---------- Forwarded message ----------
From: pradeep jain <capjain68@gmail.com>
Date: Tue, Oct 26, 2010 at 7:04 PM
Subject: NashiCAs Publishing of our Article GST- It must be better late than never!!
To: NashiCAs <nashicas@googlegroups.com>
Dear Professional Friends,
Goods And Service Tax (GST) has become a hot topic of discussion and
speculation miles before it is even near being effectively
implemented. We have written an Article on the recent events relating
to GST. Our article titled "GST-It must be better late than never!!"
has been published on various leading websites on taxes which are as
following:
1. On Caclubindia.com
2. On Tax Management India.com
3. On CA Students Forum.in
4. On taxguru.in
5. On Articlebase.com
As knowledge increases by sharing, kindly send us your views and
thoughts on the topic. Your feedback is very valuable to us.
For the convenience of readers of this group, we are enclosing
hereunder our Article:
GST- It must be better late than never!!
Prepared By:
CA Preeti Parihar and
CA Rajani Thanvi
Introduction:-
"Continuity gives us roots; change gives us branches, letting us
stretch and grow and reach new heights." How truly it has been said.
The change is the need of time, change is innovation, but it becomes
arduous when it is not accepted by that people for whom it was made.
Whenever any change is about to come in our country it hangs in the
way cause of lack of cooperation. To change the system of Indirect
taxation Government brought a new system for implementation called GST-
The goods and services tax. It was heard that GST will bring a drastic
revolution in Indian Indirect Taxation system but the real picture
shows something else as it itself become a reason of struggle between
Central and states.
Need:-
Indian entrepreneurs are loaded with a number of taxes. Almost every
business transaction suffers a different tax. For services, it is
service tax, for manufacture it is Excise Duty, for sale within state
it is VAT, for inter-state sale it is CST, for income earned it is
Income Tax, for wealth created it is wealth tax, etc. These are mere
examples for the consultants, but for the businessmen, they mean a lot
of compliances involving a significant number of man power and money.
In order to relieve the businessman from some of the taxes, government
has planned to bring a composite levy – The GST which is said to bring
a tax-revolution in the country. It is said that the GST will simplify
the complex tax structure of the country and will replace around 16
central and state taxes including the service tax, excise duty, VAT,
etc. while maintaining a collaboration between the Centre and the
State.
Benefits:-
The main beneficiaries will be the business personnel. At present,
there are a no. of taxes governed by different Acts and rules. The
separate records are to be kept, separate returns are to be filed,
different dates are there for payment of taxes and filing of returns,
etc. which require a significant amount of man power and money.
However, the GST, when implemented, will replace many of the taxes and
will obviously reduce the paper work, man power and money. Further,
there are no. of ambiguities in certain cases which makes it difficult
to ascertain as to which law is applicable. For eg. software and SIM
cards are service or goods? The service tax department says it is a
service while the sales tax department says it is sale of goods. The
GST will resolve the issue. The Government too will be benefitted. It
is anticipated that the GDP of the economy will be increased by $500
billion and exports will also increase by 15%.
Beginning of GST:-
The Thirteenth Finance Commission, as constituted by the President on
November 13, 2007 to give recommendations regarding the Central-State
Fiscal relations during the year 2010-15. The Commission recommended a
model GST structure and also recommended a grant of Rs. 50000 crores
for its implementation. The recommendations were accepted in principle
and discussions were carried out between the Centre and State.
The Empowered committee of state finance ministers has released the
First discussion paper on GST on 10.11.2009 and it was proposed that
GST is going to be implemented on 01.04.2010 with its new developments
regarding unvarying tax rates all over country, removing cascading
effects of Cenvat and service tax with set off by making a chain of
set-off for hierarchy of Producer/manufacturer/service provider to
Retailer/End user level. For this purpose GST is to be introduced at
state level. But as history repeats itself Government had faced and
still facing intricacy of different opinions of states in the way of
implementation of GST. It is not an easy task to combine all the
provisions and demands of the states having different thoughts and
opinions. When everyone was waiting to greet with GST it was
recommended in Report of Task Force on GST that it will be postponed
till 01.10.2010 due to oppositions raised by states which is again
delayed by 01.04.2011.
In the middle:-
On oppositions made by states, Government presented a revised draft
bill of GST in order to arriving at consensus with the states. In the
revised bill Government has provided veto power to the Union Finance
Minister relating to state subjects matters on taxation issues. Then
after Finance minister had offered some concessions on major demands
of states relating to simplification of tax administration and
replacement of multiple levies of taxes like CST, VAT, Excise, Service
tax into a single tax. Government also proposed dual rate system to be
included in GST system but because of this new system states may have
revenue loss in initial year of implementation of GST. For this it was
cleared by the government for compensation to states for switchover to
the new tax regime including special incentives to those states such
as Punjab and Haryana for loss out of purchase tax. The Government
also agreed to exclude crude oil, petrol, diesel and ATF from the GST
structure on demand raised by states.
Present scenario:-
But as it was predicted this bill also comes in litigations between
states and central. The Empowered Committee of State Finance Ministers
on GST has rejected the constitutional amendment bill on 01.08.2010.
