Goods & Service Tax (GST)

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MehtaRahulC
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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Wed Nov 29, 2017 3:39 am

Unpacked unbranded Ghee and unpacked unbraned butter / cheese is also taxed in GST. Milk, branded or unbranded is not taxed. But I think flavored milk is taxed.
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GST can be taxed above 28% by levying what is called as cess. So there is NO defacto upper limit on GST rate. And there should be none !! Goods like vehicles impose huge cost on Govt - building roads, building streets, paying traffic policemen etc So we cant have ceilings on goods like petrol or cars
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I dont get into what should be GSTed and what should not be GSTed. And what should be GST rates. GST is hell hole. One reason why USA is far far ahead of Europe is because Europe adopted GST while USA didnt. And USA only has state sales tax on end sales. And that too is now creating a mess.

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Re: Goods & Service Tax (GST)

Post by Mort Walker » Wed Nov 29, 2017 7:41 pm

RM,

I disagree with you on fuel tax. Cheap transportation costs helps the economy grow. Cheap power prices keeps factories productive. The US has benefited with cheap transportation and electric energy. India needs the same, but with the hindsight of not polluting the environment in the process.

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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Thu Nov 30, 2017 5:13 am

The question is --- who should pay for making and maintaining roads? IMO, all money to make and maintain roads , footpaths and pay traffic cops etc should come from petrol consumers and vehicle owners - be excise on vehicles or petrol tax or tolls. I dont want non users to pay for users under the garb of the useless concept of positive externalities.
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USA has huge military firepower. Using military, USA coerced many countries' leaders to buy USA's Govt bonds. And so rest of the world paid for many expenses of USA such as roads. We dont have such firepower yet. So we have to pay for our roads.
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I am not proposing high tax on petrol, vehicles. I am only proposing tax sufficient to cover ALL expenses to support vehicles and pedestarians
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Now in India, us pedestarians are treated like animals by leaders of ALL parties. In fact, worse than animals ---- all leaders see us pedestarians as streetside garbage. So no money is allocated to make and maintain footpaths and zebra crossings. But when all that changes, and footpaths widen and zebra crossing improve, the cost of streets in cities will shootup. And so more tax will be needed from vehicle owners. They better pay. Or else ...
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------------
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July GST returns have been filed by 50 lakh out of 70 lakh registered traders. So 20 lakh registered dealers have NOT filed GST return of even July !! And non filing rates are over 20% across all months. This is huge. Lets see what steps Govt takes. Also, GST collection will increase when GST payers realize that input credit they have claimed has been cancelled because their seller didnt pay GST !!! So it looks like we will get final July-2017 only much much after jan-2018 !!!
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Re: Goods & Service Tax (GST)

Post by SRoy » Thu Nov 30, 2017 6:18 am

Rahul Mehta Ji,

I would personally not like to pay a single penny extra over my regular taxes for road use and continue to drive my car.

If it sounds selfish let it be.

The reason?

Vehicular traffic is one aspect of road. The government having taken the tax monies of mine, my father's and my grandfather's have not shown even a minuscule intent to make the road usable for me.

I can't walk on the sidewalks, because it has been encroached upon. By whom? By those that don't pay taxes. Hawkers spill over on main carriage way? They are again non-tax payers.

My vehicle undergoes unnatural wear and tear and yet the government misuses my tax monies to do a hogwash of repair by awarding the job to shoddy contractors, the repair which washes away with first shower.

Are you done with your fake concern for pedestrian?
Show me your DRAFT to evict encroachments and to ban of roadside hawking. Be done with that. Pedestrians will have lot of space for themselves.


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Re: Goods & Service Tax (GST)

Post by Primus » Thu Nov 30, 2017 6:51 pm

GDP grows again, Jaitley says it is the beginning of a new trend and the manufacturing sector is doing much better.



