Copyright @ Study-IQ education · July 1 •Doctor’s Day •CA day •State Bank of India...

Copyright @ Study-IQ education

TEST SERIES –Prelims – 40 tests – 7500 (7TH August)Mains – Essay Writing – 15 Tests – 6000

(8th July)

July1• Doctor’sDay• CAday• StateBankofIndiacelebratedits58thbankdayinChennaionMonday.• Itwasonthisday,July1,1955,theImperialBankofIndiawasreconstitutedbyanActofParliamenttotocreateStateBankofIndia

• InstituteofChartedAccountantofIndia (ICAI) established• Indiahasslippedto88thplaceintermsofmoneyparkedbyitscitizenswithSwissbanks,whiletheUKremainsonthetop.

Indiawasplacedat75thpositionin2015andat61stintheyearbeforethat,thoughitusedtobeamongtop-50countriesintermsofholdingsinSwissbankstill2007.Thecountrywasrankedhighestat37thplaceintheyear2004.

Rs 4,500crore in2016.

• TheElectionCommissionofIndia(ECI)haslaunched NationwideamonthlongSpecialDrivefromtoday,1st Julyformaximizationofregistrationofeligibleelectorswithfocusonleftouteligibleyoungcitizensinagegroupof18-19andremovalofnamesofregistereddeadelectors,ifany,fromelectoralrolls

• PartneredwithFACEBOOK• 25January1950(CelebratedasNationalVotersDay)• Originallyin1950,thecommissionhadonlyaChiefElectionCommissioner.TheElectionCommissionerAmendmentAct,1989madetheCommissionamulti-memberbody.• TheSixty-firstAmendment'oftheConstitutionof India,1989,loweredthevotingageofelectionstotheLok SabhaandtotheLegislativeAssembliesofStatesfrom 21 yearsto 18years.

CIC,UPSCchairman,CEC&CAG6YEARSOR65

Goods&ServicesTax

onenation,onetax,onemarket.

President’s speech GST• Thishistoricmomentistheculminationofafourteen-yearlongjourneywhichbeganinDecember2002,whentheKelkar TaskForceonindirecttaxationsuggestedacomprehensiveGoodsandServicesTax(GST)basedontheValueAddedTaxprinciple.

TheproposaltointroduceGSTwasfirstmootedintheBudgetSpeechforthefinancialyear2006-07.

SincetheproposalinvolvedrestructuringandreformofnotonlyindirecttaxesleviedbytheCentrebutalsotheStates,theresponsibilityofpreparinga

designandaplanofactionfortheimplementationofGSTwasassignedtotheEmpoweredCommitteeofStateFinanceMinisterswhichhadbeenformed

earlierforimplementationoftheValueAddedTax.TheEmpoweredCommitteereleaseditsFirstDiscussionPaperonGoodsandServicesTaxin

November,2009.

TIMELINE

• GST,whichwillreplacemorethanadozencentralandstateleviesincludingfactory-gate,exciseduty,servicetaxandlocalsalestaxorVAT,isIndia’sbiggesttaxreformin70yearsofindependenceandwillhelpmodernise Asia’sthirdlargesteconomy.

Hereisalookatthetimelinesthatshapedthe‘onenation,onetax’system:*February1986:FinanceMinisterVishwanath Pratap Singhproposesamajor

overhauloftheexcisetaxationstructureinthebudgetfor1986-87.*2000:PrimeMinisterAtalBihariVajpyee introducestheconcept,setsupa

committeeheadedbythethenWestBengalFinanceMinisterAsim Dasgupta todesignaGSTmodel.

*2003:TheVajpayeegovernmentformsataskforceunderVijayKelkar torecommendtaxreforms.

*2004:VijayKelkar,thenadvisortotheFinanceMinistry,recommendsGSTtoreplacetheexistingtaxregime.

GST

VijayKelkarFinanceSecretary, GovernmentofIndia 1998–1999,

Chairman,13th Financecommission(The FinanceCommission cameintoexistencein1951.Itwasestablishedunder Article 280 ofthe IndianConstitution bythe PresidentofIndia.Itwasformedtodefinethefinancial

relationsbetweenthecentreandthestate. )

14th Finance commission – Y V ReddyTheshareofstatesinthenetproceedsoftheshareableCentraltaxes

shouldbe42%.Thisis10percentagepointshigherthantherecommendationof13thFinanceCommission.

