New Delhi, July 26: Outgoing Chief Economic Adviser Arvind Subramanian exuded confidence that the highest slab of 28 per cent tax under GST would be “virtually a hollow shell” over the next year or so.
The all powerful GST Council comprising state finance ministers and headed by Union Finance Minister has pruned the highest 28 per cent slab by cutting tax rates on 191 goods over the last one year, including ACs, digital cameras, video recorders, dish-washing machines and automobiles.
There are just 35 items left in the highest tax bracket.
When the 28 per cent tax rate was imposed on certain items under GST, there was a political reaction against it, and the GST Council responded by “really whittling down…quite substantially” the number of products in that slab, Subramanian said in an interview to Rajya Sabha TV’s ‘To The Point’ programme.
“I am very confident that over the next year so that 28 per cent hopefully will be virtually a shell hollow shell,” he said.
The CEA also said that a lot of effort and time was devoted to the simplifying the burden on small and medium enterprises.
To a question regarding lateral entry into government, he said: “I am lateral entrant myself. So how can I argue against that?”
He stressed on the need to get talent from everywhere outside the government or outside the country as well.
“You need specific expertise. I think the lateral entry is a good thing. Govt needs more talent than silicon valley,” said Subramanian, who would be leaving the finance ministry on July 30. He had joined the ministry in October 2014.
New Delhi, Jun 8 : India’s GDP growth is likely to cross 8 per cent in the next two years and the government is taking a number of steps including formulation of a new industrial policy to double the economy’s size to USD 5 trillion in 7-8 years, Commerce Minister Suresh Prabhu said today.
“We are working on few strategies to boost economic growth. We are now seeing an upsurge,” he told reporters here while talking about the achievements of the government during the last four years.
Prabhu exuded confidence that the growth in 2018-19 will be better than the preceding fiscal.
“I should not be surprised that in the next few quarters, say next 2 years for sure, we will be very close to or cross 8 per cent growth and that is coming out of strong performance of so many sectors,” he said.
India’s GDP grew at the fastest pace in seven quarters at 7.7 per cent in the January-March quarter of last fiscal, retaining the fastest growing major economy tag on robust performance by manufacturing and service sectors as well as good farm output.
On yearly basis, however, it grew at a four-year low of 6.7 per cent in 2017-18, down from 7.1 per cent in the previous fiscal.
Prabhu said that to facilitate the 8 per cent potential growth, the government is working on several areas including formulation of a new industrial policy, “which is going to make India ready for the fourth industrial revolution and beyond”.
“We have created a vision for USD 5 trillion economy in which USD one trillion will come from manufacturing, USD 3 trillion from services and USD one trillion agriculture and allied sector,” he added.
When asked about the impact of the RBI’s decision this week to raise the benchmark lending rate by 0.25 per cent, the minister said: “I do not think it should hamper investments”.
On his US visit next week, Prabhu said that he would meet his counterpart and industry leaders and raise India’s concerns about tightening visa regime in the US and its impact on Indian IT sector.
“We will be raising the visa issue because we feel that Indians and their spouses are facing some issues there,” he said, adding, “we will explaining our position. It is not a formal trade talk..there is no huge expectations”.
On the US challenging India’s export support programmes, Prabhu said he would explain that those measures are not subsidies and instead ways to partially offset various additional costs incurred by them.
“Our export support regime is not violating any of the WTO rules,” he said.
“We are also working to make sure that there is a proper clarity on this. But what we are doing today is not violating any WTO rule,” he added.
On the proposed mega trade deal – Regional Comprehensive Economic Partnership (RCEP), Prabhu said India is actively engaged in the negotiations and also holding bilateral talks with member countries including China, Australia and New Zealand.
“What we are saying in RCEP is that it is a comprehensive economic partnership pact and in this services should be an integral part of the agreement,” he added.
Country’s GDP growth is estimated to slow down to 7.1% in current fiscal, from 7.6% in 2015-16, mainly due to slump in manufacturing, mining and construction sectors, the government data showed today without factoring in ‘volatile’ post-demonetization figures. Releasing the data compiled by the Central Statistics Office (CSO), Chief Statistician T C A Anant said the figures for November were available and examined but “it was felt in view of the policy of denotification of notes there is a high degree of volatility in theses figures and conscious decision was taken not make projection using the November figure”.
Accordingly, the ‘First Advance Estimates of National Income, 2016-17’ did not reflect the impact of demonetization, effected on November 9 for ban of old Rs 500/1,000 notes, and are based on sectoral data for only seven months or till October. Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2016-17 is likely to attain a level of Rs 121.55 lakh crore, as against the Provisional Estimate of GDP for the year 2015-16 of Rs 113.50 lakh crore, released May 31, 2016. “The growth in GDP during 2016-17 is estimated at 7.1% as compared to the growth rate of 7.6% in 2015- 16,” the CSO said.
The CSO projections on national income are now in line with the Reserve Bank’s estimates, which too has lowered the GDP growth prospects to 7.1%. “Anticipated growth of real GVA at basic prices in 2016-17 is 7% against 7.2% in 2015-16,” the CSO said. In value terms, the Gross Value Added (GVA) at constant prices is anticipated to increase from Rs 104.27 lakh crore in 2015-16 to Rs 111.53 lakh crore in 2016-17.