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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Mon Dec 18, 2017 5:55 pm

sbajwa wrote:
Tue Oct 24, 2017 3:17 pm
Since Gujarat is mostly medium level traders (business) economy., let's see what happens in the assembly elections in Gujarat. The Gujarat elections will be referendum on GST. so wait and watch!
Both congress and RSS = BJP had supported GST and opposed wealth tax. And togather, they got 182 out of 182 seats. And those like myself who had opposed GST and supported got less than 0.5% votes and zero seats. So (as per YOUR logic), the "referendum" clearly supports GST over wealth tax !!! :roll:
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---
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Invoice matching which is core of GST has not yet started !!
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In feb-2018, invoice matching of july-2017 will start !! (so much for infosys's ability)
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Thats when real real slaughter of small manufacturers in India will start
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Just wait and watch. Rajasthan elections will be bigger "referendum".

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Re: Goods & Service Tax (GST)

Post by Mort Walker » Tue Dec 19, 2017 3:49 am

MehtaRahulC wrote:
Mon Dec 18, 2017 5:55 pm

Invoice matching which is core of GST has not yet started !!
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In feb-2018, invoice matching of july-2017 will start !! (so much for infosys's ability)
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Thats when real real slaughter of small manufacturers in India will start
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Just wait and watch. Rajasthan elections will be bigger "referendum".
Errors and discrepancies with invoices will be a problem. The whole invoice matching scheme will be a terrible burden on small businesses.

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Re: Goods & Service Tax (GST)

Post by Aditya_V » Wed Dec 20, 2017 7:00 am

Invoice Matchign will match the Seller GST amount with Buyer GST amount, it will throw some errors but I dont think it be huge issue

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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Wed Dec 20, 2017 5:38 pm

Errors and discrepancies with invoices will be a problem. The whole invoice matching scheme will be a terrible burden on small businesses.
Its not just errors - there are deliberate defaulters who have collected GST and dont want to pay. In CGST act clause-16.2.c, when a seller has collected GST from buyer, and that seller doesnt deposit that GST in Govt, the Govt collects GST from buyer once again (again, because buyer has already paid GST once to the seller).

So far, that didnt happen because invoice matching was not done. Now invoice matching for jul-2017 will start in feb-2018 and so many buyers will start getting notices that "you say you paid GST to seller Mr. X, but Mr. X didnt deposit GST, and so pls pay that GST again" !!! And its not some error that will get resolved. In some cases, X may say "GTH, I am not paying".
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Now every year, some 1% small / medium businesses will default i.e. they will not deposit GST collected. So buyers will start distrusting ALL remaining 99% honest tax paying small manufacturers and traders as well. And so buyers reduce buying from honest tax depositing small / medium businesses as well. And so small / medium budinesses / manufacturers start losing sales and start collapsing.
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Due to Gujarat elections, Central Govt suspended RCM (reverse charge mechanism) and eWay bill. And so there is revenue loss. So now RCM is coming back. So again small unregistered traders and manufacturers, and their buyers will start squealing !!! :rotfl:
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And I am eagerly waiting for e-Way bills - they are likely to start in jun-2018 !!! God --- fun will be twice the demo !!! :rotfl:
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And many exporters had paid IGST in jul / aug / sep. IGST on exports is 0%, but they still had to pay !! Now they will get refund. But guess what --- many small exporters had to borrow money from market at the rate of 24% to 36% a year !! And refund will fetch them at most 18% per year interest, that too if they are lucky. So small exporters are bleeding due to interest burden caused by IGST that they were not supposed to pay to begin with !!! :rotfl: And big business get money at 12% a year, and foreign companies get money at even lower rates. So they may even end up making profit on delay in refund !! :rotfl:
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Happy days coming. achchhe din aane waale hei ...

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Re: Goods & Service Tax (GST)

Post by Mort Walker » Fri Dec 29, 2017 4:26 pm

MehtaRahulC wrote:
Wed Dec 20, 2017 5:38 pm

Its not just errors - there are deliberate defaulters who have collected GST and dont want to pay. In CGST act clause-16.2.c, when a seller has collected GST from buyer, and that seller doesnt deposit that GST in Govt, the Govt collects GST from buyer once again (again, because buyer has already paid GST once to the seller).

