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Nagaland tax and economic reforms

The Commissionerate of Taxes, Nagaland was created in August 1964 with the appointment of the then Commissioner, Nagaland because the ex-officio Commissioner of Taxes. The department started functioning with a Superintendent of Taxes and an Inspector deputed from Assam Taxation Service. A fully fledged post of Commissioner of Taxes, Nagaland was created on August 20, 1976, with its Headquarter at Kohima. Later on, the Headquarter was shifted right down to Dimapur in November, 1976, for higher tax administration. Presently, the commissionerate workplace is found opposite to the workplace of the Deputy Commissioner, Dimapur. The Department functions underneath the executive management of the Finance Commissioner through the Revenue Branch of Finance Department, Kohima. The department is headed by the Commissioner of Taxes who is typically from the I.A.S. cadre. He is assisted by 2 further and 2 Deputy Commissioners of Taxes. For higher tax administration the department is split into 3 Zones of Dimapur, Kohima and Mokokchung. The Zonal offices area unit headed by Assistant Commissioners of Taxes. All the Districts Tax offices area unit manned by Superintendent of Taxes. The Department of Taxes is that the highest revenue generating department within the State. the whole revenue assortment throughout the year 2011-2012 was Rs 258.36 crores.

The Finance Department is chargeable for all matters regarding money administration of the government, together with preparation of the States’ Annual Budget. It exercises management and supervising over the Receipts and Expenditure of the govt. and initiates numerous measures for improvement in financial management, further resources mobilisation, economy and potency in Government expenditures etc. It conjointly formulates policies regarding levy and assortment of varied taxes like price additional Tax, oil Tax, Central nuisance tax, Professions Tax, recreation Tax etc. The Department exercises body management and supervising over the 3 Directorates of Treasuries and Accounts, Nagaland State Lotteries and Taxes.

Till attainment of Statehood, the then Naga Hills District was an administrative body underneath Assam. Among others, sales tax Law of Assam was extended to Naga Hills effective from 2-2-1948. However, it’s not obtainable on record, to determine whether or not any revenue was collected from the Naga Hills District.

(i) Year of Establishment: The Department of Taxes, Nagaland was established in August 1964, with the appointment of the Commissioner, Nagaland because the ex-officio Commissioner of Taxes vide Government Notification NO.SGN.182/63/29 (a) 14-6-63

(ii) Structure set-up at the time of inception: A full fledged Commissioner of Taxes was created on 20th August 1976, with its Headquarters at Kohima. Within the same year, the Headquarter was shifted right down to Dimapur, the business hub of the State, for higher tax administration. A post of Superintendent of Taxes was conjointly created and an official from Assam Taxation Service was brought on deputation to start out the functioning of the Department beside skeleton workers.

(iii) Activities of the department at the beginning: With the establishment of the Department, the question of adoption of the prevailing Taxation Laws of Assam as applied to the erstwhile Naga Hills District to the freshly formed State by the Nagaland Adoption of Laws Order, 1965 were examined however owing to some confusion the provisions of Taxation Laws couldn’t be enforced by adoption/modification. Meanwhile, the govt. took a call to own its own Laws that crystal rectifier to the enactment of the subsequent Taxation Laws.

The Nagaland sales tax Act, 1967.
The Nagaland Finance (Sales Tax) Act, 1967.
The Nagaland Profession, Trade, Callings and Employment Taxation Act, 1968.
The Nagaland (Sales of petroleum & petroleum products, together with Motor spirit and Lubricants) Taxation Act, 1967.
The Nagaland passenger and goods Taxation Act, 1967.

