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V S Krishnan will answer questions from the readers of The Indian Express on GST. A selection of questions and answers will be published in these columns.
How will retail inflation be impacted by GST? What kind of leverage will the Reserve Bank of India’s Monetary Policy Committee get from GST for its inflation-targeting objective?
-Bibhuti Das, Cachar, Assam
Inflation will be under control as items with 50% weightage in the CPI are exempt, and another 50% are in the concessional 5% duty bracket. In fact, the incidence of duty on all the major items is coming down under GST; therefore, the impact of GST, far from being inflationary, might actually be mildly deflationary. Therefore, there may be a case for RBI reducing interest rates post the implementation of GST.
My questions are regarding an existing Service Provider’s (SP’s) registration under GST. An individual SP is registered for service tax for the last 4 years. Until FY 2016-17, turnover of the SP was between Rs 10 lakh and Rs 16 lakh. He regularly collected and paid service tax. In the first three months of FY 2017-18, i.e., until June 30, 2017, his gross receipts from services was Rs 4 lakh. He has collected and paid service tax for this period. His gross receipts for the whole year 2017-18 would be between Rs 16 lakh and Rs 17 lakh. He has migrated to GSTN and has been provisionally registered under GST laws. He wishes to surrender the GST registration because turnover for FY 2017-18 is expected to be below the threshold turnover limit of Rs 20 lakh. Can he do so?
D K Patel, Rajkot
Yes, he is permitted. He need not have got registered, as his status for 2017-18 would be reckoned with respect to the turnover in the previous year, which was less than Rs 20 lakh — and therefore did not require registration.