of I-T Act.

At present, tax relief for specified investments under Section 80 C is Rs 1.5 lakh. This could be raised to Rs 2 lakh, if it is invested in schemes like National Saving Certificate, Post Office Savings Account, Life Insurance policies, Kisan Vikas Patra, Provident Funds, pension schemes and the like.

Effectively, it would mean that if a person with Rs 5 lakh income invests Rs 2 lakh in specified savings under Section 80C, he may not have to pay any tax.

On the corporate tax front, there could be a snip of one percentage point &ndash; from 30 per cent to 29 per cent. According to the source, there could be an announcement in this year&#39;s Budget of a 1 per cent cut in corporate tax every year for the next three years.

Service tax, which is currently a single rate of 15 per cent (14 per cent + Swachh Bharat cess + Krishi Kalyan cess), may be made multi-slab and get aligned with the proposed GST rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent.

It could be hiked to 16 per cent or 18 per cent.

&quot;In my mind, there is a very good case for having differential rates for service tax. It should not be one rate any longer, but whether they are going to act on it in the Budget or whether they will do it when GST is introduced, we have to wait and watch,&quot; said M S Mani, senior director (indirect tax), Deloitte Haskins &amp; Sells LLP.

Even taxes on goods could be brought in line with the proposed GST rates.

In what could be seen as a fallout of demonetisation, the source said that the government was very seriously considering a 1 per cent to 2 per cent BCTT on cash transaction above Rs 50,000.

&quot;This would mean that anybody who withdraws cash from banks above Rs 50,000 would have to pay a tax of Rs 500 or Rs 1,000. This is being looked at to discourage people from withdrawing cash. If the transaction is done electronically or digitally, there would be no tax.&nbsp;

Therefore, people would be inclined to do more of electronic and digital transactions,&quot; said the source.

In all likelihood, there would be a limit on cash transaction. &quot;They (government) are planning to do that. The limit could possibly be Rs 5 lakh or Rs 10 lakh&quot;.

(This article first appeared on DNA)

There are speculations that Bank Cash Transaction Tax could be imposed on transactions above Rs 50,000, to discourage people from using cash

By Praveena Sharma Budget 2017 is likely to offer some tax reliefs to individuals and corporate houses to boost consumption, savings and investment and some levies like Bank Cash Transaction Tax (BCTT), and differential service tax rates in the run-up to the implementation of Goods and Services Tax (GST) in July, according to a source. The minimum threshold for income-tax (I-T), which is currently Rs 2.5 lakh, could increase to Rs 3 lakh. However, the I-T rate slabs may remain the same. This means that personal income between Rs 3 lakh and Rs 5 lakh could attract a 10 per cent tax, between Rs 5 and 10 lakh could attract 20 per cent and incomes above Rs 10 lakh could get taxed at 30 per cent. Besides raising the threshold for I-T, sources said the government could also increase the investment amount for which tax relief could be availed under Section 80 C of I-T Act. At present, tax relief for specified investments under Section 80 C is Rs 1.5 lakh. This could be raised to Rs 2 lakh, if it is invested in schemes like National Saving Certificate, Post Office Savings Account, Life Insurance policies, Kisan Vikas Patra, Provident Funds, pension schemes and the like. Effectively, it would mean that if a person with Rs 5 lakh income invests Rs 2 lakh in specified savings under Section 80C, he may not have to pay any tax. On the corporate tax front, there could be a snip of one percentage point – from 30 per cent to 29 per cent. According to the source, there could be an announcement in this year's Budget of a 1 per cent cut in corporate tax every year for the next three years. Service tax, which is currently a single rate of 15 per cent (14 per cent + Swachh Bharat cess + Krishi Kalyan cess), may be made multi-slab and get aligned with the proposed GST rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent. It could be hiked to 16 per cent or 18 per cent. "In my mind, there is a very good case for having differential rates for service tax. It should not be one rate any longer, but whether they are going to act on it in the Budget or whether they will do it when GST is introduced, we have to wait and watch," said M S Mani, senior director (indirect tax), Deloitte Haskins & Sells LLP. Even taxes on goods could be brought in line with the proposed GST rates. In what could be seen as a fallout of demonetisation, the source said that the government was very seriously considering a 1 per cent to 2 per cent BCTT on cash transaction above Rs 50,000. "This would mean that anybody who withdraws cash from banks above Rs 50,000 would have to pay a tax of Rs 500 or Rs 1,000. This is being looked at to discourage people from withdrawing cash. If the transaction is done electronically or digitally, there would be no tax. Therefore, people would be inclined to do more of electronic and digital transactions," said the source. In all likelihood, there would be a limit on cash transaction. "They (government) are planning to do that. The limit could possibly be Rs 5 lakh or Rs 10 lakh". (This article first appeared on DNA)

Budget 2017: Income tax relief, limit on high-value cash transactions likely

Indian finance minister today said that the Goods and Services Tax Council had reached a consensus on most issues pertaining to the new tax bill, including the contentious issue of dual control. &nbsp;

After discussions were held on central GST and integrated GST drafts in a meeting in New Delhi, Jaitley told reporters that next meeting to be held on December 11-12 will focus on completion of the drafts.&nbsp;

&quot;We have received a few suggestions on the critical issue of cross-empowerment and hope that it will lead to a positive result.&quot;

He told that a discussion was also held on the fiscal situation of states, on request from some state finance ministers and demonetisation, although it does not come under the premise of the GST Council.&nbsp;

However, Kerala finance minister Thomas Issac opposed his claims and said that there will no be consensus if the Centre does not change its stand.&nbsp;

The Centre intends to implement GST from April 1 next year.&nbsp;

Due to Constitutional compulsion, the GST has to be rolled out by September 16, 2017, as the existing indirect taxes will come to an end and it would not be possible for either the Centre or states to collect the taxes.

(WION with inputs from agencies)&nbsp;

Jaitley said the council had reached a consensus on the contentious issue of dual control & the drafts will be finalised in next meeting

Indian finance minister today said that the Goods and Services Tax Council had reached a consensus on most issues pertaining to the new tax bill, including the contentious issue of dual control. After discussions were held on central GST and integrated GST drafts in a meeting in New Delhi, Jaitley told reporters that next meeting to be held on December 11-12 will focus on completion of the drafts. "We have received a few suggestions on the critical issue of cross-empowerment and hope that it will lead to a positive result." He told that a discussion was also held on the fiscal situation of states, on request from some state finance ministers and demonetisation, although it does not come under the premise of the GST Council. However, Kerala finance minister Thomas Issac opposed his claims and said that there will no be consensus if the Centre does not change its stand. The Centre intends to implement GST from April 1 next year. Due to Constitutional compulsion, the GST has to be rolled out by September 16, 2017, as the existing indirect taxes will come to an end and it would not be possible for either the Centre or states to collect the taxes. (WION with inputs from agencies)

Indian finance minister on GST: Consensus on most issues after council meet

After calling for special relief measures for poor hit by demonetisation, industrialist Ratan Tata today termed the move as one of the three most important economic reforms that will help fight black money.

