GST - Discussion on all aspects.

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JayS
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Re: Indian Economy News & Discussion - Nov 27 2017

Postby JayS » 23 Apr 2018 17:15

chetak wrote:
In massaland even the Fedral reserve, equivalent to our RBI, is ia private entity


@JayS,

Is the head of the Fed appointed "privately"?? or otherwise?? Do tell.



Was that meant for katare..? He made the statement.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby chetak » 23 Apr 2018 17:28

JayS wrote:
chetak wrote:

@JayS,

Is the head of the Fed appointed "privately"?? or otherwise?? Do tell.



Was that meant for katare..? He made the statement.


Then let's hope that katare also reads it, no?? :)

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Katare » 23 Apr 2018 22:48

Jay/Chetak et al

We need to separate the issues or points to have a clean debate. Financial ownership structure of GSTN (which is public/private partnership in this case) is what I was commenting on. Grievances related to execution of GST and pain it has caused is another issue and I concur it could have been done better.

The model of private/public partnership with the majority nongovt shareholding was chosen to allow for more nimble management and tapping of talents from a wider pool, unfettered by govt rulebook on hiring/paying/firing and approvals. The other goal was to make the financial institutions a s direct stakeholder in the system.

The GSTN ownership is with companies that are mostly PSUs and public (non-promoter) companies with board members coming from multiple entities including Govt.

If the nation trusts these private sector banks with hundreds of billions of dollars of public money than we can also trust them with running a company in partnership with govt.

As far as foreign shareholding of Banks like ICICI and Axis banks goes, most CT folks comment on the issue in colorful language without understanding the differences in how the shareholding and voting rights work for the Banks. Anyhow all Indian banks are directly governed by RBI and the board's power are limited by both govt and RBI oversights and legislations. RBI can even reject a CEO like it did for Axis bank.

All the ADR/GDR that banks issued in US/London are non-voting right shares as per RBI rules. The ADR holders does not have a say about anything. The holding bank votes for ADR holders but it has to vote as per the direction of the bank board. In other words the voting rights remains with the Board while financial ownership is transferred to foreigners.

RBI mandates that all member of bank boards and major executives have to be resident Indians.

ICICI and Axis banks are both pseudo-govt banks anyhow and Indian Govt still nominates one of the board members. This is the reason that these two are the rotten apple in the basket of the private sector banks. Rest of the banks including the largest private bank, i.e. HDFC, have NPAs in 1 to 2% range.

Jay,
How can a govt fund a private company? It would be illegal, funds come from equity or debt there is no other source for them. Many time govt forms a company on the paper and transfers it to the private sector for running because it is faster and more efficient. This does not mean public money was wasted or given to a private entity without getting equity in return. If you have evidence to contrary I would like to see it.

Mort,
Federal reserve as per their own website is a public/private partnership.

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 24 Apr 2018 08:33

Katare wrote:
Mort,
Federal reserve as per their own website is a public/private partnership.


No sir. It is not.

Who Owns the US Federal Reserve?

Some observers mistakenly consider the Federal Reserve to be a private entity because the Reserve Banks are organized similarly to private corporations. For instance, each of the 12 Reserve Banks operates within its own particular geographic area, or District, of the United States, and each is separately incorporated and has its own board of directors. Commercial banks that are members of the Federal Reserve System hold stock in their District's Reserve Bank. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. In fact, the Reserve Banks are required by law to transfer net earnings to the U.S. Treasury, after providing for all necessary expenses of the Reserve Banks, legally required dividend payments, and maintaining a limited balance in a surplus fund.


The 12 directors of the federal reserve are US government employees.

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Re: GST - Discussion on all aspects.

Postby Katare » 24 Apr 2018 08:57

Fine believe what you want to or consider to be truth.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 24 Apr 2018 10:01

Katare wrote:Fine believe what you want to or consider to be truth.


The link I posted came from the Federal Reserve itself!

The larger issue here is that unlike India, the US does not have public sector banks, of course not including the two Federal Home Loan Mortgage corporations and the US Export/Import Bank. The banks are private. It is the Federal Reserve that directs the US Treasury Department to release currency to the private banks. The US Treasury does not have the authority to distribute currency to the public, but does have the authority to collect taxes from individuals and corporations. The US Federal Reserve IS a federal/central system and has functions much like the RBI. Various politicians over the years have talked about abolishing the US Federal Reserve system as it interferes in policy.

