GST roll-out – Complete transformation of the Indirect Taxation Landscape; Some minute details of how it happened

The Union Minister for Finance, Corporate Affairs and Defence, Shri Arun Jaitley chairing the 18th GST Council meeting, in New Delhi on June 30, 2017. The Minister of State for Finance, Shri Santosh Kumar Gangwar and the Revenue Secretary, Dr. Hasmukh Adhia are also seen

Goods and Services Tax (GST), a historic tax reform, will come into effect from tomorrow i.e.1^st July, 2017. GST will completely transform the Indirect Taxation landscape in the country involving both the Central and State levies. In a departure from the normal practice, GST will be administered together by the Centre and States.

To commemorate the historic occasion, a function will be held in the Central Hall of Parliament on the mid-night of 30th June - 1st July, 2017. The occasion will be graced by the Hon’ble President, Hon’ble Vice President,  Hon’ble Prime Minister, Hon’ble Speaker of Lok Sabha and Hon’ble Union Finance Minister among other dignitaries.

Why is GST so important?

The biggest tax reform since independence - GST - will pave the way for realization of the goal of One Nation - One Tax - One Market. GST will benefit all the stakeholders namely industry, government and consumer. It will lower the cost of goods and services, give a boost to the economy and make the products and services globally competitive, giving a major boost to ‘Make in India’ initiative. Under the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the Centre and the States. GST will make India a common market with common tax rates & procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent. GST is expected to improve ease of doing business in India.

In majority of supplies of goods, the tax incidence approved by the GST Council is much lower than the present combined indirect tax rates levied [on account of central excise duty rates / embedded central excise duty rates / service tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax, etc.] by the Centre and State(s). 

  Journey of GST after the Constitutional Amendment Act, 2016

 After the assent of the Hon’ble President on 8^th September, 2016, the 101^th Constitutional Amendment Act, 2016 came into existence. The GST Council was constituted on 15.9.2016.

Since its formation in September, 2016 the GST Council has held 18 meetings. The Finance Ministers of all the States or their representative along with State and Central govt officials have participated in these extensive meetings and formulated the law and procedure to implement this historic tax reform. It was a mammoth task involving 27000+ man hours of intensive work. More than 200 meetings of the officers of the Centre and States took place in different parts of the country to expedite the implementation of GST.

While framing GST Acts and Rules, enhanced ‘Ease of doing business’ for the taxpayers was a key consideration and accordingly the roles and responsibilities of the States and Central govt have been defined. In a short span of time, the GST council has cleared GST laws, GST Rules, Tax rate structure including Compensation Cess, Classification of goods and services into different rate slabs, exemptions, thresholds, structure for tax administration, etc. All the decisions of Council were taken with consensus. While formulating the Acts and Rules, extensive participatory consultations with trade and industry including other significant stakeholders were undertaken. Feedback was also obtained by posting draft Acts and Rules on the websites and inviting comments from the public.

On 29^th March, 2017, the Hon’ble Finance Minister of India tabled four Goods and Services Tax (GST) Bills for consideration and passage in the Lok Sabha namely The Central Goods and Services Tax (CGST) Bill, 2017, The Integrated Goods and Services Tax (IGST) Bill, 2017, The Union Territories Goods and Services Tax (UTGST) Bill, 2017 and the GST (Compensation to States) Bill, 2017. They were passed by the Lok Sabha on 29^th March, 2017 and by the Rajya Sabha on 6^th April, 2017.

The GST Council has decided the final structure of GST as follows:

·         The threshold limit for exemption from levy of GST is Rs. 20 lakh for the States except for the Special Category, where it is Rs 10 Lakh.

·         A four slab tax rate structure of 5%, 12%, 18% and 28% has been adopted for GST.

·         A cess would be levied on certain goods such as luxury cars, aerated drinks, pan masala and tobacco products, over and above the GST rate of 28% for payment of compensation to the states.

·         The threshold for availing the Composition scheme is Rs. 75 lakh except for special category States where it is Rs. 50 lakh and they are required to file quarterly returns only. Certain categories of manufacturers, service providers (except restaurants) are out of the Composition Scheme.

Other Important Features of GST

·                 GST envisages all transactions and processes to be done only through electronic mode, to achieve non-intrusive administration.  This will minimise tax payers physical interaction with the tax officials.