Tata, who is locked in a bitter boardroom battle over control of the Tata Group with his successor Cyrus P Mistry, said the government&#39;s bold implementation of the demonetisation programme needs the nation&#39;s support.

&quot;Demonetisation is amongst the three most important economic reforms in India&#39;s history, along with delicensing and GST,&quot; Tata said in a tweet.

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<blockquote class="twitter-tweet" data-lang="en">
The government&rsquo;s bold implementation of the demonetization programme needs the nation&rsquo;s support. <a href="https://t.co/tx1ZILSor8">pic.twitter.com/tx1ZILSor8</a>
&mdash; Ratan N. Tata (@RNTata2000) <a href="https://twitter.com/RNTata2000/status/802409025103020032">November 26, 2016</a></blockquote>
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The Prime Minister&#39;s recent focus on mobile and digital payments will also greatly facilitate the transition from a cash-driven economy to a cashless economy, which in the ling term will enormously benefit the poor and underprivileged, he added.

&quot;The government&#39;s firm resolve to fight and eliminate black money needs the support and cooperation of all like minded citizens of India who would like to see more equitable distribution of the nation&#39;s resources in a new India of tomorrow, based on merit and equal opportunity,&quot; Tata said.

He added that the parallel black money economy in India has fueled tax evasion, money laundering and corruption. &quot;The Prime Minister has displayed enormous courage in waging war on the black market economy in the country through the implementation of a major demonetisation programme,&quot; Tata said.

Earlier this week, the noted industrialist had asked the the government to consider special relief measures, similar to those employed at the time of national calamities, for the poor so as to lessen their hardships of currency crunch following demonetisation of high value notes.&nbsp; 
 
(PTI) 
&nbsp;

Ratan Tata says demonetisation is among the three most important economic reforms along with delicensing and the Goods and Services Tax

After calling for special relief measures for poor hit by demonetisation, industrialist Ratan Tata today termed the move as one of the three most important economic reforms that will help fight black money. Tata, who is locked in a bitter boardroom battle over control of the Tata Group with his successor Cyrus P Mistry, said the government's bold implementation of the demonetisation programme needs the nation's support. "Demonetisation is amongst the three most important economic reforms in India's history, along with delicensing and GST," Tata said in a tweet. The government’s bold implementation of the demonetization programme needs the nation’s support. pic.twitter.com/tx1ZILSor8 — Ratan N. Tata (@RNTata2000) November 26, 2016 × The Prime Minister's recent focus on mobile and digital payments will also greatly facilitate the transition from a cash-driven economy to a cashless economy, which in the ling term will enormously benefit the poor and underprivileged, he added. "The government's firm resolve to fight and eliminate black money needs the support and cooperation of all like minded citizens of India who would like to see more equitable distribution of the nation's resources in a new India of tomorrow, based on merit and equal opportunity," Tata said. He added that the parallel black money economy in India has fueled tax evasion, money laundering and corruption. "The Prime Minister has displayed enormous courage in waging war on the black market economy in the country through the implementation of a major demonetisation programme," Tata said. Earlier this week, the noted industrialist had asked the the government to consider special relief measures, similar to those employed at the time of national calamities, for the poor so as to lessen their hardships of currency crunch following demonetisation of high value notes. (PTI)

Demonetisation among 3 most important economic reforms in India's history: Ratan Tata

Minister of state in the Prime Minister&#39;s Office (PMO) Jitendra Singh on Wednesday hailed demonetisation as a &quot;historic&quot; decision and expressed his gratitude to the common man for imposing their conviction in Prime Minister Narendra Modi despite the initial inconvenience.

&quot;More gratifying is that in spite of initial inconvenience because of the transition period, the common man of this country is fully cooperative and confident in the courage and conviction of the honourable Prime Minister,&quot; Singh told mediapersons outside the parliament.

&quot;The government is ready for any kind of discussion in the house. The longer the discussion is, more elaborate would be its discussion and the more government will have opportunity to explain to the people of this country about the enormous advantages of this historic decision, which I believe is once in a century decision. So, the discussion is indeed welcomed from the point of view of government as well,&quot; he added while attempting to silence all critics.

The Rajya Sabha is presently discussion demonetisation on the opening day of the Winter Session. The Upper House suspended the listed business for the day on the demand by the Opposition parties, which had given notices.

Prime Minister Modi earlier today called for a healthy debate on various issues including the Goods and Services Tax (GST) during the Winter Session of Parliament.

(ANI)

The minister of state in the Prime Minister's Office expressed his gratitude to the common man for their cooperation despite inconvenience

Minister of state in the Prime Minister's Office (PMO) Jitendra Singh on Wednesday hailed demonetisation as a "historic" decision and expressed his gratitude to the common man for imposing their conviction in Prime Minister Narendra Modi despite the initial inconvenience. "More gratifying is that in spite of initial inconvenience because of the transition period, the common man of this country is fully cooperative and confident in the courage and conviction of the honourable Prime Minister," Singh told mediapersons outside the parliament. "The government is ready for any kind of discussion in the house. The longer the discussion is, more elaborate would be its discussion and the more government will have opportunity to explain to the people of this country about the enormous advantages of this historic decision, which I believe is once in a century decision. So, the discussion is indeed welcomed from the point of view of government as well," he added while attempting to silence all critics. The Rajya Sabha is presently discussion demonetisation on the opening day of the Winter Session. The Upper House suspended the listed business for the day on the demand by the Opposition parties, which had given notices. Prime Minister Modi earlier today called for a healthy debate on various issues including the Goods and Services Tax (GST) during the Winter Session of Parliament. (ANI)

Indian minister lauds nation for trusting prime minister's 'historic' demonetisation move

The European Union (EU) on Sunday welcomed India&#39;s decision to withdraw high-value banknotes in a bid to root out black money.

Ridding the system of &#39;&#39;black component&quot; and bringing transparency will strengthen Indian economy and aid growth, the EU said.

Vice-president of European Commission Jyrki Katainen complimented the Indian government for its resolve to roll out the Goods and Services Tax (GST) along with other reform measures, PTI reported.

Katainen, who is on a visit to India over the&nbsp;EU-India Broad-based Trade and Investment Agreement (BTIA), said that the fight against tax dodgers will boost India&#39;s financial system.

&quot;All the measures which will reduce black economy are always good for people and the financial system,&quot; he told PTI following the Indian government&#39;s decision to withdraw Rs 500 and 1,000 notes.

