Latest news with #post-GST
The Print
4 days ago
- Business
- The Print
How GST changed import duty revenue for states—no blame, more profit
The last decade or so provides a nice base for studying the trends in government revenue from import tariffs of all types. This is because, during this period, the instrumentality of levying taxes on imported goods and services underwent a significant change. But this piece is not about whether India's tariffs are high. Nor is it about assessing the seriousness of the impact of higher tariffs on Indian exports. Instead, an attempt is being made here to evaluate the impact of tariffs on the exchequer by way of tax revenue. One of the reasons behind Mr Trump's move to raise tariffs is to bolster his government's revenue flow. So, how have India's tariffs played out with regard to its own tax revenue? Everyone these days is talking about tariffs. India has been accused of being a tariff king, suggesting that the country keeps its tariffs high. The United States President Donald Trump has levied additional tariffs of over 50 per cent on imports of most goods from India. Indian exporters are, obviously, worried and concerned. Till June 30, 2017, Customs duty provided a comprehensive picture of the total tax revenue collected by the Union government through various forms of import duties. With the launch of goods and services tax (GST) from July 2017, this was no longer true. Taxes such as countervailing duty levied on imports were subsumed in the GST structure, which had three segments — Central GST, State GST and Integrated GST or IGST. There are two components of IGST — it is levied on all inter-state transactions of taxable goods and services and on imports. The IGST rate is mostly 18 per cent on all such inter-state transactions and imports. The revenue from IGST is shared by the Centre and the states, depending on the final destination of the goods and services. Thus, after the launch of the GST regime, a complete picture of India's tax revenue from import tariffs is available only if you take into account collections of both Customs duty and IGST on imports. In 2016-17, the last full financial year before GST was launched, the Union government's Customs duty collections were about ~2.25 trillion. This amount was equivalent to 1.5 per cent of India's nominal gross domestic product (GDP) and 8.7 per cent of its total goods imports that year. Customs duty collections last financial year, almost eight years later, were almost unchanged at ~2.33 trillion or sharply down at 0.7 per cent of GDP. In tune with that fall, Customs duty collections accounted for only 3.8 per cent of India's merchandise goods imports in 2024-25. Also read: US bullying spurred Green Revolution. Let tariffs give us a Business Revolution Note that in the post-GST era, Customs duty collections have ceased to be the only indicator of India's import tariffs. IGST on imports has begun to play a significant role in boosting India's tax revenue from imports. Gross IGST on imports rose from ~3 trillion in 2018-19 (the first full year after the launch of the GST regime) to ~5.33 trillion in 2024-25. Interestingly, the Covid pandemic did not have any major impact on collections from import duties — neither on Customs nor on IGST on imports, contrary to the sharp setback in collections of other taxes in 2020-21. No surprise that the combined collections from Customs and IGST on imports almost doubled from ~4.18 trillion in 2018-19 to ~7.66 trillion in 2024-25. But as percentage of GDP and total imports of goods and services in this period, the combined collections of Customs and IGST on imports rose only marginally — from 2.21 per cent to 2.32 per cent of GDP, and from 9.34 per cent to 9.91 per cent of total goods and services imports. A change in the composition of revenue from import duties, however, was clearly noticeable. The share of Customs in total import tariff collections fell significantly over the last eight years since the launch of the GST regime. What kept the import duty collections growth momentum somewhat intact was the rise in IGST on imports, which shot up from ~3 trillion in 2018-19 to ~5.33 trillion in 2024-25. Of course, the net IGST on imports was a little lower because of export refunds of about a fifth of total collections. But the larger point about a sharp rise in IGST on imports cannot be missed. Indeed, since the new taxation regime's launch in July 2017, IGST on imports has consistently maintained a share of a fourth of total annual GST collections. For the Centre, however, the changing composition of the total import duty collections has dented its net tax revenue in light of the devolution formula recommended by the Finance Commission. The Centre has had to share about 41-42 per cent of the Customs duty collections with states in this period. But the IGST collections on imports have to be shared with the states at a rate that is much higher. About half of the IGST on imports is shared with the states. The remaining half comes to the Centre, but even this amount is shared with the states as per the Finance Commission-mandated formula of 41-42 per cent. What emerges clearly from these numbers is that the IGST component of total import duty collections is growing faster than that from Customs duty. But states enjoy an effectively larger share in the rapidly growing pie of IGST on imports because of the manner in which these duties are shared. The Centre may take the blame for maintaining a tariff regime that exporters to India might complain. But the revenue gains from such a tariff regime are more for the states. For the Centre, this may be a fiscally benevolent and generous approach towards the states. But the Centre may not remain very pleased for long with a situation where the states end up getting a much larger share of the total duties collected on imports of goods and services. Once the 14th and 15th Finance Commissions raised the share of central taxes to be transferred to the states to 42 per cent and 41 per cent, respectively, the Centre over the last decade or so has increased its reliance on cesses and surcharges, which are not part of the divisible pool, and prevented a larger transfer of taxes. Will the Centre do something similar to limit the states' import revenue share? AK Bhattacharya is the Editorial Director, Business Standard. He tweets @AshokAkaybee. Views are personal.
