Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARDS :: form 3cd :: TDS :: VAT RATES :: articles on VAT and GST in India :: cpt :: VAT Audit :: ACCOUNTING STANDARD :: due date for vat payment
 
 
« Indirect Tax »
 Indirect tax collections rise by 23.1 per cent in November
 Government waives service tax charged while making payments through credit card, debit card, charge card or any other payment card; waiver limited to payments up to Rs. 2,000 in a single transaction
 Clarification Regarding Filing of Offline Challans with IEPF Authority under Companies Act
 Cash deposits in Jan Dhan accounts drop after govt warning: income tax dept
 Indirect tax receipts to see small, brief hit’
 There is no tax on interest income of up to Rs3 lakh a year for senior citizens
 Chidambaram favours change in direct tax rates
  Further rationalization of revised simplified procedure for fixation of brand rates
 Kerala to accept demonetised banknotes for payment of state tax till Nov 24
 Centre-state gridlock over GST jurisdiction remains, could threaten tax rollout
 India to levy tax on investments from Cyprus from April 2017

Carving-out GST exemptions will break up input tax credit chain
November, 21st 2013

States want to keep petroleum products and liquor out of the goods and services tax (GST). This is a bad idea and inimical to GST, meant to replace a multitude of state taxes, excise and other indirect levies. Subsuming many levies in GST will cut out the cascade of multiple taxes that these products bear, lower retail prices, and lead to efficiency gains and faster growth. More important, GST captures value addition in the production chain, and across sectors, as a manufacturer can claim credit for all the taxes paid on inputs.

However, exemptions will break up the input tax credit chain. Today, state taxes on petro products are steep and cascading. Petro-products attract heavy taxes in Europe too, but an integrated GST that provides credit for taxes already paid, offsets the burden. An integrated tax regime for oil products, with tax payable on the value added at each stage of production, distribution and sale brooks no delay. States must see reason. They must also agree to scrapping entry taxes as well as the central sales tax, a tax on interstate sales collected and appropriated by the state where the sale originates, to remove barriers for seamless movement of goods and services.

Many states find petroleum and liquor easy revenue sources and tax them heavily — collections in petroleum products alone account for over a third of the consolidated tax revenue. The Centre should compensate states for any revenue shortfall during the transition for GST just as it did when states switched to the value added tax ( VAT) system from the inefficient sales tax system.

States apparently want a formal constitutional mechanism for compensation. That's not a good idea as compensation has to be for a short transition period. GST will see revenues, including income tax, grow faster: the incentive to pay tax is built in because only then will a manufacturer be able to claim credit for the taxes already paid. The audit trail so generated would make evasion of income tax difficult as well. So, devolutions from the Centre would have to be taken into account to compute loss to state revenues, if any.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Outsourcing Test Solutions Software Testing Software Bug Testing Software Issues Tracking Software Issue Fix Software Code Optimization Database Design Optimization

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions