BUDGET 2011 SHOULD HAVE FINAL SAY ON GST – Goods and Service Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 9-2-2011 Last Replied Date:- 30-12-1899 – Once again we enter the budget month ,ie, February and we expect the Union Budget 2011 to be unveiled on 28 the February 2011 when country s Finance Minister shall be laying before the Parliament the Government s budgetary proposals and tax proposals- both direct and indirect. This year s budget assumes greater importance in the wake of ongoing high level of corruption and financial irregularities in almost every sphere of governance, thus putting tremendous pressure on the exchequer and fuelling bad money in the system. Also, the present governance and banking system has been unable to tame the evil of inflation causing hardship to one and all. Petrol prices and high rate home loans are only adding salt to the injury. However, economy has shown positive signs on various parameters. Thus, the top agenda for the Finance Minister would be t
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middot;Draw a final road map with timelines for both- DTC and GST atleast w.e.f. 1.4.2012. ·To revisit GST structure to be followed with fresh and open mind to restore confidence, remove various impediments faced and find solution to issues posed before the empowered committee. So far as GST is concerned, the seriousness of our Government , the democratic approach to introduce GDP and the deliberations at Empowered Committee – all have become a mockery. What is painful is that the people who do not understand much about GST and its implications are to decide on GST structure in the said empowered committee. The members therein, are primarily concerned about state s shares of revenue and nothing else, of course, least about the tax payer. It is high time that the Union Government should stop hoping for the consensus to emerge between the centre and different states on the GST roll out. Now what is legally permissible must be acted upon. It is once again advocated thatIndiamust f
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percent (being Union tax). We also have a strong case for tax rate reduction owing to higher inflation and slow sectoral growth. The government should also work on a formula where in all the products and services are covered under the GST regime. The benefit of GST should be available to all players including those in liquour or tobacco industry and fuel / petroleum sector. The budget should also seek to integrate or blend the excise and service tax before we get GST. Though we already have common cenvat credit rules in place, there are disputes in relation to direct or indirect inputs and input services. To point out few grey areas where integration is needed, issues persist such as payment of excise duty at the time of clearance of goods from the factory but service tax being paid on receipt of value of service, separate registration and procedural compliance requirements, different treatment of export of services and export of goods and consequential relief or rebate. Not only this,
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