Posts Tagged ‘stimulus packages’

E-Filing of Service Tax to be Made Mandatory in Coming Months

E-Filing of Service Tax Set to be Made Mandatory in Coming Months

E-Filing of Service Tax Set to be Made Mandatory in Coming Months

The government will make electronic filing of service tax mandatory within a couple of months, said a senior official of the Central Board of Excise and Customs (CBEC).

โ€œElectronic filing of service tax will be made compulsory in the next two months,” CBEC member Mr Y G Parande told reporters on the sidelines of a PHD chamber seminar.

Parande also expressed hope that despite impact of stimulus package on realisation of revenue, the government would meet service tax collection target during the financial year.

During the year, the government proposed to garner Rs 65,000 crore as service tax.

The service tax collection during the first seven months has dropped by 5.4 per cent to Rs 28,926 crore compared with corresponding period last year.

The collections of indirect tax, including customs, excise and service tax, fell by 21.6 per cent to Rs 1,26,903 crore during the period of April-October.

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Attributing decline in revenue collections to incentives given by the government to help the economy combat the impact of global slowdown, Mr Parande said, โ€œcertainly, the stimulus packages have had the effect (on indirect tax collections), particularly because rates were brought down.”

Earlier, stimulus packages and economic slowdown have hit the exchequer hard as indirect tax collections shrunk by 21.6 per cent to Rs 1.27 lakh crore in the first seven months of this fiscal, against Rs 1.62 lakh crore a year ago.

All the three components of indirect tax โ€” excise, customs and service tax โ€” have registered decline in collections.

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As stimulus is taking a heavy toll on the exchequer, talks have also already begun about when to withdraw it.

Prime Minister Manmohan Singh had said it will be phased out from next fiscal, while Finance Minister Pranab Mukherjee had said it will continue till the global economy recovers.

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Indian Corporates Pitched For a Cut in Interest Rates :)

Softer Interest Rate Regime

Stating that it was essential to maintain the growth momentum, India Inc described 6.8% rise in July industrial output as “evidence of recovery and pitched for a cut in interest rate.

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However, although performance in July has been lower than the previous month, vigorous increase in mining and manufacturing has kept up the level of industrial growth at a reasonable level of 6.8%.

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Additionally, it is said that the industrial economy is passing through a very important stage and FICCI has as a result advocated the need for a softer interest rate regime to assist the overall growth process and promote investments.

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“Although performance in July has been somewhat lower than the previous month…nevertheless robust growth in mining and manufacturing have kept up the level of industrial growth at a reasonable level of 6.8 per cent,” Ficci Secretary General Amit Mitra said in a statement.

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On the other hand, the RBI had cut reverse repo and repo rate by 25 basis points each in April whereas in June, the factory production was revised to 8.2% against 7.8% anticipated provisionally.

Moreover, Assocham stated that in future, the force of stimulus packages would also add on to the revival and India could move on to a close to 6.5% of GDP in the present financial year.

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Fiscal Deficit will not be in Double Digits: Montek Singh Ahluwalia

Fiscal Deficit will not be in Double Digits: Montek

Fiscal Deficit will not be in Double Digits: Montek

Seeking to mollify the fears of banks that high government borrowing would not allow interest rate to come down, the Planning Commission on Sunday said the fiscal deficit will be high but not in “double digits”.

“Bankers are always concerned about the size of the government’s borrowing. Because it is very very large, many of them think that the interest rate on government debt will rise and they would rather retain liquidity now in order to invest in high-yielding government bonds,” Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

He, however, advised bankers to wait as nobody knows what the government borrowing would be till the Budget and added that “I feel it will be possible to accommodate a reasonable fiscal deficit.”

He stressed, “should not look for a return this year to the normal fiscal deficit, which used to be 3 per cent. It should be significantly higher.”

Fiscal deficit, which is roughly the difference between total expenditure and total receipts, is an indicator of government borrowing.

On account of various stimulus packages announced by the government to arrest the impact of the global financial meltdown on the country, the fiscal deficit during 2008-09 shot up to over 6 per cent of gross domestic product (GDP) as against the original estimate of 2.5 per cent.

He pointed out that all over the world countries are running high fiscal deficits.
Admitting that the monetary policy stance does have a bearing on interest rates, he said, “I am sure the Finance Ministry and the RBI are in close contact on this issue.”