He called the GST a &quot;very ambitious&quot; and &quot;very necessary&quot; move to reform the tax structure in India and to boost investor&nbsp;confidence.

Investors from European countries are bringing &quot;white clean money&quot; to India he said.

The two-way commerce in goods between India and the EU was USD 98.5 billion in 2014-15, PTI reported. If the BTIA or the free trade agreement was finalised, European investments into India are set to increase manifold, Katainen said.

India&#39;s existing trade and investment agreement with The Netherlands will come to an end in two weeks and similar pacts with several other EU countries will expire in coming months making it difficult for the European corporates to make fresh investment in India, he stressed.

As per European Union law, no member country now can go for bilateral trade and investment pact with India as the grouping is in negotiations for an EU-India Broad-based Trade and Investment Agreement (BTIA), the PTI report stated.

India&#39;s trade and investment pact with 23 countries is likely to expire by the end of next year.

Launched in June 2007, negotiations over the proposed agreement have seen many hurdles but the EU has now shown an inclination to restart talks.

(WION with inputs from PTI)

EU's vice-president said fight against tax dodgers and those having ill-gotten wealth will pay dividends and strengthen the financial system

The European Union (EU) on Sunday welcomed India's decision to withdraw high-value banknotes in a bid to root out black money. Ridding the system of ''black component" and bringing transparency will strengthen Indian economy and aid growth, the EU said. Vice-president of European Commission Jyrki Katainen complimented the Indian government for its resolve to roll out the Goods and Services Tax (GST) along with other reform measures, PTI reported. Katainen, who is on a visit to India over the EU-India Broad-based Trade and Investment Agreement (BTIA), said that the fight against tax dodgers will boost India's financial system. "All the measures which will reduce black economy are always good for people and the financial system," he told PTI following the Indian government's decision to withdraw Rs 500 and 1,000 notes. He called the GST a "very ambitious" and "very necessary" move to reform the tax structure in India and to boost investor confidence. Investors from European countries are bringing "white clean money" to India he said. The two-way commerce in goods between India and the EU was USD 98.5 billion in 2014-15, PTI reported. If the BTIA or the free trade agreement was finalised, European investments into India are set to increase manifold, Katainen said. India's existing trade and investment agreement with The Netherlands will come to an end in two weeks and similar pacts with several other EU countries will expire in coming months making it difficult for the European corporates to make fresh investment in India, he stressed. As per European Union law, no member country now can go for bilateral trade and investment pact with India as the grouping is in negotiations for an EU-India Broad-based Trade and Investment Agreement (BTIA), the PTI report stated. India's trade and investment pact with 23 countries is likely to expire by the end of next year. Launched in June 2007, negotiations over the proposed agreement have seen many hurdles but the EU has now shown an inclination to restart talks. (WION with inputs from PTI)

India's crackdown on black money will help financial system: EU

Global Ratings agency S&amp;P today said India&#39;s new Goods and Services Tax bill will provide impetus to the country&#39;s target of 8 per cent growth in the next few years.&nbsp;

S&amp;P termed GST the most important structural reform till date by the Narendra Modi-led government, saying it will only improve efficiency, cross-state trade and tax buoyancy in the economy.&nbsp;

In its report titled &quot;Asia-Pacific steadies while China goes silent&quot;, the agency said, &quot;India&#39;s GST passage gives us additional conviction around our 8%-ish GDP growth forecast over the next few years.&quot;

Indian central bank, Reserve Bank of India, too gave a positive growth outlook for the near future. The country&#39;s growth projections seem brighter than last fiscal&#39;s and the economy is likely to expand at 7.6 per cent in 2016-17, it said. &nbsp;

However, S&amp;P said inflation remained a risk in the Reserve Bank&#39;s target basket. The latest gross domestic production (GDP) figures showed that India&#39;s growth slowed to 7.1 per cent in the April-June quarter, from 7.9 per cent in January-March.

In comparison, S&amp;P said China has been nudged up as it raised the GDP growth forecast by about a quarter percentage point in 2016 and 2017 to 6.6 per cent and 6.4 per cent, respectively, and has kept its 2018 forecast roughly unchanged at 6.1 per cent.

It saw a reasonably firm pick-up in Asia-Pacific&#39;s macro momentum indicators, with pick-up in retail sales offering the clearest sign in most of the region&#39;s economies. This, it said, stems from rising income with consumption playing a larger role.

(WION with inputs from PTI) 
&nbsp;

The S&P Global Ratings agency said the passage of the indirect tax law gives additional conviction to India's growth projections

Global Ratings agency S&P today said India's new Goods and Services Tax bill will provide impetus to the country's target of 8 per cent growth in the next few years. S&P termed GST the most important structural reform till date by the Narendra Modi-led government, saying it will only improve efficiency, cross-state trade and tax buoyancy in the economy. In its report titled "Asia-Pacific steadies while China goes silent", the agency said, "India's GST passage gives us additional conviction around our 8%-ish GDP growth forecast over the next few years." Indian central bank, Reserve Bank of India, too gave a positive growth outlook for the near future. The country's growth projections seem brighter than last fiscal's and the economy is likely to expand at 7.6 per cent in 2016-17, it said. However, S&P said inflation remained a risk in the Reserve Bank's target basket. The latest gross domestic production (GDP) figures showed that India's growth slowed to 7.1 per cent in the April-June quarter, from 7.9 per cent in January-March. In comparison, S&P said China has been nudged up as it raised the GDP growth forecast by about a quarter percentage point in 2016 and 2017 to 6.6 per cent and 6.4 per cent, respectively, and has kept its 2018 forecast roughly unchanged at 6.1 per cent. It saw a reasonably firm pick-up in Asia-Pacific's macro momentum indicators, with pick-up in retail sales offering the clearest sign in most of the region's economies. This, it said, stems from rising income with consumption playing a larger role. (WION with inputs from PTI)

GST lends more weight to India's 8% growth projection: S&P

The first meeting of the newly constituted GST Council saw a wide consensus on the timetable for deciding on the tax rate and completion of legislative work for the Goods and Services Tax (GST). 
 
The Council, headed by finance minister Arun Jaitley and representatives of all the 29 states and 2 union territories, discussed draft rules regarding the GST and the threshold for exemption and compensation norm. 
 
