sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
News Headlines »
 First Writ Petition In The General Interest Of CA Members From Northern India
 How much tax are you liable to pay on long-term capital gains on property?
 How To Save Tax Deductions Despite New Law
 Companies (Appointment and Qualification of Directors) Sixth Amendment Rules, 2018.
 Easier tax refund regime for exporters in the works
 Income tax on your gold and real estate investments
 Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Central Goods and Service Tax Rules, 2017 in certain cases
 How RBI dealt with the crisis amid tensions with FinMin
 Pay tax on this PF account withdrawal Income tax return (ITR) filinga
 Seeks to make amendments (Ninth Amendment, 2018) to the CGST Rules, 2017.
 How govt is dealing with tax evasion, corporate fraud

Govt depts to pay more tax on inter-State purchases
January, 06th 2007
Move to form part of CST compensation package

The Government departments at both the Central and State levels would in the coming days be required to pay more tax on their inter-State purchases of goods.

The Centre and the Empowered Committee of State Finance Ministers on Value Added Tax (VAT) have agreed to do away with the facility of concessional tax rate currently enjoyed by Government departments on such purchases.

As this move would bolster revenues for the States, this measure has been counted towards the compensation package to be offered to the States for the proposed central sales tax (CST) phase-out.

This would also bring Government departments at par with the private sector as they would be required to fork out VAT at normal rates instead of concessional rate of 4 per cent. Official sources said that abolition of Form D, which allows Government departments to make inter-State purchases at 4 per cent, would result in the central ministries and organisations such as the Railways paying up additional taxes of anywhere between Rs 1,500-Rs 3,000 crore annually to the States.

In 2007-08, States may face revenue loss of Rs 6,000-Rs 6,500 crore on account of reduction in CST from 4 to 3 per cent with effect from April 1 this year.

"The main benefit to the States is in terms of additional revenues flowing to them through the higher spending of the Central Government ministries from their budget allocations," sources said.

The proposed abolition of Form D would result in increased revenues to the State exchequer, as sales made to Government departments would attract higher rate of incidence of sales tax/VAT, Mr Aseem Chawla, Director-Taxation, Amarchand & Mangaldas, told Business Line.

He highlighted that the removal of Form D was one process towards the "big ticket" item of CST phase-out. The system of Form D was introduced in September 1958.

The doing away with Form D may also imply higher cost for provision of goods or services, depending on whether the incremental increase in incidence of taxes is passed on to the ultimate consumer or absorbed by the Government.

Meanwhile, official sources said that VAT on imports would not form part of the compensation package for CST phase-out although this issue was very much on the discussion table.

"As an issue, VAT on imports is very much alive," sources said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multi-level Marketing MLM India Affiliate Marketing Affiliate Marketing Software MLM Software MLM Solutions Multi level marketing solutions MLM Servi

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions