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GST will have positive impact on states’ finances: Ind-Ra

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GST-WEFORNEWS

New Delhi, Aug 28: The implementation of the Goods and Services tax (GST) will have a positive impact on state governments’ finances in the medium to long term, domestic rating agency India Ratings and Research (Ind-Ra) said on Monday.

Even in the short term, the impact on aggregate state finances will be positive but calculations show that the picture may vary from state to state, it said in a report.

The report said that GST revenues of all states combined will grow at 16.6 per cent in 2017-18 over 2015-16. However, since the picture at the individual state level differs, eight states namely Andhra Pradesh, Chhattisgarh, Gujarat, Himachal Pradesh, Madhya Pradesh, Odisha, Punjab and Tamil Nadu would need compensation from the central government for any revenue loss under baseline scenario, it said.

Post introduction of GST, input tax credit is available on both goods and services. The growth of GST component of states’ own tax revenue for all states in such a case would drop to 15.5 per cent in 2017-18 and three more states namely, Goa, Jammu and Kashmir and Jharkhand would require compensation from the central government, it said.

“The total compensation amount therefore would increase to Rs 95 billion in current fiscal. This is based on the assumption that in the final production of goods and services, service tax accounts for 10 per cent,” the report stated.

The Centre has agreed to compensate states for five years at the growth rate of 14 per cent. During FY12-FY17, the states’ tax revenue on an average grew by 14 per cent. However, there are wide variations across states, with Punjab taxes growing at just 8.47 per cent during FY12-FY17 while Telangana’s at 39.70 per cent.

Nine state-level taxes subsumed in GST include state value added tax, central sales tax, purchase tax, luxury tax, entry tax (all forms), entertainment tax (except those levied by local bodies), taxes on advertisements, taxes on lotteries, betting and gambling and state cesses and surcharges so far as they relate to the supply of goods or services.

However, taxes on income, property and capital transactions, petroleum products, state excise and electricity duty are not part of GST and states would continue to levy and collect these in the same manner as earlier.

At an aggregate level, the state taxes that are subsumed in GST accounted for 55 per cent of states’ tax revenue.

“Like the state VAT which was rolled out from April 2005 to January 2008, implementation of GST will also bring in some efficiency gains. If we combine the 5 per cent efficiency gain with 10 per cent input tax credit on services tax, then only five states namely Chhattisgarh, Gujarat, Odisha, Punjab and Tamil Nadu would need compensation from the central government and the total compensation amount would drop to Rs 37 billion in 2017-18,” it said.

To be able to absorb the positive impact of GST on state finances, states will have to keep a constant vigil on the buoyancy of taxes that are outside the purview of GST as also their own non-tax revenues, it added.

IANS

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No lay-offs by Wipro amid crorona crisis, no such plan

The Bengaluru-headquartered IT behemoth employs more than 1.75 lakh people in several countries across the globe.

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Azim Premji Wipro

Bengaluru, July 13 : Global software major Wipro has not laid off any employee during the Covid-19 pandemic nor has any such plan at the moment, a top company official said on Monday.

“I just want to give comfort and say this categorically that we have not laid off a single employee as the pandemic unfolded,” Wipro Chairman Rishad Premji said at the company”s 74th annual general meeting (AGM) held virtually.

“At the moment, we have no plans to lay off anybody at the company,” he said, replying to a female shareholder.

“We are trying to drive cost deductions through various other means operationally and otherwise,” said Premji.

The Bengaluru-headquartered IT behemoth employs more than 1.75 lakh people in several countries across the globe.

–IANS

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Google to invest Rs 75,000 crore to boost digitisation in India

The investment will focus on four areas important to India’s digitisation– first enabling affordable access to information to every Indian in their own language.

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Sundar Pichai

New Delhi, July 13 : Google CEO Sundar Pichai on Monday announced a Google for India digitisation fund through which, the company will invest Rs 75,000 crore or approximately $10 billion over the next five to seven years to help India go digital.

“We will do this through a mix of equity investment, partnerships and an operational infrastructure ecosystem in India. This is a reflection of our confidence in the future of India and its digital economy,” Pichai said during the Google for India virtual conference.

The investment will focus on four areas important to India’s digitisation– first enabling affordable access to information to every Indian in their own language.

“Second, building new products and services that are deeply relevant to India”s unique needs. Third, empowering businesses to continue or embark on digital transformation. And fourth, leveraging technology and Artificial Intelligence for social good in areas like health, agriculture and education,” the Google CEO said.

India’s Union IT Minister Ravi Shankar Prasad were also present during the conference.

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Business partner of Rajasthan CM’s son under ED scanner

Sharma was summoned by the ED four days ago. The agency suspects that large scale overseas transactions have taken place.

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Ashok Gehlot

New Delhi, July 13 : Amid political crisis in Rajasthan, the Enforcement Directorate (ED) on Monday conducted raids at Hotel Fairmont in Jaipur.

Investor Ratan Kant Sharma, close aide of Chief Minister Ashok Gehlot’s son, is under the agency’s scanner.

Sharma had allegedly received around Rs 96.7 crore from Mauritius and has stakes in Hotel Fairmont. Sharma and Vaibhav Gehlot, son of Chief Minister Ashok Gehlot, are business partners.

Sharma was summoned by the ED four days ago. The agency suspects that large scale overseas transactions have taken place.

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