13thFinanceCommission – 32%12thFinanceCommission– 30.5%

(Co-operativefederalism)

Fiscaldeficittobereducedto3%oftheGDPby2017–18.TheFinancialStabilityReport2017,releasedbyRBI,basesitsoptimismtothelowerfiscaldeficitat3.2%forthisyeardownfrom3.5%in2016-17


(8th July)

Fiscaldeficit,canwecontrolit?

• Agriculturalloansaccountfor14%oftotalbanklending,accordingtotheReserveBankofIndiaandareequivalenttoaround6.5%ofGDP.

• Uniformfarmloanwaiverscouldleadtomoralhazardandweakenthegeneralrepaymentcultureamongfinanciallyhealthyfarmers

• SchemeslikeUDAY?

• TheUnionBudget2017-18hadsetthefiscaldeficittargetforFY18atRs54.7lakhcroretargetor3.2percentofthegrossdomesticproduct.

GST“Goingforward,reformsinFDIandrealestatesector,implementationofGST,andrevivalinexternaldemandarelikelytocontributetoabettergrowth

outlook.GVAgrowthisexpectedtobehigherat7.3%in2017-18,”

- Politicalstability- GST

- NITIAayog - GoodsandServicesTax(GST)wouldincreasetheGrossDomesticProduct(GDP)growthrateby1.5percent.

- IndianGSTisnotanidealonebecauseofitsfederalnature.SettingupofaGSTCounciltofinalise taxrateswascompromiseforcedbythefederalstructureofthecountry.

True or False ?

Around150countriesintheworldhaveGST.

IndiaisthefirstfederalcountrytohaveGST

• "TherearemanycountriesintheworldhaveVAT,ValueAddedTax.AVATisnotGST.ThenumberofcountrieshavingGSTis6or7,not

morethanthat,"saidDebroy.

• "Exceptoneallareunitary.TheonlycountryintheworldwhichisfederalandhasGSTisCanada.Indiaisonlytheotherfederal

countryintheworldtohaveGST,"Bibek Debroy said

• Bibek Debroy – NITIaayog Member• Debroy termedthemultipletaxratesasthebiggestproblemofthe

GST.


(8th July)

• February 28, 2006:GSTappearsintheBudgetspeechforthefirsttime;FinanceMinisterPChidambaramsetsanambitiousApril1,2010as

deadlineforGSTimplementation.HesaystheEmpoweredCommitteeoffinanceministerswillpreparearoadmapforGST.

• 2008:EmpoweredCommitteeofStateFinanceMinistersconstituted.

*April 30, 2008:TheEmpoweredCommitteesubmitsareporttitled‘AModelandRoadmapGoodsandServicesTax(GST)inIndia’tothe

government

*April 30, 2008:TheEmpoweredCommitteesubmitsareporttitled‘AModelandRoadmapGoodsandServicesTax(GST)inIndia’tothegovernment

*November10,2009:EmpoweredCommitteesubmitsadiscussionpaperinthepublicdomainonGSTwelcomingdebate.

* 2009:FinanceMinisterPranab MukherjeeannouncesbasicstructureofGSTasdesignedbyDasgupta committee;retains2010deadline.

*BJPopposesGSTbasicstructure.*February2010:FinanceMinistrystartsmission-modecomputerisation of

commercialtaxesinstates,tolaythefoundationforGSTrollout.*Pranab MukherjeedefersGSTtoApril1,2011.

*March22,2011:UPA-IItables115thConstitutionAmendmentBillintheLok SabhaforbringingGST.

*March29,2011:GSTBillreferredtoParliamentaryStandingCommitteeonFinanceledbyYashwant Sinha.

*Asim Dasgupta resigns,replacedbythethenKeralaFinanceMinisterKMMani.

*November2012:FinanceMinisterPChidambaramholdsmeetingswithstatefinanceministers;decidestoresolveallissuesbyDecember31,2012forGST

rollout.*February2013:DeclaringUPAgovernment’sresolvetointroducingGST,ChidambaraminhisBudgetspeechmakesprovisionfor Rs. 9,000croreto

compensatestatesforlossesincurredbecauseofGST.*August2013:ParliamentarystandingcommitteesubmitsreporttoParliament

suggestingimprovementsonGST.GSTBillgetsreadyforintroductioninParliament.*October2013:GujaratChiefMinisterNarendraModiopposesGSTBillsayingstate

wouldincurlossesworth Rs. 14,000croreeveryyearduetoGST.*2014:GSTBillclearedbyStandingCommitteelapsesasLok Sabhadissolves;BJP-

ledNDAgovernmentcomestopower.*December18,2014:Cabinetapproves122ndConstitutionAmendmentBilltoGST.*December19,2014:FinanceMinisterArun Jaitley introducestheConstitution

(122nd)AmendmentBillintheLok Sabha;Congressobjects.*February2015:Jaitley setsApril1,2016asdeadlineforGSTrollout.*May6,2015:Lok SabhapassesGSTConstitutionalAmendmentBill.

