|
Jharkhand budget diesel VAT rolled back
Ranchi, March 7, 2010: It was a budget aimed at sweetening the bitter price rise pill. From cutting down VAT on diesel, sweets and ice- cream to
making foodgrains available at Re 1 per kg for the poor, deputy chief minister Raghubar Das today presented an annual
budget which focused on rural development, food security and social welfare. Das brought smiles on the faces of children and adults alike
by reducing VAT on ice cream and sweets to 4 per cent from the existing 12.5 per cent.
The minister partially rolled back VAT on diesel to 18 per cent from 20, leaving petroleum dealers
unhappy. They threatened to continue their agitation till the government brought it down to 14.5 per cent. Source: The Telegraph
Houses to cost more after service tax
Mumbai, March 4, 2010: Now home buyers will bear a 10% service tax on properties under construction. This,
even before the title transfers from the developer to the consumer.
Union Budget 2010 may have put more money into the hands of consumers. But that
promise does not hold true for home buyers. A 10.3% service tax is now applicable on all under-construction properties. So
far, till the title in a property was passed to the buyer from the developer and
the occupation certificate was handed out, it was understood that there is no "service" that was being provided to customers.
However, now the proposed change in the law defines "service" as any receipt of
money from the buyer to the developer."Service tax was imposed on developers in 2005. In 2009, the government issued a
clarification note based on which we sought legal opinion. And, we were advised
that developers did not have to pay service tax," said JC Sharma, MD, Sobha
Developers. Source: IBNLive
Orissa to offer VAT exemption to IT SMEs
Bhubaneswar March 02, 2010:As part of its endeavour to promote SMEs (Small and Medium Enterprises) in the IT sector in Orissa, the state IT
department plans to offer a rent subsidy of Rs 10 per sq ft to these units. Sources close to the state IT department said, plans are also afoot to offer other enabling measures like exemption of electricity duties and value added tax (VAT) for IT SMEs.
These measures would be included in the new ICT (Information and Communication Technologies) policy of the state government. Earlier, SMEs had sought complete exemption from VAT on hardware
procurement by the units, investment subsidy and employment subsidy as well as “plug and play” office space for upcoming units. VAT on IT hardware currently ranges from 4 per cent to 12.5 per cent.
Goods and Services Tax delayed, now from April 1, 2011
NEW DELHI, February 26, 2010 (IANS): Finance minister Pranab Mukherjee Friday said he would
introduce major reforms for indirect taxes in the form of Goods and Services Tax (GST) from April 1 next
year. The government was earlier scheduled to introduce GST by April 1 this year.
"I am confident that the government will be in a position to implement DTC
(direct tax code) from April 1, 2011. It will be my earnest endeavour to
implement GST along with DTC from April 1, 2011," Finance Minister Pranab
Mukherjee said during his annual budget speech in the Lok Sabha.
GST is India's most ambitious indirect tax reform, which seeks to bring together
a common market and reduce costs to replace the current fragmented tax regime at
central and states levels like service tax, excise duty, VAT, cesses, surcharges
and local levies.
Auto cos wants govt to retain 8% excise duty
February 19, 2010: IIFL has mentioned auto sector expectations from the budget in its research
report India Strategy dated 17th February, 2010. Last year, excise duty on small cars, two-wheelers and was cut to 8% from 14%, as part of fiscal stimulus.
Large cars and UVs attract an excise duty of 20% + an additional surcharge of Rs 15,000 or Rs 20,000 per vehicle, depending on engine
capacity. Automobiles attract 8% excise, 12.5% VAT, 2% CST and 1% natural calamity cess.
