New Delhi: The government collected Rs 94,726 crore as goods and services tax (GST) in December, lower than the collection in the previous two months.
With a shortfall in seven of the nine months so far in 2018-19, GST collection in January, February and March has to be on average Rs 1.23 trillion to meet the budgeted target, according to calculations by Business Standard. While states are relatively safe due to compensation, the Centre’s fiscal position is in peril.
Against expectations of Rs 6.04 trillion from the Central GST (CGST) in 2018-19, CGST revenue stands at Rs 3.41 trillion in nine months (April-December). The Integrated GST (IGST) which has not yet been apportioned to either the states or the Centre stands at Rs 1.31 trillion. Adding half of it to the CGST kitty, the CGST collection till date becomes Rs 4.07 trillion, or 67 per cent of the annual target.
The Centre needs Rs 65,000 crore in January, February and March at least to recoup this shortfall. This includes tax collected as CGST as well as settlement towards CGST from IGST account. In comparison, the highest inflow as CGST was recorded in July 2018 stood at Rs 58,796 crore.
Admitting that the financial year would end with some shortfall, finance ministry officials said the amount would be near Rs 40,000 crore. Cuts in revenue and capital expenditure would be imperative, they said.
Experts said enhanced revenue from other indirect taxes and income tax would not be sufficient to make good the gap, and, as a result, anti-evasion measures would gain prominence.
“CGST collection so far suggests an impending shortfall relative to the budgeted estimate this fiscal year. A provisional settlement of the Integrated GST (IGST), as well as the residual GST compensation cess that remains after disbursal to states, will be key in augmenting the Centre’s cash flows in the coming months,” said Aditi Nayar, principal economist, ICRA.
The slowdown is surprising especially since Diwali fell in November, the month the December collection represents.
“The collections, while admittedly below the targets, seem to indicate the revenue is stabilising at around Rs 95,000 crore a month, despite the rate reductions in the current fiscal year. A lower revenue than the target could lead to more compliance pressures on businesses and more focus on anti-evasion measures,” said M S Mani, partner, Deloitte India.
Recovering evaded GST would also be important for meeting the annual target, said Pratik Jain, partner, indirect tax, PwC India.
Tax evasion detected in April-November stands at Rs 12,767 crore, of which Rs 7,910 crore has been recovered, according to the data presented by the finance ministry in Parliament.
“We should expect greater enforcement and investigations of cases in the next few months,” said Jain.
The GST Council, in its December 22 meeting, slashed the rates of 23 items, of which six were in the top slab of 28 per cent. This would help in improving compliance, experts said.
December recorded the highest number of monthly returns (GSTR-3B) filed, at 7.24 million, 4 per cent more than 7 million filed in November.
However, this might make further rate cuts difficult, some experts said.
“The slight dip in GST revenue collections as compared to the last two months is a bit discouraging. This may deter the government from rationalising the rate of goods left in the 28 per cent category like cement and auto parts in the short term,” said Abhishek Jain, tax partner, EY India
India can’t achieve 9-10 per cent GDP growth without agri-revolution: Kant
New Delhi: India cannot achieve 9-10 per cent GDP growth without revolution in the farm sector, Niti Aayog CEO Amitabh Kant said.
Addressing Mahindra Samriddhi Agri awards, he said there is a need to boost investment in the agriculture sector as well as to introduce new technology and market reforms.
Kant also stressed on scrapping Agriculture Produce Marketing Committee and some old laws like Essential Commodites Act, which restrict movement of farm produces.
However, he said agriculture is a state subject and the central government has limited role in it.
“In India 50 per cent of our population is dependent on agriculture. If India’s GDP has to grow at 9-10 per cent for the next 30 years, then it cannot be without bringing revolution in the agri sector,” Kant said.
He also emphasised on eliminating middlemen in marketing of farm produces to boost farmers’ income.
Kant expressed confidence that farmer income will be doubled by 2022.
He said there is a need to spread good agriculture practice and success stories of farmers across the country.
“The second revolution in agriculture will come from technology and marketing,” Kant said.
