GST to hit informal sector; GDP growth to moderate: UN report
GST to hit informal sector; GDP growth to moderate: UN report
India's informal sector got badly affected by demonetisation and may take further hit due to GST, a UN report today said, lowering country's growth projection to 6.7 per cent for 2017 from 7 per cent in 2016.
UNCTAD's Trade and Development 2017 report notes that the world economy in 2017 is picking up but not lifting off. The growth is expected to reach 2.6 per cent, slightly higher than in 2016 but well below the pre-financial crisis average of 3.2 per cent.
Referring to India and China, it said at the current levels of growth, the countries are unlikely to serve as "growth polls" for the global economy in near future.
India's "output growth" is likely to slowdown to 6.7 per cent in 2017 from 7 per cent in the previous year, it said. The report retained the growth projection for China at 6.7 per cent, the same as 2016.
India's growth performance, it said, depends to a large extent on reforms to its banking sector, which is burdened with large volumes of stressed and non-performing assets, and there are already signs of a reduction in the pace of credit creation.
Indian banks are saddled with non-performing assets of about Rs 8 lakh crore.
Since debt-financed private investment and consumption have been important drivers of growth in India, the easing of the credit boom is likely to slow GDP growth, it said.
"In addition, the informal sector, which still accounts for at least one-third of the country's GDP and more than four-fifths of employment, was badly affected by the government's 'demonetisation' move in November 2016, and it may be further affected by the rollout of the GST from July 2017," it said.
Thus, even if the current levels of growth in both China and India are sustained, "it is unlikely that these countries will serve as growth poles for the global economy in the near future".
The report said the gradual slowdown of China is expected to continue as it moves ahead with rebalancing its economy, towards domestic markets.
However, the explosion of domestic debt since the crisis is proving to be a major challenge for a sustained growth.
Thus, the dependence on debt makes the boom in China and India difficult to sustain and raises the possibility that when the downturn occurs in these countries, deleveraging will accelerate the fall and make recovery difficult, it said.
"Expecting these countries to continue to serve as the growth poles that would fuel a global recovery is clearly unwarranted," the report said.
Referring to global growth, it said most regions are set to register small gains, with Latin America exiting recession and posting the biggest turnaround, even if only at 1.2 per cent growth.
The eurozone is expected to see its fastest growth since 2010 (1.8 per cent) but is still lagging behind the US.
The United Nations Conference on Trade and Development (UNCTAD) report also said that unregulated finance remains at the heart of today's hyper-globalised world and the failure to tame it and address the deep-seated inequalities, it has generated threatens efforts to build inclusive economies.
The report calls for a serious examination of market power, rent-seeking behaviour and "winner-take-most" rules of the game, which have generated exclusionary outcomes.
In response to the political slogan of yesteryear - "there is no alternative" - the report outlines a global new deal to build more inclusive and caring economies.
This would combine economic recovery with regulatory reforms and redistribution policies, and do so with speed and at the requisite scale.
"The successes of the New Deal of the 1930s in the United States owed much to its emphasis on counterbalancing powers and giving a voice to weaker groups in society, including consumer groups, workers' organisations, farmers and the dispossessed poor. This is no less true today," it said.
It further said a decade after sparking a massive global crisis that absorbed trillions of dollars of taxpayers' money in bailouts, the dominant financial sector has barely changed.
The report also examines other sources of anxiety linked to robots and gender discrimination, which are affecting job prospects in developed and developing economies alike.
"While automation and increased female participation should be welcome developments, they appear threatening because they coincide with a world of austerity and excessive competition, leading to a race to the bottom in job markets," the report said.
Consequences of incorrect invoice details uploaded while filing GSTR 1 What will be the consequences if incorrect invoice details are uploaded on GSTN Portal while filing GSTR 1? How any one canamend these details?
It is a very common question of every GST taxpayer that what would be the consequences if one encounters following mistake while filing his GSTR 1
• Mention the wrong GSTIN (For example the invoice is on the name of M/s A but mistakenly shown it as sale made to M/s B) • Mention wrong Invoice No. or Invoice date • Punched wrong Invoice value (Mistake is due to wrong data Punching)
As we all aware of the fact that GST Law doesn't provide any option to amend the GST Return. Therefore the taxpayers (especially small traders) are very much concern regarding consequences of clerical mistake committed while filling GST Returns specially GSTR 1.
However, Section No. 34 of CGST Act, 2017 provides that the person can issue a debit or credit note as the case may being fol…
Borewell rig owners in the small town of Tiruchengode in Tamil Nadu, who operate their machines across the country, are worried over the applicability of Goods and Services Tax (GST).Out of nearly 10,000 rig vehicles in the country, nearly half belong to residents of Tiruchengode, nearly 400 km west of Chennai. Providing service to agriculture sector, the industry was earlier exempt from Service Tax and are hoping for exemption under GST Act. However, there is no clarity on the GST as yet.The rigs criss cross the country. Each vehicle costs over ₹1 crore and carries 5-6 workers, sources said.“Since the introduction of GST, our members are not clear how it will impact us. The government should exempt services provided by us to agriculture from GST Act as was done under Service Tax,” said Paari Ganeshan, President, Tiruchengode Lorry Owners Association, and former president of Tiruchengode Rig Owners Association.Supply of water for production of any agricultural produce was excluded fro…
GST ON TOUR OPERATORS AND AIR TRAVEL AGENTS GST ON TOUR OPERATORSGST @ 5% has been applied on services of tour operator without benefit of Input Tax Credit (ITC) on goods and services. 5% GST will be payable on the gross amount charged by the tour operator from the customer. This GST is uniform for all services – package tours, hotel accommodation only etc. The expression “tour operator” is defined in entry No. 23 of notification No. 11/2017-Central Tax (Rate) dated 28.6.2017 as under:-“Tour operator” means any person engaged in the business of planning, scheduling, organizing, arranging tours (which may include arrangements for accommodation, sight-seeing or other similar services) by any mode of transport and includes any person engaged in the business of operating tours”. In the case of Intra-State supply of tour operator’s services, CGST @2.5% and SGST @ 2.5% will be levied making the total tax as 5%. On the contrary, in the case of Inter-State supply of services, 5% IGST will apply …