So far, that didnt happen because invoice matching was not done. Now invoice matching for jul-2017 will start in feb-2018 and so many buyers will start getting notices that "you say you paid GST to seller Mr. X, but Mr. X didnt deposit GST, and so pls pay that GST again" !!! And its not some error that will get resolved. In some cases, X may say "GTH, I am not paying".
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Now every year, some 1% small / medium businesses will default i.e. they will not deposit GST collected. So buyers will start distrusting ALL remaining 99% honest tax paying small manufacturers and traders as well. And so buyers reduce buying from honest tax depositing small / medium businesses as well. And so small / medium budinesses / manufacturers start losing sales and start collapsing.
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Due to Gujarat elections, Central Govt suspended RCM (reverse charge mechanism) and eWay bill. And so there is revenue loss. So now RCM is coming back. So again small unregistered traders and manufacturers, and their buyers will start squealing !!! :rotfl:
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And I am eagerly waiting for e-Way bills - they are likely to start in jun-2018 !!! God --- fun will be twice the demo !!! :rotfl:
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And many exporters had paid IGST in jul / aug / sep. IGST on exports is 0%, but they still had to pay !! Now they will get refund. But guess what --- many small exporters had to borrow money from market at the rate of 24% to 36% a year !! And refund will fetch them at most 18% per year interest, that too if they are lucky. So small exporters are bleeding due to interest burden caused by IGST that they were not supposed to pay to begin with !!! :rotfl: And big business get money at 12% a year, and foreign companies get money at even lower rates. So they may even end up making profit on delay in refund !! :rotfl:
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Happy days coming. achchhe din aane waale hei ...
So what you're saying is that with RCM - if the seller collected GST, but didn't deposit that GST, then the buyer would have to pay the GST of the goods bought from the seller? If this were the case, would it not be better to insist on an official invoice that showed the seller has paid the GST? Yes, it is a burden.

In the case of IGST, that appears to be teething pains of implementing GST. It is sloppy though and will have an impact into next year.

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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Fri Dec 29, 2017 4:50 pm

Mort Walker wrote:
Fri Dec 29, 2017 4:26 pm

So what you're saying is that with RCM - if the seller collected GST, but didn't deposit that GST, then the buyer would have to pay the GST of the goods bought from the seller? If this were the case, would it not be better to insist on an official invoice that showed the seller has paid the GST? Yes, it is a burden.

In the case of IGST, that appears to be teething pains of implementing GST. It is sloppy though and will have an impact into next year.
Buyer will have to defacto pay GST once again to Govt , if GST that buyer has once paid to seller is NOT deposited by seller to Govt. Even if buyer has paid by cheque, and even if buyer has official invoice and even if seller admits that buyer did pay GST. But all documents in order, if seller doesnt pay GST to Govt, then as per clause-16.2.c, Govt will simply collect GST from buyer once again !!! Now buyer can chase courts and seller and govt for a few years demanding refund. That may come in next life. But within 2-3 quarters, Govt will simply collect GST from buyer !!!

And this is NOT teething problem - i.e. some problem that comes in the beginning and will go away with time. This feature or flaw is INHERENT and integral part of GST

Let me state this missing trader problem again

(1) Say RCM sells goods worth Rs 1000 to MW . Say GST is 20%.

Then MW has to pay Rs 1000 + Rs 200 (GST) = Rs 1200 to RCM

(2) Say MW has invoice signed by RCM with digital signatuires and MW has paid money by bank RTGS and all proofs exist.

(3) RCM has to pay Rs 200 to Govt.

(4) Now MW decides to sell goods for Rs 50 of profit to his customer

So MW collects = Rs 1050 + Rs 210 = Rs 1260 from MW's client

(5) MW has to deposit Rs 210 - Rs 200 = Rs 10 to Govt.

So far, fine.

But if RCM refuses to pay GST of Rs 200 collected from MW, then Govt will collect Rs 200 from MW once again !!! GST dept has powers to deduct money from your bank account. Even if MW gives all paper and digital proofs of payments --- Govt will simply show clause-16.2.c and deduct Rs 200 from MW's input credit i.e. same as saying Govt will ask MW to pay Rs 200 AGAIN !!

