Walmart India Trains Supplier Partners in GST Compliance

Walmart India has started a series of workshops for its supplier partners to help them evaluate their Goods and Services Tax compliance levels and prepare for the transition to the new tax structure to be rolled out from July 1. Tax rates have been finalized for 1,211 items with a majority of items listed under the 18 percent slab.

GST is not just a tax reform, it is a whole new way of doing business. With its impending implementation, it is imperative for all businesses, large and small, to get ready to embark on the GST adoption journey,” said Krish Iyer, president and CEO of Walmart India.

Taxes“These workshops are expected to educate them [supplier partners] and accelerate their preparation by providing them with a platform to answer queries and concerns. With the customer at the heart of everything we do, this initiative will ultimately lead to a positive impact on the customer as we emerge with a streamlined process both at the back-end and the front-end,” Iyer added, reports the Economic Times.

May 29, 2017   No Comments

India Finalizes Rates for New GST Regimen

At a two-day meeting of the Goods and Services Tax (GST) Council in Srinagar, the capital of India’s northernmost state of Jammu and Kashmir, India finalized tax rates that will apply to different goods and services from July 1. A panel comprising federal and state finance ministers fixed the rates for over 1211 items under the Goods and Services tax.

Goods
No tax will be imposed on food items such as fresh meat, fish chicken, eggs, milk, butter milk, yogurt, natural honey, fresh fruits and vegetables, flour, bread, and salt to mention a few. Stamps, judicial papers, printed books, newspapers, and bangles, are some of the non-food items which will not be taxed.

A 5% tax will be applied on items such as fish fillet, cream, skimmed milk powder, frozen vegetables, coffee, tea, spices, and edible oil for example. Kerosene, coal, medicines, stents and lifeboats will also be taxed at 5%.

A 12% tax will be levied on frozen meat products , butter, cheese, ghee, dry fruits in packaged form, animal fat, sausage, fruit juices, savory snack items. Ayurvedic medicines, tooth powder, incense, coloring books, picture books, umbrellas, sewing machines, and mobile phones also fall in this tax bracket.

An 18% tax slab will be applied to refined sugar, pasta, cornflakes, pastries and cakes, preserved vegetables, jams, sauces, soups, ice cream, instant food mixes, and mineral water to name a few. Tissues, envelopes, tampons, note books, steel products, printed circuits, cameras, speakers and monitors also fall in this tax slab.

A 28% tax – the highest in the GST systemwill be levied on chewing gum, molasses, waffles and wafers coated with chocolate, and aerated water. This tax slab also includes items such as paints, deodorants, shaving creams, after shave lotions, shampoos, dyes, sunscreen, wallpaper, ceramic tiles, water heaters, dishwashers, weighing machines, washing machines, vending machines, vacuum cleaners, shavers, hair clippers, automobiles, motorcycles, aircraft for personal use.

Services

No Tax on Education and Healthcare services, hotels and lodges with tariffs below $15. The services that are currently exempt shall continue to be exempt under the GST regime. Services by government, and foreign diplomatic missions are also covered in the exemption list.

A 5% tax will apply to transport services such as railways, and economy class air transport,  cab aggregators, and small restaurants.

A 12% tax will be levied on hotels that do not have air conditioners, business class air tickets, fertilizers, and work contracts.

 An 18% tax slab will apply to hotels that have air conditioning and that serve liquor, telecom services, IT services, branded garments, insurance, and financial services.

A 28% tax will be applied to 5-star hotels, betting on races, and movie tickets.

Input tax credit will lower all taxes. E-commerce establishments will deduct 1% tax at source before paying suppliers. The GST Council will take up taxation of gold and other precious metals and items such as packaged foods, footwear and textiles at the next meeting on June 3, India’s Finance Minister Jaitley said. Taxation of lottery service has also not been decided yet reports the Economic Times.

“Several process related changes can now be undertaken as the passage of the rules has paved the way for the introduction of the most significant tax reform in India,” said M.S. Mani, senior director at Deloitte Haskins & Sells LLP.

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May 20, 2017   No Comments

IMF: GST Will Push India’s GDP Growth Rate up over 8%

In an exclusive interview with the Press Trust of India, Tao Zhang, Deputy Managing Director of the International Monetary Fund said: “The government has made significant progress on important economic reforms that will support strong and sustainable growth going forward.”

 “We expect that the Goods and Services Tax (GST), which is targeted to be applied, starting in July, will help raise India’s medium-term growth to above 8 per cent, as it will enhance production and the movement of goods and services across Indian states.”
“We are extremely impressed by the work that is being done and that we expect it will pay off in terms of higher growth in the future. More could be done to raise agricultural productivity and enhance market efficiency. This would help increase the supply of high-value foods, enhance returns to farmers, and dampen food inflation pressures.”
The Economic Times reports that Zhang also stressed on the need for labor market reforms in India. “As India persists with its strong reform efforts, labor market reforms should take priority,” he noted.
Taxes

May 13, 2017   No Comments

IMF: GST Could Raise India’s GDP to Over 8%

The International Monetary Fund said that the adoption of the Goods and Services Tax could help raise India’s medium-term GDP growth to over eight percent and create a single national market for enhancing the efficiency of the movement of goods and services. It also suggested that the GST “should have minimal exemptions, uniform cross-state rates, and as few tax rate tiers as possible.”

Zee News reports IMF’s additional inputs for India:

  • Structural reforms could lead to significantly stronger growth
  • A sustained period of continued low global energy prices would be beneficial to India
  • Key sectors such as energy and real estate should be kept within the tax base
  •  A lower corporate income tax rate with smaller and streamlined deductions and exemptions should continue
  • Efforts to improve tax administration should be stepped up

The Government of India expects to roll out the GST regime by July 1.

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IMF further noted:

  • Export competitiveness will rise as the cost of logistics fall
  • GST will raise general government tax collection; foster compliance, and help ensure a decline in the share of the informal sector
  • It can support fiscal consolidation efforts which, in addition to economic efficiency gains, should solidify recent monetary policy strides in achieving low and stable inflation in the medium-term
  • Destination-based GST will create a single Indian market, and will greatly enhance India as an investment destination.

 

 

April 16, 2017   No Comments

India’s Growth Rate Will Improve to 7.4 percent in Fiscal 2018

The Asian Development Bank said that India’s growth rate will improve to 7.4 percent during 2017-18 and go up further to 7.6 per cent in the next fiscal year

In the Asian Development Outlook, the bank’s flagship economic publication, reasons given for this forecast are: “The impact of the demonetization of high-value banknotes is dissipating as the replacement banknotes enter circulation. Stronger consumption and fiscal reforms are also expected to improve business confidence and investment prospects in the country.” The report also noted that India’s economic reforms initiative, including the liberalization of the Foreign Direct Investment regime, and the Goods and Services Tax that is expected to roll out from July, are favorable to the country.

economic growth
Commenting on future prospects, it said that in two-thirds of economies in developing Asia, the growth is being supported by higher external demand, rebounding global commodity prices, and domestic reforms, making the region the largest single contributor to global growth at 60 percent, reports the Economic Times.

April 11, 2017   No Comments