FEBRUARY 28, 2015

By Pritam Mahure, CA

FM re-affirms introduction of GST

In today's Union Budget speech, by reiterating GST multiple times, the Finance Minister has evidently re-affirmed Governments commitment to introduce GST from 1 April 2016.

Also, following cumulative steps (4 E's) indicate assurance toward GST.

EC and SHEC to be subsumed

FM has provided for subsuming of Education Cess (EC) and Secondary and Higher Education Cess.

However, the standard rate of Excise will be 12.5% (instead of current 12.36%) and Service Tax will be 14% (instead of current 12.36%).

‘Exemption-free' GST regime

FM has further pruned the list of excise and service tax exemption which will help transition to proposed introduction of GST which is expected to be ‘exemption-free'.

This move was in-line with the Economic Survey 2014-15 observations to narrow the exemptions. Thus, it appears that the GST will be nearly an ‘exemption-free' regime.

Emphasis on leveraging technology for GST

FM emphasised on art of modern technology as enabler for GST introduction and smooth transition.

Even the Economic Survey 2014-15 (which was released yesterday) emphasised on leveraging technology. Thus, in coming months, the industry can expect the GSTN (GST portal) to go live soon for public comments / suggestions.

Exchange of information to go up

To curb black money the FM has come out with a slew of steps and one of them being reporting of purchase transactions above rupees one lakh to concerned Authority and passing that information to CBDT/CBEC.

Aforesaid steps undoubtedly assert that GST will be introduced by 1 April 2016 and thus its high time for industry to gear up for GST regime.