Business Standard
09-08-2025
- Business
- Business Standard
Hindustan Foods posts 17% YoY rise in Q1 PAT; clocks EBITDA of Rs 83.5 crore
Hindustan Foods has recorded 17% increase in consolidated net profit to Rs 31.7 crore in Q1 FY26 from Rs 27.2 crore in Q1 FY25. For the quarter, the company declared revenue of Rs 998.1 crore, a growth of 15% over the corresponding quarter of the previous year. EBITDA improved by 10% to Rs 83.5 crore in Q1 FY26 from Rs 75.5 crore in Q1 FY25. Profit before tax (PBT) in Q1 FY26 was at Rs 42.1 crore, up by 16% from Rs 36.2 crore posted in Q1 FY25. Sameer R. Kothari, managing director, said: HFL was able to achieve its highest ever quarterly profit despite the unseasonal rains that affected the off take of our seasonal offerings like ice creams and beverages. The ramp-up in our new plant in Nashik and the stabilization of the shoe business led to a satisfactory performance in this quarter. The last year was the year of Audacious, Agile and Ambitious bets, this year is going to be all about scaling with intent and executing with discipline. We will continue to focus on acquisitions which are value accretive in an external environment that continues to be challenging and more so with the Tariff War. Our diversified product mix and differentiated business model gives us confidence of being able to successfully maneuver the turbulent times and we remain confident of being able to achieve the targets that we have set for ourselves." Hindustan Foods (HFL) offers dedicated and shared manufacturing services to FMCG corporates who are looking to minimize costs while maximizing product quality in the post-GST environment. In 2013, Vanity Case India bought a controlling stake in HFL and since then, the company has diversified across various FMCG categories with manufacturing competencies in food & beverages, home care, fabric care, beauty & personal care, wellness & OTC pharma, leather & sports footwear, and household insecticides, amongst others. The scrip had shed 0.82% to end at Rs 535.00 on the BSE on Friday.
Time of India
04-08-2025
- Politics
- Time of India
End of the road for checkposts in Telangana as corruption complaints spike
Hyderabad: In a significant move to combat corruption and ease traffic congestion at the borders, the Telangana govt is planning to abolish all checkposts across the state. There are 14 checkposts at state borders, including Bhainsa, Kamareddy, Zaheerabad, Alampur, Aswaraopet, and Nagarjunasagar, and one intra-state checkpost at Kamareddy. These checkposts were established to provide checking facilities to transport operators at a single point and to avoid unnecessary delay and harassment. There were many allegations of corruption levelled against motor vehicle inspectors (MVIs) and assistant MVIs within the Regional Transport Authority (RTA) during inter-state vehicle inspections. In recent months, there were several instances of the Anti-Corruption Bureau (ACB) exposing instances of corruption at checkposts in Adilabad, Nalgonda, Gadwal, and Kamareddy districts. This has prompted govt authorities to close these checkposts entirely. You Can Also Check: Hyderabad AQI | Weather in Hyderabad | Bank Holidays in Hyderabad | Public Holidays in Hyderabad The ministry of road transport and highways previously communicated with the principal secretary (transport) of 11 states, including Telangana and Andhra Pradesh, regarding the removal of border checkposts. The ministry emphasised that post-GST implementation in 2017, these checkposts were redundant, particularly as vehicle and driver information was now readily accessible through digital platforms VAHAN and Sarathi. Already, a majority of states, including Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh, and Maharashtra, removed checkposts to facilitate seamless flow of goods and services across state borders. 'A study is being conducted to implement a new system, following Gujarat's model which eliminated all checkposts in 2019. The proposal involves transitioning to digital verification of documentation for vehicles crossing state borders,' said a senior official in RTA. The state has already proposed to install around 30 automatic number plate recognition (ANPR) cameras at checkposts throughout the state. These cameras would be set up nearly 500 metres to 1 km ahead of each checkpost to capture vehicles' documentation, including tax payments, pollution certificates, fitness certificates, permits, and other essential paperwork, subsequently notifying MVIs. Lorry owners' wait comes to an end Demanding the RTA eliminate the checkposts, the Telangana Lorry Owners Association (TLOA) wrote multiple representations in the last few years. According to the association, approximately 2 lakh heavy vehicles operating within the state face delays and operational challenges during these mandatory inspections while transporting essential goods. 'For years, our appeals to the RTA regarding the removal of checkposts remained unaddressed. Despite central govt instructions, the state administration took nearly four years to consider the possibility of abolishing these checkposts,' said Manchi Reddy Rajender Reddy, President, TLOA.