Please don't resort to pouting!

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Re: Indian Economy News & Discussion - Nov 27 2017

Postby JayS » 24 Apr 2018 11:12

Katare wrote:Jay,
How can a govt fund a private company? It would be illegal, funds come from equity or debt there is no other source for them. Many time govt forms a company on the paper and transfers it to the private sector for running because it is faster and more efficient. This does not mean public money was wasted or given to a private entity without getting equity in return. If you have evidence to contrary I would like to see it.


My comment is based on the statement in one of the news article posted by Chetak:

The Finance Ministry has allotted more Rs.5000 crores to GSTN to develop software through Infosys and still, the software is not working properly. The 51 percent shareholders in GSTN are ICICI Bank, HDFC, HDFC Bank, LIC Housing Finance and an NSE subsidiary… These firms have not yet put a single paisa in GSTN[9].


Who is exactly funding GST system development, GOI or GSTN..? From the article it looks like its GOI.

Also I wonder on what basis these particular companies are chosen. Was there any RFP or something to invite bids for partnership in GSTN..? I am sure other pvt companies would also be interested in participating GSTN. Its a good steady business with assured growth.

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Re: GST - Discussion on all aspects.

Postby Katare » 24 Apr 2018 18:47

JayS,
I just looked it up, the GSTN is a not for profit, section 8 entity. It’s purpose seems to manage the IT backbone for GoI. Since there is no profit/return for the private sector investors and all the tax revenue goes to government, GoI is footing the bill.

Also, it is my opinion, take it for whatever it’s worth to you but i think although PGurus type websites can sometimes be very helpful but they are mostly a dig for CT folks.

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Re: GST - Discussion on all aspects.

Postby JTull » 24 Apr 2018 18:55

I think there's a fundamental misunderstanding that equity == funding.

Initial Paid-up equity is Rs 10 crore only and these banks have paid these tiny amounts to be shareholders.

Further details on finances here.

https://www.gstn.org/about-us/

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Re: GST - Discussion on all aspects.

Postby Suraj » 28 Apr 2018 23:30

GST collection in first 9 months of its roll out at Rs 7.41 trillion
Goods and services tax (GST) collection in the first nine months of its roll out during 2017-18 stood at Rs 7.41 trillion, even as average monthly collection turned out lower than initial targets of the government.

The monthly average was Rs 890 billion, against the targeted Rs 920 billion. However, very close to the FY18 Revised Estimates (RE) of the Union Budget. GST was enforced from July 1.

The figures issued by the government on Friday comprised Central GST (CGST) and State GST (SGST) for August-March 2017-18 and integrated GST (IGST) and compensation cess for July-March.

"During 2017-18, total revenue collected was Rs 7.19 trillion," the finance ministry said. If one adds the cess and IGST collection for July, the total stood at Rs 7.41 trillion.

Revised Estimates in the Budget pegged collection at Rs 4.44 trillion. Actuals released by the government on Friday showed the Centre's collections at Rs 4.5 trillion.

The government has achieved the RE target on indirect tax collection for 2017-18, an official said.

Image

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Re: GST - Discussion on all aspects.

Postby Vips » 01 May 2018 18:13

In a first, GST revenue collection for a month exceeds Rs 1 lakh crore.

The revenue collection from Goods and Services Tax (GST) exceeded Rs 1 lakh crore in April 2018, the Ministry of Finance said on Tuesday. This is the first occasion that the monthly revenue has breached the Rs 1 trillion milestone.

News agency ANI reported that the gross GST revenue collected in April 2018 came at Rs 1,03,458 crore of which Central GST (CGST) is Rs 18,652 crore and State GST (SGST) is Rs 25,704 crore. The Integrated GST (IGST) came at Rs 50,548 crore while cess accounted for Rs 8,554 crore. Finance minister Arun Jaitley congratulated various stakeholders + hailing the record GST collection as "a landmark achievement and a confirmation of increased economic activity". I would like to congratulate all taxpayers, Hon’ble Members of the GST Council, State and Central Government tax administration for this achievement," he tweeted.