·                 GST provides for the facility of auto-populated monthly returns and annual return.

·                 It also facilitates the taxpayers by prescribing grant of refund within 60 days, and provisional release of 90% refund to exporters within 7 days. Further facilitation measures include interest payment if refund is not sanctioned in time, and refund to be directly credited to bank accounts.

·                 Comprehensive transitional provisions for ensuring smooth transition of existing taxpayers to GST regime, credit for available stocks, etc.

·                 Other provisions include system of GST Compliance Rating, etc.

·                 Anti-profiteering provisions for protection of consumer rights.

Role of GST Network (GSTN) – IT backbone of GST

GSTN has been created as a section 25 private limited company with Strategic Control with the Government, to function as a common Pass-through portal for taxpayers. On this common portal, taxpayers will submit their registration applications, file returns, make tax payments, claim refunds etc. GSTN has been provided with a robust IT platform and it will provide interface to 80 lakh taxpayers and thousands of tax officials. All filings under GST will be done electronically.  While GSTN remains a front-end, at the back end, the IT systems of CBEC and different states interface with the GSTN IT network to provide a seamless end to end processing of tax returns for the taxpayers. 64,000 officials have been trained on the GST portal from February till June 2017. The GSTN IT systems have undergone load tests, performance tests, vulnerability tests, security and all other mandatory tests.

Enrolment of existing taxpayers of the State tax administrations and the Central Board of Excise and Customs to the GST system commenced on 8^thNovember, 2016. More than 66 lakh taxpayers have activated their account at the GST portal.

GST Application on Payment has been operationalized. 25 banks have been integrated with the GST Common portal and will be providing e-payment and Over the counter payment facilities as well as payment through NeFT/RTGS and credit/debit card.

GST OUTREACH PROGRAMME

The Government has stepped up its outreach programme through various events, workshops, media, television to reach masses. Field formations of CBEC, at all levels have been activated to carry out interaction with the trade and industry to help them with the migration to GST and to clear their doubts. The field units of CBEC have run campaigns using mobile vans to reach the assessees at their door-step to help them with the GST migration and transitional issues. A total of 4700 workshops have been conducted across India.

An extensive multi-media campaign through print and electronic media, outdoor hoardings, etc. has been carried out for informing, educating and assisting taxpayers and other stake-holders to enable a smooth transition to GST. 

 RE-ORGANISATION OF CBEC

 Implementation of GST has necessitated reorganisation of the Central Board of Excise & Customs formations for administration of GST. The reorganisation involved bringing about structural changes and redeployment of human resources. Redeployment has been done to ensure outreach to the remotest corner. The Directorates which have significant role under the GST have been adequately expanded and strengthened.

The field formations have been restructured as 21 CGST & CX Zones, 107 CGST & CX Commissionerates, 12 Sub-Commissionerates, 768 CGST & CX Divisions, 3969 CGST & CX Ranges, 48 Audit Commissionerates and 49 Appeal Commissionerates.

TRAINING

 For a smooth roll out of GST, it was imperative to carry out adequate capacity-building exercise and awareness. National Academy of Customs Indirect Taxes and Narcotics (NACIN) have conducted extensive training programs. In the first phase, nearly 52,000 officers were trained during September, 2016 to January, 2017 through a multi-layered training programme across India. A Refresher Training was also conducted on updated Law, Rules and Procedures and a total of 17,213 officials were trained till 23rd June, 2017.  Under the Accredited GST Training Programme, 20 institutes have been certified as ‘Approved Training Partners’ to impart ‘quality training at reasonable cost’ to members of trade/industry and other stakeholders. 2,565 participants have been trained so far (ongoing). NACIN have also trained 2,611 officers from 92 Ministries/PSUs trained so far.  

Besides that, training resources such as 500 FAQs on GST have been released in English, Hindi and 10 regional languages. A number of Flyers on different topics of GST explaining the GST concepts, for dissemination to trade & industry, PPTs and Learning Videos for GST training and other training materials for the officials have also been released.

SERVICE THROUGH SOCIAL MEDIA

 A twitter seva started by the Government as an initiative to answer queries of the Tax Payers on a real time basis. The twitter handle askGST_GOI attracts thousands of taxpayer queries every day. A list of FAQs based on frequent questions asked on Twitter has been already got published.