The Print
05-07-2025
- Business
- The Print
State finance ministers' panel discusses ways to curb ITC frauds, sector-specific tax evasion
The GoM also discussed state-specific policy suggestions for boosting revenue, and coordination between central and state tax administrations for plugging GST evasion. The Group of Ministers (GoM) on GST revenue analysis under Goa Chief Minister Pramod Sawant also discussed comparative analysis of pre- and post-GST revenue trends, e-invoicing and IT system enhancements for better traceability. New Delhi, Jul 4 (PTI) A panel of state finance ministers on Friday discussed tax evasions in specific sectors as it mulled over policies to check input tax credit (ITC) fraud which has reached a staggering Rs 2 lakh crore. 'The meeting discussed state-wise revenue trend analysis, analysis of economic and other factors on GST revenue and integration of anti-evasion and compliance tool. The meeting also discussed policy recommendations for revenue augmentation,' Sawant said after chairing the GoM meeting. The GoM identified Input Tax Credit (ITC) fraud as a major issue under goods and services tax (GST) and states suggested various measures to prevent it. Officials said the GoM flagged Rs 2 lakh crore of ITC fraud over the past years, with states like Gujarat, Telangana, and Rajasthan making presentations on best practices for GST revenue augmentation. The GoM would meet again soon and thereafter will submit its report to the GST Council, chaired by Union finance minister and comprising ministers from all states. In March, the GST Council had reconstituted GoM on 'Analysis of Revenue from GST'. Chaired by Sawant, the GoM had nine members, including from Bihar (Samrat Chaudhary), Chhattisgarh (O P Choudhary), Gujarat (Kanubhai Desai), Andhra Pradesh (P Keshav), Maharashtra (Ajit Pawar), Punjab (Harpal Singh Cheema), Tamil Nadu (Thangam Thennarasu) and Telangana (M B Vikramarka). ITC fraud has been a major pain point for GST officials with fraudsters coming up with new modus operandi to defraud the exchequer. During 2024-25, central and state GST officers have detected 25,009 fake firms involved in fraudulently passing input tax credit (ITC) worth Rs 61,545 crore. As per data on ITC frauds unearthed by central and state GST officers, over the two years 2023-24 and 2024-25, a total of 42,140 fake firms were detected, which were involved in fraudulently generating ITC of over Rs 1.01 lakh crore. A total of Rs 3,107 crore was recovered by way of blocking of ITC, and 316 arrests have been made. PTI JD HVA This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Time of India
05-07-2025
- Business
- Time of India
Indian soft drink industry to rebound next year with 10% growth despite weather disruptions: Report
The Indian soft drink industry is expected to return to a growth rate of over 10 per cent next year, which is impacted in the current year due to weather disruptions, said a report by Systematix Institutional Equities . The Carbonated Soft Drinks (CSD) industry is expected to deliver strong double-digit growth medium-term; historically, it has grown 13-14 per cent. The report citing the experts stated that the carbonated soft drinks (CSD) market of Rs 300 billion should deliver strong double-digit growth over the medium term. By definition, Carbonated Soft Drinks are non-alcoholic beverages containing usually carbonated water and flavouring and then sweetened with sugar or a non-caloric sweetener. The Indian markets consist mainly of Liquid Refreshment Beverages (LRB), which include CSD, water, juices & nectars/juice-based drinks, energy drinks, and sports drinks. Soft drinks make up 40-45 per cent of the overall market, energy drinks 8-10 per cent, juices 5 per cent, and sports drinks 1-2 per cent; the balance is water. About 50 per cent of the market is with local players and 50 per cent with major players, Bisleri, Kinley, Aquafina, and Bailey. The report highlighted that per capita beverage consumption is low in India, even lower than in Bangladesh and Pakistan. Going further, the report added that post-GST competition from regional players has eased in the Indian markets. The Bindu-Jeera drink in the South and Karachi Soda in the North had a 75-80 per cent category share, which is also coming down, the report added. It further added that larger players are seeing some share shift from local players. In Tamil Nadu for instance, apart from Bovonto, there is no other local brand available, the report added. India's soft drink industry is a rapidly growing segment, driven by rising disposable incomes, urbanisation, and a youthful population. Dominated by global players, the market also sees the presence of various local brands. Increasing demand for healthier, low-sugar, and regional flavours is shaping future growth and innovation.