You love this clause-16.2.c , dont ya? Well, if you dont love this clause, then pls start loving it asap. Because if you love GST, then you better love clause-16.2.c of CGST act. Because this clause is INTEGRAL part of GST-law-draft. Remove this clause, and GST collection will fall to Rs zero crores !!! And if this clause remains, then small / medium businesses will collapse. And this clause-16.2.c summarizes SoMoKe's ideology or mentality, whatever it is. (SoMoKe = SoGa / NaMo / ArKe). So pls do love this clause-16.2.c

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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Thu Jan 18, 2018 4:46 am

Financial express, today --- http://www.financialexpress.com/economy ... s/1019710/

GST: Compliance falls for invoice returns

Compliance level for GST invoice-level filings continues to be low despite several extensions and, in all probability, are just over 30% right now.

Compliance level for GST invoice-level filings continues to be low despite several extensions and, in all probability, are just over 30% right now. In the case of summary returns, however, compliance levels have been higher at around 65-70%. Detailed invoice-level filings are important because it is only after these details are available that GST authorities can check the levels of tax evasion. While the break-even GST collection is likely to be in the range of Rs 95,000-1,00,000 crore per month, in April-November collections have averaged Rs 87,000 — after Rs 92,000 crore for July, collections fell to Rs 81,000 crore for November. While there were around 60 lakh firms registered under GST in July, this rose to 84 lakh by November. In addition, the number of firms under the composition scheme — these firms need to pay just a 1% GST levy on sales and file quarterly summary returns — rose from 5 lakh to 16 lakh over the same period.

Summary returns that all non-composition firms have to file every month fell from 58.7 lakh in July to 53 lakh in November. This works out to an average compliance level of 66%. Compliance levels for the composition scheme, surprisingly, fell to a lower 35-40% and with tax filed of Rs 250 crore, the average turnover of these firms was around Rs 2 lakh in that quarter or Rs 8 lakh if its annualised. Since firms with sales of less than Rs 20 lakh don’t even have to register for GST, the tax evasion is apparent. Firms with a turnover of less than Rs 1.5 crore had to file detailed sales return with invoice-level return for July-September by January 10, making that a total of around 180-200 lakh returns.

Firms with a turnover of more than Rs 1.5 crore had to file these returns for July to November, making that a total of 35-40 lakh returns. While no details are available of the number of returns filed before January 2, according to data given by Bihar finance minister Sushil Modi, in the eight days leading to the January 10 deadline, a total of 47 lakh returns were filed . If you assume 20-30 lakh return were filed prior to January 2, that gives a filing ratio of about 33%.
As per this newslink, to break even, GST collection needs to be Rs 95000 crore per month. And GST collections are much lesser than that and only reducing day by day. Also, July/Aug collection was high, but soon excise credits will have to be paid and IGST paid by exporters has to be refuded.

So govt finance survived only because of petrol taxes. What would happen to economy, if cruder prices were $100 to $120 which they were for several years in past? Quite a horror picture
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All in all, congress made a royal mess and its now clear that other than petrol tax, there is nothing in economy that gives any hope. And how long petrol be can be taxed to such extent depends on international prices. In international prices shoot, then we have total mess at hand
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eWayBill system is brought with hope that eWayBill system will increase GST collection. But eWayBill system will wreck economy apart. Lets see how eWayBill system goes.

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Re: Goods & Service Tax (GST)

Post by Aditya_V » Fri Jan 19, 2018 5:18 am

What is Break even GST, Please explain with Numbers, Excise wtihout Diesel and Petrol was 1.5 Lakh crore, Service tax 2.4 Lakh crore , VAT without Petrol Diesel and Alcohol of various states another 3 Lakh crore, Add all other taxes Get anther 75K crore, thats 7.75 Lakh crore etc, 65K crore per month from Legacy taxes which GST replaced.

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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Fri Jan 19, 2018 6:56 am

Aditya_V wrote:
Fri Jan 19, 2018 5:18 am
What is Break even GST, Please explain with Numbers, Excise wtihout Diesel and Petrol was 1.5 Lakh crore, Service tax 2.4 Lakh crore , VAT without Petrol Diesel and Alcohol of various states another 3 Lakh crore, Add all other taxes Get anther 75K crore, thats 7.75 Lakh crore etc, 65K crore per month from Legacy taxes which GST replaced.
I dont know. The article says that break even GST should be Rs 95000 crore per month.

I could not find any link to GoI website which gives full breakup of taxes for past three years. There are central taxes like CST and there are also state taxes like entertainment taxes on movie tix which were big.