The timetable has been set keeping April 1, 2017, deadline in mind, the finance minister said in a briefing to media.&nbsp; 
 
&quot;The target also involves the passage of CGST and IGST law at the central Parliament and then by the state legislatures the state GST law in the winter session itself,&quot; Jaitley said.&nbsp; 
 
Jaitley expressed hope that all outstanding issues will be resolved in the next two months time, till November 22.&nbsp; 
 
There was a&nbsp;disappointment for states like Tamil Nadu and Uttar Pradesh which demanded a larger say than the&nbsp;one-state-one-vote principle that puts a smaller state on equal footing with a large manufacturing one. The Council overruled their demand. &nbsp; 
 
There were varied opinions on the turnover limit for exemption from the new tax, with the majority in view of a higher limit.&nbsp; 
 
While some states demanded traders with a&nbsp;turnover of Rs 10 lakh or less be exempted, a large number, including Delhi, were in favour of the limit being fixed at Rs 25 lakh in a year. 
 
The tax collection from traders will be just 2 percent of the total tax collection.&nbsp; 
 
The Council arrived on a consensus on compounding or composition scheme which decided that traders with a&nbsp;gross turnover cut-off of Rs 50 lakh will pay 1-2 per cent tax, Revenue Secretary Hasmukh Adhia said. 
 
It provides for an easier method of calculating tax liability and it allows an&nbsp;option for GST registration for dealers with turnover below the compounding cut-off. 
 
&quot;With regard to composition we have finalised our proposal which has been unanimously accepted by the members. With regard to the&nbsp;threshold for exemptions, there are two sets of suggestions which have come. We have converged to those two different views and both on officers and ministers track we will continue the meeting tomorrow and thereafter so that we are able to converge to one particular figure as far as the exemptions are concerned,&quot; Jaitley said. 
 
The Council will continue the&nbsp;discussion on provision for cross empowerment on Friday. It will also take up the issue of GST rate in its subsequent meetings.&nbsp; 
 
(WION with inputs from agencies) 
&nbsp;

Council provided composition scheme to reduce tax collection from small traders, which will be much lower than the GST rate

The first meeting of the newly constituted GST Council saw a wide consensus on the timetable for deciding on the tax rate and completion of legislative work for the Goods and Services Tax (GST). The Council, headed by finance minister Arun Jaitley and representatives of all the 29 states and 2 union territories, discussed draft rules regarding the GST and the threshold for exemption and compensation norm. The timetable has been set keeping April 1, 2017, deadline in mind, the finance minister said in a briefing to media. "The target also involves the passage of CGST and IGST law at the central Parliament and then by the state legislatures the state GST law in the winter session itself," Jaitley said. Jaitley expressed hope that all outstanding issues will be resolved in the next two months time, till November 22. There was a disappointment for states like Tamil Nadu and Uttar Pradesh which demanded a larger say than the one-state-one-vote principle that puts a smaller state on equal footing with a large manufacturing one. The Council overruled their demand. There were varied opinions on the turnover limit for exemption from the new tax, with the majority in view of a higher limit. While some states demanded traders with a turnover of Rs 10 lakh or less be exempted, a large number, including Delhi, were in favour of the limit being fixed at Rs 25 lakh in a year. The tax collection from traders will be just 2 percent of the total tax collection. The Council arrived on a consensus on compounding or composition scheme which decided that traders with a gross turnover cut-off of Rs 50 lakh will pay 1-2 per cent tax, Revenue Secretary Hasmukh Adhia said. It provides for an easier method of calculating tax liability and it allows an option for GST registration for dealers with turnover below the compounding cut-off. "With regard to composition we have finalised our proposal which has been unanimously accepted by the members. With regard to the threshold for exemptions, there are two sets of suggestions which have come. We have converged to those two different views and both on officers and ministers track we will continue the meeting tomorrow and thereafter so that we are able to converge to one particular figure as far as the exemptions are concerned," Jaitley said. The Council will continue the discussion on provision for cross empowerment on Friday. It will also take up the issue of GST rate in its subsequent meetings. (WION with inputs from agencies)

Indian government and states work out timetable for April 1 roll out of new Goods and Services Tax

By Praveen Sharma&nbsp; 
 
For once, it is the government, which has moved with lightning speed in its race to meet the GST rollout deadline of April 1,2017, while India Inc seems to be biting its nails and wondering how will it be able to keep pace with it. 
 
On Monday, the union cabinet led by Indian Prime Minister Narendra Modi approved the formation of GST Council, which was another major milestone in the journey of implementation of goods and services tax (GST) law, which will unify all existing indirect taxes to create a single nationwide market. 
 
The speed with which the government has moved till now on the crucial tax law it is well on track for the final destination, but corporates have expressed their inability to meet the deadline, which they have asked to be pushed back by a quarter or two. 
 
&quot;Industry bodies have been asking for more time. They want it to be delayed by a quarter or two. They would like to see the fine print and then prepare for the GST regime,&quot; said Mahesh Jaising, partner, BMR &amp; Associates LLP,&nbsp; 
 
And a fine-print wouldn&#39;t emerge before November or December. Jaising said in many overseas markets, where GST has been introduced, corporates were given about a year to tune their system to new tax regime. 
 
However, Jaising&#39;s colleague Rajeev Dimri, leader, indirect tax, BMR &amp; Associates LLP, said there was &quot;no case&quot; for India Inc to be in &quot;wait and watch&quot; any more. 
 
&quot;There is no case anymore for India Inc to remain in the wait and watch mode. It&#39;s high time that businesses roll up their sleeves to work towards creating a GST compliant internal set up by the go-live date,&quot; he said in a statement issued by BMR &amp; Associates LLP, a consulting firm.&nbsp; 
 
As per the article 279A (1) of the amended Indian constitution, the GST Council has to be formed within 60 days after it comes into force (Monday). 
 
The council will make recommendations on matters such as standard GST rate, model GST laws, principles that will govern the place of supply, threshold limits, goods and services that could be exempted from the levy and other matters relating to the indirect tax. 
 
It will be chaired by Indian&nbsp;finance minister while minister of state for finance and state finance ministers will be its members. The central government will have 1/3rd vote and the states will have two-third vote in the Council. Any decision will need 3/4 majority. 
 
Monday also saw Cabinet appointing the revenue secretary as the ex-officio secretary to the Council. The next meeting of the Council is slated to be held on September 22 and September 23. 
 
&quot;We are fully geared up for April 1, 2017, deadline for GST rollout,&quot; Hashmukh Adhia, revenue secretary in the finance ministry told the press after Cabinet meeting. 
 
Once the GST Council works out the details of the GST laws, it will have to be approved in the Parliament in the winter session, which is expected to be reportedly moved ahead by fortnight and held in the first week of November, to meet the deadline of April next fiscal. 
 
Two bills related to biggest tax reform will be taken up in the Parliament&#39;s next session &ndash; Central GST or CGST bill and the Integrated GST bill. States will approve their own GST bills. 
 