District Tax Offices: All the District Tax offices perform underneath the superintendence of the Zonal Assistant Commissioners of Taxes. Every District Tax office is headed by a Superintendent of Taxes. Dealers register their business and file tax returns within the District Tax workplace. Tax is directly deposited within the several Government heads of account by the tax remunerator through the District Treasury workplace. Nagaland Taxation Check Gates: The department has erected four Check Gates at the strategic entry points specifically Zubza and Tsutapela underneath Kohima and Mokokchung severally and Dillai Road and New Field Gate at Dimapur with a read to forestall evasion of tax. These Check Gates monitor the movement of merchandise – each coming into and going out of dutiable goods through the State. The Nagaland Taxation Check Gates at Dillai Road and Gologhat Road, Dimapur, perform underneath the management of the Assistant Commissioner of Taxes, Mobile Squad. The Zubza and therefore the Tsutapela Check Gates perform underneath the direct management and supervision of the Assistant Commissioners of Taxes Kohima and Mokokchung Zones respectively.

One of the strengths of Nagaland lies in her natural resources however presently natural resources that can not be replaced particularly the non-renewable resources are empty at can greatly. Sadly the policies relating to the extraction of natural resources area unit inadequate thereby the economic performance stay not solely poor however has opened the window towards way reaching harmful consequences. On another level, sound of natural resources ought to be backed by policies that might enhance revenue generation. The pattern of development ought to be such; it ought to scrutinize diversifying the revenue to different sectors to reinforce development. This needs correct investment policies particularly on revenue generation with target shifting the pattern of economic development towards producing and service sectors.

Industrialization of each little and massive industries is another major concern for economic development. Today, of the 2 major industries, one is within the ‘processes of revival and therefore the different is detected no additional. The revival of Tuli manufactory is an imperative necessity if Nagaland is to revive economy. Further, having a pulp centre for the paper mill in every district will certainly cause work potency, employment generation and inflated production. to the current finish of end of industry, power and electricity is another major concern.

Goods and Services Tax (GST) is a comprehensive indirect tax on manufacture, sale, and consumption of goods and services throughout India. GST would replace respective taxes levied by the central and state governments.

What is GST?

It is a destination-based taxation system.
It has been established by the 101st Constitutional Amendment Act.
It is an indirect tax for the whole country on the lines of “One Nation One Tax” to make India a unified market.
It is a single tax on supply of Goods and Services in its entire product cycle or life cycle i.e. from manufacturer to the consumer.
It is calculated only in the “Value addition” at any stage of a goods or services.
The final consumer will pay only his part of the tax and not the entire supply chain which was the case earlier.
There is a provision of GST Council to decide upon any matter related to GST whose chairman in the finance minister of India.

What taxes at center and state level are incorporated into the GST?

At the State Level

State Value Added Tax/Sales Tax
Entertainment Tax (Other than the tax levied by the local bodies)
Octroi and Entry Tax
Purchase Tax
Luxury Tax
Taxes on lottery, betting, and gambling

At the Central level

Central Excise Duty
Additional Excise Duty
Service Tax
Additional Customs Duty (Countervailing Duty)
Special Additional Duty of Customs

Benefits of GST

For Central and State Governments

Simple and Easy to administer: Because multiple indirect taxes at the central and state levels are being replaced by a single tax “GST”. Moreover, backed with a robust end to end IT system, it would be easier to administer.
Better control on leakage: Because of better tax compliance, reduction of rent seeking, transparency in taxation due to IT use, an inbuilt mechanism in the design of GST that would incentivize tax compliance by traders.
Higher revenue efficiency: Since the cost of collection will decrease along with an increase in the ease of compliance, it will lead to higher tax revenue.

For the Consumer

The single and transparent tax will provide a lowering of inflation.
Relief in overall tax burden.
Tax democracy that is luxury items will be taxed more and basic goods will be tax-free.

For the Business Class

Ease of doing business will increase due to easy tax compliance.
Uniformity of tax rate and structure, therefore, better future business decision making and investments by the corporates.
Removal of cascading effects of taxes.
Reduction in transactional cost will lead to improved competitiveness.
Gain to the manufacturer and exporters.
It is expected to raise the country GDP by 2% points.

GST Council

It is the 1st Federal Institution of India, as per the Finance minister.
It will approve all decision related to taxation in the country.
It consists of Centre, 29 states, Delhi and Puducherry.
Centre has 1/3rd voting rights and states have 2/3rd voting rights.
Decisions are taken after a majority in the council.