And many refunds apply on GST collected, and full GST is yet to be collected. There are many firms which havent even submitted return of jul-2018 yet, and many firms are claiming excise. Many firms say that they have paid IGST on export and are eligible for 100% refund PLUS 18% interest on the delay !! So even July number will not be clear anytime soon.

But now real game change is eWayBill System. eWayBill is suppose to increase GST collection significantly. Lets see how high it takes.

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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Thu Mar 01, 2018 12:03 pm

http://www.financialexpress.com/economy ... e/1082366/

(see image in the above newslink)

Image says that the Center as per budget presented is expecting GST of Rs 54000 crore (as center's share, NOT total). Currently Center's share in GST is is only getting about Rs 37000 crore a month. So gap between expectation and reality is wide.

Experts say that invoice-matching and eWayBill will improve collection !!! Well, lets see how many businesses shut down due to invoice matching and eWayBill system.

========

http://www.livemint.com/Politics/Y1oW9S ... T-Act.html

The first two arrests under GST act made. They are accused of making and using invoices without actual shipment of goods.

And both are Gujaraties !!! :lol: . Should we all Gujaraties be proud that FIRST persons arrested in GST were Gujaraties? 8-)

The way Duratma Gandhi fooled whole India, and the way Modiji and Urjit Patel are now fooling whole India, and the way Nirav etc have fooled banks, looks like after year 2024, no Indian will trust any Gujarati for next 50 years !!! Just kidding folks.

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Re: Goods & Service Tax (GST)

Post by chetak » Sun Apr 22, 2018 6:59 am

x posted from the political thread

Why were companies with foreign shareholding and in some cases untraceable ownership specially chosen and made part of the GSTN network??

Were Indian PU banks not seen as being adequate to the task or were there other considerations??

Much of this data has national security implications, especially of the economic kind.


https://www.pgurus.com/did-hasmukh-adhi ... 3-project/

Pranab Mukherjee had suggested a fully owned Government mechanism to administer and collect the tax. Chidambaram changed it into a 51% private organizations controlled company! The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Puducherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% is with HDFC (10%), HDFC Bank (10%), ICICI (10%), NSE Strategic investments (10%) and LIC Housing Finance (10%). The majority of the LIC Housing Finance is now with foreign financial firms and private firms and LIC is having only nominal shares.

The authorized capital of the company is Rs.10 crores, of which Rs.5 crores was provided (shared amongst) the majority shareholders. To start with, GSTN was funded through a one-time non-recurring Grant- in aid of Rs.315 crores from the Central Government towards expenditure for the initial set up and functioning of the Special Purpose Vehicle (SPV). Following this, the Union and State Governments of India have pumped in more than Rs 5000 crore to keep GSTN kicking. So precisely, by paying up Rs.5 crores, the majority stakeholders controlled Rs.5000 crore of the public money!

The first question is – Is it true that the Central Board of Excise and Customs (CBEC) repeatedly proposed on file to make GSTN a wholly-owned Government of India body? Is it true that Finance Secretary Hasmukh Adhia scuttled every effort by the CBEC to purge GSTN of the majority private shareholders? Is it because the Civil service Conduct Rules do not apply to the employees of a body like GSTN? Why unlike the UIDAI, the GSTN was not made a fully-owned Government body, especially because it is the repository of national tax data and also that the GSTN is linked to all banks, RBI, Customs servers and the PFMS module of the Union Accounts Department?

Secondly, why did the majority stakeholders make no contribution towards the expenditure of the GSTN? Why did Adhia approve performance-linked incentives for the senior officials of the GSTN, when he was fully aware that this was an expense from the exchequer? Who audited the performance of GSTN before they were doled out public money as incentives? If there was no audit of their performance by the Government before sanctioning such incentives, running into crores, is this not a fraud on the exchequer, in which Adhia has colluded?

If one is made to believe that the functioning of GSTN is transparent and legal, why did Adhia not sign any file as Chairman GSTN? Why did he abdicate his responsibilities and hand over the additional charge to Mr. A. B. Pandey, CEO of UIDAI within a matter of 10 days? Was there a nefarious design to keep the GSTN outside the purview of the CBI to ensure a free hand to the officers to indulge in all activities with utter contempt for the law?

