After switchover, be prepared for challenges in a short-term, says Union
Finance Minister Arun Jaitley Shri Arun Jaitley when announcing that the country
will witness a transition to GST (Goods and Service Tax) from the midnight of
30th June to 1st July 2017. He also disclosed that GST
bill will be launched in the Parliament’s Central Hall by the Honourable
President, Shri Pranab Mukherjee.
The Finance Minister said that people should be prepared to confront a few challenges. He added that he anticipates more revenues to grow in the medium to long-term because this efficient system will check evasions effectively. This will strengthen the hands of the central and state government in terms of spending capacity and also have a positive impact on the Indian GDP.
State GST laws have been cleared by most of the Indian States, except Jammu & Kashmir and Kerala. Addressing a press conference, Mr. Jaitley said that Kerala will consider GST in the coming week while J&K has to go through process separately as that state has different statutes.
Official Launch of GST: GST Bill will be officially inaugurated on 30th June, late in the evening (midnight). All members of Parliament – Lok Sabha, Rajya Sabha, Chief Ministers, GST council members, Finance Ministers of State, and Empowered Committees’ Chairmen, as well as officials who helped to make GST a reality will be cordially invited to this official launch. Along with the President, Shri Pranab Mukherjee, Vice President Hamid Ansari and Prime Minister Narendra Modi will also be present in the Central Hall. Ex-Prime Ministers- Shri HD Deve Gowda and Shri Manmohan Singh have also been requested to attend this official launch. Lok Sabha Speaker Smt Sumitra Mahajan will also be present at this auspicious occasion. Union Finance Minister – Mr Arun Jaitley said that it will be a one-hour function where the President – Pranab Mukherjee and Prime Minister – Narendra Modi will speak on the subject. Thereafter, a short film will be screened on GST, he added.
Process Is Not Very Complicated:
In his brief, Mr. Jaitley said it was not a very complicated process. He urged industry members to be ready for GST process. He explained that the government has already extended the dates of filing returns on a monthly basis for July and August. Now, it is time for industry and traders to pull their resources and prepare themselves for this new regime of taxation.
He was relatively satisfied with the process of registration going on currently. There are approximately 80 lakhs assessees (all indirect tax assessee) and among them, nearly 65 lakhs has already registered until the last week. But, there are some duplication issues because some of them have registered for both - Excise and VAT. That will be rectified and eliminated quickly. Since this system is prone to checking evasions, the numbers of assessees will increase the in long run.
Mr. Jaitley said that the government had already announced GST rollout date six months back as 1st July. Hence, there is no excuse for industries and traders who have not prepared yet. Their readiness will be determined by 10th August 2017 which is the first date of filing returns. However, dates are extended to 15th September and there is enough time for industries that are not prepared for the new tax of GST.
Revenue and Inflation
When asked regarding the anticipations of falling revenues, Union Finance Minister said that the rates of revenue will not fall due to the system that will reduce evasion. Tax rates will be lower but a reduction in evasion will compensate this shortfall. However, falling rates will have an impact on the inflation.
Impact on GST excluded State:
The consumers and producers of that state will suffer a lot if a state stays out of GST. They will not get the benefits of input tax credit and consequently, consumers have to purchase same products at much higher prices than other states that have implied GST. Also, those States will not get the advantage of revenue loss compensation which is termed to be paid for the next 5 years.
Mr. Jaitley said that reforms are undertaken for betterment. It is seen as disruptive at the initial stage but in the longer run, these reforms will have better results. You should remain on a high alert and listen to every instruction precisely to avoid future problems.
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