Like our Facebook Page

Early Times Newspaper Jammu, Leading Newspaper Jammu
Breaking News :   Milky waterfall Noori Chamb to woo tourists with improved infra | BSP mourns demise of Party's J&K General Secretary Som Nath | AP demands free of cost flu vaccination for BPL families | LMD Kishtwar recovers Rs 41000 fine from erring traders | Manjit Singh urges LG to frame policy for regularization for daily wagers | Amid India-China stand-off, 131 soldiers join Ladakh Scouts Regiment | PMEGP scheme enhancing businesses | Gulmarg receives seasons first snow fall | DDC flags off quick loan shoppee van of HDFC Bank | New fruit & vegetable market starts operations | Altaf Bukhari welcomes new entrants into party fold | Ace golfer Brig Abrol scores Hole-In-One at JTGC | Samoon distributes award among winner students of online Urdu essay competition | First NCC camp after coronavirus lockdown brings cheers on faces of cadets in Jammu | Free online national level Yoga workshop organized | Yoga & Health training programme concludes | DIC Ramban hosts awareness events to encourage entrepreneurship | Actor appeals LG to start film industry | NSS volunteer organises awareness programme | Wave Mall Association condoles demise of its Director | LPS extends best wishes to Abdul Samad in IPL matches | 11 including 3 critically injured in Chatroo accident | RM Public School organizes ‘Best Out of Waste’ competition | GDC RS Pura organizes slogan writing competition | DG CRPF rewards 6 personnel for COVID-control efforts | Narinder Singh criticizes doctors | Amit checks working of Covid Hospital Jammu | ‘Congress misleading farmers over Farm Bills’: Kavinder | Health Department of UT is like a lifeless statue: Mahajan Sabha | CF expresses concern over pathetic condition in GMC | CWA expressed concern over pathetic situation in hospitals | ABVP criticizes JU authorities | DDC Ramban discusses modalities at DLMC meeting | Senior Citizens express concern on bad condition of GMC Jammu | People with Metabolic syndrome at high risk in COVID-19 recovery: TMF | Udhampur : Police holds online Jan Sunwai | JKNPP to hold party elections on Oct 8 | Pak violates ceasefire in Rajouri's Nowshera, India retaliates | KCCC Greens wins inaugural tie | NCUARDS holds GB meeting | NC leader lies to dad, party irked! | ‘Medicos at CD Hospital Jammu ignoring COVID patients’ | Dr Jitendra Singh’s efforts go in a vain | J&K’s tax revenue plummeting | 39 ventilators turn defunct in absence of staff at Udhampur hospital | Rajouri: 14 years on, construction of HDD office complex yet to commence | Two sisters including COVID patient die in Qazigund accident | 3 yrs on, probe into Verinag Development Authority scam incomplete | Deserving bidder forced not to submit offer for supply of books at Degree College Ganderbal | COVID-19 recovery rate improves to 72 percent as 1937 patients recover, get discharged | Munish Gupta asks government to step in & solve problems of residents | Redouble efforts to provide patient care: Atal Dulloo to GMC Administration | Recently recruited TRF militant arrested | JKPCC fails to finalise accounts amid decline in value of works: CAG | CB Kashmir Files FIR against ex-DC, others for allowing illegal stone crusher in Kupwara | CAG flags deficiencies in JKPDD, says J&K's power purchase deficit at Rs 14,871 cr in 2012-17 | CAG flags deficiencies in JKPDD, says J&K's power purchase deficit at Rs 14,871 cr in 2012-17 | Panchayat Ghar Nallah in shamble, no repairs done till date | Govt suspends two senior KAS officers | IGP Jammu reviews Border Security grid of Samba, Kathua, National Highway | Kashmiri pandit leader on hunger strike to draw Centre’s attention | Heavy hailstorm destroys kharif crops, vegetables in Kotranka | Power shut down | Govt resuming operation of Gulmarg Gondola Section-I on weekends from today | Pak shells forward areas along LoC in Rajouri | Earthquake of magnitude 4.6 hits Kashmir | Case registered after detection of fraud in joint private business in Jammu | Govt notifies officers’ training schedule for B2V3 | Ladakh records 56 new cases, two more deaths | Court awards seven years rigorous imprisonment in rape case | JKPC announces dis-association with ex-Srinagar Mayor Junaid Mattu | Back Issues  
news details
The disjunct between the promise and reality of GST
8/15/2020 12:34:01 AM

