Home / Knowledge / News / Textiles / GST Countdown: More hurdles aheadBy Subir Ghosh
GST Countdown: More hurdles ahead
By Subir Ghosh
13
Aug '16

The Assam Assembly on August 12 became the first state legislature to ratify the Constitution (122nd Amendment) Bill for the rollout of the Goods and Services Tax (GST) regime. With that, the last leg of the race to meet the April 1, 2017 deadline of the Union government has finally begun.

The Assam ratification came just four days after all 443 members present in the Lok Sabha voted in favour of the legislation. The Bill had earlier, on August 3, been passed by all 203 members present in the Rajya Sabha where it had run into a bottleneck last year. With Assam having cleared the hurdles, the Bill will now have to be ratified by at least 15 of 28 remaining state assemblies. "This can be done without difficulty as 12 states are ruled by the Bharatiya Janata Party (BJP) and roughly two-third of India's 29 states are consumption-intensive and so will gain from GST," an HSBC Global Research report remarked.

The action will then shift to the GST Council which will decide on the new tax rate as well as centre and state taxes that will be subsumed under the new tax regime. The GST Council will be constituted after the Constitution amendment bill is notified. The new tax rates, as approved by the GST Council, will then come before the Union Cabinet which will approve the new bills, Central GST (CGST) and Inter-State GST (IGST), to be tabled in Parliament, and passed as well.

Up next: A council and its tasks

All that, however, do not mean that there would be no more bottlenecks: the rates are still far from being sorted out. Any consensus over the rates under GST will not be easy to reach since the Centre favours a moderate rate while the states want a minimum rate of 20 per cent, since they are apprehensive of losing revenue with GST subsuming various indirect taxes at the central and the state levels including excise duty, service tax, value-added tax, entertainment tax and luxury tax. The GST Committee, headed by chief economic advisor Arvind Subramanian, has suggested a rate of 17-19 per cent.

Issues of administrative control over traders and the revenue threshold below which traders will be exempted from GST need to be sorted out too. These would be taken up by at a meeting of the Empowered Group of State Finance Ministers after the monsoon session of Parliament is adjourned later in August.

The GST Council will be the highest decision-making body of the new tax regime, and will have representation from both the Union and state governments. It will be headed by the Union finance minister, with a state finance minister being the deputy chairman. All decisions will have to be taken by a three-fourth majority, where the Union government’s vote will have a one-third weightage. The GST Council will obviously resolve disputes that may arise between the Centre and states, or even among different states. The Union government is hopeful of setting up this body by the last week of September.

The Centre is more than wary about the next hurdle ahead. The day that the Lok Sabha passed the Bill, finance minister Arun Jaitley asserted that the final tax rates will be worked out by the GST Council. “The GST Council will work on the functional modalities. The rate of taxation will also be determined there,” Jaitley said, as he initiated the discussion on the Bill in the Lok Sabha.

CGST and SGST would be applicable to all transactions of goods and services except those exempted. Since these have not been finalised yet, many sectors are said to be already lobbying for exemption. For instance, the renewable energy sector where most equipment is imported has made representations for exemption from the new tax regime. The government, however, is reported to be against making too many exemptions since that would defeat the very purpose of the upcoming tax structure. The GST Council will need to take a call on this too, since real estate, power, alcohol and petroleum products have already been kept out.

Next week: Main concern areas

DISCLAIMER : Views expressed above are the author's own.

Fibre2Fashion News Desk – India


Must ReadView All

Chinese firm sets up textile-garment chain in Vietnam

Apparel/Garments | On 13th Dec 2017

Chinese firm sets up textile-garment chain in Vietnam

Worldon Vietnam Co. Ltd under the Chinese Shenzhou Group is likely to ...

Courtesy: SATO Global Solutions

Information Technology | On 13th Dec 2017

Sensor networks improve inventory management

Sensor networks like radio frequency identification (RFID) and smart...

CMAI hails review of FTP as 'progressive package'

Apparel/Garments | On 13th Dec 2017

CMAI hails review of FTP as 'progressive package'

The Clothing Manufacturers' Association of India (CMAI) has hailed...

Interviews View All

Top executives
Textile industry, India

The event should be organised every year

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Amardeep Singh
Orient Craft

'In export markets, the trend in terms of embroidery, is towards matte...

Erik Sy

Manila-based CustomThread is a start-up offering premium custom apparel...

Hardik Sanghvi

Idealin Fogging Systems has been engaged in designing and manufacturing...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search