GST - Goods & Service Tax

GST - Goods & Service Tax

·         W.e.f  01.07.2017

·         Biggest reform in the Indirect tax regime.

·         One Nation  - One Tax  - One Market

·         Formulae is IGST(5%) = CGST (2.5%) + SGST/UTGST (2.5%)

·         Single Tax - Right from the Manufacturer to consumer.

·         Transaction based tax.

·         Five tax slabs  - 0%, 5%, 12%, 18% and 28%

·         GST - governed by GST council which consists of Finance Ministers of Union Government and All states.

·         Changed  from Origin based tax to Destination based Tax.

CGST	Levied by the Central Govt
SGST	Levied by the State Govt
UTGST	Levied by the UT Govt
IGST	Levied by the Central Govt on interstate supplies and on Imports of Goods

·         The following Central and State taxes are subsumed/included/merged into GST:

a)      Central Excise Duty (including additional duties of Excise)

b)      Service tax

c)      CVD (Levied on imports in lieu of Excise Duty)

d)      SACD (Levied on imports in lieu of VAT)

e)      Central Sales Tax(CST)

f)       Surcharges and Cesses.

g)      Octroi/Entry tax

h)      Purchase tax

i)        VAT

j)        Entertainment tax

k)      Luxury tax

l)        Tax on lottery, betting and gambling

·         The following taxes are not subsumed/ not included into GST

1.      Income Tax

2.      Customs duty

3.      Export duty

4.      Property tax

5.      Stamp duty

6.      Seniorage charges

GST is not applicable  on Petroleum products, Electricity and Alcohol.

·         The list of exempted Goods and Services are kept to a minimum and harmonised for Centre and States as far as possible.

·         The credit permitted to be utilised in the following manner:

a)      ITC of CGST allowed for payment of CGST & IGST in that Order.

b)      ITC of SGST allowed for payment of SGST & IGST in that Order.

c)      ITC of IGST allowed for payment of IGST, CGST & SGST.

GSTIN

ü  Full form : Goods & Service Tax Identification Number

ü  Assigned to every GST dealer.

ü  15 digit GSTIN based on State wise PAN (Permanent Account Number)

1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
State Code		PAN number of the Tax payer										No of registration within the state	Z	Check Code

Advantages:

·         Create unified common national market for India.

·         Giving a boost to Foreign Investment and “Make in India Campaign”

·         Boost export and Manufacturing activity and leading to substantive economic growth.

·         Help in poverty eradication by generating more employment.

·         Uniform SGST and IGST rates reduce the incentive for tax evasion.

·         Simple tax based system online

·         Uniform prices followed throughout the country.

·         Transparency prevails in taxation system.

·         Higher threshold achieved for registration.

·         Composition scheme for small business

·         The number of compliance is lesser.

·         Defined treatment for E-commerce operations

·         Improved efficiency of logistics

·         Unorganised sector is regulated under GST

****

Transformation Cell

Transformation Cell

·                     Constituted by Railway Board on 09.03.2017.

·                     During the last 14 months (from 2017 Oct to 2018 Nov) - Nearly 170 Circulars are  issued.  That means, On an average 12 circulars are being issued every month or 3 circulars every week ,which is remarkable.

·                      

·                     PED - Principal Executive Director  is in charge of the Transformation Cell.  Under him 8 Nodal Executive Directors work, drawn from different disciplines like Traffic, Engineering, Mechanical, Electrical, S&T, Personnel, Accounts ,etc.

·                      

·                     It hires young professionals — MBAs, BTechs, CAs — from the private sector to assist.

·                      

·                     It overrides all the other existing Directorates for issuing the orders/circulars duly taking the approval of CRB and other related Member.

·                      

·                     Mandated with the implementation of 55 new ideas.

·                      

·                     Story behind formation: Railways had crowd sourced ideas of reformation ,from its 13 lakh employees and has received 1.5 lakh suggestions on issues regarding cleanliness, improving passenger amenities, safety of the railway employees,  increasing earnings from freight and processing of making journey in Indian railways a pleasant experience for its 23 million passengers .

