GST in Parliament
NOVEMBER 27, 2019
By Vijay Kumar
DURING the last ten days, the Government gave interesting justified answers in Parliament to some important questions on GST.
This is a gist of the government's concept of GST as revealed to Parliamentarians:
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Question
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Answer
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STREAMLINING OF GST SYSTEM
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Whether the Ministry has taken note that the present GST system needs corrective measures to streamline the system; if so, the details thereof.
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GST has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology–driven tax regime which has integrated India into a single, common market by removing barriers to inter-State trade and commerce. GST has eliminated cascading of taxes and reduced turnaround time for the transporters.
All teething issues are being proactively resolved regularly by the GST Council and the Government.
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Whether Government has invited suggestions to improve the system, if so, the details thereof.
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The Government conducts frequent meetings with the trade and industry.
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Whether Government has so far received any suggestions from economists and industrialists with regard to improving the present system, if so, the details thereof?"
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Representations received from trade and industry are examined, collated and brought before the GST Council from time to time. Based on the recommendations of the GST Council, amendments have been made to the GST Acts. Further, 34 amendments have been made in the CGST Rules, 2017 till November, 2019.
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REVIEW OF GST
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Whether the Government is considering to review the Goods and Services Tax(GST) in view of falling State revenues;if so, the details thereof.
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A Group of Ministers (GoM) on Analysis of Revenue from GST has been constituted on the recommendation of GST Council to suggest suitable measures/policy intervention for course correction for revenue augmentation, particularly for the States suffering high revenue shortfall. It is further submitted that the Government has also constituted a Committee of Officers(CoO) in October, 2019 to suggest measures to augment GST revenue. The Committee will look into issues such as systemic changes in GST to prevent misuse, measures to expand tax base, improved compliance monitoring and anti-evasion measures using better data analytics and better administrative coordination.
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Whether the Government has received any demands from the States in this regard;if so, the details thereof.
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No Sir.
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Whether GST collection was lowest in September this year and if so, the details thereof along with the reasons therefor?
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Gross GST collection in September, 2019 was Rs . 91,916 crores, showing a Month on Month decline of 2.67%. The GST collection in any particular month would depend upon the total taxable value of goods or services or both supplied in that month. However, it can be seen that the average GST collection in the FY 2019-20 (April to October) has been Rs. 1,00,239 cr which is higher than the average GST collection of Rs. 96,945 cr in FY 2018-19(April to October).
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GLITCHES IN IMPLEMENTATION OF GST
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Whether any glitches have been pointed out in the implementation of Goods and Services Tax(GST) and if so, the points and areas identified that needs correction.
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While GST has been implemented successfully in India, further improvements in processes and systems are being made continuously, based on inputs received from trade and industry stakeholders, as examined and recommended by the GST Council. Anumber of simplification measures were brought in along with introduction of GST like easy process for registration,seamless flow of credit across automated refunds etc. in addition to reduction in overall level of taxation.
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Whether the IT based interface also remains a distant dream thereby leaving the system prone to tax frauds;if so, the details thereof along with the details of shortcomings noticed in the GST registrations well as payment module and the status of lack of co-ordination between the stakeholders; and the steps to be taken for a smooth transition.
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GST system is a robust IT system which has successfully implemented the GST law,rules and processes. It has seamless integration with different IT systems of States, CBIC, RBI,Banks, Principal Chief Controller of Accounts, Accounting authorities of states and other stakeholders. Around 1.23 crore taxpayers are registered and around 1.60 crore returns on anaverage are filed every month. The Central and State/UT governments have collected tax revenues from the first month of GST roll out as the taxpayers have been able to make payment.
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BALANCING THE RATES OF GST ON FOOD AND POST-MEAL PROCESS
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(a) whether Government implemented GST on food items at the rate of 5 per cent whereas on toilet and other sanitary materials, the GST rate is 12 per cent or more;
(b) if so, whether this GST rate does not seem to be fair and contrary to nature as for eating and the post-meal process which spreads dirt; and
(c) if so, whether Government has any plan to balance GST rates which have been levied on food and post-meal process?
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(a) Agriculture produce and most other food items are either exempt or attract 5% GST.Certain processed/ manufactured food items attract 12% and 18% GST. Toilet articles and other sanitary materials attract GST rates of 12% or 18%.
(b) and c) These GST rates have been prescribed on the recommendation of the GST Council. While making recommendations, GST Council in general is guided by the pre-GST tax incidence. The rates have been significantly rationalised subsequent to roll out of GST.
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Directions to GST Council by High Courts -
A Single Judge Bench of the Kerala High Court in judgment dated 02.08.2017, in a writ petition, directed the GST Council to consider and pass orders on the representation submitted by the Petitioner, within a period of one month from the date of receipt of a copy of the judgement, after hearing the parties .
The aggrieved Union of India took the matter in writ appeal to a Division Bench, which vide order dated 11.04.2019 2019-TIOL-888-HC-KERALA-GST , set aside the impugned judgement dated 02.08.2017. The High Court held that on perusal of Article 279A of the Constitution of India, "it is evident that there is no mechanism provided in the Constitution or any other statute for the Goods and Services Tax Council to adjudicate the grievances raised by the general public. There is no mechanism for consideration and disposal of representations made by the general public to the Council after conducting personal hearing of the parties who make such representations."
Now, in an instruction to the field officers, CBIC has directed that: (CBIC F.No.276/187/2018-CX.8A Part, dated 20.11.2019)
1. The judgment dated 11.04.2019 2019-TIOL-888-HC-KERALA-GST may kindly be considered before filing any affidavit before the Courts under similar circumstances,
2. Necessary action may be taken to safeguard the interests of UoI/GST Council.
3. The disposed matters, wherein the similar directions have been issued by the High Courts, may be agitated before the appropriate forum, in terms of extant instructions, by following the ratio enunciated by the Hon'ble Kerala High Court in the judgement dated 11.04.2019 2019-TIOL-888-HC-KERALA-GST .
On basic amenities for common people, average tax has been halved for about 99% products due to GST. There was a time when electronic devices were taxed 31%. Today it stands at 10-12% only.
Had it been their way, the GST would not have been applied in the country as well. It was considered a huge risk. A lot of Govts have tumbled all across the world due to this.
We did not fall to the greed of political power but ensured its application:
Prime Minister
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Until next week
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