There is a history to some of the private stakeholders. The National Stock Exchange (NSE) under Ravi Narayan, who was part of the GSTN Board, was mired in several controversies and BJP leader Subramanian Swamy was campaigning for his removal from the board, which, it is reliably learnt, happened after the intervention of the Prime Minister’s Office.

There are lessons for bureaucrats and ministers after every scam is analysed threadbare in public. Even after the CWG scam, wherein Suresh Kalmadi was accused of flouting tender norms to provide contracts to private entities, why is the same pattern being repeated here in GSTN? Why did Hasmukh Adhia decide to look the other way while this was unfolding or did he deliberately participate in this?

Why did Adhia, who was the epicentre of GST and GSTN, discard the advice of the CBEC to make GSTN a wholly owned Government body? Why are those files of the CBEC which proposed for takeover of the GSTN being suppressed in the Finance Ministry now? It is an open secret that the only officer who has been with Adhia all throughout this GSTN journey is – Uday Singh Kumawat!! Kumawat dutifully continued the legacy of Chidambaram in the Finance Ministry and shaped the GSTN project accordingly, while Adhia played along. Why, Mr Hasmukh Adhia?

Why was the PMO kept in the dark on these proposals pertaining to the take-over of the GSTN to make it a fully owned Government body?

A North Block veteran told PGurus – from the conceptualization to the award of contract to Infosys (which reeks of a scam), actual user charges allocation (which is a fraud on the cabinet) to the flouting of the General Financial Rules (an illegality), Adhia handled the entire project the way Chidambaram would have done it.

https://www.pgurus.com/gstn-floated-upa ... 1-percent/

Creation of GST involves Constitutional Amendments and this GST administration and tax management company should have been ideally created by a consortium of Centre and State Governments. After all they have all the data and it is a matter of pulling them together for computation of GST. The question then is why the then Finance Ministry under P Chidambaram took this decision to outsource such a strategic activity to the private sector?

On first looks, the most significant player in this tax collection effort should be the one who has the Data. In this case, that would be the Central and State Governments. Everything else such as adjusting the percentage of GST for various states is just a matter of programming, which could have been done by the Government itself. After all, it has codified Income Tax! This cannot be more complicated than that!

A closer look at the private partners reveals that entities such as the HDFC Bank, ICICI Bank and LIC Housing Finance Limited have shareholding of several foreign investments companies. In LIC Housing Finance Limited, among the 59 percent private shares, Abu Dhabi Investment Authority, Bank of Muscat, Mawer International Equity Fund, ICICI Prudential are the major private players.

In our opinion, tax administration is a sensitive matter dealing with sensitive information. Being a shareholder, would this automatically mean that HDFC and ICICI will be the bankers of public money collected through taxes? If yes, that would be a large amount of money passing through these banks! Also has the Home Ministry approved GSTN operators to allow them access to tax data?

The GST Bill has a long way to go. Only the constitutional amendments have been passed in the Parliament. States have to come on board and the final bill needs to be drafted and agreed to be made into law. Adequate security has to be established to ensure that this data does not fall in the wrong hands.






Finally, after all the mess, the Government decides to take over GSTN. Will FM & Adhia admit they were wrong?




Finally, after all the mess, the Government decides to take over GSTN. Will FM & Adhia admit they were wrong?

Has wisdom finally dawned on the Indian government on GSTN?

By Sree Iyer - April 11, 2018

It is believed that Winston Churchill said that “Americans can always be trusted to do the right thing, once all other possibilities have been exhausted.” There has been much speculation[1] about whether Churchill did indeed say that but this was the phrase that came to mind when I read that Indian Govt. is mulling taking full control of the Goods and Services Tax Network (GSTN).

It appears as though wisdom has finally dawned. The Union Government on Tuesday started thinking of taking full control of Goods and Services Tax’s (GST) control and tax collecting mechanism GSTN.


When PGurus questioned the ownership structure of GSTN, a hue and cry were raised[2]. Finance Minister Jaitley replied in the Lok Sabha that it is best left to a private company to deal with the billions of transactions that take place on a daily basis[3]. This was an indirect jab at Government’s own departments, who had written the Income Tax Software program and other services, that they did not have the skills to come up with the software for GSTN.