The BJP-ruled states, including Gujarat, Madhya Pradesh, Chhattisgarh,
Himachal Pradesh and few others had opposed the constitutional
amendment saying that all powers of the states have been snatched
through the constitutional amendment. Chairman of the Empowered
Committee of State Finance Ministers commented on the constitutional
amendment that states were against infringement on their financial
autonomy and have certain reservation on the provision of draft bill
for the GST council and the GST Disputes Authority hence this draft
bill is not acceptable in this form to the states. However some states
were in favour of this amendment.
On coming of oppositions from many states, Centre has given up on the
matter of veto powers given to the Union Finance Minister. The veto
power has been withdrawn from the constitutional amendment bill on GST
with giving a statement that central FM had no any intention of
becoming the Super Finance Minister to interfere with the State GST.
In the latest meeting of state finance ministers and centre for GST,
held on 20.09.2010 many states has accepted the approach of new draft
of GST bill except few mainly Gujarat and Madhya Pradesh who still
have different viewpoint. In that meeting the Madhya Pradesh
government given an idea of an alternative model of the GST and BJP
rules states has supported to it. Also some other states have allotted
one month time for consideration to make their opinion on revised
bill. In the meeting the states has stressed on retention of their
rights and wished some more changes in the proposed Act.
Next what?
Recently, while addressing an interactive session organized by the
Merchants' Chamber of Commerce at Kolkata, the chairman of empowered
Committee – Mr. Asim Dasgupta, who is also the finance minister of
West Bengal; indicated that the ongoing conflicts between the states
regarding GST are about to resolve. The matter will be on board once
again on October 30, 2010; when the empowered Committee will meet
again. The points of dispute – the Dispute settlement mechanism of GST
and GST council constitution will be discussed therein.
Before Leaving:-
Government has to obtain categorical support of all the sates since
two-third majority is required for ratification of GST. But some
states ruled by BJP and other opposite parties are not happy on
implementation of GST. So it becomes a necessity for both Centre and
States to have consensus on GST very soon for bringing the GST in
actuality in 2011. But after coming of statement of Revenue Secretary
in this august that introduction of GST will miss the deadline of
April, 2011 it becomes unambiguous that the matter of GST becomes
political issue rather than an economical or legal one. It is ever
called that "Better late than never" so we can hope that the delay in
coming of GST will bring a fruitful result with it's implication. Let
we hope that GST bill will be presented in winter session and
political differences will shut down.
************
Kind Regards,
CA PRADEEP JAIN, (B. Com Hons., F. C. A.)
From: pradeep jain <capjain68@gmail.com>
Date: Tue, Oct 26, 2010 at 7:04 PM
Subject: NashiCAs Publishing of our Article GST- It must be better late than never!!
To: NashiCAs <nashicas@googlegroups.com>
Dear Professional Friends,
Goods And Service Tax (GST) has become a hot topic of discussion and
speculation miles before it is even near being effectively
implemented. We have written an Article on the recent events relating
to GST. Our article titled "GST-It must be better late than never!!"
has been published on various leading websites on taxes which are as
following:
1. On Caclubindia.com
2. On Tax Management India.com
3. On CA Students Forum.in
4. On taxguru.in
5. On Articlebase.com
As knowledge increases by sharing, kindly send us your views and
thoughts on the topic. Your feedback is very valuable to us.
For the convenience of readers of this group, we are enclosing
hereunder our Article:
GST- It must be better late than never!!
Prepared By:
CA Preeti Parihar and
CA Rajani Thanvi
Introduction:-
"Continuity gives us roots; change gives us branches, letting us
stretch and grow and reach new heights." How truly it has been said.
The change is the need of time, change is innovation, but it becomes
arduous when it is not accepted by that people for whom it was made.
Whenever any change is about to come in our country it hangs in the
way cause of lack of cooperation. To change the system of Indirect
taxation Government brought a new system for implementation called GST-
The goods and services tax. It was heard that GST will bring a drastic
revolution in Indian Indirect Taxation system but the real picture
shows something else as it itself become a reason of struggle between
Central and states.
Need:-
Indian entrepreneurs are loaded with a number of taxes. Almost every
business transaction suffers a different tax. For services, it is
service tax, for manufacture it is Excise Duty, for sale within state
it is VAT, for inter-state sale it is CST, for income earned it is
Income Tax, for wealth created it is wealth tax, etc. These are mere
examples for the consultants, but for the businessmen, they mean a lot
of compliances involving a significant number of man power and money.
In order to relieve the businessman from some of the taxes, government
has planned to bring a composite levy – The GST which is said to bring
a tax-revolution in the country. It is said that the GST will simplify
the complex tax structure of the country and will replace around 16
central and state taxes including the service tax, excise duty, VAT,
etc. while maintaining a collaboration between the Centre and the
State.
Benefits:-
The main beneficiaries will be the business personnel. At present,
there are a no. of taxes governed by different Acts and rules. The
separate records are to be kept, separate returns are to be filed,
different dates are there for payment of taxes and filing of returns,
etc. which require a significant amount of man power and money.
