Prospects brighten for key tax reform; Arvind Subramanian panel may suggest 18% GST rate
A key panel on GST is likely to recommend a revenue-neutral rate of about 18%. The group, headed by Chief Economic Adviser, Arvind Subramanian, has zeroed in on the rate after considering various scenarios, brightening the chances for this important reform as the low rate should be acceptable to everyone. "It has worked out to about 18%," a government official privy to discussions said. Another official said the range for the tax could be 16-18%.
Source: The Economic Times dated 24 November 2015
Congress, BJP may strike deal on GST
In a move that may end the political deadlock over GST, the government, on Monday, indicated that it is considering some of the key demands of the Congress party. Minister of State for Finance, Jayant Sinha said, ”We are in continuous consultation with our colleagues in the opposition. We are trying to talk with them about all the aspects of GST. We all recognise how important this is for the economy, for all of India; so we are in continuous discussion to see what we can do to get it passed in the winter session.”
Source: Livemint dated 24 November 2015
Panel calls for standard GST rate of 23-25%
India moved a step closer to introducing GST, the nation’s biggest tax reform, after a panel proposed that the standard revenue-neutral GST rate could be in the range of 23-25%. These calculations, drawn up by the National Institute of Public Finance and Policy (NIPFP), provide an important input into the deliberations of the panel headed by Chief Economic Adviser, Arvind Subramanian, that is looking into what the revenue-neutral rate under GST should be.
Source: Livemint dated 23 November 2015
Ratings to face stress if reforms stray; GST crucial: S&P
Expressing concern over the slowdown in the pace of reforms, Standard & Poor’s has said India’s rating could come under stress if the government fails to pursue a reforms agenda and overshoots fiscal deficit target. “GST will bring in a simple tax regime and a business-friendly environment. Passage of the GST Bill will be credit positive for India. It would indicate that the government’s reform initiative is picking pace with a strong momentum,” S&P’s Rating Services India Sovereign Analyst, Kyran Curry said.
Source: The Indian Express dated 21 November 2015
State Finance Ministers debate over GST, urge simplicity
State Finance Ministers continue to wrangle over the threshold of taxation under the proposed GST regime. Delhi Deputy Chief Minister, Manish Sisodia, who chaired the empowered committee meeting said the states were ‘divided’ over the threshold. While the Centre is of the view that the threshold for levying Central GST (CGST) and State GST (SGST) should be kept at an annual turnover of INR 2.5 million, some states want it to be at INR 1 million.
Source: The Economic Times dated 20 November 2015
Did you know?
Through the course of various reports published over the years and as per the statements given by the Central Board of Excise and Customs officers, we can derive that more than one GST Rate can be expected in the GST regime. The First Discussion Paper on GST in 2009 suggested that there could be a set of four major rate categories specifically:
- Standard GST Rate
- Lower GST Rate
- Precious Metal Rate and
- Zero Rate