India hits back at China, says India of 2017 different from 1962

New Delhi, Jun 30 (PTI) India today hit back at China for making veiled threats with Defence Minister Arun Jaitely asserting that India of 2017 is different from what it was in 1962, even as New Delhi told Beijing its actions near Sikkim have "serious" security implications for this country.

A day after China's oblique reference to the war the two countries had fought 55 years ago, the defence minister also said the current standoff between Indian and Chinese troops was triggered by Beijing.

Expressing deep concern over China constructing a road in the disputed Doklam area near Sikkim, the Ministry of External Affairs (MEA) said it was essential that all parties concerned display utmost restraint and abide by their respective bilateral understandings not to change the status quo unilaterally.

India's reaction follows a face-off between Indian and Chinese troops in the area, prompting Beijing to take a tough stance and demand withdrawal of Indian troops from the Sikkim sector as a precondition for "meaningful dialogue" to resolve the situation.

Beijing had also accused India of being a "third-party" to the China-Bhutan dispute.

"India is deeply concerned at the recent Chinese actions and has conveyed to the Chinese government that such construction would represent a significant change of status quo with serious security implications for India," the MEA asserted in a press release.

It was also important that the consensus reached between India and China through the Special Representatives process was scrupulously respected by both sides, the ministry added.

Prime Minister Narendra Modi, who is travelling next week to Germany for a G-20 Summit where Chinese President Xi Jinping will also be present, is being briefed regularly about the current stand-off between Indian and Chinese troops.

It is also understood that the government will take a call whether it should make a request for a bilateral or a pull aside on the sidelines of the G-20 conclave in Germany next week between Modi and Xi in the backdrop of the ongoing stand-off.

The two leaders had met last in Astana on the sidelines of the SCO Summit during which Modi had conveyed to Xi that differences between the two countries should be resolved and not allowed to become disputes.

The Chinese action has raised serious security concerns here as it will bring closer the Chinese presence to Indian defence interests and also move forward the India-China-Bhutan tri-junction.

Narrating the sequence of events since June 16, the MEA said a People's Liberation Army (PLA) construction party entered the Doklam area and attempted to construct a road.

"In coordination with the Royal Government of Bhutan, Indian personnel, who were present at general area Doka La, approached the Chinese construction party and urged them to desist from changing the status quo. These efforts continue," the ministry said.

In keeping with their tradition of maintaining close consultation on matters of mutual interest, Bhutan and India had been in continuous contact through the unfolding of these developments, it said.

As far as the boundary in the Sikkim sector was concerned, India and China had reached an understanding in 2012 reconfirming their mutual agreement on the "basis of the alignment", the ministry said, adding further discussions regarding finalisation of the boundary had been taking place under the Special Representatives framework.

While status of Sikkim as part of India has been settled with China, the border is yet to be finalised.

India also treats the June 26 statement by the Chinese foreign ministry that Indian border troops crossed the boundary line in the Sikkim sector of the China-India boundary and entered Chinese territory as factually incorrect.

India has always maintained that there is no China between the Sikkim and Bhutan border.

"It is our understanding that a Royal Bhutan Army patrol attempted to dissuade them (the PLA construction party) from this unilateral activity," it said, adding that Bhutan's ambassador had publicly stated that it lodged a protest with the Chinese government through its embassy in New Delhi on June 20.

It is understood that the Chinese, in response to the demarche, have termed the road construction as routine activity.

Bhutan has also urged China to return to the status quo as on June 16, 2017, the MEA said.

India underlined that the two governments had in 2012 reached an agreement that tri-junction boundary points among India, China and third countries would be finalised in consultation with the countries concerne.

"Any attempt, therefore, to unilaterally determine tri- junction points is in violation of this understanding," it said.

Meanwhile, India has cancelled the Kailash Mansarovar yatra through Nathu La in Sikkim, though there was normal trade activity taking place from there.

While there have been instances of stand-off between Indian and Chinese troops in the past, including in Chumar, a border patrol facility located in southern Ladakh, this time it is different as it involves a third country.

