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» GST should be in place by October 2012: CBEC Chairman S D Mazumdar
Meeting the indirect tax collection target could be a problem if mop-up remains subdued in the second half. So the government is focusing is on the services sector, which contributes 60% to India's GDP but only 15-20% in taxes. And the measures taken so far have definitely yielded results, says Central Board of Excise and Customs chairman S D Mazumdar, who demits office on Monday. The government's negative services list, which is expected to boost revenues, could also take effect before the proposed goods and services tax is introduced in about a year, he says in an interview to Deepshikha Sikarwar . Excerpts:
Indirect taxes collections, particularly excise duty and to some extent customs duty, depend on manufacturing growth. Despite slowdown concerns, indirect tax collections have remained robust till August. For the first time, in September, excise duty collections fell by 7.8% and customs collections rose only by about 7%, largely on account of rupee depreciation.
We need to wait and watch for the October numbers. Generally, there is a pick-up in the second half of the financial year. Cumulative growth in collections is on target so far, but if mop-ups continue to decline in the coming months then that would be worrisome.
The focus is on service tax. The services sector has a share of 60% in the country's GDP but it contributes just 15-20% in taxes. We have 15 lakh registered service providers, of which only 6 lakh file returns. Four out of five cases registered by our anti-evasion wing, Directorate General of Central Excise Intelligence, are those relating to service tax.
This is despite the fact that contribution of service tax in the overall indirect taxes kitty is very small. We have brought in measures for prosecution and provisional attachment of property in service tax. These steps seem to be have had some effect as collections witnessed a robust 37.7 % growth in the first half.
The negative-list approach is an attempt by the government to bring international best practices in the taxation structure. Finance minister Pranab Mukherjee wanted a debate on it. So we put out a discussion paper and the response has been overwhelming. We will come out with a final paper soon. I see no reason as to why this can't be implemented before the proposed goods and services tax. But the final decision would the finance minister's.
A task force set up by the finance minister has just submitted its report on the business process. The discussion paper on this covers key definitions that will form the very basis of taxation. Drafting GST legislation on this basis can be done in a month. It would be put in the public domain after due examination and given to the states. After feedback from all quarters, drafting of the GST legislation would be done.
Work is progressing well on GST net also. The standing committee has just started work on the bill. So if they give the report by the winter session then we can take it up in the budget session. After that we will have to get GST bill passed in Parliament and also state assemblies. We can have GST in place by October 2012.
Source : The Economic Times, Sun, Nov 13, 2011 | Updated 09.18AM IST