Union Budget for F.Y. 2016-17 is a complete miss so far as Goods and Services Tax is concerned, more so when everyone was expecting some announcement on GST in this Budget. The Budget speech in its opening paragraphs highlights the achievements of last three years including economic consolidation, growth and other strengths besides counting on the failures of previous Government but it lacks direction, vision, seriousness and commitment towards migrating to GST.
The Union Budget has introduced two new cesses in the name and style of Infrastructure Cess and Krishi Kalyan Cess, former in the nature of excise duty and later as Service Tax. Clean Energy Cess has been renamed as Clean Environment Cess while enhancing the cess by 100 percent. These cesses, in nutshell are as follows:
Though there is no major change in basic tax rates in direct and indirect taxes, the Budget 2016-17 talks of following three cesses- Clean Environment Cess (renamed from clean energy cess), Infrastructure Cess and Krishi Kalyan Cess.
The Economy Survey, tabled by Finance Minsiter in the Lok Sabha on 26.02.2016 describes India as a refuge of stability and an outpost of opportunity at a time of global turbulence and volatility. The targeted growth for 2016-17 is pegged at 7-7.5 per cent , put out in the Economic Survey, does not paint a very glowing picture of the economy.
Some changes have been made in customs and excise duty rates on certain inputs, raw materials, intermediate products etc, besides simplifying procedures so as to reduce cost and improve competitiveness in sectors like capital goods, information technology, defence, textile, mineral, fuels / oils, chemicals, paper, newsprint, maintenance, repair and over hauling of aircraft or ship etc.
In State GST, the States alone can levy GST and the Centre withdraws from the field of GST or VAT completely. It can be a desirable option given the mismatch in resources and responsibilities of the States. In this case, the State GST will work as the redistributing mechanism.
In the Indian context, Constitution of India specifically reserves the power to impose tax on specific activities to specific level of Government, e.g., tax on import of goods can be imposed by Union Government only whereas tax on sale of goods involving movement of goods within the State can be imposed by State Governments only.
In a federal country like India where the power to tax domestic trade is divided between the Central Government and the State Government, the designing of a destination based GST becomes extremely complicated. A conventional national GST cannot be implemented without the States losing their fiscal autonomy.
‘Service Tax Case Digest’, a two volume book on service tax by Dr. Sanjiv Agarwal , a city based chartered accountant and service tax practitioner, was launched on 18.01.2016 at New Delhi by Justice ‘G’ Raghuram, President of Customs Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi. The release function was attended by all […]
Additional tax is an additional tax levy whereby states will be allowed to collect tax of one percent over and above the normal GST for the goods that enter the state. This is imposable for a maximum period of two years.
