Bureau of Indian Standards Bill, 2015

The Union Cabinet recently gave its approval to introduce a new Bureau of Indian Standards Bill, 2015. The new Bill will provide legislative framework for following new provisions other than the provisions in the existing Bureau of Indian Standards Act, 1986 which is proposed to be repealed:

Important provisions in of the Bill:

  • It seeks to establish the Bureau of Indian standards (BIS) as the National Standards Body of India.
  • The Bureau will perform its functions through a Governing Council, which will consist of its President and other members.
  • It seeks to include goods, services and systems, besides articles and processes under the standardization regime;
  • It enables the Government to bring under the mandatory certification regime such article, process or service which it considers necessary from the point of view of health, safety, environment, prevention of deceptive practices, security etc. This will help consumers receive ISI certified products and will also help in prevention of import of sub-standard products;
  • It seeks to allow multiple types of simplified conformity assessment schemes including Self Declaration Of Conformity (SDOC) against any standard which will give multiple simplified options to manufacturers to adhere to standards and get a certificate of conformity, thus improving the “ease of doing business”;
  • It seeks to enable the Central Government to appoint any authority, in addition to the Bureau of Indian Standards, to verify the conformity of products and services to a standard and issue certificate of conformity;
  • It also seeks to enable the Government to implement mandatory hallmarking of precious metal articles;
  • It seeks to repeal the BIS Act, 1986.

Benefits:

  • The proposed provisions in the new Bureau of Indian Standards Bill, 2015 will empower the Central Government and the Bureau of Indian Standards to promote a culture of quality of products and services through mandatory/voluntary compliance with Indian standards through the process of ‘product certification’ and ‘Certificate of Conformity’ with a broad objective of consumer’s welfare.
  • It is also expected to improve enforcement of Indian standards.
  • The proposed provisions will also promote harmonious development of the activities of standardization, marking and quality certification of goods and services.

Sources: PIB.

Two panels to facilitate rollout

Union Finance Minister has approved the formation of two committees to facilitate the implementation of the Goods and Services Tax (GST) from next April.

About the Committees:

  • A steering committee, chaired by the Additional Secretary, Department of Revenue, and the Member Secretary of the Empowered Committee of State Finance Ministers, will monitor the setting up of IT infrastructure for the GST network, the Central Board of Excise and Customs and other tax authorities. The committee will monitor the progress of consultations with stakeholders such as trade and industry and the training of officers.
  • The other committee, chaired by Arvind Subramanian, Chief Economic Adviser, will recommend possible tax rates under the GST that would be consistent with the present level of revenue collected by the Centre and the States. While making recommendations, the committee will take into account the expected levels of economic growth, the different levels of compliance, and the broadening of the tax base. The panel would assess the sector- and State-wise impact of the GST on the economy.

Issues that could potentially delay the rollout of GST include:

  • The States have been demanding that the Centre compensate them fully for any revenue loss due to the implementation of the GST for five years. But, the Centre has agreed to full compensation for three years, 75% compensation in the fourth year and 50% in the fifth year.
  • States are demanding that they should be allowed to levy an additional sales tax on tobacco and tobacco products.
  • Some States have favoured abolition of the entry tax, while others have demanded that purchase tax not be merged with the GST.

Sources: The Hindu.

Presiding officers told to press close button at the end of poll

In a bid to prevent manipulation of EVMs, the Election Commission recently directed all presiding officers in Dr. Radhakrishnan Nagar Assembly Constituency, Chennai to press the close button after the end of poll.

What else has the EC said?

  • All presiding officers should draw a line at the end of poll after the last entry in Form 17-A, and should record the signed statement, obtaining the signatures of all polling agents, as may be present.
  • They should also give an attested copy of the Account of Votes Recorded (in Form 17C) at the end of poll to all such polling agents as may be present, irrespective of their asking for it or not.

These set of directions were issued following complaints in the previous elections that the presiding officers have failed to close the EVMs by pressing the ‘close button’ at the end of poll. Candidates have said the failure to close EVM is likely to lead to suspicion about manipulation.

Sources: The Hindu.

AC restaurants alone can levy service tax: Govt

The Ministry of Finance has clarified that only restaurants and eating places that have air-conditioning can charge service tax. And the tax will be levied on only 40% of the amount charged.

  • Restaurants, eating joints or messes which do not have air-conditioning or central air-heating in any part of the establishment are exempt from service tax.