Prashant Deshpande, partner, Deloitte Haskins &amp; Sells LLP, said the &quot;immediate agenda&quot; of the Council would be to finalise the GST rate and exemptions; &quot;without a fix on which the stakeholder consensus would be difficult to achieve.&quot; 
 
Pratik Jain, leader - indirect tax, PwC India, also said implementation of GST from April 1, next fiscal would be contingent upon the speed at which the Council is able to build a consensus on issues such as rates, exemptions, dual control etc. 
 
BMR &amp; Associates LLP&#39;s Dimri said with the enforcement of section 12 of the Indian constitution (One Hundred and First Amendment) Act, 2016, the two months&#39; clock for setting up of the GST Council has started ticking. 
 
&quot;As soon as the Council gets formed it will have a platter full of important and critically time-driven deliverables. The most important of them being reaching consensus amongst all states regarding several aspects of levy and administration of GST in India viz. tax rates, list of goods to be exempt / taxable on merit rates of GST, determining the threshold for taxable turnover for goods and services, and so on,&quot; he said. 
 
The Constitutional amendment Bill for GST was passed in both Houses of the Parliament in the Monsoon Session this year after much delay. After being cleared there, it has been ratified by 17 states till now. It needed 15, or half of India&#39;s 29 states to approve it. Last week, it got the Presidential assent.

 
(This report first appeared on DNA)&nbsp;

The Cabinet led by PM Modi approved the formation of GST Council on Monday, a major milestone towards the implementation of the bill

By Praveen Sharma For once, it is the government, which has moved with lightning speed in its race to meet the GST rollout deadline of April 1,2017, while India Inc seems to be biting its nails and wondering how will it be able to keep pace with it. On Monday, the union cabinet led by Indian Prime Minister Narendra Modi approved the formation of GST Council, which was another major milestone in the journey of implementation of goods and services tax (GST) law, which will unify all existing indirect taxes to create a single nationwide market. The speed with which the government has moved till now on the crucial tax law it is well on track for the final destination, but corporates have expressed their inability to meet the deadline, which they have asked to be pushed back by a quarter or two. "Industry bodies have been asking for more time. They want it to be delayed by a quarter or two. They would like to see the fine print and then prepare for the GST regime," said Mahesh Jaising, partner, BMR & Associates LLP, And a fine-print wouldn't emerge before November or December. Jaising said in many overseas markets, where GST has been introduced, corporates were given about a year to tune their system to new tax regime. However, Jaising's colleague Rajeev Dimri, leader, indirect tax, BMR & Associates LLP, said there was "no case" for India Inc to be in "wait and watch" any more. "There is no case anymore for India Inc to remain in the wait and watch mode. It's high time that businesses roll up their sleeves to work towards creating a GST compliant internal set up by the go-live date," he said in a statement issued by BMR & Associates LLP, a consulting firm. As per the article 279A (1) of the amended Indian constitution, the GST Council has to be formed within 60 days after it comes into force (Monday). The council will make recommendations on matters such as standard GST rate, model GST laws, principles that will govern the place of supply, threshold limits, goods and services that could be exempted from the levy and other matters relating to the indirect tax. It will be chaired by Indian finance minister while minister of state for finance and state finance ministers will be its members. The central government will have 1/3rd vote and the states will have two-third vote in the Council. Any decision will need 3/4 majority. Monday also saw Cabinet appointing the revenue secretary as the ex-officio secretary to the Council. The next meeting of the Council is slated to be held on September 22 and September 23. "We are fully geared up for April 1, 2017, deadline for GST rollout," Hashmukh Adhia, revenue secretary in the finance ministry told the press after Cabinet meeting. Once the GST Council works out the details of the GST laws, it will have to be approved in the Parliament in the winter session, which is expected to be reportedly moved ahead by fortnight and held in the first week of November, to meet the deadline of April next fiscal. Two bills related to biggest tax reform will be taken up in the Parliament's next session – Central GST or CGST bill and the Integrated GST bill. States will approve their own GST bills. Prashant Deshpande, partner, Deloitte Haskins & Sells LLP, said the "immediate agenda" of the Council would be to finalise the GST rate and exemptions; "without a fix on which the stakeholder consensus would be difficult to achieve." Pratik Jain, leader - indirect tax, PwC India, also said implementation of GST from April 1, next fiscal would be contingent upon the speed at which the Council is able to build a consensus on issues such as rates, exemptions, dual control etc. BMR & Associates LLP's Dimri said with the enforcement of section 12 of the Indian constitution (One Hundred and First Amendment) Act, 2016, the two months' clock for setting up of the GST Council has started ticking. "As soon as the Council gets formed it will have a platter full of important and critically time-driven deliverables. The most important of them being reaching consensus amongst all states regarding several aspects of levy and administration of GST in India viz. tax rates, list of goods to be exempt / taxable on merit rates of GST, determining the threshold for taxable turnover for goods and services, and so on," he said. The Constitutional amendment Bill for GST was passed in both Houses of the Parliament in the Monsoon Session this year after much delay. After being cleared there, it has been ratified by 17 states till now. It needed 15, or half of India's 29 states to approve it. Last week, it got the Presidential assent. (This report first appeared on DNA)

Indian government closer to major tax reform law, corporates want more time

Foreign investors have pumped in nearly $1 billion (Rs 6,800 crore) into India&#39;s capital market so far this month. 
 
The investments were attributed to a good monsoon, positive data from the US economy, better corporate earnings and progress on the rollout of the Goods and Services Tax (GST). 
 
Business sentiment also improved after domestic passenger vehicle sales grew for the 14th straight month in August, experts said. 
 
According to depositors&#39; data, net Foreign Portfolio Investment (FPI) stood at Rs 3,178 crore in equities from September 1-9. The same for debt markets was at Rs 3,617 crore, taking the total inflow to Rs 6,795 crore ($1.02 billion). 
 
Portfolio investors had pulled out Rs 4,373 crore from the equity and debt markets in June and July. 
 
So far this year, FPIs have invested Rs 44,028 crore in equities while withdrawing Rs 3,730 crore from the debt market, resulting in a net flow of Rs 40,297 crore. 
 
(WION with inputs from PTI) 
 
&nbsp;

The latest FPI infusion comes on top of a whopping inflow of Rs 25,904 in the preceding two months

Foreign investors have pumped in nearly $1 billion (Rs 6,800 crore) into India's capital market so far this month. The investments were attributed to a good monsoon, positive data from the US economy, better corporate earnings and progress on the rollout of the Goods and Services Tax (GST). Business sentiment also improved after domestic passenger vehicle sales grew for the 14th straight month in August, experts said. According to depositors' data, net Foreign Portfolio Investment (FPI) stood at Rs 3,178 crore in equities from September 1-9. The same for debt markets was at Rs 3,617 crore, taking the total inflow to Rs 6,795 crore ($1.02 billion). Portfolio investors had pulled out Rs 4,373 crore from the equity and debt markets in June and July. So far this year, FPIs have invested Rs 44,028 crore in equities while withdrawing Rs 3,730 crore from the debt market, resulting in a net flow of Rs 40,297 crore. (WION with inputs from PTI)

Foreign investors infuse $1 billion in Indian markets in September

Indian President Pranab Mukherjee on Thursday approved the&nbsp;Goods and Services Tax (GST) Bill. 
 