Vinay K Srivastava

The Goods and Services Tax regime completed three years on July 1. The concept of GST came in 2005 when the Vijay Kelkar-led task force submitted its report and recommended the replacement of all indirect taxes with GST. Even earlier, then finance minister Yashwant Sinha constituted a seven-member Expert Group on Taxation of Services as per his budget speech for FY2000-01. The expert group led by M Govinda Rao submitted its report in March 2001. The group made the first recommendation on GST. The dream became a reality when the new tax was introduced at the midnight of June 30 and July 1, 2017.
It was introduced as the biggest tax reform for indirect taxes. But unfortunately, it has failed to live up to people’s expectations. To remove glitches, the government has made 697 changes in GST since its inception by issuing notifications related to rates, the amendment of rules and waiver of penalty. Besides this, 146 circulars and 19 orders have been issued so far on various issues.
It was expected that the introduction of GST would increase the Gross Domestic Product (GDP) of the country because a simplified tax structure will eliminate the cascading effect of taxes and increase government’s revenue. While there may be a set of complex factors that have led to a dip in growth, the fact is that the expected boost has not happened. The growth rate of GDP of Q4 of FY20 has declined to 3.1%. The growth rate of GDP for FY20 has fallen to 4.2% — the lowest in the last 11 years.
The coding of goods under various Harmonised System of Nomenclature (HSN) brackets has always been a challenge for the GST council. Take this example. In the recent past, the Authority for Advanced Rulings (AAR)-Karnataka bench has said that 18% GST will be levied on parathas and roti will be taxed at 5% of GST slabs rate. The AAR has ruled that a paratha is different from a roti. The same problem arose with the rate of tax on hand sanitiser. The AAR-Goa bench established that alcohol-based hand sanitisers will be taxed at 18%. Hand sanitisers are essential in the Covid-19 battle. While the GST Council has made efforts to resolve such issues, the fact that they keep recurring is a sign of the weakness of the system.
Various states were ready to hop on to the same boat on the condition that the central government would compensate their revenue loss for the first five years. Accordingly, a provision was made under section 7 of GST (Compensation to State) Act, 2017. As per the provision, the loss of revenue will be compensated at the end of every two months for five years. When states were fighting against the pandemic and struggling for revenue in the middle of the lockdown, the Centre did not release compensation money, which had not been paid since November 2019. The Centre only released Rs 36,400 crore on June 4, due to the states and Union territories for the period starting from December 2019 to February 2020. The government further released Rs 13,806 crore for March 2020 on July 27, and paid all dues for FY20. The amount for April-July for FY21 is still due. While states need the compensation, the Centre seems to lack the resources to meet its commitment on a consistent basis. On the revenue front, there was an unofficial target to collect Rs 1 lakh crore GST every month. The average collection was Rs 89,885 crore in FY18, Rs 98,114 crore in FY19, though this improved to Rs 101,845 crore in FY20. The total revenue collection was Rs 7.19 lakh crore in the first eight months of FY18. The total revenue collection was Rs 11.77 lakh crore in FY19 and Rs 12.22 lakh crore in FY20.
There was no budget provision made by the central government for FY18. The revised estimate was made of Rs 4.44 lakh crore. But the actual realisation was Rs 4.42 lakh crore. The government had made a budget provision of Rs 7.43 lakh crore for FY19. The target was revised downward to Rs 6.43 lakh crore in the midterm budget review for FY19. However, the actual realisation was Rs 5.81 lakh crore. The government has made a budgeted estimate of Rs 7.61 lakh crore for the collection of GST for FY20 in the interim budget. However, finance minister Nirmala Sitharaman’s revised budget estimates to Rs 6.63 lakh crores in her maiden budget speech for FY20. The target was further revised to Rs 6.12 lakh crore. All these figures show a consistent overestimation of the collections. The government has already set a budgeted target of Rs 6.90 lakh crore for FY21. The collection for the first four months for FY21 is Rs 32,172 crore, Rs 62,151 crore, Rs 90,917 crore and Rs 87,422 crore respectively. The signs are clear. There will be a shortfall again, making the reality of GST more sobering than the promise of GST.
  Share This News with Your Friends on Social Network  
  Comment on this Story  
Early Times Android App
BSE Sensex
NSE Nifty
Home About Us Top Stories Local News National News Sports News Opinion Editorial ET Cetra Advertise with Us ET E-paper
J&K Govt. Official website
Jammu Kashmir Tourism
Mata Vaishnodevi Shrine Board
Shri Amarnath Ji Shrine Board
Shri Shiv Khori Shrine Board
Train Enquiry
Jammu Kashmir Bank
State Bank of India
Passport Department
Income Tax Department
IT Education
Web Site Design Services
Jammu University
Jammu University Results
Kashmir University
IGNOU Jammu Center