Government Sticks To 2017-18 Borrowing Target, Open To Extra Bond Sales

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New Delhi: The government on Thursday stuck to its budgeted market borrowing target for the fiscal year ending in March 2018 but held out the possibility of selling additional bonds to fund any new spending. 

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An economic slowdown following the launch of a nationwide Goods and Service Tax (GST) in July have put federal revenues under pressure, raising worries that New Delhi will struggle to trim its fiscal deficit.

Separately, the Reserve Bank of India (RBI) said on Thursday it would raise the foreign investment limits for government bonds by 80 billion rupees to 2.5 trillion rupees for the October-December quarter.

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The action came after current quotas were almost fully exhausted amid strong buying by foreign investors, as India offers high yields at a time of globally low interest rates.

In February, Finance Minister Arun Jaitley had budgeted to raise 5.8 trillion rupees ($88.57 billion) in 2017/18 via bond sales to bridge the fiscal deficit of 3.2 percent of GDP.

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However, the deficit has already crossed 92 percent of the full-year target. Adding to the concern, GST collections fell 3.6 percent in August from July.

Yet, Economic Affairs Secretary Subhash Chandra Garg said that New Delhi would leave the full-year borrowing target intact and sell bonds worth 2.08 trillion rupees ($31.77 billion) between October and March.

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"We do not foresee extra borrowing at this point in time, but we are conscious there may be a possibility," Garg told reporters after a meeting with central bank officials.

ADDITIONAL BOND SALES?
 
Growth in Asia's third-largest economy slowed to a three-year low of 5.7 percent in the quarter that ended in June. The slowdown has given the opposition Congress party an opening to regain political ground against Prime Minister Narendra Modi, although the next general election is not due until 2019.

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Some government officials including one of Modi's top policy advisers have called for stepping up government spending even at the risk of busting the fiscal deficit target.
 
Relaxing the deficit target, however, runs the risk of inviting a censure from credit ratings agencies and could also make foreign investors wary. They have continued to buy into Indian debt, despite recent strong selling in equities, with net purchases of $23 billion so far this year.

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While Garg remained non-committal on extra government spending, he said state-run companies would spend an additional 250 billion rupees in the current fiscal year.
 
Government officials told Reuters last week that they were contemplating spending up to 500 billion rupees more to halt the slowdown, which could widen the federal fiscal deficit by as much as 500 basis points to 3.7 percent.
 
"At this moment we are going as per our programme," Garg said. "But we have to be conscious that there may be a possibility...then we will plan for the additional borrowing."
 

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Government gets Rs 42,000 crore tax so far in first filing under GST

NEW DELHI: As much as Rs 42,000 crore has already come in as taxes so far in the first monthly filing under the new Goods and Services Tax (GST) regime and the revenues are expected to swell further as the filing cycle closes this later this week.

A senior official said that about Rs 15,000 crore has come in as Integrated-GST, which is levied on inter-state movement of goods, and another Rs 5,000 crore by way of cess on demerit goods like cars and tobacco.

The remaining Rs 22,000 crore has come in as Central-GST and State-GST, which would be split equally between the Union and state government.

"Tax deposited till this morning was Rs 42,000 crore," the official said

So far, 10 lakh tax payers have filed returns and another 20 lakh have logged in and saved return forms.

"We are seeing good compliance and our estimation is that 90-95 per cent of the assesses will file returns and pay taxes," he said.

Under the GST regime, which was implemented from July 1, businesses are expected to file the monthly tax return.

Tax for the first month is to be filed by an extended deadline of August 25. The deadline was extended as the tax return filing website snapped just a day before the due date ended on August 20.

GST unifies more than a dozen central and state levies including excise duty, service tax and VAT, and the revenue generated is to be split equally between the Centre and states.

In July last year, Rs 31,782 crore of excise duty was collected and Rs 19,600 crore of service tax.

Estimate for the combined sales tax or VAT collection by states was available.

While 72 lakh assessees of the old indirect tax regime have migrated to the GST Network portal, nearly 50 lakh have completed the migration proces

Besides, of the 15 lakh fresh registrations that have happened, as many as 10 lakh are expected to file returns for July.

A total of 60 lakh businesses are expected to file returns and pay taxes for July, the official added.

As per the GST law, any registered person who fails to furnish the details of outward or inward supplies or returns required by the due date will have to pay a late fee of Rs 100 for every day during which such failure continues subject to a maximum amount of Rs 5,000.

The collections from customs duty and IGST from imports post-implementation of GST have almost doubled to Rs 30,000 crore in July.

This compares to indirect tax collection of over Rs 16,000 crore of the same month of 2016.

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GST portal stops functioning, fails to resume after ‘scheduled downtime’

The GST website for filing returns is facing “issues” and services to the website has not been restored, throwing into disarray the return filing processes for some business. For a section of the business the last date to file return remains August 20.

It is not clear what has caused the issue, but a tweet from GST Tech says it is facing issues and that users will have to try after some time.

It may be the case that the huge volume of users trying to log in as the due date approaches led to the site giving up, but earlier in the day many individuals who wanted to file returns talked about the site working intermittently.

Subsequently, the site was taken down at 2 pm to “enhance services on the site”, and the scheduled downtime was to be till 2 30p. However, the site is still not up.

