New Delhi: The Goods and Services Tax launch will enhance buying power of consumers as over 80 per cent of the goods fall below the 18 per cent tax bracket, but SMEs need to work to remove technology glitches, say experts.

Tax professionals want the government to have empathy towards businesses in initial days of GST rollout to make the reform acceptable to all sectors of the economy. The biggest tax reform in independent India was rolled out at the stroke of the mid-night — the intervening night of June 30-July 1 — by President Pranab Mukherjee and Prime Minister Narendra Modi.

“With 80 per cent of the goods falling under 12 per cent and 18 per cent bracket leading to a fall in prices, GST will enhance the buying power of consumers without real increase in their income, which in turn will spur demand,” said Sachin Menon, KPMG (India) Partner and Head, Indirect Tax.

GST will remove plethora of taxes like excise, service tax and VAT and transform India into a uniform market for seamless movement of goods and services. In the initial few months of the GST launch, companies do expect significant challenges with respect to effective delivery by various realigned IT systems and continuous changes required in processes and systems on account of the law evolving each day.

“It is also highly expected that many sections of the industry may not be fully compliant with various requirements of GST law from Day 1 itself and would require a transitioning period of few months, post the go-live date,” said Rajeev Dimri, BMR and Associates LLP Leader (Indirect Tax).

Experts also say lack of clarity with respect to taxability of transactions with Jammu and Kashmir is leaving many companies unnerved. It would also be of utmost importance to carefully book all expenses and sales and map all the credits accurately in early days of GST for successful transition of all such credits.

“The launch of GST will truly unite the country as far as taxation of goods and services is concerned. We now hope that that the government moves to a considerate and empathetic implementation regime with a focus on making the reform acceptable to all sectors of the economy,” said M S Mani, Deloitte Haskins and Sells LLP (Senior Director).

Menon said that with assumptions and presumptions on date of implementation out of the way, industry players, including the MSME sector, will need to iron out last-minute glitches to ensure smooth operations from the first day itself. According to Pratik Jain, PwC India Partner and Leader, Indirect Tax, once the regime settles in, “we can look forward to it spurring the economy by incentivising manufacturing and making business decisions independent of taxes”.

Archit Gupta, Cleartax.com CEO and founder, said, “Even though some sellers may be facing hardships at this crucial transition phase, we join hands with the government in helping them bridge the other side.”

(Agencies)

Bengaluru: Bengaluru Cyber Crime Branch Police arrested Madhusudan (29) who opened a fake twitter account in the name of Karnataka Chief Minister Siddaramaiah and posted derogatory content in December 2016. The accused created the fake twitter account, ‘@CMoKarnataka’ which looks similar to the original account of the chief minister ‘@CMofKarnataka’ and posted controversial tweets. Following some media reports on fake twitter account, chief minister’s office deactivated the account and registered a police complaint on the incident.

The city police succeeded to arrest the accused after six month long search on June 30. Mandya native, Madhusudan is a software engineer and has been residing in the state capital for the last two years. The accused informed the police that he posted controversial tweets to get publicity.

(Agencies)

Panaji: The North Goa district administration on Friday extended the ban on Mangalore-based Hindu outfit Sri Rama Sene chief Pramod Muthalik for 60 more days with effect from June 30.

“The step has been taken to prevent every possibility of disturbance to law and order and danger to public safety due to their aggressive statements or speeches that could hurt the sentiments of certain groups of the public and instigate violence, thus adversely affecting public peace and tranquility,” the order issued by North Goa District Magistrate Nila Mohanan said.

According to the order, the associates of Muthalik have also been banned from entering Goa.

Muthalik’s entry into the coastal state’s North Goa district has been banned since 2014, after the rightwing Hindu activist said that he proposed to set up a branch of the Karnataka-based Sene in the state and that would work towards banning nightlife and pubs in the tourism-oriented state because they “ape western culture”.

Muthalik has already challenged in the Supreme Court the ban on his entry to North Goa and last week, the apex court sought from the state government an explanation for the ban.