As per the data, performance of the all sectors, excluding ‘agriculture’ and ‘public administration, defence and other services’. ‘Agriculture, forestry and fishing’ is expected to expand by 4.1% in 2016-17 from 1.2%. On the other hand, mining and quarrying is likely to shrink by 1.8% after recording a growth a 7.4% in 2015-16. Growth in manufacturing is expected to slow to 7.4% (from 9.3%) and construction activities to 2.9% (from 3.9%). As per the data, the per capita net national income (current prices) during 2016-17 is estimated to be Rs 1,03,007 showing a rise of 10.4% as compared to Rs 93,293 during 2015-16 with the growth rate of 7.4 percent.
New Delhi: India’s per capita income, a gauge for measuring living standard, is estimated to cross INR 1 lakh in 2016-17, up from INR 93,293 in the previous fiscal.
As per the ‘First Advance Estimates of National Income, 2016-17’ released by the Central Statistics Office (CSO), the per capita net national income during 2016-17 is “estimated to be INR 103,007” at current prices.
This is higher by 10.4 per cent compared to INR 93,293 during 2015-16.
“The per capita income in real terms (at 2011-12 prices) during 2016-17 is likely to attain a level of INR 81,805 as compared to INR 77,435 for the year 2015-16,” the estimates said.
At constant prices, the growth rate in per capita income is estimated at 5.6 per cent during 2016-17, as against 6.2 per cent in the previous year.
The Central Statistics Office said India’s GDP is expected to slowdown to 7.1 per cent during 2016-17 from 7.6 per cent in the previous fiscal mainly due to slump in manufacturing, mining and construction activities.
The CSO did not figure in the impact of demonetisation, effected on November 9 and the estimates are based on sectoral data available till October.
The CSO projections on national income are in line with the Reserve Bank’s estimates, which too had lowered the GDP growth prospects to 7.1 per cent.
New Delhi, Dec 2 : Citing constitutional compulsion, Finance Minister Arun Jaitley today sought to drive home the point that the Goods and Services Tax has to roll out before September 16 next year as the existing indirect taxes will come to an end by then and it would not be possible to run the country without revenue collection.
He made a pitch for widening the tax base, saying efforts are on to make taxation process far simpler and make rates more reasonable.
For instance, he said, the GST Council is deliberating on ways to reduce the taxation process, including assessment by tax officials.
“Today, each person gets assessed thrice, in each of the three taxations (including VAT and central excise). Now, you will only be assessed once and what one authority assesses, others will have to accept that assessment,” he said.
Terming GST as a game changer, Jaitley said: “The Constitution does not permit delay in GST implementation. The government notified GST on September 16 and the constitutional amendment itself says the current indirect tax system can continue for one year, after which the GST has to come.”
So, if as on September 16, 2017, there is no GST, then there is no taxation in the country, he reasoned.
“So, you have a constitutional compulsion to have a Goods and Services Tax in place before September 16 (2017), otherwise the country doesn’t run, and the tax is absolutely essential. Therefore, our intention is it gets implemented from April 1, 2017, that was the original intention,” he said.
Jaitley made the point that states should not oppose every reform for the sake of opposition because that makes investors wary.
“The states must welcome the decision and I can only tell you, if some states are seen as opposing every reform, then investors in the country and the ones coming from outside, must decide which are the states they want to invest in,” he cautioned.
“So, if your state is seen on the wrong side of the reform, then investors are going to be very wary of those states.
New Delhi, Nov 14 : With states and Centre set to meet this week to chalk out jurisdiction over assessees under GST, a majority of states, including Kerala, West Bengal and Delhi, are sticking to their stand of sole control over entities with turnover below Rs 1.5 crore.
Kerala Finance Minister Thomas Issac today said that a vertical division of assessees for collection of taxes and for the purpose of audit would create problems for small taxpayers.
“Kerala, Bengal, Tamil Nadu, Bihar, Delhi, Odisha…
majority of states want a combination of vertical and horizontal (dual control structure). Below Rs 1.5 (crore turnover), states should tax, above Rs 1.5 crore, it can be vertical division,” Issac said.
After nailing a four-tier rate structure of 5, 12, 18 and 28 per cent, the GST Council
at its meeting on November 4 failed to reach a consensus on which category of assessees would be governed by the Centre and which by states.
The finance ministers of states will now informally meet Union Finance Minister Arun Jaitley on November 20 to evolve a political consensus on the sticky issue.
The next meeting of the GST Council, headed by Jaitley, is scheduled for November 24-25.
Differences on the issue of cross empowerment to avoid dual control arose with states demanding control over 11 lakh service tax assessees, and Centre proposing to do away states having exclusive control over all dealers up to an annual revenue threshold of Rs 1.5 crore — an issue which was settled in the first meeting of the GST Council.
The Council has arrived at an option of two proposals– horizontal division and vertical division.
‘Horizontal division’ would mean taxpayers would be divided both for administrative and audit purposes based on a cut off turnover. Those with a turnover over Rs 1.5 crore would be administered both by the Centre and states, while those with below Rs 1.5 crore would be administered solely by the states.
‘Vertical division’ based on ratios assigns taxpayers to a tax administration, Centre or state, for a period of three years for all purposes including audit. Taxpayers could be divided in a ratio which would balance the interest of the Centre and the state, both with respect to revenue and spread of numbers.
According to sources, the Centre feels that horizontal division would be lopsided as 93 per cent of Service Tax assessees and 85 per cent of VAT taxpayers have a turnover below Rs 1.5 crore.