May12,2015:TheAmendmentBillpresentedintheRajya Sabha.*CongressdemandstheBillbesenttoSelectCommitteeofRajya Sabha;demands

cappingGSTrateat18percent.*May14,2015:TheGSTBillforwardedtojointcommitteeofRajya SabhaandLok

Sabha.*August2015:GovernmentfailstowinthesupportofOppositiontopassthebillin

theRajya Sabhawhereitlackssufficientnumbers.*July2016:CentreopposescappingGSTrateat18%;getsstatesaround.

*August2016:Congress,BJPagreetopasstheConstitutionAmendmentBill.*August3,2016:Rajya SabhapassestheConstitutionAmendmentBillbytwo-thirds

majority.*September2,2016:16statesratifyGSTBill;PresidentPranab Mukherjeegives

assenttotheBill.*September12:UnionCabinetclearsformationofGSTCouncil

*September22—23:Councilmeetsforfirsttime.

*November 3:GSTCouncilagreesonfourslabtaxstructureof5,12,18and28%alongwithanadditionalcess onluxuryandsingoods.

*January16,2017:Jaitley announcesJuly1asGSTrolloutdeadline.Centre,statesagreeoncontentiousissueofdualcontrolandtaxingrightsongoodsathighsea.

*February18:GSTCouncilfinalises draftcompensationbillprovidingtomakegoodanyrevenuelosstostatesinfirstfiveyearsofGSTrollout.

*March4:GSTCouncilapprovesCGSTandIntegrated-GSTbills.*March20:CabinetapprovedCGST,IGSTandUTGSTandCompensationbills.

*March27:Jaitley tablesCGST,IGST,UTGSTandCompensationbillsinParliament.Lok SabhaandRajya SabhapassallthefourkeyGSTBills— CentralGST(CGST),

IntegratedGST(IGST),StateGST(SGST)andUnionTerritoryGST(UTGST).*May18:GSTCouncilfitsover1,200goodsinoneofthefourtaxslabsof5,12,18and28%.Over80%ofgoodsofmassconsumptioneitherexemptedortaxedunder

5%slab.*GSTCouncilfixescess onluxuryandsingoodstocreatekittyforcompensating

states.*May19:GSTCouncildecideson5,12,18and28%asservicetaxslabs.


(8th July)

*Jun21:AllstatesexceptJammuandKashmirpassSGSTlaw.*June28:Mamata Banerjeeannouncesherparty’sdecision

toskipmidnightlaunchofGST.*June29:Congress,Lefttoodecidetoskiplaunch.

*June30Midnight:GSTrollED out.

• Myconfidencestoodjustifiedwhen,on8thSeptember2016,aftertheBillwaspassedbybothHousesofParliamentandmorethan50percentofStateLegislatures,IhadtheprivilegeofgivingassenttotheConstitution(OneHundredandFirstAmendment)Act.

• AftertheamendmentofConstitution,theGSTCouncilhasbeenconstitutedaspertheprovisionsofArticle 279A oftheConstitution.TheCouncil,whichisresponsibleformakingallrecommendationstotheUnionandStatesinrespectofGST,suchasmodellaws,rates,exemptions,isuniqueinourConstitution.ItisajointforumoftheCentreandtheStates,whereneithertheCentrenortheStatescan,withoutthesupportoftheother,takeanydecision.ThoughanelaboratevotingstructurehasbeenbuiltintothedecisionmakingprocessoftheCouncilintheConstitution,itisremarkablethatinthe18meetingsheldsofar,alldecisionshavebeentakenbyconsensusintheCouncil.Icongratulatethem.

• Centralexcisedutyhasalonghistory.DuringmydifferenttenuresasFinanceMinister,ithasalwaysbeenoneofthelargestcontributorstotheCentralexchequer.

• Servicetaxisrelativelynewbuthasgrownveryrapidlyinrevenueterms.Exceptforafewgoodsoutsidethepurviewofgoodsandservicestax,bothofthesewillnowdisappearalongwithAdditionalCustomsDuty,SpecialAdditionalDutyofCustomsandnumerouscessesandsurcharges.CentralSalestaxoninter-statesalewillceaseforgoodsfallingundergoodsandservicestax.