Amitabh Bachchan, Aamir, Priyanka invited to join the Oscar Academy

Los Angeles, Jun 29 (PTI) Indian stars Amitabh Bachchan, Aamir Khan, Priyanka Chopra, Aishwarya Rai, filmmakers Goutam Ghose and Buddhadeb Dasgupta are among the 774 people, who have been invited to join the Academy and vote in the Oscars.

According to The Academy of Motion Picture Arts and Sciences website, the 2017 invitees come from 57 countries, with the list comprising 39 per cent female and 30 per cent people of colour.

Bollywood superstar Salman Khan, Irrfan Khan, Deepika Padukone, "Monsoon Wedding" costume designer Arjun Bhasin, writer Sooni Taraporevala and documentary filmmaker Anand Patwardhan are among other invitees from India.

"We're proud to invite our newest class to the Academy.

The entire motion picture community is what we make of it," Cheryl Boone Isaacs, Academy President, said in a statement.

"It's up to all of us to ensure that new faces and voices are seen and heard, and to take a shot on the next generation the way someone took a shot on each of us." 

Indian-origin visual effects director Mohit Kallianpur, behind animated films like "Frozen" and "Tangled", is also on the list.

Elle Fanning is the youngest invitee at 19, while Betty White at 95 is the oldest.

The list of actors also includes Israeli actress and "Wonder Woman" star Gal Gadot, comedian Amy Poehler, "Mr.

Robot" actor Rami Malek, "Rogue One" actor Riz Ahmed, Kristen Stewart, Chris Hemsworth and Dwayne "The Rock" Johnson.

The directors on the list are Barry Jenkins, Jordan Peele, Kim Ki-Duk, Theodore Melfi, David Ayer, Emmanuelle Bercot, Fatih Akin, Derek Cianfrance, Patricia Cardoso, Garth Davis, Lav Diaz, Tom Ford, Anna Hui, Takashi Miike, and Guy Ritchie, among others.

Cabinet approves recommendations of the 7th CPC on allowances

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved the recommendations of the 7^th CPC on allowances with some modifications. The revised rates of the allowances shall come into effect from 1^st July, 2017 and shall affect more than 48 lakh central government employees.

While approving the recommendations of the 7^th CPC on 29^th June, 2016, the Cabinet had decided to set up the Committee on Allowances (CoA) in view of substantial changes in the existing provisions and a number of representations received. The modifications are based on suggestions made by the CoA in its Report submitted to Finance Minister on 27^th April, 2017 and the Empowered Committee of Secretaries set up to screen the recommendations of 7^th CPC.

7th CPC recommendations on Allowances

The 7^th CPC had adopted a three-pronged approach in examining a total of 197 allowances which involved an assessment of the need for continuation of each allowance, appropriateness of the set of people covered by the allowance and rationalisation which involved clubbing of allowances with similar objectives. Based on the examination on these lines, the 7^th CPC recommended that 53 allowances be abolished and 37 be subsumed in an existing or a newly proposed allowance.

For most of the allowances that were retained, the 7^th CPC recommended a raise commensurate with inflation as reflected in the rates of Dearness Allowance (DA). Accordingly, fully DA-indexed allowances such as Transport Allowance were not given any raise. Allowances not indexed to DA were raised by a factor of 2.25 and the partially indexed ones by a factor of 1.5. The quantum of allowances paid as a percentage of pay was rationalised by a factor of 0.8.

A new paradigm has been evolved to administer the allowances linked to risk and hardship. The myriad allowances, their categories and sub–categories pertaining to  civilians employees, CAPF and defence personnel have been fitted into a table called the Risk and Hardship Matrix (R&H Matrix). The Matrix has nine cells denoting varying degrees of risk and hardship with one extra cell at the top named as RH - Max to include Siachen Allowance. Multiple rates applicable to individual allowances will be replaced by two slab rates for every cell of the R&H Matrix.

Modifications approved by the Cabinet

The modifications approved today were finalised by the E-CoS based on the recommendations of the CoA. The CoA had undertaken extensive stakeholder consultations before finalising its recommendations. It had interacted with Joint Consultative Machinery (Staff side) and representatives from various staff associations. Most of the modifications are on account of continuing requirement of some of the existing arrangements, administrative exigencies and to further the rationalization of the allowances structure.