Supporting Laws to implement GST

For the implementation of GST, apart from the Constitution Amendment Act, some other statutes are also necessary. Recently 5 supporting laws to the GST were recommended by the council. 4 for the bills should be passed by the parliament, while the 5th one should be passed by respective state legislatures. The details are given below.

The Central Goods and Services Tax Bill 2017 (The CGST Bill).
The Integrated Goods and Services Tax Bill 2017 (The IGST Bill).
The Union Territory Goods and Services Tax Bill 2017 (The UTGST Bill).
The Goods and Services Tax (Compensation to the States) Bill 2017 (The Compensation Bill).
And a state GST will be passed by the respective state legislative assemblies.
Tax slabs are decided as 0%, 5%, 12%, 18%, 28% along with categories of exempted and zero rated goods for different types of goods and services.
Further, a cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the rate of 28% for payment of compensation to the States.
However, which goods and services fall into which bracket is still an enormous task to be completed by the GST council.
Highest tax slab is pegged at 40%.

Another massive challenge to economic development comes from road and connectivity. Roads and property area unit important to economic development, however the condition of the roads is hampering the economic and social progress of the state. Proper roads and a viable transport system could be a lifeline. It will effectively bring multiple socio-economic reforms in terms of economic transformation particularly within the rural areas through accrued social mobility, booming market, production of commodity, reduced impoverishment which is able to end in a reworked means of life. These area unit incentives to reinforce socio-economic development and a property growth. On the full, the ‘lack’ of correct roads in Nagaland could be a real presentation of a serious ‘stumbling block’ within the emergence of Nagaland as associate economic powerhouse. The pattern of development particularly within the rural sector ought to essentially address the issues related to fast urbanization. To the present finish, improved roads and property, a system of agriculture that encourages farming and faculty education can go a protracted manner in solving the issues of urbanization.

Nagaland Public Finance and fiscal Policy

Nagaland is one amongst the north-eastern states in India. It’s bordered on its west and north by Assam, on its east by Myanmar (formerly referred to as Burma), on its north by Arunachal Pradesh, and on its south by Manipur.

Nagaland is one of India’s smallest states, with an entire space of 16,579 sq kilometre. The Naga Hills run through this small state that has Saramati as its highest peak at a height of regarding 12,600 ft. Dhansiri, Doyang, Dikhu and Jhanji ar the rivers that flow through this state. The piece of land is mountainous, thickly sylvan, and cut by deep watercourse valleys. There’s a decent type of plant and animal life. Nagaland features a monsoon climate with sometimes high humidity; rain averages between 1800 to 2500 mm (70 to 100 inches) a year.

Nagaland has a legislative assembly with sixty seats. The state sends 2 members to the Indian Parliament: one to the Rajya Sabha and one to the Lok Sabha. There are seven government body districts – Mokokchung, Tuensang, Mon, Wokha, Zunheboto, Phek and Kohima.

The state is found between the 93°20′ E and 95°15′ E Longitudes and 25°6′ and 27°4′ N Latitudes. The total space lined by the state is 16,579 sq. kilometer. Nagaland was declared the sixteenth state of the country of India on 1 December 1963. Before this, Nagaland accustomed could be a union territory. The other attention-grabbing knowledge concerning Nagaland is that it homes as many as sixteen entirely completely different ethnic groups. These groups of people have their own separate cultural identities that embrace customs, dresses and languages. Nearly ninety make the most the population of Nagaland is devout Christians. The state collectively options considerable Hindu individuals. Kohima, the capital town of the state, options a variety of websites that ought to be visited by the tourists as a result of it will facilitate them in getting an insight of the rich history place. The name ‘Kohima’ has been derived from the name of a plant referred to as ‘Kew Hi’ that thrives inside the mountainous region. Kohima could be a fascinating place, endued with scores of natural beauty. Nagaland Public Finance and fiscal Policy