• AttheStatelevel,theenormityofthechangeisnoless.ThemajortaxesbeingsubsumedareValueAddedTaxorSalesTax,entrytax,taxesonadvertisements,andluxurytax,alongwithstate-levelentertainmenttaxandnumerouscessesandsurcharges.

• ThefollowingtaxeswillbereplacedbytheGST:• CentralExciseDuty• CommercialTax

• ValueAddedTax(VAT)• FoodTax

• Central SalesTax (CST)• Introit• Octroi

• EntertainmentTax• EntryTax

• PurchaseTax• LuxuryTax

• Advertisementtax• ServiceTax• CustomsDuty• Surcharges


(8th July)

InadequateTime:Malaysia,whileintroducingasimplersystem(uniform6%rateandnodualGST),gavestakeholdersayearandahalftoprepareforthenewsystem.Rateswerefinalizedwellinadvanceandstepsweretakentoensurethatthevariousstakeholderswereawareofhowthe

systemfunctioned.

ContrasttheMalaysianapproachwiththescenarioinIndia,wheretheCabinetSecretaryaskedtheSecretariesof30centralministriestoorganizeoutreachmeetingsandpublicitycampaignsthroughtheir

departmentstoexplaintheprovisionsofthenewlawandrulestotheirstakeholdersonthe20thofJune,2017,i.e.lessthantwoweeksbeforetheGSTrollout.Similarly,therateswerefinalizedlessthanamonth

andahalfbeforetherolloutdate.

TheIssueofProfiteering:NotpassingonthebenefitstothecommonmanThegovernmentonitsparthasgivenoutnotificationsmainlytothetelecomandrealestatesectorsdirectingthemtoreducetheprices.Havingsaidthat,in

practicetherearenospecificguidelinesonAnti-ProfiteeringprovisionsThemethodtoreducethealreadyprintedMaximumRetailPrice(MRP)to

adheretothechangedratesisstillaquestionthathasnoanswer.Inthecaseofactsofprofiteeringbythesellersortraderstherearealotof

issuesthatareleftuntouched.Afewofthemare,themannerofcomputationofprofiteering,shouldtheanti–profiteeringinvestigationbedoneatthe

productorservicelevel,canprofitsgainedandlossesearnedbeset-offagainsteachotherwhiledealingwithmultipleproductsegmentsetc.


(8th July)

Technical glitches

WhenaskedwhethertheGSTNwilldeliverarobustsoftware,ChairmanNavin Kumarsaid,“Nowhereintheworlddoesthehardeningofsoftwaretakeplacebeforetherollout.Whenyouareabouttodeploythesoftware,thereisacodefreezewhencodewritingstops.Inthenext10daysyoudothetesting.Thereisnotimeforthatnow.Ittakesthree-fourmonthsforstabilisation to

happen.”

Prakash Kumar - CEOGoodsandServicesTaxNetwork(GSTN),theinformation-technologybackboneofIndia'snewtaxregime,isadata-storagebehemoth.Nearly80lakhbusinesseswilluploaddetailsandcarryouttransactionsonthenetwork.AfterAadhaar,IndiahasseensuchalargescaleofIToperationsin

GSTN.

GSTN,anot-for-profitprivatelimitedcompany,has51percentequityoffiveprivateinstitutions--HDFCBankLtd(10percent),HDFCLtd(10percent),ICICIBankLtd(10percent),NSEStrategic

InvestmentCorporationLtd(10percent)andLICHousingFinanceLimited(11percent).Thecentralgovernmenthas24.5percentequityintheGSTN,whereasstategovernments,two

Unionterritoriesandempoweredcommitteeofstatefinanceministerstogetherholdanother24.5percentstakeinit.India'sleadingITcompanyInfosysismanagedserviceproviderofGSTN.

• inApril2012,aSpecialPurposeVehicle,theGSTN(GSTNetwork),wasapprovedforcreationbythegovernmentforGSTimplementation.

AREBANKSREADY?“witheffectfromJuly1,2017,theexistingservicetaxof15percentlevied

onallthebankingserviceswillbereplacedbyaGSTof18percent.”

Amongthebankingservicesthatwillattracthigherservicetaxincludedebitcard,fundtransfer,ATMwithdrawalbeyondthenumberoffreeservices,

homeloanprocessingfee,lockerrentals,issuanceofchequebooks/drafts/duplicatepassbooks,collectionofbills,collectionofoutstationcheques,cashhandlingchargesandSMSalerts.Inaddition,lifeandnon-life

premiumswillseeanincreasefrom15percentto18percent.