Muthalik and the Sene first hit infamy after they vandalised a pub in Karnataka’s Mangalore city and assaulted young men and women at the outlet, claiming they were blindly aping western tradition.

(Agencies)

New Delhi: India on Friday said it has told China that the building of a road by Chinese troops in a border region will have “serious security implications for India” and urged Beijing “not to change the status quo unilaterally”.

“India is deeply concerned at the recent Chinese actions and has conveyed to the Chinese government that such construction would represent a significant change of status quo with serious security implications for India,” an External Affairs Ministry statement said.

This was India’s first public reaction to an ongoing stand-off between Indian and Chinese troops on their border. Beijing has sharply escalated the rhetoric, with the People’s Liberation Army telling New Delhi to remember its 1962 military debacle.

The statement said India had underlined that New Delhi and Beijing had in 2012 reached an agreement that the tri-junction boundary points between India, China and third countries would be finalized in consultation with the concerned countries.

“Any attempt, therefore, to unilaterally determine tri-junction points is in violation of this understanding,” the Indian statement said.

The latest stand-off occurred in Donglong or Doklam, a disputed territory between Bhutan and China. Beijing has accused India of obstructing road building in the area, which it claims as its own.

Beijing has also charged New Delhi with acting at the behest of Bhutan, which also lays claim to Donglong.

The External Affairs Ministry denied that Indian border troops crossed the boundary in the Sikkim sector of the China-India frontier and entered Chinese territory.

It said a PLA construction party entered Doklam area on June 16 and attempted to build a road despite objections from a Royal Bhutan Army patrol. Bhutan lodged a protest with China on June 20.

On Thursday, Bhutan said the construction of the road inside its territory was a violation of the 1988 and 1998 agreements with China.

India said that in keeping with the tradition of maintaining close consultation on matters of mutual interest, Bhutan and India had been in continuous contact “through the unfolding of these developments”.

It said that in coordination with the Bhutanese Army, Indian soldiers who were present at general area Doka La “approached the Chinese construction party and urged them to desist from changing the status quo. These efforts continue”.

India said the matter was under discussion between the Indian and Chinese foreign ministries since then both in New Delhi and Beijing. It was also discussed at a meeting of border personnel at Nathu La on June 20.

“Where the boundary in the Sikkim sector is concerned, India and China had reached an understanding also in 2012 reconfirming their mutual agreement on the ‘basis of the alignment’.

“Further discussions regarding finalization of the boundary have been taking place under the Special Representatives framework.

“It is essential that all parties concerned display utmost restraint and abide by their respective bilateral understandings not to change the status quo unilaterally.

“It is also important that the consensus reached between India and China through the Special Representatives process is scrupulously respected by both sides.”

The statement said India had consistently taken a positive approach to the settlement of its own boundary with China, along with the associated issue of the tri-junctions.

It said India cherished peace and tranquillity on the India-China border areas. “It has not come easily.

“Both sides have worked hard to establish institutional framework to discuss all issues to ensure peace and tranquillity in the India-China border areas,” the statement said.

“India is committed to working with China to find peaceful resolution of all issues in the border areas through dialogue.”

(IANS)

Hyderabad: The implementation of GST regime would lead to “chaos” similar to what had happened in the aftermath of demonetisation of high value notes last year, AIMIM president Asaduddin Owaisi said today.

The Hyderabad Lok Sabha member said he was not sure how far the new taxation system will be implemented in an “organised way”.

“Government is rushing and doing it. I see that there will be chaos…when demonetisation happened, it led to chaos because no proper planning was done. Now also, the government is rushing and pushing and this will lead to chaos,” he told PTI.

Owaisi added that economic and tax experts had expressed “lot of concerns” vis-a-vis the Goods and Services Tax (GST).

(Agencies)

New Delhi: Stage is set for the launch of a nationwide goods and services tax at midnight Friday amid protests from opposition parties who see hardships to small businesses in pushing through the biggest economic reform without preparations.