“It is experiencing problems and keeping the tax payers anxious over the weekend before the first deadline is drawing to a close tomorrow. The good news is the Government got the tax, as last day happens to be Sunday and the taxpayers already paid off their July GST liability,” says KPMG India, Partner, Priyajit Ghosh.

The GST site is going through its testing time, even over the return filing of GSTR 3B, which is in a summary format and only of two pages. “One is wondering, is this a precursor to even a bigger challenge when transactional level details are supposed to be updated by more than 8 million tax payers in just about two weeks time from now. It will be prudent to extend the timeline for 3B from 20 Aug to 31 Aug for all taxpayers in the interest of a truly smooth rollout sans anxiety. Load testing is a tricky area in the IT space. Considering the magnitude of data and the number of taxpayers, the Government should reassess the deadline for the detailed filing,” says Ghosh.

Earlier in the days news agency IANS quoted Prateek Jain, chairman, Assocham Special Task Force on GST, saying, "The GST site has been working intermittently since 12 noon. It is creating a lot of confusion among traders. Many of our clients have called up saying they can't file returns. If this continues the government might need to extend the last date of filing by another couple of days at least.”

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Achieving high end of 6.75-7.5% growth difficult due to farm loan waivers, GST challenges: Economic Survey

The government presented a second or a mid-year economic survey for the year 2017-18 highlighting the new factors that the economy faces since the last such exercise in February.

Acieving the high end of the 6.75-7.5% growth projected previously will be difficult due to appreciation of rupee, farm loan waivers and transitionary challenges from implementing GST, the Economic Survey said on Friday.

For the first time on Friday, the government presented a second or a mid-year economic survey for the year 2016-17 highlighting the new factors that the economy faces since the last such exercise in February.

It also said that the scope for monetary easing was considerable and this, coupled with reform to address the twin balance sheet challenge, will help the economy achieve its full potential quicker.

“Cyclical conditions suggest that the policy rate should actually be below... the neutral rate. The conclusion is inescapable that the scope for monetary easing is considerable,” he said..

The Economic Survey said that a number of indicators-- GDP, IIP, credit, investment and capacity utilisation, point to a deceleration in real activity sinc

e first quarter of 2016-17 and a further deceleration since the third quarter.

The first volume of the Survey in February had predicted the range of GDP growth of between 6.75-7.5%, factoring in more buoyant exports, a post-demonetisation catch-up in consumption and a relaxation in monetary conditions consequent upon demonetisation.

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GST, surveillance post note ban to increase tax-GDP ratio: Government

NEW DELHI:

 The implementation of GSTand increased surveillance post demonetisation will help increase the tax-GDP ratio to 11.9 per cent by 2019-20, government said on Thursday.

The gross tax-GDP ratio in 2017-18 is estimated to be around 11.3 per cent.

In the Medium Term Expenditure Framework Statement, tabled in the Lok Sabha, the finance ministry has projected that in the medium term taxrevenues will show the growth anticipated during the presentation of the Budget.

"In other words it is felt that any shocks to tax collections due to the introduction of GST will be absorbed in the current financial year and hence the tax-GDP ratio will remain at the level of 2016-17," it said.

As per the statement, going forward "in the years 2018-19 and 2019-20 the gains from expansion of the tax base due to the introduction of GST and the increased surveillance post demonetisation will ensure that tax-GDP ratio will increase by 30 basis points".

As per the statement, going forward "in the years 2018-19 and 2019-20 the gains from expansion of the tax base due to the introduction of GST and the increased surveillance post demonetisation will ensure that tax-GDP ratio will increase by 30 basis points".

Goods and Services Tax (GST) was rolled out from July 1 and it is estimated that the new indirect tax regime would add to revenues and boost GDP by about 2 per cent.

Besides, the demonetisation of Rs 500 and Rs 1,000 notes have brought an additional over 1 crore people in the tax net. The tax department has launched operation clean money to detect people whose cash deposits post demonetisation does not match their tax profile.

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Kahi aap bhi MRP par GST to nai de rahe ? to jaan lijiye ye sach...

Since July one country has been imposed in the country. GST has started for one month, with the introduction of a Tex, with an ambitious goal.

There is a lot of questions and doubts in the minds of people even before and after GST is the biggest tax reform in the country. Meanwhile, complaints are coming that if you are getting more money than MRP on a product in the name of GST, then it is a completely wrong.

After GST is implemented, it is wrong for a consumer to buy more than the MRP of a product. GST is connected to MRP, so the customer does not have to pay any money on the MRP. But if the shopkeeper is charging you a few rupees in the name of GST even after the MRP, then be cautious as it is against consumer rights.

According to the Ministry of Consumer Affairs, there is a GST in the MRP, so you can not sell anything at a higher price than that. Apart from this, if the MRP of any product is growing under GST, then the company will have to give it information in the newspaper through AD and also the new MRP sticker paste on the product with the old sticker. For all these changes, the Ministry has given the traders 60 days time.

According to the GST Expert, many shopkeepers intentionally are charging the name of GST over the MRP and people are also paying the ignorance. But it is very clear that no one can put any other tax on the MRP. If you get any such bill, then you can complain through the helpline number of the central government.

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