The finance ministry echoed Jaitley's sentiments, "The buoyancy in the tax revenue of GST reflects the upswing in the economy and better compliance". Out of 87.12 lakh taxpayers, 60.47 lakh filed GSTR-3B, resulting in 69.5 per cent compliance," it tweeted via its official handle.
April was also the month for filing of quarterly return for composition dealers.Out of 19.31 lakh composition dealers,11.47 lakh filed their quarterly return(GSTR 4) , a 59.40 per cent compliance and paid Rs 579 crores as GST.

The spike in GST revenue may also be linked to the roll out of e-way bills which was touted as a major anti-evasion measure.

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Re: GST - Discussion on all aspects.

Postby Suraj » 01 May 2018 22:02

A lot of GST growing pains can be attributed to lack of understanding of how to use it properly, particularly considering many simply avoided paying taxes altogether in the past.
Many companies in India don’t understand the country’s largest tax reform
According to a recent survey of these businesses by Wydr, India’s largest mobile-based wholesale marketplace, 57% of the respondents said they don’t fully understand how the GST works—and nearly one in five said they still do not understand the tax policy at all.

A total of 130 businesses across India were surveyed by Wydr about how the GST regime has impacted them.

“The scale of implementation for the GST is unprecedented anywhere in the world, which naturally leads to some challenges and teething trouble in the first few months,” Devesh Rai, founder and CEO of Wydr, said. “…even though significant progress has been made in GST rollout, the administration needs to enhance its focus on educating small and medium business owners across India.”

The tax reform shook up everyone, from luxury carmakers and the banarasi sari industry to the Rs100,000 crore wedding industry. And, across the board, the smallest players have faced the biggest hurdles.

Though the GST was meant to put an end to a cascading and complex tax structure, nearly a third of the respondents don’t believe it simplified anything. What’s more, confused retailers and manufacturers don’t know how to seek guidance. Over 55% haven’t been able to get GST-related help easily.

Though its implementation hasn’t been smooth, “the government is working towards minimising the issues,” Rai said. “It has not even been a year since the tax system has been implemented and considering the scale of implementation, I think we are much better off.”

Businesses, too, are hopeful, with 45% saying the GST will be good in the long run. Over half also said that they believe the resultant uniformity will make one aspect of business easier—expanding to other states.

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Re: GST - Discussion on all aspects.

Postby Mukesh.Kumar » 02 May 2018 00:54

Suraj wrote:A lot of GST growing pains can be attributed to lack of understanding of how to use it properly, particularly considering many simply avoided paying taxes altogether in the past.
Many companies in India don’t understand the country’s largest tax reform
According to a recent survey of these businesses by Wydr, India’s largest mobile-based wholesale marketplace, 57% of the respondents said they don’t fully understand how the GST works—and nearly one in five said they still do not understand the tax policy at all.

A total of 130 businesses across India were surveyed by Wydr about how the GST regime has impacted them.

“The scale of implementation for the GST is unprecedented anywhere in the world, which naturally leads to some challenges and teething trouble in the first few months,” Devesh Rai, founder and CEO of Wydr, said. “…even though significant progress has been made in GST rollout, the administration needs to enhance its focus on educating small and medium business owners across India.”

The tax reform shook up everyone, from luxury carmakers and the banarasi sari industry to the Rs100,000 crore wedding industry. And, across the board, the smallest players have faced the biggest hurdles.

Though the GST was meant to put an end to a cascading and complex tax structure, nearly a third of the respondents don’t believe it simplified anything. What’s more, confused retailers and manufacturers don’t know how to seek guidance. Over 55% haven’t been able to get GST-related help easily.

Though its implementation hasn’t been smooth, “the government is working towards minimising the issues,” Rai said. “It has not even been a year since the tax system has been implemented and considering the scale of implementation, I think we are much better off.”

Businesses, too, are hopeful, with 45% saying the GST will be good in the long run. Over half also said that they believe the resultant uniformity will make one aspect of business easier—expanding to other states.



I guess it's too small a sample and that too skewed towards small businesses. But FWIW a good data point.

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Re: GST - Discussion on all aspects.

