BUDGET-2017 AND GST EXPECTATIONS
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 14-1-2017
While the Government still claims that it is actively working to see GST roll out from April, 2017, much would depend upon next week's GST Council meeting. States have indicated that it could be doable from any time between June and September, 2017.
Finance Minister has once again affirmed in ongoing Vibrant Gujarat Summit that GST could be introduced in April, 2017. Gujarat may be one of the few states that are prepared for GST. Government is working overtime to make it a reality with target of 1st April, 2017. However the present developments are not in sync with this dream. All the states will have to pass legisl
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it, is in the process of being fully geared up for April, 2017 (though it may not happen).
If Government may so feel, it may increase the rate of Service Tax to avoid any revenue loss due to delayed GST. This will serve dual purposes – will improve revenues and bring Service Tax rates closer to standard GST rates.
Since the likely standard rte of GST would be 18 percent as decided by GST Council, there is all likelihood that Service Tax rate may be increased to 16 or 18 percent. This would result in higher revenues to centre as compared to GST regime where rate is likely to be lower for some select services.
We can look for the following in Budget- 2017:
* Clear road map and Government's irrevocable intention on GST implementation
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re not as expected, how will amount collected be applied and whether rate of taxes / cases be lowered)
* Laying GST Bills in Budget session itself
For the first time, Union Budget will include (subsume) railway budget in it as there will be no separate railway budget. This would also mean a total fact lift for railways in two ways, moving on to accrual based accounting and second, an independent authority to recommend changes in fares and fright tariff.
With general elections having been announced in five states from 5th February till 8th March, 2017, the combined opposition is now demanding that Union Government should not present the Budget on 1st February, 2017 as it could influence the voters in election states. However, Government
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