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ECONOMIC AFFAIRS

numerous exceptions, instead of the
single slab adopted in countries like
the UK, Singapore and Malaysia. Six
months into implementation, there are
Natural Gas may come talks of evasion creeping in with
unscrupulous traders colluding with
transporters and suppliers preferring
under GST to conduct a cash-only business and
not pay the tax.
Also, states like Tamil Nadu and
The Centre may try to bring up inclusion of natural gas at the next GST Maharashtra have used their discretion
Council meeting. But doing so for other petroleum items could be difficult to raise taxes on certain goods
because the states and the Centre both get quite a bit of revenue from those excluded from the new regime,
items —By Joyeeta Dey defeating the purpose of unified tax.
But multiple rates wasn’t the biggest
problem with GST. It was the costly
It literally took the country by storm at the next GST Council meeting in
six months back when dozens of taxes January. But doing so for other compliance. The need for computerised
and levies were rolled into one, but as petroleum items could be difficult accounting in businesses often run by
the new goods and services tax (GST) because the states and the Centre both barely literate was a hurdle. For
stabilises, its ambit is now likely to be get quite a bit of revenue from those exporters, GST was a nightmare as tax
increased by including natural gas in refunds were delayed, leaving them
next couple of months. short of capital. Small, unorganised
EXPANDING THE AMBIT OF GST In Brief businesses, especially in traditionally
On July 1, when the new national sales  As the new GST stabilises, its dominant textiles and jewellery
tax was implemented, it was decried ambit is now likely to be sectors, were worst hit.
as technologically tedious and increased by including So, the government eased the filing
expensive and had potential to torpedo process for traders with a turnover of
political prospects of the ruling BJP. natural gas in next couple of less than Rs 1.5 crore and expedited
However, the government made months. refunds to exporters. With GST, about
numerous changes, including easing  The government made two dozen of 29 states have abolished
the tax filing process and reducing numerous changes, including check points at their borders, where
rates on over 200 items, to save the easing the tax filing process. truck drivers had to halt and fill out
day for the party in Prime Minister  Real estate as well as crude paperwork, often delay deliveries, at
Narendra Modi’s home state Gujarat. oil, jet fuel or ATF, natural gas, times by days. The posts have gone
While GST transformed India into ‘one diesel and petrol were kept out but tax officials can still clog the roads
nation, one market’ at the “stroke of of its purview. by demanding inspections of goods
midnight” on June 30, real estate as  In a bid to get states and being moved or fees. Prices of some
well as crude oil, jet fuel or ATF, natural political rivals onboard, the products are varying according to
gas, diesel and petrol were kept out of location as traders have not fully
its purview. This meant that the government got a four tax implemented the new structure and
products continued to attract duties rates of 5, 12, 18 and 28. profiteers have stepped in. Asked by
like central excise and VAT. That may  The revenues under the GST when could real estate be brought into
well change in 2018, at least for natural slipped to Rs Rs 83,346 crore the fold of GST, the official said it is
gas. in October. even more “difficult candidate”.
A top revenue department official “The real benefit of bringing real
said as the Centre and states are estate into GST can occur to consumer
assured of revenue flows, natural gas items. The roll out of biggest tax reform only when there is a combined
can be the next big item to be included. since independence on July 1 was discussion on Stamp Duty,
“To me it appears that out of the 5 without undue disruption. Registration charges and GST. If you
petroleum products, natural gas is an ADJUSTMENTS BY THE GOVERNMENT are going to have real estate in GST
easier candidate for bringing into The ‘one nation, one tax’ united at least independent of stamp duty, then there
GST,” he said, adding that a 5 per cent 17 different central and state indirect will be duality of taxation and it will be
GST, equivalent to that being charged taxes under one umbrella to cut tax more burdensome for consumers,” he
on coal, will benefit states in reducing evasions and reduce corruption. In a said. He said that the new indirect tax
price of CNG as well as cooking gas bid to get states and political rivals reform since independence has “more
piped into kitchens. The Centre may onboard, the government got a four tax
try to bring up inclusion of natural gas rates of 5, 12, 18 and 28 per cent with (Contd on page 64)

62 Competition Wizard March 2018