PUBLIC FINANCE

With a slender tax base, the State depends on central transfers for its finances since Statehood. Post the fourteenth finance commission recommendations; the State total receipt throughout 2016-2017 (B.E) is anticipated to extend by 15 per cent. Consequently, the State’s business enterprise deficit is calculable to fall inside the 3 per cent business enterprise deficit target as set underneath Nagaland business enterprise Responsibility & Budget Management Act. But a problem of concern is that the State’s total liability that is calculable to stay at 43.77 per cent of GSDP as against the Medium Term economic policy Statement target of 32.15 per cent in 2016-17. Total Receipts of the State

The full receipts of the authorities comprise of the revenue receipts and also the capital receipts. Throughout 2016-17 (B.E) the full receipts of the authorities is calculable to grow by 15 per cent raising the full receipt to Rs.13,870.98 crore from Rs.12,060.99 crore in 2015-16 (R.E). Element wise, throughout 2016-17 (B.E) the share of revenue receipts and capital receipts within the total receipts was seventy 6.19 per cent and 23.81 per cent severally.

State tax income receipt contains of State’s own tax income receipts and share of central tax transfers. State own tax income includes receipts from land revenue, stamp duties and registration, sales tax/VAT, skilled tax, tax on cars, State excise etc. Among the various classes of State’s own taxes; VAT, skilled tax and tax on vehicles contribute the most quantity to State own tax income. Throughout 2016-17 (B.E) the full quantity of tax income is calculable to extend to Rs. 3531.62 crore from Rs. 2985.93 crore in 2015-16 (R.E). As share of total revenue receipts, total tax income account for 33.20 per cent throughout 2015-16 (R.E) and 34.42 per cent throughout 2016-17 (B.E).

The non-tax revenue contains of interest receipts, revenue from administration, State lottery, power, facility, housing, forestry and life and road transport. Within the State, underneath non tax income, the main contribution comes from Power Department. Throughout 2016-17 (B.E) the full non-tax revenue is calculable to extend to Rs. 261.59 crore from Rs. 237.82 crore in 2015-16 (R.E).

State’s own revenue (including tax and non-tax) receipts (SORR) that was Rs. 536.83 crore throughout 2011-12 raised to Rs. 659.22 crore throughout 2014-15. Throughout 2016-17(B.E) the SORR is calculable to additional increase to Rs.776.90 crore. As against absolutely the increase in SORR, the percentage share of the State’s own revenue receipts (i,e. tax and non-tax revenue) to total revenue receipts swayback from 9.61 per cent in 2011-12 to 7.35 per cent in 2016-17 (B.E).

Nagaland gross fiscal deficit soared from Rs 1 Billion in 1991-92 to Rs 11.6 Billion within the fiscal year (FY) 2015-2016 as per the info discharged by reserve bank of India (RBI) on Saturday.

According to the reference book of Statistics of run 1st released in 2016, the number is that the highest business enterprise deficit in sixteen years of Nagaland state since 1991 and State had just one surplus fiscal year in 2003-04.

However, as per the advance budget estimate, the business enterprise deficit is anticipated to decrease to Rs 5.4 billion (Rs 5,400 billion) in FY 2016-17. Overall, the second edition of RBI’s applied math publication titled ‘Handbook of Statistics on States 2016-17’ rumored a hike within the gross business enterprise deficit of all the states of India, surging from a Rs 187.9 billion in FY 1991 to Rs 4,495.2 billion in FY a 2016.

The State with the very best deficit was Rajasthan at Rs 673.5 billion followed by Uttar Pradesh at Rs 643.2 billion. The Gross fiscal Deficit (GFD) shows the surplus of total expenditure together with loans internet of recovery over revenue receipts (including external grants) and non-debt capital receipts.

The rise in fiscal deficit is additionally indicative of 2 deteriorating state of affairs within the economy growing revenue deficit moreover outstanding liabilities.

