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New Indian Express
a day ago
- Business
- New Indian Express
GST overhaul: Pricing models to logistics resets, what firms may need to do
'Businesses must also factor in anti-profiteering rules, which were active until March 31, 2025, but could be extended. A detailed supply chain review will also be essential to evaluate any possible inverted duty structure and manage potential credit accumulation,' said Pratik Jain, partner, Price Waterhouse & Co LLP. Companies with exposure to state-level incentive schemes may also need to reassess their positions. Rate rationalisation could affect net State GST reimbursements under industrial policies in states such as Maharashtra, prompting businesses to rework their cost and incentive models. Operational preparedness will be the key, particularly in managing inventory, passing on discounts, and handling distributor contracts. Promotional strategies are likely to get a revamp. Manufacturers in the 5% slab often avoid promotional schemes fearing mixed supply attracting higher taxes. With more goods moving to lower rates, companies can design more customer-focused promotions. Digital channels of the businesses will require adjustments too. Vivek Baj, partner, Economic Laws Practice, noted that companies must work with e-commerce platforms to update marketplace-seller settlement models and 're-evaluate HSN classification of goods to ensure the correct GST rate is applied from the date of change in rate of tax.' Industry players have also flagged the need for clarity and sufficient time to implement the amendments. With amendments expected by Diwali, businesses are seeking a clear roadmap. Shivam Mehta, Executive Partner, Lakshmikumaran & Sridharan Attorneys asserts that the government needs to provide prior notice, clear guidelines and a reasonable window for businesses to make the necessary changes which will help ensure that the intended benefit of price reduction actually reaches customers in a timely and seamless manner.
Economic Times
3 days ago
- Business
- Economic Times
GST 2.0 reforms: From 4 slabs to 2, simpler tax system ahead
Synopsis With robust GST collections and a broad tax base, India is poised for next-generation GST reforms, potentially streamlining the rate structure to 5% and 18% slabs. This shift aims to boost consumption and economic activity by lowering rates on many goods, while minimizing revenue impact. Pratik Jain - Partner, Price Waterhouse & Co LLP Over the last eight years since the introduction of GST, the focus has been on compliance and expanding the tax base. With average monthly GST collections of over ₹1.8 lakh crore in FY25 and a tax base exceeding 1.5 crore, the time has come for 'next generation GST reforms', as announced by the prime minister on Independence are now set for GST rate rationalisation, with four main rate slabs of 5, 12, 18 and 28% likely to give way to two slabs of 5 and 18% (with a few 'sin' products subject to 40%). This means that most items currently under the 12% slab could attract a lower rate of 5% (including many food and household products) and those under 28% might be reduced to 18% (including cement and cars). This will significantly boost consumption and spur economic activity, without impacting government revenues too much, as over 70% of collections come from the 18% category. It would also reduce disputes on product classification and simplify the overall tax structure. As the new rate structure takes shape, the GST Council should ensure it does not create an 'inverted duty' structure and, if it does, the laws are amended to allow refunds of accumulated credits. Industry will also need to watch for any changes to the 'anti-profiteering' provisions, which were in force until March 31, 2025. In any case, market forces should ensure that the benefits of GST cuts are passed on to exciting Diwali lies ahead for all of us! (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of
New Indian Express
12-08-2025
- Business
- New Indian Express
Net tax collection slips 3.95% as refunds surge
Net tax collection by the mid of the second quarter of FY26 (till August 11, 2025) has contracted by 3.95% compared to the corresponding period last year, as per the latest data released by the Central Board of Direct Taxes (CBDT). The latest figures released by CBDT reveal that the net advance tax collection by the mid of the second quarter of FY26 stood at Rs 6.63 lakh crore, which previously stood at Rs 6.91 lakh crore as on August 11, 2024. The gross tax collection also registered a fall of 1.87%, as it went down from Rs 8.14 lakh crore in the corresponding period previous year to Rs 7.98 lakh crore. The refunds have gone up by 9.81% to Rs 1.34 lakh crore during the period, compared to Rs 1.03 lakh crore in the previous fiscal year's corresponding period. 'The decline in the net collections is mainly due to the higher volume of refunds issued, especially for the corporate tax. One has to also understands tax collections cannot just have one way trajectory and are more dynamic in nature and what we are observing is basically just the impact of refund outflows on the government's net revenue position in the early part of the fiscal year,' says Hitesh Sawhney, partner, Price Waterhouse & Co LLP. The fall in the tax collection is primarily due to the sharp decline in personal income tax collection. While the corporate tax collection has gone up slightly by around 3%, personal income tax collection went down by more than 7% during the period. Previously, under the new tax regime (for 2024-25), taxpayers with income up to Rs 7 lakh had to pay no taxes. But from 2025-26, the exemption limit has been increased to Rs 12 lakh, making income up to Rs 12 lakh completely tax-free under the new regime.
