Indian Tax Solutions
Home | Why Register? | Register | Subscription | Contact Us | Discussion Board | Pay Online
Last Updated : Tuesday 27th March, 2012 - 10:30am
NEWS UPDATES

Seeks to notify the “resident firm” as the class of persons for the purposes of section 23A of the Central Excise Act, 1944 so as to extend the scheme of Advance Ruling to Resident Firm. Continue reading | Seeks to amend Notification No. 16/2014-CE (NT) dated 21st March 2014 to make its provisions applicable to registered importers. Continue reading | Seeks to amend Central Excise Rules, 2002 to interalia provide for i) Issue of digitally signed invoices and preservation of records in electronic form by a manufacturer; ii) Application of certain provision of these rules to registered importer also Continue reading | Seeks to amend Notification No. 35/2001-CE (NT) dated 26th June 2001 so as to simplify registration process. Continue reading | Seeks to amend Cenvat Credit Rules, 2004. Continue reading | Seeks to amend Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 notified vide Notification No. 30/2008-CE (NT), dated 1st July, 2008. Continue reading | Seeks to amend Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 notified vide Notification No. 11/2010-CE (NT), dated 27th February, 2010 Continue reading | Seeks to amend Notification No. 23/2003-CE, dated the 31st March, 2008 so as to omit certain entries and increase the rate of excise duty from 12% to 12.5% in respect of certain entries Continue reading | Seeks to exempt all goods falling within the First Schedule of the CETA, 1985 from the whole of Secondary and Higher Education Cess leviable under Section 138 of the Finance Act, 2007. Continue reading | Seeks to exempt all goods falling within the First Schedule of the CETA, 1985 from the whole of Education Cess leviable under Section 93 of the Finance (No. 2) Act, 2004 Continue reading |
 
 
 
Budget 2012 made it clear that GST is around the corner

Budget 2012 made it clear that  GST is around the corner

March 26, 2012:  Amidst the global economic scenario and the pressures of populism from within the ruling alliance, the Finance Minister had the unenviable task of pushing for long-awaited tax reforms. In the short term, his proposals to increase rates of both Service Tax and Central Excise to 12 per cent and extend the levy of service tax on all services seem cruel and inflationary. However, the sum total of the proposals clearly indicate a move to simplify the complex indirect tax system and move to a simpler and more tax neutral Goods and Services Tax (GST) regime.

BENEFITS OF GST

GST is the most widely accepted indirect tax system and is prevalent in more than 150 countries. It is a destination-based consumption tax and is applicable on all transactions of goods and services. The Finance Minister has made clear his intention of implementing GST as soon as ‘politically' possible.

India has a complex indirect tax system, with the Central Government levying taxes on manufacture and services and the State Government levying taxes on sale of goods, etc. The tax paid on inputs is not creditable between the Central and State levies. Tax paid to one State on a sale cannot be credited in the State where subsequent sales happen. This leads to an inefficient tax system and distortions in the supply chain. Companies set up depots in different states with the sole objective of making sales in the customer's State so that credit can be passed.

The GST would subsume most indirect taxes (currently levied on both goods and services) under a single umbrella. Major taxes likely to be subsumed are CENVAT, VAT, service tax, etc, on manufacture, sale and consumption of goods as well as services at a national level. This would simplify the tax regime. GST will facilitate seamless credit across the entire supply chain and across all States. It will do away with the need for depots at each State to register local sales and pass on credit.

BUDGET PROPOSAL

However, a Constitutional amendment is required to give the States and Centre concurrent powers to tax both goods and services and this Bill is pending in Parliament since March 2011.

The Bill has been sent to the Parliamentary Standing Committee. The main obstacle has been the irrational fear of certain State governments that they would lose revenue and certain powers to the Centre.

The Finance Minister has informed the House in his Budget speech that the drafting of the Central and State GST Legislation is in progress. The GST Network (GSTN) will be operational from August 2012. Cross credit through a common CENVAT Credit Rules for both Excise and Service Tax had already been introduced. In this Budget, the rate of the two levies has also been harmonised at 12 per cent. The GST avoids the cascading effect of tax on tax. It eliminates a parallel economy as all credits are based on bills and an IT system. We hope the Finance Minister is able to win over a recalcitrant opposition.

Source: http://www.thehindubusinessline.com




-->
Search
Advanced Search
 
Member Login

You are not currently logged in.

Username
Password
  Forgot Password? | Sign Up
 
Subscribe Newsletter
Subscribe to our newsletter and be kept with latest Indian Tax solutions.
Name
Email