With the enactment of a fiscal Responsibility and Budget Management Act (FRBM) Act, 2005 at the centre, the Twelfth Finance Commission (XII FC) suggested that every State enact a fiscal responsibility legislation prescribing specific annual targets with a read to eliminate the Revenue Deficit by 2008-09 and scale back financial Deficit supported a path for reduction of borrowings and guarantees. The State of Nagaland enacted Nagaland financial Responsibility and Budget Management (NFRBM) Act in 2005. The targets prescribed in NFRBM Act and projections created by government in its Medium Term fiscal policy Statement (MTFPS), targets planned within the Budget, Fourteenth Finance Commission (XIV FC) targets for the State vis-a-vis achievements throughout the year 2014-15

Nagaland gross fiscal deficit soared from Rs 1 Billion in 1991-92 to Rs 11.6 Billion within the fiscal year (FY) 2015-2016 as per the information discharged by reserve bank of India (RBI) on Saturday.

According to RBI, the reference work of Statistics initial discharged in 2016, it’s the best fiscal deficit in 16 years of Nagaland state since 1991 and State had only 1 surplus fiscal year in 2003-04.

However, as per the advance budget estimate, the financial deficit is predicted to decrease to Rs 5.4 billion in FY2016-17. Overall, the second edition of RBI’s statistical publication titled ‘Handbook of Statistics on States 2016-17’ according a hike within the gross fiscal deficit of all the states of India, surging from a Rs 187.9 billion in FY 1991 to Rs 4,495.2 billion in FY2016.

The State with the best deficit was Rajasthan at Rs 673.5 billion followed by Uttar Pradesh at Rs 643.2 billion. The Gross fiscal Deficit (GFD) shows the surplus of total expenditure together with loans internet of recovery over revenue receipts (including external grants) and non-debt capital receipts.

The rise in financial deficit is additionally indicative of 2 deteriorating state of affairs within the economy growing revenue deficit moreover outstanding liabilities. (UNI)

In Nagaland’s 2015-16 budget, one amongst the best contributors to the state’s increase in revenue on the capital account are internal debt. The inner debt of the state is predicted to extend by quite 55th from the revised estimates of 2014-15. The government is predicted to lift the aforesaid quantity from enhanced market borrowings to the tune of Rs. 480 crores and ways that and suggests that advances from the tally to the tune of Rs. 626 crores of rupees. The exaggerated borrowings can presumably place a pressure on the debt service burden within the future. However, the increased GSDP, to the tune of quite terrorist organization, is predicted to cut back the consolidated debt as a printed of GSDP to 35.4% from 4.5%. Thus the importance of economic process once more props its head within the budget numbers. To confirm that the amount of debt square measure property within the end of the day there’s a requirement to confirm that the divisor, particularly GSDP should increase moreover. The fiscal deficit is predicted to be 4.91% of the GSDP. Reduction in financial deficit that has been envisaged by the XIV Finance Commission to sub third levels would require our state to renew its target revenue generation. For this purpose it’s necessary that we glance at newer sources of tax income. It’s going to be pertinent to say the expertise of Mizoram that gathered over Rs.7.23 crores at intervals an area of underneath three months. The enacting of the Mizoram Liquor Prohibition & management Act, 2014 when a. associate degree sophisticated dialogue on the difficulty of prohibition in our state should be conducted so it’ll provide some respite to the cash stripped Nagaland government.

The main feature of our revenue performance is that the increase of quite two hundredth in own tax income compared to RE 2014-15 and budgeted at Rs. 434.46 crores. Together with this increase there has been a decrease in non-tax revenue by 27th and is budgeted to be at Rs. 360.48. The revenue deficit is budgeted to be 125th of GSDP.

Another feature that’s noteworthy is that the slow however steady increase in interest payments created by our government. It exaggerated from the particular figure of Rs. 450.6cr in 2013-14 to the budgeted to Rs. 661.42cr in 2015-16. As mentioned earlier it’s vital that there’s a combined effort to cut back the interest burden on the govt. in an exceedingly comprehensive manner. No budget discussion in Nagaland is complete while not a reference or an examination of the position or otherwise of the role competes by central transfers. It’s been budgeted that there’ll be a rise (compared to RE 2014-15) within the transfers from the centre to Rs. 8227 cr. this is often simply over 37.0% of the anticipated increase in GSDP.