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Business Standard
01-08-2025
- Business
- Business Standard
India's net GST revenue rises 1.7% to ₹1.68 trillion in July; refunds surge
India's net revenues from goods and services tax (GST) grew by a marginal 1.7 per cent in July to ₹1.68 trillion, thanks largely to a sharp spike in refunds even as gross collections from the indirect tax were up 7.5 per cent at almost ₹ 1.96 lakh crore. July's net GST kitty growth marks the slowest pace since last February from when disaggregated data on gross and net GST collections is available. In June, net GST revenues were up 3.3 per cent. Net revenues from domestic transactions, in fact, contracted 0.2 per cent in July, even though gross domestic revenues were up 6.7 per cent, as refunds for domestic transactions more than doubled to nearly ₹17,000 crore from under ₹8,000 crore in July 2024. GST refunds to exporters grew at a slower pace of 20 per cent and added up to a little over ₹10,000 crore, so net revenues from imports were up 7.5 per cent at ₹42,548 crore. Gross revenues from imports rose 9.7 per cent prior to refunds, to touch nearly ₹53,000 crore. 'Higher refunds on domestic supplies could be from excess tax payments, inverted duty structures, and other adjustments. The increased refunds should aid cash flows for businesses,' observed Abhishek Jain, indirect tax head and partner at KPMG. Sequentially, July's net GST collections, for transactions undertaken in June, were nearly 6 per cent higher than from ₹1.59 trillion reported in June. In May and April, the net GST receipts were registered at ₹1.73 trillion and ₹2.09 trillion respectively. In the first four months of financial year 2025-26, net GST revenues are up 8.4 per cent at ₹7.11 trillion, with domestic revenues rising 6.1 per cent to ₹5.6 trillion and import revenues surging 18.1 per cent to almost Rs. 1.51 trillion. Gross GST revenues, before effecting refunds, are up 10.7 per cent to ₹8.18 trillion, while refunds have risen 29 per cent to about ₹1.07 trillion. 'The growth in net monthly collection is only 1.7 per cent as against YTD (year-to-date) growth of 8.4 per cent, though partly attributed to significant increase in refunds,' said Pratik Jain, partner with Price Waterhouse & Co LLP. 'After a tepid growth in the previous month as well, the GST Council may like to discuss the possible measures to augment the revenues in the next meeting. With the GST Compensation Cess going away, the states may also be a bit more concerned about the slowdown in GST collections,' Jain remarked. MS Mani, partner at Deloitte India noted that though there has been a focus on domestic manufacturing and import substitution, the GST revenue numbers indicate that the gross GST domestic revenue risen only 9 per cent so far this year, while import revenues have risen 16 per cent. The spike in refunds augurs well for businesses as it signals quicker processing by the tax authorities, he said. Mani also pointed to the weak growth in revenues amongst large producing and consuming states — from 2 per cent for Delhi, 3 per cent for Gujarat, 4 per cent for Rajasthan, 6 per cent for Maharashtra, 7 per cent for Karnataka and Uttar Pradesh, and 8 per cent for Tamil Nadu. The state-wise data shows smaller states and Union Territories like Tripura (41 per cent), Andaman and Nicobar Islands (31 per cent), and Meghalaya (26 per cent) posted over 25 per cent growth in July. , Uttar Pradesh (7 per cent) reported single digit growth. Mizoram, Manipur and Lakshdweep clocked contractions of 21 per cent, 36 per cent and 52 per cent, respectively, as did Jammu and Kashmir (-5 per cent), Chhatisgarh (-4 per cent), and Jharkhand (-3 per cent).