Service Tax in India is an indirect tax paid on services provided in the country. According to Finance Act 1994, all service providers of the country except in J&K have to pay service tax. Current service tax is 14%. This tax would be applicable on services except the negative list of services. It is levied by the central government.

Sources: the Hindu, Wiki, finmin.

Chowdary is new CVC; Vijai Singh new CIC

K.V. Chowdary : Central Vigilance Commission

Vijai Singh : Chief Information Commissioner

Government has appointed former chairman of the Central Board of Direct Taxes K.V. Chowdary as the Central Vigilance Commissioner (CVC) and Information Commissioner (IC) Vijai Singh as the Chief Information Commissioner (CIC), filling two vacancies that are key to the institutional framework for accountability.

  • The CVC’s appointment is subject to the approval of the Supreme Court, which is hearing a public interest litigation petition for transparency in appointments to the post and that of vigilance commissioners.

CVC is appointed by the President of India on the recommendations of a committee consisting of Prime Minister, Union Home Minister and Leader of the Opposition in Lok Sabha (if there is no LoP then the leader of the single largest Opposition party in the Lok Sabha).

CIC is appointed by the President on the recommendation of a committee consisting of—

  • The Prime Minister, who shall be the Chairperson of the committee;
  • The Leader of Opposition in the Lok Sabha; and
  • A Union Cabinet Minister to be nominated by the Prime Minister.

Sources: The Hindu, Wiki, CIC, CVC.

No more horse-driven carriages in Mumbai: HC

Terming illegal the use of horse carriages for joyrides, the Bombay High Court recently banned them in Mumbai and directed the authorities to phase them out in one year.

What else has the Court said?

  • The Court also said that no wheeled vehicle hired for joyrides could be used for public conveyance. Therefore, no licences can be granted for the victorias or carriages drawn or propelled by the horses in Mumbai.
  • The court further said that the carriages did not fall in the category of “public conveyance” under the Bombay Public Conveyance Act 1920, and were only meant for joyrides.

What about those families whose livelihoods were dependent on these carriages?

  • The court has directed the State to identify the number of families whose livelihoods were connected with the running of horse carriages and come up with schemes for their rehabilitation by December 2015. The government would also have to formulate schemes for rehabilitation of the animals. There are approximately 700 families operating the business.
  • After the expiry of the one-year period, the Mumbai Corporation would have to close down all the stables meant for horses and ponies and take action under the provisions of the Prevention of Cruelty to Animals Act.

The decision came based on the petition which said the horses were forced to overwork.

Sources: The Hindu.

New demand by States could hit GST rollout

The States have demanded that the Centre compensate them fully for any loss of revenue during the first five years of transition to the new GST tax regime. This is a setback to the government’s plan of rolling out the Goods and Services Tax (GST) by April 1, 2016.

  • While, the Centre has proposed to compensate the States, fully for the first three years, followed by three-fourths of the losses in the fourth year and half during the fifth.

Other demands by the states:

  • They want the power to levy additional sales tax over and above the GST on tobacco and tobacco products.
  • Some States want the purchase tax be not subsumed in the GST. However, if it were to be merged, then they should be awarded compensation for 15 years.
  • The States have also raised concerns over the proposed provision of an additional 1% tax over and above the GST, which the Centre offered as an assurance against apprehensions of loss of revenue.

GST:

The goods and services tax (GST) is a comprehensive value-added tax (VAT) on goods and services. It is an indirect tax levied on manufacture, sale and consumption of goods as well as services at a national level.

  • Through a tax credit mechanism, this tax is collected on value-added goods and services at each stage of sale or purchase in the supply chain.
  • The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.
  • Experts say that GST is likely to improve tax collections and boost India’s economic development by breaking tax barriers between States and integrating India through a uniform tax rate.

What are the benefits of GST?

  • Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions.
  • It is expected to help build a transparent and corruption-free tax administration. GST will be is levied only at the destination point, and not at various points (from manufacturing to retail outlets).
  • Currently, a manufacturer needs to pay tax when a finished product moves out from a factory, and it is again taxed at the retail outlet when sold.

How will it benefit the Centre and the States?

It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth. It will divide the tax burden equitably between manufacturing and services.

What are the benefits of GST for individuals and companies?

  • In the GST system, both Central and State taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost. This will benefit individuals as prices are likely to come down. Lower prices will lead to more consumption, thereby helping companies.

The bill on GST, which will be the biggest tax reform after 1947, was introduced in the Lok Sabha in December last year. A single rate of GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer of goods and services.

Sources: The Hindu, gstindia.com.