Needless to say that this raised the hackles of the Indian Revenue Service (IRS) Officers Association. The association has been demanding that they be given the control of this software. BJP leader Subramanian Swamy was urging full government control, pointing out the dangers of allowing majority ownership in the hands of foreign banks[4]. But Finance Minister Arun Jaitley preferred to go ahead with the GSTN whose ownership was tweaked by his buddy, the former Finance Minister P Chidambaram, to include Private Banks[5]. Apart from Jaitley, his Finance Secretary Hasmukh Adhia also threw his weight behind GSTN[6].

It appears as though wisdom has finally dawned. The Union Government on Tuesday started thinking of taking full control of Goods and Services Tax’s (GST) control and tax collecting mechanism GSTN.

PGurus ran a series of articles[7] in which serious matters pertaining to the role and the performance of the GSTN was questioned. Hasmukh Adhia was asked many pointed questions on data security, tender issues, and expenditure from exchequer[8].

The Finance Ministry has allotted more Rs.5000 crores to GSTN to develop software through Infosys and still, the software is not working properly. The 51 percent shareholders in GSTN are ICICI Bank, HDFC, HDFC Bank, LIC Housing Finance and an NSE subsidiary… These firms have not yet put a single paisa in GSTN[9]. Due to software related issues, lakhs of crores of rupees are not still disbursed between states and huge amounts of money are deposited at shareholder private banks like the ICICI Bank and the HDFC Bank. Shouldn’t these funds be kept in Public Sector Undertaking (PSU) Banks such as the State Bank of India?

In what appears to be the first step towards a drastic restructuring and resurrection of the GSTN, the Prime Minister Narendra Modi appears to have issued directions to have this matter be looked at from ground up. The Government is considering to convert Goods and Services Tax Network (GSTN) into a government entity soon, to monitor the performance of the company more closely.

According to media reports on Tuesday, after returning from the All India Institute of Medical Sciences (AIIMS), the Finance Minister Arun Jaitley has written to Finance Secretary Hasmukh Adhia to “examine the possibility of converting GSTN into a government company[10]“. The fact is that these two individuals were among the most vociferous supporters of GSTN being kept private. This must be a bitter pill to swallow.

The new proposal, after being finalized will have to go through the rest of GST Council, which will have to give its final nod, before the government can actually convert GSTN to a government entity. Arun Jaitley and Hasmukh Adhia were stonewalling CAG from auditing GSTN8 and they even went to extent of issuing circulars that the affairs of GSTN be exempt from General Financial Rules and also allowed payment of Rs.1400 crores to GSTN without Cabinet approval. Have a lawyer and a Doctorate in Yoga placed the administration and tax collection mechanism of GST in serious jeopardy? We at PGurus have been well-intentioned for the past two years, warning of the possible chaos that would result from the hasty decisions that the previous government had taken. Unfortunately, these pleas fell on deaf ears and now we are at a critical stage.

GSTN affairs were messed up by Jaitley and Adhia for the past four years and they should be made accountable for this. Hope the Prime Minister is listening.

References:

[1] Americans Will Always Do the Right Thing… – Nov 22, 2016, The Churchill Project

[2] Why was GSTN floated by the UPA in 2013, with private ownership of 51 percent? – Aug 7, 2016, PGurus.com

[3] Finance Minister Arun Jaitley addresses Lok Sabha on GST Bill – Aug 8, 2016, DD channel on YouTube

[4] GSTN – It is the data and the Govt owns it – Sep 1, 2016, PGurus.com

[5] Chidambaram changed Pranab model of GSTN and rigged it for Pvt. firms. Change it – Swamy to PM – Oct 1, 2016, PGurus.com

[6] More muck and sleaze tumbles out from the cupboards of the Finance Ministry – Mar 18, 2018, PGurus.com

[7] The GSTN Saga – The pain of doing business in India – Sep 17, 2017, PGurus.com

[8] GSTN tender scam – Will Hasmukh Adhia speak now? Why was Rs.1400 crores allotted bypassing the Union Cabinet? – Mar 28, 2018, PGurus.com

[9] Did Hasmukh Adhia convert GSTN into a UPA-3 project? – Mar 30, 2018, PGurus.com

[10] Govt mulling converting GSTN to govt company – Apr 10, 2018, LiveMint.com

chetak
BGR Oldie
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Re: Goods & Service Tax (GST)

Post by chetak » Sat May 05, 2018 8:38 am

There is no indication of which banks will be used to deposit the GST accruals or is the existing arrangement of using private banks to continue undisturbed??