Pawan Goenka, Managing Director, Mahindra & Mahindra Ltd,, said: “The contribution made by our farming community is a manifestation of this new age of farming which we celebrate through our annual awards”.
As part of Mahindra Agri Village (MAV) programme, he said the company has worked closely with more than 50 villages.
“Our Prerna initative has empowered nearly 2,000 women farmers over 40 villages, through the introduction of gender-neutral farm tools for reducing farm drudgery, and dissemination of knowledge and essential capabilities,” Goenka said.
Mahindra Samriddhi Krishi Shiromani Samman (Lifetime Achievement Award) 2019 was conferred upon E A Siddiq for his immense contribution to Indian agriculture. The award was handed over to recognise his contribution of enhancing productivity of paddy (Both Basmati & Non Basmati).
The group gave awards in total 11 categories.
Mukesh Ambani bails out Anil in Ericsson payout case day before SC deadline
Mumbai: Billionaire Mukesh Ambani stepped in to bail out younger brother Anil Ambani by helping him repay Reliance Communications’ (RCom’s) dues to Ericsson. The last-minute rescue spares the younger Ambani a three-month jail term for contempt of court.
RCom cleared the entire dues to Ericsson India to purge the contempt of a Supreme Court order. The debt-ridden company had already paid Rs 118 crore of the Rs 550-crore dues. In addition, the company had paid around Rs 3 crore in penalties to Ericsson.
“My sincere and heartfelt thanks to my respected elder brother, Mukesh, and Nita for standing by me during these trying times and demonstrating the importance of staying true to our strong family values by extending this timely support,” said Anil Ambani in a media statement. RCom had time until Tuesday to make the payment, failing which Anil Ambani, its chairman, would have had to serve a three-month jail term, according to the court’s order.
Probing Amazon, Flipkart for alleged violation of foreign exchange law: ED
New Delhi : Investigation has been initiated against e-commerce giants Amazon and Flipkart for alleged violation of foreign exchange law, the Enforcement Directorate (ED) Monday informed the Delhi High Court.
A bench of Chief Justice Rajendra Menon and Justice A J Bhambhani noted the submissions of the ED that a case has been registered under provisions of the Foreign Exchange Management Act (FEMA) against the two companies and disposed of a PIL which has alleged that the e-commerce giants were violating foreign direct investment (FDI) norms.
The court had earlier sought response of the central government, Amazon and Flipkart to the plea which has sought a probe into the alleged FDI violations.
The ED, in its reply filed through central government standing counsel Amit Mahajan, has said the “department has already registered and initiated investigation under the provisions of FEMA against the two companies to ascertain whether they have been contravening any provisions of FEMA or contravening any rule, regulations, notification, direction or order issued in exercise of the powers under FEMA….”
The agency also sought dismissal of the petition.
The petition by an NGO, Telecom Watchdog, also asked for initiation of legal proceedings against the two e-commerce companies under the FEMA for alleged violation and circumvention of FDI norms.
The plea, filed through advocate Pranav Sachdeva, has claimed that Amazon and Flipkart have created multiple entities to circumvent the FDI norms and route the hot-selling stock at cheaper rates.
The petition has contended that according to Press Note 3 of 2016, which regulates FDI in e-commerce, entities like Amazon and Flipkart are not to exercise ownership over stock, nor directly or indirectly influence price of goods and services sold on their marketplace.
It claimed that by creating name lending companies, Amazon and Flipkart buy branded goods in bulk at discounts from manufacturers and render small sellers uncompetitive by a wide margin, thus influencing the prices in violation of the FDI norms.
“As a consequence of this FDI norms violation, smaller sellers are unable to participate in the fast growing e-commerce sector,” the plea has contended, adding that due to subsidised prices on such platforms, small sellers are unable to sell in the brick-n-mortar world too.
Besides, the plea has also claimed that the two e-commerce firms have created several other group companies in the chain to divide discounts and losses.
“Exchange offers, EMI costs and bank offers are funded completely or substantially by Amazon and Flipkart and constitute a clear influence on price in violation of FDI norms,” it has alleged.