·                      

·                     To infuse new ideas and adopt latest technologies that can bring a change in the working of railways, the Indian Railways is in the process of creating a new Transformation Directorate which works to implement the suggestions made during Rail Vikas Shivir which was attended by Prime Minister Shri Narendra Modi in November 2016.

·                      

·                     During the last two years, four directorates have been created to look into specific areas. These include ,non fare revenue, mobility, environment and heritage.

·                      

·                     Improving financial health of the railways and providing world class amenities to passengers are the top most agendas of the Government. The ministry has been having regular meetings with Niti Aayog to carry out reforms in Indian Railways.

·                     Achievements so far:

1.    Model SOP - in delegation of more powers to DRMs and other branch officers.

2.    Uniformity of provisions in Works, Earnings & Services contracts

3.    New GCC

4.    Re engagement of retired staff and officers

5.    Miscellaneous matters

****

VGF - Viability Gap Fund

 

VGF - Viability Gap Funding

 

 

v  VGF is in the limelight after Central Government gave in approval of  viability gap funding of Rs. 1,458 crore (12.35 per cent of total project cost of Rs. 11,814 crore) under the VFG scheme to the project from government of Andhra Pradesh for development of Hyderabad Metro Rail on DBFOT (toll) basis.

v  DBFOT  - Design, Build, Finance, Operate and Transfer

 

 What is viability gap funding?

 

v   There are many projects with high economic returns, but the financial returns may not be adequate for a profit-seeking investor.   

 

v The lack of financial viability usually arises from long gestation periods and the inability to increase user charges to commercial levels.

 

v  Example, a rural road connecting several villages to the nearby town. This would yield huge economic benefits by integrating these villages with the market economy, but because of low incomes it may not be possible to charge user fee.

 

v   In such a situation, the project is unlikely to get private investment. In such cases, the government can pitch in and meet a portion of the cost, making the project viable. This method is known as viability gap funding.

 

v   Under VGF, the central government meets up to 20% of capital cost of a project.

 

v  The state government, sponsoring ministry or the project authority can pitch in with another 20% of the project cost to make the projects even more attractive for the investors.

 

v   Potential investors(like L&T corporation in Hyderabad Metro bidding) bid for these projects on the basis of VGF needed.

 

v  Those needing the least VGF support will be awarded the project. (in case of Hyderabad Metro, L&T Corporation is the lowest bidder with Rs.1458 Crores i.e., 12.35 per cent of total project cost of Rs. 11,814 crore )

v   VGF is disbursed only after the private sector company has subscribed and expended the equity contribution required for the project.

 

v   Example is the viability gap funding i.e., Rs.1458 Crores will start flowing after the concessionaire L&T Metro Rail Hyderabad (L&TMRH) will spend its equity share of Rs.2,768 crore of the total project cost of Rs.12,132 crore in Hyderabad Metro project.

 

v  The scheme is administered by the ministry of finance.

Which are the eligible sectors?

 

v   Roads, ports, airports, railways, inland waterways, urban transport (Hyderabad Metro), power, water supply, other physical infrastructure in urban areas, infrastructure projects in special eco-nomic zones, tourism infrastructure projects are generally eligible for viability gap funding. The government now proposes to add social sectors such as education and health to the list.

 

v Ministry of New and Renewable Energy has proposed to fund solar energy projects under phase-II of the Jawaharlal Nehru National Solar Mission (JNNSM) through viability gap funding (VGF).  

How does the government benefit?

 

v    The government has limited resources. It can use those funds to build everything on its own, but such public funding will take years to create the infrastructure that is needed to achieve higher growth.

 

v To make infrastructure projects attractive for the private sector, government introduced viability gap funding (VGF) in 2004 by subsidising the capital cost through public-private partnership (PPP) framework.

 

v  Through viability gap funding, the same amount of funds can be used to execute many more projects through private participation.

 

v  VGF is in that sense a force multiplier, enabling government to leverage its re-sources more effectively.

 

What has been the success rate?

 

v   During 2005 to 2020 year:

 

A.   Approved VGF – Rs. 5600 Crores

B.   No. of Projects – 63

C.   Total investment involved Rs. 35000

 

 

######