GST and anti-profiteering: Industry must pass on benefit to consumers, but authorities too must take a big step
Anti-profiteering provisions under GST have been one of the most hotly debated topics recently. This debate has gained momentum after the steep GST rate cut from 28% to 18% on over 175 items from mid-November.
Before the roll out of GST, the US Federal Reserve in a study predicted that an aggregate weighted GST of 16% could lead to a positive impact on real GDP by 4.2%, whereas at 20% it would result in a positive impact of 3.1% on GDP.
Addressing key areas of discomfort—such as GSTN glitches, readiness of industry, the burden on exports and SMEs—will help smoothen GST’s path.
Too many items are in the top-rate basket, and services, like Goods, will be Subject to Multiple rates, but GST largely should not lead to price increase
Recently, the Indian Revenue Service Association wrote a letter to the prime minister, outlining some of their concerns on GST implementation.
GST positive, but there are concerns Narendra Modi govt will have to address digital payments: Pursuit of a less-cash economy benefits everyone
While approving the laws, few important changes were proposed. First, a maximum ceiling of GST rates got increased from 14% under the central and state GST laws, respectively, to 20%, thereby effectively increasing the cap from 28% to 40%.
The focus should be to have most products at a standard rate (18%) and reliance on increased consumption, more manufacturing and economic activity
Things continue to take place at lightning speed on the GST front.
The proposal for 1% additional tax on inter-state supplies has been scrapped. This is indeed a welcome move and would eliminate inefficiency
Recently, the draft of the Goods and Services Tax (GST) law was released by the finance ministry. While there are no major surprises in the structure of the law from what was earlier envisaged by the Empowered Committee’s discussion papers, the e-commerce proposals come as a bit of a surprise for the industry.
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