Postby Suraj » 02 May 2018 01:06

Yes the sample size is small. However they do focus on small businesses, who have a relatively higher cost of compliance. They're also the largest in number. The small sample size may still be ok if variance is low, which is likely if the nature of the concerns are consistent and predictable. That also makes the solutions more straightforward to implement and apply.

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Re: GST - Discussion on all aspects.

Postby chetak » 05 May 2018 13:52

There is no indication of which banks will be used to deposit the GST accruals or is the existing arrangement of using private banks to continue undisturbed??

All the high paid "staff" and the GSTN Board appointed by the private banks and other erstwhile shareholders are to continue for a period of five years.

Someone should file a request for details on their salary and perks, which are anyway being paid for from public funds.



At last, Government acquires 100% shares in GSTN by kicking out all tax money eating private players


At last, Government acquires 100% shares in GSTN by kicking out all tax money eating private players

By Team PGurus - May 5, 2018

Modi has correctly re-organized the corporate structure of GSTN to make it completely Government owned

Modi’s government took corrective measures[1] to fully acquire the Goods and Services Tax’s administration firm Goods and Services Tax Network (GSTN) by avoiding all the private players inducted by the former tainted Finance Minister P Chidambaram. Friday’s GST Council meet has officially declared that 51 percent shareholding by private bankers and dubious stock brokers consortium would be avoided from the strategic tax collection firm GSTN and it is made as a 50:50 partnership between the Centre and the State Governments.
....................

On Swamy’s complaints, Prime Minister had ordered Intelligence Bureau probe on how private banks and firms were allowed in GSTN and found that there was no security clearance received from Union Home Ministry. GSTN was floated by Chidambaram in March 2013 with 51 percent private banks. It is still a wonder, how Chidambaram dubiously floated a private firm in 2013 when GST Acts were passed only in 2016.

“Presently, the Central Government and State Government are holding 24.5% equity shares respectively and the remaining 51% are held by non-Governmental institutions and through various mechanisms, GSTN is under strategic control of government[3]. Majority of the GST processes including registration, the filing of returns, payment of taxes, processing of refunds is IT driven and GSTN is handling large-scale invoice level data of lakhs of business entities including data relating to exports and imports. Considering the nature of ‘state’ function performed by GSTN, Council felt that GSTN be converted into be a fully owned government Company.

*In view of the above, GST Council in its meeting held today decided:*

Acquisition of entire 51% of equity held by the Non-Governmental Institutions in GSTN amounting to Rs. 5.1 crore, equally by the Centre and the States governments and allow GSTN Board to initiate the process for acquisition of equity held by the private Companies; and

GSTN Board shall be allowed to continue the existing staff at existing terms and conditions for a period up to five years, and shall have the flexibility of hiring people through a contract on the terms and conditions similar to those used by GSTN till now while hiring regular employees. The existing financial commitments given by Centre and States to GSTN to share the capital and O&M cost of the IT Systems shall continue,” said the press statement issued by Finance Ministry after the May 4th GST Council Meet.

Finance Ministry has made several controversial moves by allowing Infosys to undertake the software and networking of GSTN. Though more than Rs.5000 crores was pumped to Infosys[4] from GSTN, the software and networking are still in a state of chaos[5]. Jaitley and Adhia even made secret notes to disallow the Comptroller and Auditor General (CAG) from auditing GSTN[6] and even made an order that GSTN would not come under General Financial Rules (GFR). This was a dubious move to avoid Union Cabinet clearances to pump money into GSTN and give to private vendors like Infosys.

Now, after Prime Minister Narendra Modi’s intervention, GSTN has become a full government entity and Government should take back all tax collection money deposited in private banks like the ICICI and HDFC and deposit it in a Public Sector Bank.

Prime Minister should look to flush out the crooked people in Finance Ministry responsible for much of this chaos for the past four years


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Re: GST - Discussion on all aspects.

Postby Mort Walker » 05 May 2018 22:37

Now, after Prime Minister Narendra Modi’s intervention, GSTN has become a full government entity and Government should take back all tax collection money deposited in private banks like the ICICI and HDFC and deposit it in a Public Sector Bank.

Prime Minister should look to flush out the crooked people in Finance Ministry responsible for much of this chaos for the past four years.


Good job. Tax collection is inherently a governmental function.


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