Financial Implications

The modifications approved by the Government in the recommendations of the 7th CPC on allowances will lead to a modest increase of ₹1448.23 crore per annum over the projections made by the 7th CPC. The 7th CPC, in its Report, had projected the additional financial implication on allowances at ₹29,300 crore per annum. The combined additional financial implication on account of the 7th CPC recommendations along with the modifications approved by the Cabinet is estimated at ₹30748.23 crore per annum.

Highlights of Cabinet approval on Allowances

1.        Number of allowances recommended to be abolished and subsumed:

Government has decided not to abolish 12 of the 53 allowances which were recommended to be abolished by the 7th CPC. The decision to retain these allowances has been taken keeping in view the specific functional requirements of Railways, Posts and Scientific Departments such as Space and Atomic Energy. It has also been decided that 3 of the 37 allowances recommended to be subsumed by the 7th CPC will continue as separate identities. This has been done on account of the unique nature of these allowances. The rates of these allowances have also been enhanced as per the formula adopted by the 7th CPC. This will benefit over one lakh employees belonging to specific categories in Railways, Posts, Defence and Scientific Departments.

2.        House Rent Allowance

HRA is currently paid @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities. 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities. As the HRA at the reduced rates may not be sufficient for employees falling in lower pay bracket, it has been decided that HRA shall not be less than ₹5400, ₹3600 and ₹1800 for X, Y and Z category of cities respectively. This floor rate has been calculated @ 30%, 20% and 10% of the minimum pay of ₹18000. This will benefit more than 7.5 lakh employees belonging to Levels 1 to 3.

7th CPC had also recommended that HRA rates will be revised upwards in two phases to 27%, 18% and 9% when DA crosses 50% and to 30%, 20% and 10% when DA crosses 100%. Keeping in view the current inflation trends, the Government has decided that these rates will be revised upwards when DA crosses 25% and 50% respectively. This will benefit all employees who do not reside in government accommodation and get HRA.

3.        Siachen Allowance

7th CPC had placed Siachen Allowance in the RH-Max cell of the R&H Matrix with two slabs of ₹21,000 and ₹31,500. Recognizing the extreme nature of risk and hardship faced by officers / PBORs on continuous basis in Siachen, the Government has decided to further enhance the rates of Siachen Allowance which will now go up from the existing rate from ₹14,000 to ₹30,000 per month for Jawans & JCOs (Level 8 and below) and from ₹21,000 to ₹42,500 per month for Officers (Level 9 and above). With this enhancement, Siachen Allowance will become more than twice the existing rates. It will benefit all the soldiers and officers of Indian Army who are posted in Siachen.

4.        Dress Allowance

At present, various types of allowances are paid for provisioning and maintenance of uniforms/outfits such as Washing Allowance, Uniform Allowance, Kit Maintenance Allowance, Outfit Allowance etc. These have been rationalised and subsumed in newly proposed Dress Allowance to be paid annually in four slabs @ ₹5000,₹10,000, ₹15,000 and ₹20,000 per annum for various category of employees. This allowance will continue to be paid to Nurses on a monthly basis in view of high maintenance and hygiene requirements. Government has decided to pay higher rate of Dress Allowance to SPG personnel keeping in view the existing rates of Uniform Allowance paid to them (which is higher than the rates recommended by the 7th CPC) as also their specific requirements. The rates for specific clothing for different categories of employees will be governed separately.

5.        Tough Location Allowance

Some allowances based on geographical location such as Special Compensatory (Remote Locality) Allowance (SCRLA), Sunderban Allowance & Tribal Area Allowance have been subsumed in Tough Location Allowance. The areas under TLA have been classified into three categories and the rates will be governed as per different cells of R&H Matrix and will be in the range of ₹1000 - ₹5300 per month. The 7th CPC had recommended that TLA will not be admissible with Special Duty Allowance (SDA) payable in North-East, Ladakh and the Islands. Government has decided that employees will be given the option to avail of the benefit of SCRLA at pre-revised rates along with SDA at revised rates.

6.                     Recommendations in respect of some important allowances paid to all employees:

(i)                  Rate of Children Education Allowance (CEA) has been increased from ₹1500 per month / child (max. 2) to ₹2250 per month / child (max.2). Hostel Subsidy will also go up from ₹4500 per month to ₹6750 per month.

