Finmin to initiate Budget exercise next week

Finmin to initiate Budget exercise next week

Work on India’s first post-GST Union Budget 2018-19 will start next week with the finance ministry issuing timelines for different processes that will culminate with its presentation in February.

Finance Minister Arun Jaitley arrived at the parliament on Wednesday for Budget.

It may also be the current government's last full-fledged Budget as general elections are due in 2019.

Even though independent India’s biggest tax reform of GST was implemented from July 1, the Budget for 2017-18 (April- March), had followed the practice of tax revenue projections under the heads of customs duty, central excise and service tax alongside direct tax numbers.

With excise duty and service tax being subsumed in the Goods and Services Tax (GST), the classifications will undergo change, an official said.

While a new classification for revenues to be accrued from GST will be included in the Budget for next fiscal, for the current year two sets of accounting may be presented - one for actual accruals during April-June for excise, customs and service tax, and the other for July-March period for GST and customs duty.

The official said that since the GST rates are decided by a GST Council, headed by Union Finance Minister and comprising of representatives of all states, the Budget for 2018-19 will not have any tax proposals concerning excise and service tax levies.

Only proposals for changes in direct taxes - both personal income tax and corporate tax, besides customs duty - are likely to be presented in the Budget along with new schemes and programmes of the government.

This will be Finance Minister Arun Jaitley's 5th Budget in a row.

It would also be the last full Budget of the BJP-led NDA government before the 2019 General Elections. As per practice a vote-on-account or approval for essential government spending for a limited period is taken in the election year and a full-fledged budget presented by the new government.

While P Chidambaram had presented the previous UPA government's vote- on-account in February 2014, Jaitley had presented a full budget in July that year.

The official said the finance ministry will next week issue the Budget circular and start consultations with other ministries from October for Revised Estimates (RE) of expenditure for the current fiscal.

The Budget Circular contains the timelines for submission of information of budget requirements to the Ministry of Finance along with prescribed formats.

The ministries will have to provide the actual money spent in 2016-17 along with the budget estimates and Revised Estimates for current fiscal.

Along with this, they have to give the Budget they are expecting for 2018-19 as well, the official added.

Scrapping a colonial-era tradition of presenting the Budget at the end of February, Jaitley had for the first time presented the annual accounts on February 1, 2017.

With the preponement of Budget, ministries are now allocated their budgeted funds from the start of the financial year beginning April.

This gives government departments more leeway to spend as well as allow companies time to adapt to business and taxation plans.

Previously, when the Budget was presented at the end of February, the three-stage Parliament approval process used to get completed some time in mid-May, weeks ahead of onset of monsoon rains.

This meant government departments would start spending on projects only from August-end or September, after the monsoon season ended.

Besides advancing the presentation date, the Budget scrapped the Plan and non-Plan distinction and merged the Railway Budget with it, ending a nearly century-long practice.

PTI

Central government to hire 2.8 lakh staff in a year, police, I-T and customs to get lions share

Central government to hire 2.8 lakh staff in a year, police, I-T and customs to get lions share

New Delhi: The size of the central government, particularly police and tax officials, is likely to grow with the Centre’s Budget providing for the recruitment of around 2.80 lakh more staff.

Of this number, more than 1.80 lakh would be recruits to departments of police, income tax, customs and central excise. As of March 2016, the central government had 32.84 lakh staff across 55 departments and ministries, including 13.31 lakh in railways, but excluding defence forces. This is projected to rise to 35.67 lakh by March 2018 if the recruitment goal is achieved.

Strengthening enforcement agencies seems a priority with budgetary allocations made for expansion of police forces (central paramilitary and Delhi Police), taking their strength from 10.07 lakh to 11.13 lakh by March 2018. The Centre in its Budget has provided for the recruitment of around 2.80 lakh more staff. The income tax department, the agency involved in the drive against black money post-demonetisation, is set to expand from the existing strength of 46,000 to 80,000 by March 2018.

Similarly , customs and excise department, which will implement the ambitious goods and services tax regime, will get additional manpower of over 41,000.The current strength of 50,600 for customs and excise staff is to go up to 91,700. A review of the estimated strength of establishment  in the Budget annexures indicates no change in the manpower of railways, the single largest employer (13.31 lakh) other than defence, in the three years till 2018.

Departments of space, atomic energy , cabinet secretariat and the ministries of information and broadcasting and external affairs are some others where sanctioned strength has gone up significantly.

The government had projected to increase its manpower in 2016 by 1.88 lakh but failed to make fresh recruitments in I-T, customs and central excise departments.This led to an erosion in the employee base by at least 21,000 over the strength in 2015. People superannuating far exceeded new employees.

PM Narendra Modi's interest in foreign policy has translated into a significant jump in the strength of the foreign ministry where the government has decided to add over 2,000 employees -up from 9,294 in 2016 to 11,403 in 2018. The I&B ministry , too, has increased its sanctioned strength from 4,012 two years ago to 6,258 in 2018.The cabinet secretariat has been strengthened with manpower to go up from 921 to 1,218 by next year.

TNN

GST: Service tax likely to be hiked to 18 percent this budget

GST: Service tax likely to be hiked to 18 percent this budget

New Delhi: Most services are likely to attract a tax of 18 percent under the Goods and Services Tax (GST) as Union Finance Minister Arun Jaitley presents the Union Budget on February 1.

It will be interesting to witness whether the Centre raises the service tax rate from the existing 15 percent by at least one percentage point to 16 percent as a precursor to the rollout of GST.
However, the Centre and states have agreed to rollout GST from July 1, 2017, after which most services will turn costlier.

Also, a higher service tax, even for three months, will help the Centre partially offset the revenue loss after the GST kicks in, sources indicated.

Under GST, the service tax collections will be divided equally between the Centre and the states. A service tax closer to the GST rate will also help consumers avoid a greater price shock after the new system is rolled out.

Jaitley-headed GST Council has agreed on a four-slab structure -5, 12, 18 and 28 percent-along with a cess on luxury and 'sin' goods such as tobacco.

Within these, two standard rates of 12 percent and 18 percent could extend to a majority of the taxable goods.

ANI