The Goods and Services Tax will subsume a host of taxes that is currently charged by the the federal and state governments.&nbsp; 
 
The president&#39;s nod paves way for the creation of a GST council, a body that will decide the tax rate, cess and surcharges.&nbsp; 
 
Focus will also shift on to the states which are yet to ratify the GST Bill. So far, 18 out of 29 states have green-lit the bill.&nbsp; 
 
A flagship tax reform, Indian Prime Minister Narendra Modi is keen to implement it from the next fiscal year.. 
 
The passing of the Bill in in the Indian Parliament on August 8 had its fair share of political bickering and differences.&nbsp; 
 
(WION with inputs from PTI) 
 
 
 
&nbsp;

The president's nod paves way for the creation of a GST council, a body that will decide the tax rate, cess and surcharges

Indian President Pranab Mukherjee on Thursday approved the Goods and Services Tax (GST) Bill. The Goods and Services Tax will subsume a host of taxes that is currently charged by the the federal and state governments. The president's nod paves way for the creation of a GST council, a body that will decide the tax rate, cess and surcharges. Focus will also shift on to the states which are yet to ratify the GST Bill. So far, 18 out of 29 states have green-lit the bill. A flagship tax reform, Indian Prime Minister Narendra Modi is keen to implement it from the next fiscal year.. The passing of the Bill in in the Indian Parliament on August 8 had its fair share of political bickering and differences. (WION with inputs from PTI)

Indian President approves Goods and Services Tax Bill

The state assembly in northeastern state of Assam unanimously passed the Constitution Amendment Bill on Goods and Services Tax (GST) today, becoming the first state in India to ratify the crucial tax reform legislation. 
 
&quot;I declare the bill, which was passed by both houses of parliament, to be ratified unanimously by Assam assembly,&quot; speaker Ranjeet Kumar Dass announced in the house. 
 
Though opposition Congress and The All India United Democratic Front &nbsp;(AIUDF) MLAs supported the bill, they had earlier sought a discussion in the assembly to evaluate GST&#39;s impact on Assam and people. But they were turned down by the speaker. 
 
&#39;India will be third country in world to collect the tax with GST council&#39; &nbsp; 
 
Following passage of the Constitution (One Hundred and Twenty Second Amendment) Bill, 2014, Dass and finance minister Himanta Biswa Sarma, who introduced it in the house, exchanged sweets. 
 
Sarma said chief minister Sarbananda Sonowal wanted that Assam becomes the first state to pass the amendment as this would send a positive signal to the industry. 
 
&quot;We have always lagged behind, but want to be the first in passing this Bill. This is a historic proposal. I thank the Speaker for allowing us to introduce it today after we informed him just last night,&quot; said Sarma, who introduced the bill on behalf of the chief minister. 
 
Sarma said after Brazil and Canada, India will be the third country in the world to collect GST by both centre and state through a new body - GST Council (GSTC). 
 
&#39;Assam will gain in long-term&#39;&nbsp; 
 
Sarma said in the House that &quot;of the central GST portion, 42 per cent tax will be given back to the state again.&quot; 
 
The GST will also have a special concession option for NE and Himalayan states if they request reduction of taxes for any reason, he claimed. 
 
&quot;Besides, we can also collect special tax during natural calamities like flood if we feel the need to generate more revenue. But everything will have to be approved by the GSTC,&quot; he added. 
 
Talking about the impact of GST on Assam, Sarma said the state is likely to incur a revenue loss of Rs 3,000 crore in the initial period of its rollout. 
 
&quot;The state cannot levy service tax as of now as it is a central duty. For the first time, we will be able to levy service tax. This will recover 2-3 per cent of our losses,&quot; he added. 
 
The finance minister said any shortfall of tax collection compared to the existing numbers will be compensated by the Centre as grants for the next five years, taking 2016-17 as the base year. 
 
&quot;So, overall we will not suffer any loss. In fact, we will gain in long term. GST will be a blessing to all as both the Centre and the state will be gainer.&quot; 
 
Sarma said 127 items, for which VAT is six per cent at this moment, will be little more expensive after GST is rolled out. &quot;However, there are thousand other goods with VAT more than 14 per cent, those will be cheaper in future. So immediately prices of many goods will come down.&quot; 
 
Sarma said GST will benefit consumer states more as the tax will be collected at the place where the goods have been purchased, unlike VAT which is collected at the manufacturing gates. 
 
Assam, he said, will continue to tax all petroleum products, alcohol and tobacco products as these have been kept outside the purview of GST. 
 
Petroleum and tobacco products have been kept outside GST for temporary period, while alcohol will never be a part of the new tax regime. 
 
&quot;Of our total tax collection, around 30 per cent will come from petroleum products, tobacco and alcohol, while remaining 70 per cent will be from GST. 
 
&quot;If there is any shortfall, it will be compensated by the Centre for the next five years,&quot; Sarma said. 
 
Municipal councils and other local bodies will not be part of GST and will continue to collect their taxes, he added&nbsp; 
 
The GST Bill, seen as single biggest tax reform in a long time, needs to be ratified by at least 15 state legislatures before the Indian President can notify the GST Council which will decide the new tax rate and other issues. 
 
The government has set a deadline of April, 2017 for its rollout. 
 
 
(PTI)&nbsp;

CM Sarbananda Sonowal wanted Assam to be the first state to pass the bill to send positive signal to the industry, said the finance minister