(ii)                Existing rates of Special Allowance for Child Care for Women with Disabilities has been doubled from ₹1500 per month to ₹3000 per month.

(iii)          Higher Qualification Incentive for Civilians has been increased from ₹2000 - ₹10000 (Grant) to ₹10000 - ₹30000 (Grant).

7.        Recommendations in respect of some important allowances paid to         Uniformed Services: Defence, CAPFs, Police, Indian Coast Guard and    Security Agencies

                    i.                        The 7th CPC has recommended abolition of Ration Money Allowance (RMA) and free ration to Defence officers posted in peace areas. It has been decided that Ration Money Allowance will continue to be paid to them and directly credited to their account. It will benefit 43000 Defence officers.

                  ii.                        Technical Allowance (Tier - I & II) are paid to Defence officers belonging to technical branches @₹3000 per month and ₹4500 per month. 7th CPC has recommended that Technical Allowance (Tier - II) be merged with Higher Qualification Incentive for Defence personnel. In view of the specific requirements of Defence Forces for the Defence personnel to keep pace with changing Defence requirements and technologies, the  Government has decided not to discontinue Technical Allowance. The list of courses for these allowances will be reviewed to remain in sync with the latest technical advancements in Defence.

                iii.                        The facility of one additional free railway warrant (Leave Travel Concession) presently granted to personnel of Defence Forces serving in  field/high altitude/CI Ops shall also be extended to all personnels of CAPFs and the Indian Coast Guard. 

                iv.                        Rates of High Altitude Allowance granted to Defence Forces and CAPF personnel will be governed by the R&H Matrix. The rates will go up from  ₹810 - ₹16800 per month to ₹2700 – ₹25000 per month.

                  v.                        Field Area Allowances are granted to Indian Army, Air Force & CAPF personnel. The rates of Field Area Allowances (Modified Field, Field & Highly Active)  will be governed by the R&H Matrix. The rates will go up from ₹1200 - ₹12600 per month to ₹6000 - ₹16900 per month. Classification of field areas for this allowance will be done by Ministry of Defence for Defence personnel and by Ministry of Home Affairs for CAPFs.

                vi.                        The rates of Counter Insurgency Ops (CI Ops) Allowance, granted to Defence and CAPFs while deployed in counter – insurgency operations will be governed by the R&H Matrix. The rates will go up from  ₹3000 - ₹11700 per month to ₹6000 – ₹16900 per month.

              vii.                        Rates of MARCOS and Chariot Allowance granted to marine commandos of Indian Navy will be governed by the R&H Matrix. The rates will go up from ₹10500 - ₹15750 per month to ₹17300 – ₹25000 per month.

            viii.                        Rates of Sea Going Allowance granted to personnel of Indian Navy will be governed by the R&H Matrix. The twelve hour conditionality for determining the eligibility of Sea Going Allowance has been reduced to four hours. The rates will go up from ₹3000 - ₹7800 per month to ₹6000 – ₹10500 per month.

                ix.                        Rates of Commando Battalion for Resolute Action (COBRA) Allowance granted to CRPF personnel deployed in Naxal hit areas will be governed by the R&H Matrix. The rates will go up from ₹8400 - ₹16800 per month to ₹17300 – ₹25000 per month.

                  x.                        Rates of Flying Allowance granted to flying branch and technical officers of Defence Forces will be governed by the R&H Matrix. The rates will go up from ₹10500 - ₹15750 per month to ₹17300 – ₹25000 per month. It has been extended mutatis mutandis to BSF Air Wing also.

                xi.                        Rates of Higher Qualification Incentive for Defence Personnel have been increased from ₹9000 – ₹30000 (Grant) to ₹10000 – ₹30000 (Grant).

              xii.                        Aeronautical Allowance, presently paid to personnel of Indian Navy, has been extended to Indian Coast Guard. The rate of this allowance has been increased from ₹300 per month to ₹450 per month.

            xiii.                        Rates of Test Pilot and Flight Test Engineer Allowance will be governed by the R&H Matrix. The rates will go up from  ₹1500 / ₹3000 per month to ₹4100 / ₹5300 per month.

