GST: Finance Minister may hike service tax to 16-18% in Budget

GST: Finance Minister may hike service tax to 16-18% in Budget

New Delhi: Finance Minister Arun Jaitley may hike service tax rate to 16-18 per cent from the current 15 per cent in the Budget, due on Wednesday, as a precursor to the Goods and Services Tax (GST) rollout.

The move, that will make flying, eating out, phone bills and a host of other services expensive, would be an attempt to take the rates closer to the proposed tax slabs for GST.

GST, which will subsume central and state levies like excise duty, service tax and VAT, is scheduled to be rolled out from July 1.

The tax slabs decided for the GST are 5, 12, 18 and 28 per cent and taking service tax closer to one of the slabs is a logical move in the Budget, tax experts said.

Tax experts say, Jaitley, who had in his previous budget hiked service tax rate by 0.5 per cent to 15 per cent, may raise the levy by at least one percentage point to 16 per cent.

Some others feel there could be different service tax rates with a lower 12 per cent for basic services and a higher 18 per cent for the rest.

Also, a higher service tax for April-June will help the government garner more revenue to meet expenses on schemes and programmes it may be planning to contain the impact of demonetisation.

A service tax rate closer to the GST rate will also help consumers avoid a greater price shock when the new national sales tax is rolled out.

While service tax until now is a central levy, it will be equally split between the Centre and states under the new GST regime. Most services, except essential ones like primary healthcare and basic education, will be covered by GST.

Service tax was budgeted to provide Rs 2.31 lakh crore in 2016-17, more than 14 per cent of the Centre’s total tax revenues of Rs 16.30 lakh crore.

This will be the third time that Jaitley will raise service tax rate. Service tax from June 1, 2015 was hiked from 12.36 per cent to 14 per cent. A 0.5 per cent Swachh Bharat Cess was levied on all services, taking the total incidence of service tax to 14.5 per cent from November 15, 2015.

In the last Budget, he imposed a Krishi Kalyan Cess at the rate of 0.5 per cent on all taxable services to take the levy to 15 per cent.

PTI

Government may make Aadhaar must for rail concession in Budget 2017

Government may make Aadhaar must for rail concession in Budget 2017

New Delhi: Government is contemplating to make Aadhaar or Unique Identification (UID) card mandatory to avail rail concession, and an announcement is likely to be made by Finance Minister Arun Jaitley while presenting the first combined General and Railway Budget on February 1.

The move will help the government in better targetting of benefits and check misuse of the facility, sources said.

The Railways provides concession on tickets to more than 50 categories of passengers which include senior citizens, students, research scholars, teacher, doctor, nurse, patients, sports people, unemployed youth, Arjun awardees among others.

At present, Railways is running a pilot project for senior citizens who are entitled for rail concessions.

The concessional tickets cost the Railways about Rs 1,600 crore in 2015-16, with the bulk being accounted for senior citizens.

As per the government data, over 100 crore Aadhaar cards have been issued so for covering bulk of India’s population.

The government has decided to end the 92-year-old practice of presenting a separate Railway budget and merged it with the General Budget.

Jaitley, according to sources, will contribute few pages of his Budget to programmes and schemes related to Indian Railways.

Although there will be a single budget, the Railways will continue to have autonomy as commercial undertaking and the existing financial arrangement will remain.

The Railways is expected to get exemption from payment of dividend to the Union government, a move which will help strengthening its finances.

The organisation will also get budget support to meet part of its capital expenditure and will be allowed to raise extra budgetary resources.

According to sources, Railways would continue to bear the expenditure on social and public service obligations.

It is also expected that Jaitley will present a separate statement of budget estimates and demand for grants for Railways in the General Budget.

There will also be a single Appropriation bill, including the estimates of Railways, to the Parliament.

PTI

Officers to face action for delay in GPF payments to retiring employees

Officers to face action for delay in GPF payments to retiring employees

New Delhi: Action will be taken against the officers concerned in cases of delay in processing payment of General Provident Fund (GPF) to retiring employees, the Centre has said.

The move comes after it was noticed that GPF final payment in many cases was not being made to the government servants immediately after retirement leading to payment of interest for the period delayed.

In an order, the Ministry of Personnel said in order to ensure timely final payment of GPF and to avoid unnecessary financial burden on account of interest, it has now been decided that every case, in which payment of interest on General Provident Fund becomes necessary beyond the date of retirement, shall be put up for consideration to the Secretary of the administrative ministry.

"In all such cases the Secretary of the administrative ministry or department will fix responsibility at all levels to take appropriate action against the government servant or servants who are found responsible for the delay in the payment of General Provident Fund," it said in the directive to all central government departments.

Senior Personnel Ministry officials also said there have been a few instances in which there were complaint of delay in giving final amount of GPF to the retiring employees.

Rules clearly provide that when the amount standing at the credit of a subscriber in the General Provident Fund becomes payable, it shall be the duty of the Accounts Officer to make the payment.

The authority for the amount payable is to be issued at least a month before the date of superannuation, but payable on the date of superannuation, the rules say.

The Centre had in 1996 dispensed with the requirement of submitting a written application by the retiring government servant for GPF final payment.

As per the rules, in case the GPF balance is not paid on retirement, interest on the GPF balance is required to be paid for the period beyond the date of retirement also.

PTI

Pay element relating to Running Staff after the recommendations of 7th CPC

Pay element relating to Running Staff after the recommendations of 7th CPC

GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
RAILWAY BOARD

No.E(P&A)II-2015/RS-25

New Delhi, dated: 24.01.2017

The General Manager,
All Indian Railways
and Production Units.

Sub: Pay element relating to Running Staff after the recommendations of Seventh CPC.

It has come to notice that on some of the zonal railways add-on pay element of 55% is not being reckoned for calculation of emoluments for the purpose of retirement benefits for the running staff on the basic pay fixed in the 7th CPC pay structure. As per Rule 924 (iii) of IREM-I that is still valid, 55% of Basic Pay is recokoned as add-on pay element for calculation of pension and DCRG of the Running Sitff. It is therefore advised that calculation of retirement benefits of the running staff may be made as per extant Rule 924 (iii) of IREM-I on the revised basic pay in the 7th CPC.

2. This issues with the concurrence of the Finance Directoiate of the Ministry of Railways.

(Dhruv Singh)
Executive Director
Pay Commission-I
Railway Board

Source: NFIR