Prime Minister Narendra Modi will at midnight unveil the new tax regime replacing overnight the messy mix of more than a dozen state and central levies built up over seven decades, with a one national GST unifying the country’s USD 2 trillion economy and 1.3 billion people into a common market.

President Pranab Mukherjee, who had originally moved the Constitution Amendment bill for bringing GST way back in 2011 when he was the finance minister in the previous UPA regime, will be present alongside eminent personalities at the historic Central-hall of Parliament.

Unlike the last midnight event held in 1997 on the occasion of golden jubilee of the Independence at a special session of Parliament, it will be a gala event at the circular -shaped hall that has been loaned for the launch of the historic reform.

GST to streamline taxes

The government promises that the transition to a single, nationwide tax on goods and services will streamline business and boost the economy by tearing down barriers between 31 states and union territories. It is estimated to add 0.4 per cent to 2 per cent to GDP growth.

But some businesses are still figuring out how it will work as they race against time to adopt or upgrade cash registers and computer system so they are able to file monthly tax returns that comply with the new tax regime.

Opposition to boycott

Opposition parties TMC, Congress and Left see undue haste in the implementation, causing hardships for millions of tiny neighbourhood shops that don’t even use a calculator. They have decided to boycott the gala event.

Finance Minister Arun Jaitley made a last minute appeal to them to reconsider their decision saying the landmark indirect tax reform was a result of a joint decision and they cannot run away from it now.

Urging the opposition parties to “display broad shoulders”, he said they should not “disassociate” from the decision they were a party to.

But opposition parties say they are not against the GST but only want small businesses, who face wrenching change, to be given more time.

Former prime ministers Manmohan Singh and H D Deva Gowda too have been invited to launch a new taxation system that is set to dramatically re-shape the over USD 2 trillion economy.

But with Congress deciding to boycott the event, Singh may not be seen on the seat reserved for him on the dais.

Jaitley acknowledged there may be “teething troubles” with many businesses as well as state governments still scrambling to get ready. But he has assured that the effort would eventually help reduce rampant tax evasion.

For some businesses, the GST is complex with four broad tax categories of 5, 12, 18 and 28 per cent, and myriad exceptions, as opposed to a simpler, flatter and broader sales taxes in other countries.

Switchover to the GST has added to the worries of businesses that are still recovering from the November 8 shock decision to overnight remove 86 per cent of currency from circulation.

One of the things that is keeping companies occupied ahead of the launch is calculation of input tax credit, which allows them to claim refunds on tax paid on inputs and pay tax on the value adds only. From soft drink makers to automobile firms, companies are busy calculating final consumer price to be charged from July 1.

The government, however, defends the decision saying enough time was given to businesses to adapt to the new regime.

Notwithstanding this, the government will take a lenient view for tax returns filed in the initial period.

Revenue Secretary Hasmukh Adhia said honest tax payers will benefit from GST and the new regime will not result in price increase of any essential or daily use commodity.

Jaitley today met industry associations and traders to nudge them to pass on the benefits of any reduction in tax incidence to consumers.

Industry’s reaction

The industry on its part said it will take about 3 months to gauge the situation.

“We assured him (Jaitley) we are ready for the roll out. Even if this was rolled out after 6 months, we would have same amount of panic. Hotel industry will take it in its stride,” Bharat Hotels CMD Jyotsna Suri said. Her company runs hotels under the Lalit brand.

First proposed in 2003, the idea of GST was bogged down for years in bipartisan debate, with political parties in government trying to push it and those in opposition dragging it down. Before Modi came to power three years ago, his party was not particularly in favour of the GST.

Over 1,200 items, from shampoo to tea to automobiles, have been put in four broad tax categories.

Unbranded food staples including vegetables, milk, eggs and flour will be exempt from GST, along with health and education services. Tea, edible oils, sugar, textiles and baby formula will attract a 5 per cent tax.

(Agencies)