This, together with the cascading effect takes total taxation to 23-25%. Industry demand - Maintain 8% excise duty on small cars and two-wheelers. Reduce excise duty on MUVs designed for transportation of 7 to 12 persons to
8% (70% of these vehicles are used in rural areas). Remove excise duty element of Rs 15,000 on passenger cars other than small cars. Remove 1% National Calamity Contingent Duty (NCCD) on cars, UVs and
two wheelers. GST rate of 16-17% for goods and a closer time limit for GST
implementation. source: Moneycontrol
VAT on goods up in Haryana
Chandigarh, February 16, 2010: The Haryana government has increased the rate of Value Added Tax (VAT) on goods included from
Sr. 1 to 101 of Schedule “C” of Haryana Value Added Tax Act, 2003, from 4 per cent to 5 per cent with immediate effect. However, tax on entry in serial No. 102 of Schedule “C”
of the Act and on the declared goods covered in Section 14 of the CST Act would continue to be levied at 4 per cent. A notification to this effect
has been issued by the Excise and Taxation Department, Haryana. Source: The Tribune
The sale of cotton exempted from the VAT
CHENNAI, February 14, 2010: The State government will soon announce an attractive textile policy, which will
further promote investment and employment in the sector, according to Chief
Minister M. Karunanidhi. Giving away export awards for 2008-2009 at a function organised by the Cotton
Textiles Export Promotion Council (TEXPROCIL) here on Saturday, he called upon
investors from other States and other countries to invest in the State textile
industrial units and assured them of all necessary assistance from the government.
The textile sector in the State provided employment to 4 million
people, the Chief Minister said his government would do its utmost to protect
the industry. The approval for setting up five integrated textile parks at
Kumarapalayam, Cuddalore, Vadipatti (Madurai district), Andipatti
(Theni district) and Karur had boosted textile investment in the State.
Giving an exhaustive account of various initiatives he announced in the Assembly a marine discharge project. The sale of cotton in the
State by the Cotton Corporation of India had been exempted from the Value Added
Tax (VAT). The sales tax on hank yarn was abolished, helping six lakh handloom
weavers. Source: The Hindu
No impact of VAT reduction on mutilated rags
New Delhi/ Chandigarh February 08, 2010 (BS): The decision of the Haryana government to reduce VAT on
mutilated rags under the Haryana Value Added Tax Act, 2003, would virtually have no major impact on the woolen and shoddy mills in Haryana, even as the government claims otherwise. The members of
Woolen and Shoddy Yarn Mill Association maintained, apart from simplifying the process of refund for
woolen and shoddy yarn manufacturers, the decision would have no major impact.
Panipat district in Haryana is one of the biggest producers of shoddy yarn with around 300 shoddy units. Mutilated rags
imported from overseas are used by the industry in Panipat to produce shoddy yarn. In its cabinet meeting held recently, the state government had announced its decision to reduce the rate of tax on mutilated rags under Haryana Value Added Tax Act, 2003 from 12.5 per cent to four per cent.
According to the government, to boost the woolen and shoddy yarn industry, which was under pressure
due to recession, the decision was taken.President of All India Woolen and Shoddy Mills’ association
Pawan Kumar Garg said earlier mutilated rags were not categorised under specified goods category but with their inclusion under specified goods category, VAT had been fixed at 4 per cent.
Liquor becomes dearer from April 1
CHANDIGARH, February 5, 2010: Haryana may witness an upward trend in liquor rates from April 1, when increase in licence fee of vends in the state comes
into effect. The hike may go up by 10% in Gurgaon, Faridabad, Panchkula and other parts of the state. Announcing the excise policy for 2010-11 after the state cabinet
meeting on Thursday, chief minister Bhupinder Singh Hooda admitted “mahangai ka asar hota hai (inflation has an impact),” while replying to a query on the likelihood of liquor rates heading
northwards. The state government has decided to renew vends of both country liquor and Indian made foreign liquor (IMFL) at a “reasonable” increase of 5 to 10%.
The cabinet has also decided to raise value added tax (VAT) on select commodities from 4% to 5% to generate additional revenue mobilisation of about Rs 300 crore per annum. The rate of tax on industrial inputs and packing materials, cereals, coal, cotton, cotton yarn, iron and steel and oil seeds will remain unchanged.
Tobacco products, including cigarettes, will also be dearer as the tax on them has been increased from 12.5% to 20%. The raise would not be applicable on tobacco products used in ‘bidi’ and
‘hukka’. Source: The Times of India
GST will not be introduced from April 1, 2010
NEW DELHI, January 30, 2010: After many doubts and much speculation, it’s now official. The proposed Goods and Services Tax (GST) which is to replace most of the indirect taxes levied by the Centre and the States will not be introduced from April 1, 2010. A fresh date for its implementation will be announced
in April after a meeting between the States and the Union Government.