The state assembly in northeastern state of Assam unanimously passed the Constitution Amendment Bill on Goods and Services Tax (GST) today, becoming the first state in India to ratify the crucial tax reform legislation. "I declare the bill, which was passed by both houses of parliament, to be ratified unanimously by Assam assembly," speaker Ranjeet Kumar Dass announced in the house. Though opposition Congress and The All India United Democratic Front (AIUDF) MLAs supported the bill, they had earlier sought a discussion in the assembly to evaluate GST's impact on Assam and people. But they were turned down by the speaker. 'India will be third country in world to collect the tax with GST council' Following passage of the Constitution (One Hundred and Twenty Second Amendment) Bill, 2014, Dass and finance minister Himanta Biswa Sarma, who introduced it in the house, exchanged sweets. Sarma said chief minister Sarbananda Sonowal wanted that Assam becomes the first state to pass the amendment as this would send a positive signal to the industry. "We have always lagged behind, but want to be the first in passing this Bill. This is a historic proposal. I thank the Speaker for allowing us to introduce it today after we informed him just last night," said Sarma, who introduced the bill on behalf of the chief minister. Sarma said after Brazil and Canada, India will be the third country in the world to collect GST by both centre and state through a new body - GST Council (GSTC). 'Assam will gain in long-term' Sarma said in the House that "of the central GST portion, 42 per cent tax will be given back to the state again." The GST will also have a special concession option for NE and Himalayan states if they request reduction of taxes for any reason, he claimed. "Besides, we can also collect special tax during natural calamities like flood if we feel the need to generate more revenue. But everything will have to be approved by the GSTC," he added. Talking about the impact of GST on Assam, Sarma said the state is likely to incur a revenue loss of Rs 3,000 crore in the initial period of its rollout. "The state cannot levy service tax as of now as it is a central duty. For the first time, we will be able to levy service tax. This will recover 2-3 per cent of our losses," he added. The finance minister said any shortfall of tax collection compared to the existing numbers will be compensated by the Centre as grants for the next five years, taking 2016-17 as the base year. "So, overall we will not suffer any loss. In fact, we will gain in long term. GST will be a blessing to all as both the Centre and the state will be gainer." Sarma said 127 items, for which VAT is six per cent at this moment, will be little more expensive after GST is rolled out. "However, there are thousand other goods with VAT more than 14 per cent, those will be cheaper in future. So immediately prices of many goods will come down." Sarma said GST will benefit consumer states more as the tax will be collected at the place where the goods have been purchased, unlike VAT which is collected at the manufacturing gates. Assam, he said, will continue to tax all petroleum products, alcohol and tobacco products as these have been kept outside the purview of GST. Petroleum and tobacco products have been kept outside GST for temporary period, while alcohol will never be a part of the new tax regime. "Of our total tax collection, around 30 per cent will come from petroleum products, tobacco and alcohol, while remaining 70 per cent will be from GST. "If there is any shortfall, it will be compensated by the Centre for the next five years," Sarma said. Municipal councils and other local bodies will not be part of GST and will continue to collect their taxes, he added The GST Bill, seen as single biggest tax reform in a long time, needs to be ratified by at least 15 state legislatures before the Indian President can notify the GST Council which will decide the new tax rate and other issues. The government has set a deadline of April, 2017 for its rollout. (PTI)

Assam becomes first state in India to ratify GST bill

Expressing gratitude to all parties for support, Indian Prime Minister Narendra Modi today described goods and services tax (GST) as a &quot;crucial step&quot; towards ending tax terrorism besides reducing corruption and black money and said the new regime of indirect taxation will make the consumer&nbsp;&quot;king&quot;. 
 
He emphasised in India&#39;s lower house Lok Sabha that the passage of the GST constitution amendment bill by parliament was not a victory of any party or government but was everybody&#39;s victory as it highlighted the success of the democratic ethos of the country. 
 
Intervening in a debate on Constitution (122nd Amendment) Bill, Modi asserted that the GST will benefit mainly those states which are considered backward and address the problem of imbalanced development. He acknowledged that manufacturing states will suffer losses but said they will be compensated. 
 
&quot;August 8th marks a crucial step towards freedom from tax terrorism,&quot; the Prime Minister said, while recalling that this was the day in 1942 when Mahatma Gandhi had sounded the bugle of &#39;Quit India&#39; which marked a major step towards the country&#39;s independence. 
 
&quot;GST can&#39;t be seen as a victory of a party or government. It is the victory for democratic ethos of India and a victory for everyone,&quot; he said, while noting that the measure was being supported by all parties, irrespective of different ideologies. 
 
(PTI)

Modi asserted that the bill will benefit mainly those states which are considered backward and address the problem of imbalanced development

Expressing gratitude to all parties for support, Indian Prime Minister Narendra Modi today described goods and services tax (GST) as a "crucial step" towards ending tax terrorism besides reducing corruption and black money and said the new regime of indirect taxation will make the consumer "king". He emphasised in India's lower house Lok Sabha that the passage of the GST constitution amendment bill by parliament was not a victory of any party or government but was everybody's victory as it highlighted the success of the democratic ethos of the country. Intervening in a debate on Constitution (122nd Amendment) Bill, Modi asserted that the GST will benefit mainly those states which are considered backward and address the problem of imbalanced development. He acknowledged that manufacturing states will suffer losses but said they will be compensated. "August 8th marks a crucial step towards freedom from tax terrorism," the Prime Minister said, while recalling that this was the day in 1942 when Mahatma Gandhi had sounded the bugle of 'Quit India' which marked a major step towards the country's independence. "GST can't be seen as a victory of a party or government. It is the victory for democratic ethos of India and a victory for everyone," he said, while noting that the measure was being supported by all parties, irrespective of different ideologies. (PTI)

Goods and services tax will end tax terrorism, says Indian PM Modi

India&#39;s parliament today passed a landmark tax reform&nbsp;bill&nbsp;that will pave the way for the introduction of a new national sales tax, and create a common market across the country for the first time. 
 
Parliament&#39;s upper house, Rajya Sabha, passed the long-awaited Goods and Services Tax (GST)&nbsp;bill&nbsp;unanimously after Prime Minister Narendra Modi&#39;s government reached a consensus with opposition parties over the new tax regime. The Constitution (122nd Amendment) Bill, 2014 was approved by the upper house with 203 votes in favour and none against, after a seven-hour debate during which a rare bonhomie was witnessed among the ruling and the opposition parties. 
 
The GST will replace a patchwork of central and state levies on goods and services and is one of the right-wing Bharatiya Janata Party government&#39;s biggest reforms since taking power in May 2014.&nbsp;Prime Minister Modi thanked the leaders and members of all the parties in a tweet&nbsp;after the bill received a thumbs up. 
&nbsp;
<blockquote class="twitter-tweet" data-lang="en">
On this truly historic occasion of the passage of the GST Bill in the Rajya Sabha, I thank the leaders and members of all parties.
&mdash; Narendra Modi (@narendramodi) <a href="https://twitter.com/narendramodi/status/760874175766507521">August 3, 2016</a></blockquote>
&nbsp;

<blockquote class="twitter-tweet" data-lang="en">
I would like to add that GST will also be the best example of cooperative federalism. Together we will take India to new heights of progress
&mdash; Narendra Modi (@narendramodi) <a href="https://twitter.com/narendramodi/status/760874652960821249">August 3, 2016</a></blockquote>
<script async src="~/platform.twitter.com/widgets.js" charset="utf-8" type="text/javascript"></script> 
The battle to introduce the economy-boosting GST has been one of the fiercest of Modi&#39;s premiership, with Congress repeatedly blocking the bill for more than a year, before finally agreeing to several amendments. 
 