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Business Standard
01-08-2025
- Business
- Business Standard
India's net GST revenue rises 1.7% to ₹1.68 trn in July as refunds surge
India's net revenues from the Goods and Services Tax (GST) grew by a marginal 1.7 per cent in July to Rs. 1.68 trillion, thanks largely to a sharp spike in refunds even as gross collections from the indirect tax were up 7.5 per cent at almost Rs. 1.96 lakh crore. July's net GST kitty growth marks the slowest pace since last February from when disaggregated data on gross and net GST collections is available. In June, net GST revenues were up 3.3 per cent. Net revenues from domestic transactions, in fact, contracted 0.2 per cent in July, even though gross domestic revenues were up 6.7 per cent, as refunds for domestic transactions more than doubled to nearly Rs. 17,000 crore from under Rs. 8,000 crore in July 2024. GST refunds to exporters grew at a slower pace of 20 per cent and added up to a little over Rs. 10,000 crore, so net revenues from imports were up 7.5 per cent at Rs. 42,548 crore. Gross revenues from imports rose 9.7 per cent prior to refunds, to touch nearly Rs. 53,000 crore. 'Higher refunds on domestic supplies could be from excess tax payments, inverted duty structures, and other adjustments. The increased refunds should aid cash flows for businesses,' observed Abhishek Jain, indirect tax head and partner at KPMG. Sequentially, July's net GST collections, for transactions undertaken in June, were nearly 6 per cent higher than from Rs 1.59 trillion reported in June. In May and April, the net GST receipts were registered at Rs 1.73 trillion and Rs 2.09 trillion respectively. In the first four months of financial year 2025-26, net GST revenues are up 8.4 per cent at Rs. 7.11 trillion, with domestic revenues rising 6.1 per cent to Rs. 5.6 trillion and import revenues surging 18.1 per cent to almost Rs. 1.51 trillion. Gross GST revenues, before effecting refunds, are up 10.7 per cent to Rs. 8.18 trillion, while refunds have risen 29 per cent to about Rs. 1.07 trillion. "The growth in net monthly collection is only 1.7 per cent as against YTD (year-to-date) growth of 8.4 per cent, though partly attributed to significant increase in refunds,' said Pratik Jain, partner with Price Waterhouse & Co LLP. 'After a tepid growth in the previous month as well, the GST Council may like to discuss the possible measures to augment the revenues in the next meeting. With the GST Compensation Cess going away, the states may also be a bit more concerned about the slowdown in GST collections,' Jain remarked. MS Mani, partner at Deloitte India noted that though there has been a focus on domestic manufacturing and import substitution, the GST revenue numbers indicate that the gross GST domestic revenue risen only 9 per cent so far this year, while import revenues have risen 16 per cent. The spike in refunds augurs well for businesses as it signals quicker processing by the tax authorities, he said. Mani also pointed to the weak growth in revenues amongst large producing and consuming states — from 2 per cent for Delhi, 3 per cent for Gujarat, 4 per cent for Rajasthan, 6 per cent for Maharashtra, 7 per cent for Karnataka and Uttar Pradesh, and 8 per cent for Tamil Nadu. The state-wise data shows smaller states and Union Territories like Tripura (41 per cent), Andaman and Nicobar Islands (31 per cent), and Meghalaya (26 per cent) posted over 25 per cent growth in July. , Uttar Pradesh (7 per cent) reported single digit growth. Mizoram, Manipur and Lakshdweep clocked contractions of 21 per cent, 36 per cent and 52 per cent, respectively, as did Jammu and Kashmir (-5 per cent), Chhatisgarh (-4 per cent), and Jharkhand (-3 per cent).