Speaking to the media after a meeting with Union Finance Minister Pranab Mukherjee here on Thursday, Empowered Committee of State Finance Ministers chairman Asim Dasgupta said: “Because of the difficulties connected with the passing of the required constitutional amendment Bill in the Budget session, it will not be practical to introduce GST on April 1,
2010. The new date for [its] introduction, the Union Finance Minister suggested, would be settled in April.”
As per the original schedule of implementation, the GST was to be launched from April 1 this year to bring about uniformity in the indirect taxation structure throughout the country by doing away with Central levies such as excise duty and excise tax along with the value added tax (VAT) and octroi at the State level. Source: The Hindu
Rajasthan govt has announced VAT exemption on imported sugar
JAIPUR, January 29, 2010 (PTI): The Rajasthan government has announced VAT exemption on imported sugar in the state till June 30, in a bid to control the spiralling sweetener prices. "The decision to exempt four per cent VAT was taken by Chief Minister Ashok Gehlot yesterday, following which sugar price will
decrease by Rs 1.6 to 1.8," an official said. Sugar prices are ruling between Rs 41-43 a kg in the state.
"The government has exempted the tax in view of rising prices. After
June, further decision will be taken accordingly after a review of situation," the official added.
India, the world's largest consumer of sugar, is estimated to produce nearly 16 million tonnes of sugar against the annual demand
of 23 million tonnes. The gap of 7 lakh tonnes is being met through imports.
Centre, states differ on GST rate structure
New Delhi, January 27, 2010 (PTI) :The Centre on Monday opposed two rates suggested by states for goods under the
proposed goods Good and Services Tax (GST). "There should be a single rate of
SGST (state GST). A two rate structure of goods would pose problems," the Union
Finance Ministry said in its comments on the discussion paper on GST mooted by
the Empowered Committee of State Finance Ministers. The empowered panel has proposed to adopt a two-rate structure -–a lower rate
for items and goods of basic importance and a standard rate for goods in
general. It also suggested a special rate for precious metals and a list of
exempted items. However, the Revenue Department said that a two-rate structure
for goods would lead to more taxes on raw material and less taxes on finished
goods. The structure would also lead to demand of two rates on services which are currently taxed at a single rate.
The empowered panel has proposed a single rate for services under the GST. The
Revenue Department said that different rates for goods and services would imply
that the distinction between goods and services should continue. The department
also differed with the empowered panel proposal on keeping alcoholic beverages
and some petroleum products out of GST.
ASSOCHAM opposes hike in VAT by three states
January 22, 2010: The Associated Chambers of Commerce and Industry of India has
sought immediate intervention of Centre as well as Empowered Committee on VAT to
persuade State’s like Delhi, Karnataka and Assam not to deviate from VAT rate
fixed by the Empowered Committee on VAT in the interest of consumers.
Mr DS Rawat secretary general of ASSOCHAM said that it was unfortunate that
State government like Delhi, Karnataka and Assam have increased VAT rate on many products by 1%.
Other states will follow the suit, warned Mr Rawat as result consumers that are
already reeling under severe heat of price rise of essential commodities would
face utter inconveniences with increased VAT rate. He said that Indian industry, mostly in manufacturing segment will not be
affected with increased VAT rate as these will drop the burden of increased
taxation on consumers which will ultimately be worst sufferers. Mr Rawat appealed to empowered committee on VAT as well as the finance minister
to intervene and persuade state’s that has deviated from fixed VAT rate to
withdraw it at rates already fixed by the committee. If VAT rates are not
brought to original slabs, other states will follow the suit and that would be a
very bad precedent in the history of Indian taxation. Source: Steel Guru
Pawar mulling removal of value-added tax (VAT) on sugar imports
January 18, 2010: Prices of sugar, which have more than doubled in the past year, are set to
soften in 10 to 15 days, Agriculture Minister Sharad Pawar has said.
The sugar crisis took a political twist when Uttar Pradesh Chief Minister
Mayawati recently blamed the Centre’s policies for the shortage. The state of UP
is a major sugar producer and Mayawati said the central government allowing
exports in a year of lean output was the chief reason behind the shortage, a move she said intended to benefit mill owners.