&quot;It&#39;s the biggest tax reform since independence,&quot; finance minister Arun Jaitley told the NDTV television channel earlier today.&nbsp;&quot;It integrates India into one economic entity India becomes a big market, there will be a seamless transfer of goods and services across the country.&quot; 
 
Investors have billed the GST as a &quot;silver bullet&quot; for India&#39;s economy that would supplant multiple federal and state levies, a chaotic structure that inflates costs for businesses. 
&nbsp;
<blockquote class="twitter-tweet" data-lang="en">
GST Bill passed.India&#39;s enormous market--a caged tiger--will now be unleashed. GoodShowTeam India!
&mdash; anand mahindra (@anandmahindra) <a href="https://twitter.com/anandmahindra/status/760876374634721280">August 3, 2016</a></blockquote>
&nbsp;

<blockquote class="twitter-tweet" data-lang="en">
Passing of the GST Amendment Bill will boost foreign investor sentiment <a href="https://twitter.com/hashtag/GSTBill?src=hash">#GSTBill</a> 
Watch for inflows
&mdash; Mahesh (@invest_mutual) <a href="https://twitter.com/invest_mutual/status/760875005089423360">August 3, 2016</a></blockquote>
<script async src="~/platform.twitter.com/widgets.js" charset="utf-8" type="text/javascript"></script> 
Hailing the passage of the bill as an extremely progressive step, Walmart India today reacted positively. 
 
&quot;Passing of the GST bill today in Rajya Sabha is an extremely progressive step and long awaited one. GST is one of the critical tax reforms which has potential to create one single market in India for goods &amp; services and will boost country&#39;s economy significantly,&quot; Walmart India president and CEO Krish Iyer said in a statement. 
 
Businesses have lobbied hard for the tax, with lobby group the Confederation of Indian Industry (CII) estimating the GST will add 1.5 to 2 percentage points to the annual economic growth rate. 
 
&quot;It is very much in the category of what one would call a big-bang reform,&quot; CII president Naushad Forbes told AFP.&nbsp;&quot;It will be a huge benefit to the ease of doing business, it&#39;s a huge potential efficiency gainer. It&#39;s a very significant potential contribution to the economy in the longer term,&quot; he said. 
 
India&#39;s GDP expanded 7.6 per cent in 2015-16, making it the fastest-growing major economy in the world.&nbsp;The actual tax is still some way off, however, with the government targeting April 2017 for its introduction, a date many experts say is overly optimistic. 
 
The bill that cleared the upper house today simply amends the constitution to grant the government new taxation powers.&nbsp;The bill must also be ratified by at least half of India&#39;s 29 states, before a specific GST bill can be introduced to enshrine the tax in law. 
 
The main rate of GST is still a hot topic for debate, with experts suggesting it is likely to end up at around 18 per cent.&nbsp;While GST may push up inflation in the short term because the price of some goods will rise, economists say it will boost business activity and deter tax evasion. 
 
About 150 countries worldwide have some form of GST or VAT (Value Added Tax), according to the Organisation for Economic Cooperation and Development. 
 
(Agencies)

The passage of the bill was held up for years by political infighting, and its advancement marks a victory for Prime Minister Narendra Modi

India's parliament today passed a landmark tax reform bill that will pave the way for the introduction of a new national sales tax, and create a common market across the country for the first time. Parliament's upper house, Rajya Sabha, passed the long-awaited Goods and Services Tax (GST) bill unanimously after Prime Minister Narendra Modi's government reached a consensus with opposition parties over the new tax regime. The Constitution (122nd Amendment) Bill, 2014 was approved by the upper house with 203 votes in favour and none against, after a seven-hour debate during which a rare bonhomie was witnessed among the ruling and the opposition parties. The GST will replace a patchwork of central and state levies on goods and services and is one of the right-wing Bharatiya Janata Party government's biggest reforms since taking power in May 2014. Prime Minister Modi thanked the leaders and members of all the parties in a tweet after the bill received a thumbs up. On this truly historic occasion of the passage of the GST Bill in the Rajya Sabha, I thank the leaders and members of all parties. — Narendra Modi (@narendramodi) August 3, 2016 I would like to add that GST will also be the best example of cooperative federalism. Together we will take India to new heights of progress — Narendra Modi (@narendramodi) August 3, 2016 The battle to introduce the economy-boosting GST has been one of the fiercest of Modi's premiership, with Congress repeatedly blocking the bill for more than a year, before finally agreeing to several amendments. "It's the biggest tax reform since independence," finance minister Arun Jaitley told the NDTV television channel earlier today. "It integrates India into one economic entity India becomes a big market, there will be a seamless transfer of goods and services across the country." Investors have billed the GST as a "silver bullet" for India's economy that would supplant multiple federal and state levies, a chaotic structure that inflates costs for businesses. GST Bill passed.India's enormous market--a caged tiger--will now be unleashed. GoodShowTeam India! — anand mahindra (@anandmahindra) August 3, 2016 Passing of the GST Amendment Bill will boost foreign investor sentiment #GSTBill Watch for inflows — Mahesh (@invest_mutual) August 3, 2016 Hailing the passage of the bill as an extremely progressive step, Walmart India today reacted positively. "Passing of the GST bill today in Rajya Sabha is an extremely progressive step and long awaited one. GST is one of the critical tax reforms which has potential to create one single market in India for goods & services and will boost country's economy significantly," Walmart India president and CEO Krish Iyer said in a statement. Businesses have lobbied hard for the tax, with lobby group the Confederation of Indian Industry (CII) estimating the GST will add 1.5 to 2 percentage points to the annual economic growth rate. "It is very much in the category of what one would call a big-bang reform," CII president Naushad Forbes told AFP. "It will be a huge benefit to the ease of doing business, it's a huge potential efficiency gainer. It's a very significant potential contribution to the economy in the longer term," he said. India's GDP expanded 7.6 per cent in 2015-16, making it the fastest-growing major economy in the world. The actual tax is still some way off, however, with the government targeting April 2017 for its introduction, a date many experts say is overly optimistic. The bill that cleared the upper house today simply amends the constitution to grant the government new taxation powers. The bill must also be ratified by at least half of India's 29 states, before a specific GST bill can be introduced to enshrine the tax in law. The main rate of GST is still a hot topic for debate, with experts suggesting it is likely to end up at around 18 per cent. While GST may push up inflation in the short term because the price of some goods will rise, economists say it will boost business activity and deter tax evasion. About 150 countries worldwide have some form of GST or VAT (Value Added Tax), according to the Organisation for Economic Cooperation and Development. (Agencies)

Indian parliament's upper house passes landmark tax reform bill

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