All the high paid "staff" and the GSTN Board appointed by the private banks and other erstwhile shareholders are to continue for a period of five years.

Someone should file a request for details on their salary and perks, which are anyway being paid for from public funds.



At last, Government acquires 100% shares in GSTN by kicking out all tax money eating private players

At last, Government acquires 100% shares in GSTN by kicking out all tax money eating private players

By Team PGurus - May 5, 2018

Modi has correctly re-organized the corporate structure of GSTN to make it completely Government owned

Modi’s government took corrective measures[1] to fully acquire the Goods and Services Tax’s administration firm Goods and Services Tax Network (GSTN) by avoiding all the private players inducted by the former tainted Finance Minister P Chidambaram. Friday’s GST Council meet has officially declared that 51 percent shareholding by private bankers and dubious stock brokers consortium would be avoided from the strategic tax collection firm GSTN and it is made as a 50:50 partnership between the Centre and the State Governments.
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On Swamy’s complaints, Prime Minister had ordered Intelligence Bureau probe on how private banks and firms were allowed in GSTN and found that there was no security clearance received from Union Home Ministry. GSTN was floated by Chidambaram in March 2013 with 51 percent private banks. It is still a wonder, how Chidambaram dubiously floated a private firm in 2013 when GST Acts were passed only in 2016.

“Presently, the Central Government and State Government are holding 24.5% equity shares respectively and the remaining 51% are held by non-Governmental institutions and through various mechanisms, GSTN is under strategic control of government[3]. Majority of the GST processes including registration, the filing of returns, payment of taxes, processing of refunds is IT driven and GSTN is handling large-scale invoice level data of lakhs of business entities including data relating to exports and imports. Considering the nature of ‘state’ function performed by GSTN, Council felt that GSTN be converted into be a fully owned government Company.

*In view of the above, GST Council in its meeting held today decided:*

Acquisition of entire 51% of equity held by the Non-Governmental Institutions in GSTN amounting to Rs. 5.1 crore, equally by the Centre and the States governments and allow GSTN Board to initiate the process for acquisition of equity held by the private Companies; and

GSTN Board shall be allowed to continue the existing staff at existing terms and conditions for a period up to five years, and shall have the flexibility of hiring people through a contract on the terms and conditions similar to those used by GSTN till now while hiring regular employees. The existing financial commitments given by Centre and States to GSTN to share the capital and O&M cost of the IT Systems shall continue,” said the press statement issued by Finance Ministry after the May 4th GST Council Meet.

Finance Ministry has made several controversial moves by allowing Infosys to undertake the software and networking of GSTN. Though more than Rs.5000 crores was pumped to Infosys[4] from GSTN, the software and networking are still in a state of chaos[5]. Jaitley and Adhia even made secret notes to disallow the Comptroller and Auditor General (CAG) from auditing GSTN[6] and even made an order that GSTN would not come under General Financial Rules (GFR). This was a dubious move to avoid Union Cabinet clearances to pump money into GSTN and give to private vendors like Infosys.

Now, after Prime Minister Narendra Modi’s intervention, GSTN has become a full government entity and Government should take back all tax collection money deposited in private banks like the ICICI and HDFC and deposit it in a Public Sector Bank.

Prime Minister should look to flush out the crooked people in Finance Ministry responsible for much of this chaos for the past four years

MehtaRahulC
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Re: Goods & Service Tax (GST)

Post by MehtaRahulC » Fri May 18, 2018 2:24 am

Malaysia has scrapped GST as per poll promise of new president. And now there is Sales and Service Tax aka SST.

https://www.businesstoday.in/current/wo ... 77131.html

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A year 2010 article by a US economist against GST aka VAT -- http://www.heritage.org/research/report ... ted-states a good read.

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We should NOT copy Malaysia or take advice of any US economist. We should use our own brain, and scrap GST and instead levy wealth tax.

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