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Last updated: 12 Jul, 2016  

Parliament.9.Thmb.jpg Monsoon session: GST challenge ahead, again

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Bikky Khosla | 12 Jul, 2016
The Cabinet Committee on Parliamentary Affairs recently finalized the dates for the monsoon session of Parliament. It will be held from July 18 to August 12, and will have a total of 20 sittings over 26 days. Of late, there has been an increasing expectation that the arithmetic this time is in favour of the GST bill -- which seeks to create a uniform indirect tax system across the country -- fueled by an impressive victory of the BJP in the recent Assembly elections and the party's growing strength in the Upper House. Also, the government has made it clear that all efforts would be made this time, raising hope of passage of the bill.

It is a relief to see that even the Congress has hinted at dropping a key GST demand. Last week, a senior leader from the party said that they may not insist on capping the tax at 18 percent, one of the three major conditions it has put forward for the passage of the bill. I think the government should, in addition to reaching out the smaller regional parties, make the best effort to win over the Congress leaders' support on the bill. According to latest media reports, formal talks are likely to take place between the two sides shortly, and I hope something positive will come out soon.

Meanwhile, some positive news emerged for the economy last week. First, India Inc's first quarter revenue growth may see a two-year high growth rate of 8 percent. Second, the Plan Expenditure of the Centre reached a whopping Rs 90,000 crore in the first two months of the current fiscal. While private investment is not coming in as expected, it is a big relief that the ministries of rural development, agriculture, HRD, highways, railways and power have turned into big spenders. Third, tax collection in the first quarter has surged to Rs 3 lakh crore. These are indications that the economy is gradually gaining strength.

However, the lingering problem of bank NPAs has now emerged as the biggest challenge facing the economy today. According to a recent report by Morgan Stanley, Indian banks' NPA woes may linger through 2016-17. This finding is contrary to investor expectations. In addition, Moody's has viewed that Indian public sector banks will need a capital infusion of Rs 1.2 lakh crore by 2020, which is far higher than the additional Rs 45,000 crore planned by the government by 2018-19. It seems the NPA problem is far more deeper, and there must be a straining of every nerve by the Centre and the RBI to overcome it.  

I invite your opinions.
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Amrut G Katwe | Thu Jul 14 08:23:58 2016
It should be applied but there shouldn't be any add on taxes in future which will be helpfull to sme.

Regarding Excise Incentive
Ry | Thu Jul 14 06:16:32 2016
If Unit Excise free till 2020 then what happed in GST for those units , Will they got any benefit or subsidy ..?

K raj | Wed Jul 13 17:43:50 2016
Problem of NPA is generated in more then 60yrs not now. The this tactics small were denied loans and not allowed in Indian economy for long. Let us hope to come over this problem created by big loan defaulted. But this problem is less then corruption threat which is always generated at top level.

Bank NPAs
Premsagar P. Batra | Wed Jul 13 09:53:40 2016
One should not assume that Banks would not be able to collect any thing tille 2020.They would and the amount they collect would bridge the gap between 1.2 lakh crores needed and 45000 provided.Strict action and refusal to finance any other company of defaulter would yield good results.

RajaRam Bhutara | Wed Jul 13 09:05:56 2016
GST bill should be passed,but it should be assured that in future no additional tax burden like cess,or CST 1% should not come.The whole meaning of GST is single tax. Any other tax in different kind shouldn't levied.

Monsoon session: GST challenge ahead, again
AJAY BHAN | Wed Jul 13 06:34:59 2016
NPAs will cause a problem but if all the bills are paased unlike last time preferably with congress support or otherwise, India would tide over its problems & even improve under NDA Govt.

kumar | Wed Jul 13 05:19:46 2016
it is very useful for traders

Gst its impact
Siddhartha Swroop | Wed Jul 13 01:15:24 2016
The point of taxation in case of GST is going to be a messy affair as one has to deal with both sale of services and sale of goods on equal footing. Similar is with place of provision of service service vis a vis place of sale/ clearance of goods. If separate provisions are made for service and the goods. The purpose of GST would be defeated and soon the litigation regarding service vs goods will emerge again.

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