However, the GST, when implemented, will replace many of the taxes and
will obviously reduce the paper work, man power and money. Further,
there are no. of ambiguities in certain cases which makes it difficult
to ascertain as to which law is applicable. For eg. software and SIM
cards are service or goods? The service tax department says it is a
service while the sales tax department says it is sale of goods. The
GST will resolve the issue. The Government too will be benefitted. It
is anticipated that the GDP of the economy will be increased by $500
billion and exports will also increase by 15%.
Beginning of GST:-
The Thirteenth Finance Commission, as constituted by the President on
November 13, 2007 to give recommendations regarding the Central-State
Fiscal relations during the year 2010-15. The Commission recommended a
model GST structure and also recommended a grant of Rs. 50000 crores
for its implementation. The recommendations were accepted in principle
and discussions were carried out between the Centre and State.
The Empowered committee of state finance ministers has released the
First discussion paper on GST on 10.11.2009 and it was proposed that
GST is going to be implemented on 01.04.2010 with its new developments
regarding unvarying tax rates all over country, removing cascading
effects of Cenvat and service tax with set off by making a chain of
set-off for hierarchy of Producer/manufacturer/service provider to
Retailer/End user level. For this purpose GST is to be introduced at
state level. But as history repeats itself Government had faced and
still facing intricacy of different opinions of states in the way of
implementation of GST. It is not an easy task to combine all the
provisions and demands of the states having different thoughts and
opinions. When everyone was waiting to greet with GST it was
recommended in Report of Task Force on GST that it will be postponed
till 01.10.2010 due to oppositions raised by states which is again
delayed by 01.04.2011.
In the middle:-
On oppositions made by states, Government presented a revised draft
bill of GST in order to arriving at consensus with the states. In the
revised bill Government has provided veto power to the Union Finance
Minister relating to state subjects matters on taxation issues. Then
after Finance minister had offered some concessions on major demands
of states relating to simplification of tax administration and
replacement of multiple levies of taxes like CST, VAT, Excise, Service
tax into a single tax. Government also proposed dual rate system to be
included in GST system but because of this new system states may have
revenue loss in initial year of implementation of GST. For this it was
cleared by the government for compensation to states for switchover to
the new tax regime including special incentives to those states such
as Punjab and Haryana for loss out of purchase tax. The Government
also agreed to exclude crude oil, petrol, diesel and ATF from the GST
structure on demand raised by states.
Present scenario:-
But as it was predicted this bill also comes in litigations between
states and central. The Empowered Committee of State Finance Ministers
on GST has rejected the constitutional amendment bill on 01.08.2010.
The BJP-ruled states, including Gujarat, Madhya Pradesh, Chhattisgarh,
Himachal Pradesh and few others had opposed the constitutional
amendment saying that all powers of the states have been snatched
through the constitutional amendment. Chairman of the Empowered
Committee of State Finance Ministers commented on the constitutional
amendment that states were against infringement on their financial
autonomy and have certain reservation on the provision of draft bill
for the GST council and the GST Disputes Authority hence this draft
bill is not acceptable in this form to the states. However some states
were in favour of this amendment.
On coming of oppositions from many states, Centre has given up on the
matter of veto powers given to the Union Finance Minister. The veto
power has been withdrawn from the constitutional amendment bill on GST
with giving a statement that central FM had no any intention of
becoming the Super Finance Minister to interfere with the State GST.
In the latest meeting of state finance ministers and centre for GST,
held on 20.09.2010 many states has accepted the approach of new draft
of GST bill except few mainly Gujarat and Madhya Pradesh who still
have different viewpoint. In that meeting the Madhya Pradesh
government given an idea of an alternative model of the GST and BJP
rules states has supported to it. Also some other states have allotted
one month time for consideration to make their opinion on revised
bill. In the meeting the states has stressed on retention of their
rights and wished some more changes in the proposed Act.
Next what?
Recently, while addressing an interactive session organized by the
Merchants' Chamber of Commerce at Kolkata, the chairman of empowered
Committee – Mr. Asim Dasgupta, who is also the finance minister of
West Bengal; indicated that the ongoing conflicts between the states
regarding GST are about to resolve. The matter will be on board once
again on October 30, 2010; when the empowered Committee will meet
again. The points of dispute – the Dispute settlement mechanism of GST
and GST council constitution will be discussed therein.
Before Leaving:-
Government has to obtain categorical support of all the sates since
two-third majority is required for ratification of GST. But some
states ruled by BJP and other opposite parties are not happy on
implementation of GST. So it becomes a necessity for both Centre and
States to have consensus on GST very soon for bringing the GST in
actuality in 2011. But after coming of statement of Revenue Secretary
in this august that introduction of GST will miss the deadline of
April, 2011 it becomes unambiguous that the matter of GST becomes
political issue rather than an economical or legal one. It is ever
called that "Better late than never" so we can hope that the delay in
coming of GST will bring a fruitful result with it's implication. Let
we hope that GST bill will be presented in winter session and
political differences will shut down.
************
Kind Regards,
CA PRADEEP JAIN, (B. Com Hons., F. C. A.)
No comments:
Post a Comment