Makebankingtopoorattractive?

ButwithGST,theywouldberequiredtoobtainregistrationineachstate.TheirIT,accountingandcompliancestandardsneedtoundergo

changeforwhichbanksarenotcompletelyready.

“SincetheGSTwillbeoperationalfromJuly1,2017,bankshavetomakelotofchangesintheirsystemsandotherprocedures.ThepreparednessofallbanksforimplementationofGSTisaquestionmark,”– IndianBanks’AssociationinformingtheParliamentary

StandingCommitteeonFinance.

Criticism

• Socialfactorsignored

• Kumkum vsSanitaryNapkins(Everywoman'shealthright'estimatedthatonly12%ofthe335millionmenstruatingwomenhaveaccesstodisposablesanitarynapkins. )

• BabyFoods– Glucosebiscuits– 18%• Vaccines– 5%

• Looseunbrandedcommoditieslike dal,riceandotherdrystaplesareexemptfromGST.However,branded,packagedversionsofthesegoodswillbetaxedat5%underthenewregime.

• Theunorganised sectorofIndia’seconomyisvast,employinganestimatednineoutof10workers.While stayingoutsidetheGSTregimeriskslosingbusiness,joiningitwillnecessitateanoverhauloffirms’accountingsystemsandaninvestmentintechnology.The newtaxsystemrequiresthreefilingamonthplusanannualreturn- atotalof37filings- foreachofIndia’s29statesinwhichafirmoperates.Forsmallercompaniesoperatingonwaferthinmargins,hiringaccountantsandtechnicalstaffcouldsubstantiallydenttheirbottomline.

• Ifasmallcompanywantstodobusinessallroundthecountry,thennumberoffilingsmovesupto1,029


(8th July)

Other NEWS

ThePresidentofIndia,ShriPranab MukherjeeinauguratedanexhibitionofartworksatAcademyofFineArts,Kolkatatoday(June30,2017).

HealsoreceivedthefirstcopiesoftwoCoffeeTablebooks‘ImagesandImpressions– ProfileandPersonaofPranab Mukherjee’and‘Pranab

Mukherjee100Frames’fromtheGovernorofWestBengal,ShriKeshariNath Tripathi whoformallyreleasedthesebooks.

• DecisiontoreduceTaxRateonFertilizersfromexisting12%to5%underGSTtakenintheinterestsoftheFarmers

UnderGSTregime,auniformMRPofRs.295.47per50kgbagtobefixedacrossthecountry

GSTregimetodeterinter-statesmugglingoffertilizersbyintegratingtheentirefertilizermarketintoaSingleMarket

FarmerstobenefittothetuneofRs.1261croresunderGSTregime:ShriAnanthkumar

• UnionMinisterforChemicals&FertilizersandParliamentaryAffairs,ShriAnanthkumar briefedthemediaontheoutcomeofthe18thmeetingoftheGSTCouncil,heldhereon30thJune2017,regardingFertilizersector.TheMinistersaidthatitwasdecidedtoreducetheGSTrateoffertilizersfromtheexisting12%to5%.Thisdecisionwasprimarilytakenintheinterestsofthefarmers.TheGovernmenthasalsotakenupwiththeIndustrytopassonthebenefittotheFarmers,theMinisterinformed.

• Witheffectfrom01.07.2017,theGovernmenthasimposed10%basiccustomsduty(BCD)on:

a)Cellularmobilephonesandspecifiedpartsofcellularmobilephoneslikecharger,battery,wireheadset,MicrophoneandReceiver,KeyPad,USBCableetc.

b)Certainotherspecifiedelectronicgoods.

Thepresentexemptionfrombasiccustomsdutyonspecifiedpartsofmobiles,namely,PrintedCircuitBoardAssembly(PCBA),CameraModule,ConnectorsDisplayAssembly,TouchPanel/CoverGlassAssembly,VibratorMotor/Ringerwillcontinue.

Further,inputsandrawmaterialformanufactureofpartsofabovespecifiedelectronicsgoodsincludingmobilephoneswillalsocontinuetobeexemptfromBCD.

65MoUssignedatTextilesIndia2017inthepresenceofUnionTextilesMinister

4thSlumYuva Daud concludesatRohini withover5000participants

Copyright @ Study-IQ education

Copyright @ Study-IQ education · July 1 •Doctor’s Day •CA day •State Bank of India...

Documents

Transcript of Copyright @ Study-IQ education · July 1 •Doctor’s Day •CA day •State Bank of India...