Dr. Sanjiv Agarwal

Union Budget 2018-19 is just a fortnight away from now and there is one school of thought which say that Budget will not contain GST proposals.

My understanding is that it will contain GST proposals too, if needed. There is no legal or constitutional bar which prevents Union Government to not have GST proposals in Budget. If Budget (Finance Bill) can have proposals for amendment to Customs, Excise, Service Tax, CST or Income Tax provisions, GST is no different.

Any change to GST laws (CGST / UTGST / IGST Acts) and Sate Compensation law has to be passed by the Parliament which alone is empowered to legislate. The only pre- requisite for GST is that GST Council has to recommend such changes. It is important that next week’s meeting of GST Council on 18 January, 2018 is going to be crucial which may recommend certain changes to GST laws.

If grapevine is to be believed, there could be proposals on inclusion of real estate, natural gas etc in GST, making compliances and returns related provisions simpler, streamlining of input tax credit etc. Certain definition for supply, input services etc may undergo a change. Charging section may also be tinkered with for reverse charge provisions and e-commerce transactions.

So far as GST rates are concerned, the case is ripe for a three-tier tax rates by merging the two rates of 12% or 18%. It could be 12% or 18% or both rates could be converged into a common tax rate of, say, 15 percent. While a rate of 15% may be welcomed by service providers in general which would imply going back to Service Tax times as far as tax rate in concerned but a well planned balancing act would be needed in case of goods.

However, Government and the GST Council should also decide not to tweak tax rates off and on but may fix a fixed date (may be once in a quarter) when any such tax rate change be attempted to in future. This would only add to efficient compliances. Compensation cess also needs to be rationalized for motor vehicles and used goods / vehicles in particular.

We should not forget that GST law is going to enjoy status of work-in- progress for few years. All eyes are now on 18th January when country looks keenly to GST Council meeting which may be a trailer before main Budget. Elections or no elections, it is hoped that collective wisdom would look at country’s economic interests and  balance the ease of doing business. Its not time to play politics for now. We had it enough.

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Author Bio

Qualification: CA in Practice
Company: Agarwal Sanjiv & Company
Location: Jaipur, Rajasthan, IN
Member Since: 03 Oct 2019 | Total Posts: 346

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  1. R G Bhat says:

    The karnataka model of uploading purchase and sales should be implemented wherein errors can be subsequently corrected without payment of late fees time frame of 6 months should be provided to match the purchase and sales

  2. V.K.Dadoo says:

    Yes, the GST law requires change.
    1. People fear the Law, as it has many aspects whereby the tax payer can be held. Government is not concerned whether the person at the helm is educated or not, computer friendly or not, Power is available or not, Computer is working or not, Net connectivity is available round the cloak or not , the dealer is having person who can operate the computer or not, the age of the dealer, the strength of the no. of people working for him etc.
    2 Now, the introduction of the E way bill wef February will created much more chaos, as the
    movement of goods will also get hampered.
    3. The rates of GST are high. That may be the e reason that the revenue collection is going up. The Government is happy, but the money is getting blocked and is getting released after around 3 months on an average. The dealer is required to bear the loss. The fact that all expenses are debited to the business, the the retail inflation is at 17 months high.
    4. People do not understand the law, therefore have to keep on running to the Chartered Accountants or Vakil etc, or they would employ a Part Time/Full time person for the purpose. .

  3. Venkat says:

    Rebecca charge provision, tax on advance, audit by chartered accountants, audit by departmental officials has to go. These provisions will not give money to government. Matching principal, e way bill with RFID technology should be implemented strictly. This will ensure correct flow of revenue to the government. Annual return provision also should be removed and CBEC should be allowed to scrutinize our income tax returns instead. This will be win win situation both for government and tax payers. V C VENKATASUBRAMANIAN CA

  4. vswami says:


    Quite S(sss)o!
    As said, summoning courage of conviction as expected, – ” We should not forget that GST law IS GOING TO ENJOY STATUS OF WORK IN PROGRESS FOR FEW YEARS” ; on which anyone could, legitimately, disagree except to fully agree !
    But, that obviously is not intended to imply, even remotely, that with those ‘few years’ left, the law could wait that long; for being rendered amenable to ease of understanding; to the end of accomplishing stability, thereby enable proper compliance; and implementation/enforcement, with due emphasis on the larger interests of THE PEOPLE .

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June 2021