The government extended the deadline for importing refined sugar and said it was mulling removal of
value-added tax (VAT) on imports. The Home Ministry would also crack down on smuggling of sugarcane and sugar in the country, the government promised.
Those measures may have now borne fruit now as wholesale sugar prices have come
down by about 10% — from Rs 4,280 per quintal to Rs 3,980 per quintal — in the last two days, Pawar said. He added retail prices were expected to come down
soon as well.
ICAI wants GST rollout to be delayed by a year
NEW DELH, January 16, 2010I: The Institute of Chartered Accountants of India
(ICAI) has asked the government to defer the implementation of Goods and Services Tax (GST) from April 1, 2010 by an year to allow for a smoother transition to the new indirect tax framework. “For smoother transition, it is imperative that GST be implemented
from the first day of a financial year. Since there is very little time for the slated implementation date of April 1, 2010, it is recommended that GST be implemented from April 1, 2011,” the ICAI said in its submission to the government.
The ICAI had constituted an expert committee to look into the implementation of the GST structure at the instance of the finance ministry. While favouring a dual- GST structure, the ICAI want the tax to be administered by a common authority. As part of transition measures, the ICAI has suggested that the
indirect tax on on-going works contracts/turnkey contracts and lease transactions be discharged on similar basis as like prior to introduction of GST. This it says will safeguard against an increase
in liability for suppliers involved in such contracts from an adverse impact of higher taxation rates under GST.
Source: The Economic Times
Delhi shifted to a 5% Value Added Tax (VAT) slab from 4%.
NEW DELHI, January 15, 2009: Starting Thursday, Delhi shifted to a 5% Value Added Tax (VAT) slab from 4%. The shift to the 5% slab will impact the prices of medicines, surgical and medical equipment, IT and electronic products like computers and software, and industrial inputs, among other things. The five percent slab will cover 170-odd items.
The draft amendment bill proposing a hike in VAT had been met with much opposition by the trader lobby. The Confederation of All India Traders had earlier raised
concerns over the proposed increase in the VAT slab, saying it would lead to a hike in the prices of
necessities and affect the common man.
But the government moved to pass the amendment Bill in the Delhi assembly in December, and on Wednesday notified the scrapping of the 4% slab and its replacement with the 5% slab. But Delhi
Fianance Minister AK Walia is clear the shift to the 5% slab is in keeping with the Central Government's directions on the VAT regime."All items under the 4% slab in the VAT Act are now under the 5% slab. The shift to a 5% slab will lead to an escalation in revenue collections," Walia said. Source: The Times of India
States have been asked to remove VAT and other taxes on imported sugar.
New Delhi, January 14, 2010: PRIME Minister Manmohan Singh, who chaired a meeting of Cabinet Committee on
Prices (CCP) on Wednesday, approved a host of measures aimed at taming the food inflation. The measures include: The Cabinet approved the sale of 5 lakh tonne
of wheat and 2 lakh tonne of rice through state-run agencies such as the National Agricultural Cooperative Marketing Federation of India Ltd and National
Cooperative Consumers’ Federation of India Limited. Also, 2-3 million tonne of wheat and rice should be released in the open market over the next two months.The CCP has approved
extending the deadline for refined sugar imports to December 31. There will be no quantitative cap on imports. The import of raw sugar at zero duty is already permitted up to 31 December 2010. Sugar prices
have hit the roof on account of drought in India and flood in Brazil, the two major sugar producing countries. The Cabinet also changed a rule to help millers in Uttar Pradesh, to process
nine lakh tonne of imported raw sugar lying at Mundra and Kandla ports, skirting a ban on supplies of imported raw sugar imposed by the Mayawati government in November to quell farmers’ protest.
States have been asked to follow Delhi to remove VAT and other taxes on imported
sugar. The CCP has also instructed the Home Ministry to crack down on smuggling
of sugarcane and sugar from India to Nepal.
Pranab to meet state FMs on Jan 13; govt to miss GST deadline
NEW DELHI, January 10, 2010: Finance Minister Pranab Mukherjee may meet state finance
ministers this week to discuss their requirements and implementation of proposed Goods and Services Tax,
speculated to be delayed by over six months, is likely to be discussed during the meeting. "Finance Minister will meet state finance Ministers on January 13 as a pre-budget exercise," an official said. Among other things, the meeting is also likely to discuss issues pertaining to implementation of GST, which is likely to be delayed by at least seven to eight months, he said.