            xiv.                        Rates of Territorial Army Allowance have been increased from ₹175 - ₹450 per month to₹1000 - ₹2000 per month.

              xv.                        Ceilings of Deputation (Duty) Allowance for Defence Personnel have been increased from ₹2000 - ₹4500 per month to ₹4500 - ₹9000 per month.

            xvi.                        Rates of Detachment Allowance have been increased ₹165 - ₹780 per day to ₹405 – ₹1170per day.

          xvii.                        Rates of Para Jump Instructor Allowance have been increased from ₹2700/3600 per month to ₹6000 / 10500 per month.

        xviii.                        Special Incident / Investigation / Security Allowance has been rationalized. Rates for Special Protection Group (SPG) have been revised to 55% and 27.5% of Basic Pay for operational and non – operational duties respectively.

8.         Recommendations in respect of some important allowances paid to Indian Railways

              i.                              Rates of Additional Allowance have been increased from ₹500 / 1000 per month to ₹1125 / 2250 per month. This has also been extended to Loco Pilot Goods and Senior Passenger Guards also @₹750 per month.  

                  ii.                        In view of strenuous nature of the job, new Allowance namely Special Train Controller’s Allowance @5000 per month for Train Controllers of Railways has been introduced.

9.        Recommendations in respect of some important allowances paid to Nurses & Ministerial Staffs of Hospital

                 i.                        Existing rate of Nursing Allowance has been increased from ₹4800 per month to ₹7200 per month.

               ii.                        Rate of Operation Theatre Allowance has been increased from ₹360 per month to ₹540 per month.

                iii.                        Rates of Hospital Patient Care Allowance / Patient Care Allowance have been increased from ₹2070 - ₹2100 per month to ₹4100 – ₹5300 per month. 7^th CPC recommendations modified to the extent that it will be granted to Ministerial staff also.

10.       Recommendations in respect of some important allowances paid to        Pensioners

Rate of Fixed Medical Allowance (FMA) for Pensioners has been increased from ₹500 per month to ₹1000 per month. This will benefit more than 5 lakh central government pensioners not availing CGHS facilities.

                    i.                        The rate of Constant Attendance Allowance granted on 100% disablement has been increased from ₹4500 per month to ₹6750 per month.

11.       Allowances to Scientific Departments

              i.                              The recommendations of 7th CPC to abolish Launch Campaign Allowance and Space Technology Allowance has not been accepted. In order to incentivize the supporting employees in Space and Atomic Energy sector, the rate of Launch Campaign and Space Technology Allowance has been increased from ₹7500 per annum to ₹11250 per annum. Professional Update Allowance for non-gazetted employees of Department of Atomic Energy will also continue to be paid at the enhanced rate of ₹11250 per annum.

                  ii.                     The 7th CPC had placed Antarctica Allowance, paid to the Scientists and other members undertaking the expedition to Antarctica under the Indian Antarctic programme, in the RH-Max Cell of the R&H Matrix. The rates of the RH-Max Cell recommended by the 7th CPC were less than the existing rates of Antarctica Allowance which is currently paid on per day basis. Considering the specific nature of these expeditions and to provide appropriate increase in rates, Government has decided to keep Antarctica Allowance out of the R&H Matrix and the allowance will continue to be paid on per day basis as per existing practice. The Rates of Antarctica Allowance will go up from ₹1125 per day (Summers) and ₹1688 per day (Winters) to ₹1500 per day (Summers) and ₹2000 per day (Winters).

12.                  Allowances paid to D/o Posts

                    i.                        The recommendations of 7th CPC to abolish Cycle Allowance, granted     mainly to Postmen and trackmen in Railways, has not been accepted.           Keeping in view the specific requirement of this allowance for postmen                       in Department of Posts and trackmen in Railways, the cycle allowance       is retained and the rates have been doubled from ₹90 per month to ₹180                       per month. This will benefit more than 22,200 employees.

Conclusion

While increasing the rate of allowances affecting the central government employees, especially the Defence, CAPF and Coast Guard personnel, the staff of Railways, Postal department and nursing staff, the total number of allowances have been rationalized from 197 to 128. Thus, the Government has shown a great deal of fiscal prudence and at the same time addressed the genuine concerns of the employees and responded to some of the administrative exigencies necessitating the modifications.

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