Maharashtra Tax and Economic Reforms

Maharashtra Tax and Economic Reforms

Maharashtra Goods and Service Tax 2017

Maharashtra Govt Passed MGST Act on 22nd May 2017. The following Bill published under Rule 117 of the Maharashtra Legislative Assembly Rules. A. BILL No. XXXIII OF 2017. A BILL to make provisions for levy and collection of tax on intra-State supply of goods or, services or, both in the State of Maharashtra and the matters connected therewith or incidental thereto.

What is GST?

Good and Services Tax Bill is a new taxation bill passed by RajyaSabha in August 2016 aims at making a single tax system for entire nation, replacing all indirect taxes imposed by State and Central Government. It is expected as a biggest tax reform in the history of India, simplifying all the complex indirect tax levying process. GST will have distinct impact on individual sectors, some will get negative or some will get positive.

Let’s have a look at several advantages of new GST Bill for Government and Indian Nationals:-

  1. GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of industry, government and the consumer. It will lower the cost of goods and services give a boost to the economy and make the products and services globally competitive. GST aims to make India a common market with common tax rates and procedures and remove the economic barriers, thus paving the way for an integrated economy at the national level.Maharashtra Tax and Economic Reforms

By subsuming most of the Central and State taxes into a single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, it would mitigate the ill effects of cascading, improve competitiveness and improve liquidity of the businesses. GST is a destination-based tax. It follows a multi-stage collection mechanism. In this, tax is collected at every stage and the credit of tax paid at the previous stage is available as a set off at the next stage of transaction. This shifts the tax incidence near to the consumer and benefits the industry through better cash flows and better working capital management.

  1. GST is largely technology driven. It will reduce the human interface to a great extent and this would lead to speedy decisions.
  2. GST will give a major boost to the ‘Make in India’ initiative of the Government of India by making goods and services produced in India competitive in the National as well as International market. Also all imported goods will be charged integrated tax (IGST) which is equivalent to Central GST + State GST. This will bring equality with taxation on local products.
  3. Under the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some taxes may not take place due to fragmented nature of indirect taxes between the Centre and the States. This will boost Indian exports in the international market thus improving the balance of payments position. Exporters with clean track record will be rewarded by getting immediate refund of 90% of their claims arising on account of exports, within seven days.
  4. GST is expected to bring buoyancy to the Government Revenue by widening the tax base and improving the taxpayer compliance. GST is likely improve India’s ranking in the Ease of Doing Business Index and is estimated to increase the GDP growth by 1.5 to 2%.
  5. GST will bring more transparency to indirect tax laws. Since the whole supply chain will be taxed at every stage with credit of taxes paid at the previous stage being available for set off at the next stage of supply, the economics and tax value of supplies will be easily distinguishable. This will help the industry to take credit and the government to verify the correctness of taxes paid and the consumer to know the exact amount of taxes paid.
  6. The taxpayers would not be required to maintain records and show compliance with a myriad of indirect tax laws of the Central Government and the State Governments like Central Excise, Service Tax, VAT, Central Sales Tax, Octroi, Entry Tax, Luxury Tax, Entertainment Tax, etc. They would only need to maintain records and show compliance in respect of Central Goods and Services Tax Act and State (or Union Territory) Goods and Services Tax Act for all intra-State supplies (which are almost identical laws) and with Integrated Goods and Services Tax for all inter-State supplies (which also has most of its basic features derived from the CGST and the SGST Act).

DEMONETIZATION AND CASHLESS ECONOMY

What is Demonetization?

  • It is a financial step where in a currency unit’s status as a legal tender is declared invalid.
  • This is usually done when old currency notes are to be replaced with the news ones.
  • The 500 and 1000 rupee notes seized to be a legal tender from 8 November, 2016.

A brief past

  • Demonetisation was earlier done in 1978 When the government demonetised Rs. 1000, Rs. 5000 and Rs. 10000 notes.
  • This was done under the High Denomination Bank Note (Demonetisation) Act, 1978.
  • The difference between 1978 and 2016 Demonetisation is that the currency in circulation (of the higher denomination) is higher in 2016 than was in 1978.
  • The current demonitization has been done by government under section 26(2) of the Reserve Bank of India Act.

 

Implications of Demonetization

  • A parallel black economy would collapse.
  • Of the Rs 17 lakh crore of total currency in circulation in the country, black money is estimated at mind-boggling Rs 3 lakh crore.
  • Counterfeit currency: Death blow to the counterfeit Indian currency syndicate operating both inside and outside the country.
  • On Employment: a large part of the Indian economy is still outside the banking system. So, the cash shortage will hurt the informal sector that does most of its transactions in cash.
  • On elections: It will reduce the Vote-for-Note politics making elections more clean and transparent.
  • On Economy:
  • First, it will bring more borrowings to the exchequer, improve inflation outlook and increase India’s gross domestic product (GDP).
  • Second, it will revive investment opportunities and give a fillip to infrastructure and the manufacturing sector.
  • Third, it will help reduce interest rates and lower income tax rate.
  • Real estate cleansing: An unexpected dip in land and property prices.
  • On Higher Education: will become more reachable as the black money from ‘high capitation fees’ is discouraged.
  • On security:
  • Terror financing: Terror financing is sourced through counterfeit currency and hawala transactions.
  • Kashmir unrest: The four-month-long unrest in Kashmir valley is on a backburner
  • North-East insurgency and Maoists: Black money is the oxygen for Maoists collected through donations, levy and extortions. The illicit money is used to purchase arms and ammunition

Chatrapati Shivaji MaharajShetkariSanmanYojana – 2017:

The Maharashtra state government has introduced the farmer’s list under ChhatrapatiShivajiMaharajShetkariSanmanYojana CSMSSY 2017. CSMSSY 2017 is a farm loan waiver scheme of Maharashtra Government, under the scheme the state government will waive the agriculture loan of the farmers of Maharashtra. Farmers can check their name in the list is available at district wise, block-wise and Gram Panchayat wise. Farmers can also check their name at csmssy.inMaharashtra Tax and Economic Reforms

The eligible and needy farmers who have registered for CSMSSY 2017 were provided an application id and district wise, taluka wise and Garmpanchayat/ Nagarparishad wise farmer list can be accessed

According to the official website of the CSMSSY, 4607203 total numbers of registrations have been done by the farmers in Maharashtra on the portal while 3928529 farmers have applied for the farm loan waiver scheme till 31st August.

 

Leave a Comment