The government had proposed to introduce GST from April 1, 2010, but it would not be possible as the constitutional amendments, necessary for introduction of the new tax structure which will subsume levies
like excise, VAT and service tax, would take seven to eight months.The government, the official said, may not introduce the amendment bills in the forthcoming Budget session as there is no consensus
among the states on rates and modalities of the new tax regime.States, which have been clamouring for more funds to tide over the financial difficulties following the economic crisis which had hit revenue collections, will also raise the issue of compensation on account of phasing out of the Central Sales Tax (CST).
Source: The Economic Times
Low VAT/GST be imposed on processed food: Sahai
Kolkata, January 8, 2010 (PTI): The Union Minister for Food Processing Subodh Kant Sahai
today said Value Added Tax rates or Goods and Services Tax rates (when it will
be in place)on processed food should be between zero to four per cent.Speaking at the North-East summit organised by the Indian Chamber of Commerce,
he said that if processed food were taxed at higher rates, then the food
processing industry would not be viable for investors. Sahai said that he had urged Asim Dasgupta, chairman of the
empowered committee of state finance ministers on GST, to keep these products in the above mentioned
taxation bracket. Once the production level of processed food increases to 50 per cent from the
present level of 10 per cent, tax rates could then be increased.
GST launch set to be delayed
NEW DELHI, January 8, 2010 : By all indications, the proposed Goods and Services Tax (GST) — much-awaited by India Inc. for
nationwide uniformity in indirect taxes — is set to miss the April 1, 2010,
deadline that was slated for its introduction. A decision on fixing a fresh date
for its launch is likely on Friday. A day before the Empowered Committee of State Finance Ministers’ meeting with
Finance Minister Pranab Mukherjee, panel Chairman and West Bengal Finance
Minister Asim Dasgupta said: “Tomorrow, we will discuss the new date for
introduction [of GST] and compensation formula to the States with the Union
Finance Minister .. Together, we will announce a new date.”
Dr. Dasgupta was talking to the media here after a meeting of the State finance
ministers on arriving at a revenue neutral rate for the GST which is envisaged
to subsume a host of indirect taxes such as excise duty and service tax at the
Central level and VAT (value added tax) at the State level, apart from surcharges, cesses and other local taxes.
Initially, the government had proposed to replace all these levies with GST from
April 1, 2010. However, no consensus has been arrived at thus far, either on the
mechanism of revenue sharing between the Centre and the States or on the date of
its countrywide launch. Besides, the other reason for its delay is the need for
Constitutional amendments for rolling out the new tax regime, apart from the
preparedness and of all the 32 States and Union territories. Source: The Hindu
Industry favours early implementation of GST
New Delhi January 5, 2010 9PTI): India Inc today asked Finance Minister Pranab
Mukherjee to introduce Goods and Services Tax (GST) "as early as possible",
amid speculations that the indirect tax reform may not be implemented from the scheduled date of April 1.
"We want that the GST deadline should not be missed," Ficci President Harsh Pati Singhania told reporters after a pre-budget meeting with Finance Minister Pranab Mukherjee along with other industrialists here today.
CII President Venu Srinivasan said: "Our view is that even if there are lacunae and flaws in GST, we will correct it as we move along, GST should be implemented as early as possible."
"We want GST implementation as soon as possible," Assocham President Swati Piramal said.
Some states, including Madhya Pradesh, Rajashtan, and Tamil
Nadu, want the GST implementation to be delayed as there are issues relating to preparedness. In fact, Mukherjee had also said that it might not be possible to introduce GST from April 1.
Singhania said in case GST could not be implemented from April 1, Central Sales Tax (CST) should be reduced to one per cent from the current 2 per cent. CST is a levy imposed on
inter-state movement of goods and has been cut from earlier 4 per cent to 2 per cent in phases, after VAT was introduced. CST does not conform to the idea behind VAT or GST, as the indirect tax reforms aim at a common market across the country. |
|
