Page 14 - Banking Finance October 017

GST UPDATE

GST

NEWS
NEWS
NEWS
NEWS
NEWS

Arun Jaitley : GST implementation smoother than ex- 64% assessees file GST
pected returns in July 2017

Finance Minister Arun Jaitley said the implementation of the new taxation re-
gime GST is going smoother than expected in initial phase.
The decision-making mechanism at the top between the
Centre and the states has been "reasonably
institutionalised" and the mechanism created to address
day-to-day issues is robust, he said.
"... these are early days of the implementation of the al-
ternative taxation system. It appears to be so far going The collections under GST in July ex-
on smoother than expected," Jaitley said, addressing the 70th annual general ceeded the Union and state govern-
meeting of the Indian Banks' Association here. ments' target, even though 36% of

He said the number of people coming under the network itself is now likely to the assessees did not file the returns.
expand gradually. The governments have earned Rs
92,283 crore, as against the target
Services sector contracts in August on GST anxiety of Rs 91,000 crore.
According to a survey the activity in the country's key services sector contracted As per the targets set in the annual
for the 2nd consecutive month in August as anxiety over the Goods & Services Budget, the central government's
Tax (GST) continued to dampen sentiments. However, Nikkei India Services PMI July tax revenue should have been Rs
Business Activity Index registered 47.5 in August, saw a rise from 45.9 in July. 48,000 crore. Assuming 14% growth
The latest figure indicated softer rate of reduction that was moderate overall. each in 2016-17 and 2017-18 over
The 50 point mark separates expansion from contraction. the 2015-16 revenues of the states,
Due to implementation of GST the manufacturing activity data for July had dis- their tax kitty should have been more
played some stress due to de-stocking by companies ahead of the release of the than Rs 43,000 crore for the month.
tax measure. The situation on the ground is gradually improving with companies The growth rate is taken in accor-
reverting to pre-GST level stocks. More clarity about the tax measure has also dance with a formula of compensat-
helped remove some of the initial anxiety among businesses. ing loss-making states. Thus, the
"Services acted as a drag on the private sector economy in August, with the combined kitty comes to Rs 91,000
reduction in business activity offsetting growth of manufacturing production. crore. Union Finance Minister Arun
While July's downturn in the goods producing industry proved to be a temporary Jaitley said: "We have crossed the red
blip, services remained trapped in contraction," said Pollyanna De Lima, princi- line so far as tax targets are con-
pal economist at IHS Markit. cerned."

BANKING FINANCE | OCTOBER | 2017 | 13

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