GST - Discussion on all aspects.

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vijayk
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Re: GST - Discussion on all aspects.

Postby vijayk » 16 Nov 2017 08:33

Image

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Re: GST - Discussion on all aspects.

Postby disha » 16 Nov 2017 12:31

manjgu wrote:aeshyam ...will khakra be raw or processed? though i agree with u that a simpler tax regime is required.. raw/processed is a good way to define. while I applaud the Govt for GST...there is a perception problem...

a) the aam janta thinks tax rates have increased ( rightly or wrongly) since one big item as GST comes in the bill ..which was not so earlier. this is one aspect govt should address ..show taxes have reduced not increased

b) when generally people are paying tazes there is a expectation that the tax money will be used for their welfare ..things like improved schools, hospitals, roads, drainage. But this never happens and so the motivation to do wrong things. there should be perceptible improvement in the services offered to common citizens...

c) a case in point is pollution cess being collected from trucks entering delhi...crores have been collected but not spent on controlling pollution.


There are some rhetorical questions raised and lot of goal shifting around. Let's try to address one at a time:

Khakra is a processed food item., so from value addition perspective it needs to be taxed. At the same time if all food items were to be taken as non-taxed then it will not be taxed., so what will you do with cold drinks and burgers and chips and popcorns? Tax-free as food items or taxable as value add? And what is wrong in taxing processed food items? Anyway some beverages like fanta/cola are not food but lassi is! So taxing a non-food-item-food-item like fanta/cola is actually a good thing.

On item a) whatever the GOI gives the number., it will be disputed. Best is for GOI to concentrate on getting GST widened and rationalization of taxes. And smoothen out GST processes. Rest will take care of itself. If aam-junta is so daft, then they are welcome to elect Pappu.

On item b) Are you saying that everybody was paying taxes and still past GOI breached their trust or you are saying that they are not paying earlier but are now paying but the current GOI is breaching their trust? Of course it takes years to improve school and there is as much state govt. responsibility as much as central. Coming to "perceptible improvement in the services"., I think there are several if you just care to see. If you do not want to see., then that is a different problem. It is not GOI's problem though.

On item c) this is a classic case of goalpost shifting. The pollution cess goes to the Delhi state government. For that you need to ask via RTI Delhi State Govt on where the funds are currently allocated.

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Re: GST - Discussion on all aspects.

Postby disha » 16 Nov 2017 12:49

vijayk wrote:<Image of a happy customers at high end restaurant>


The people in the photo look happy! I guess they know that GST rates have reduced.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 16 Nov 2017 18:41

vijayk wrote:https://twitter.com/rishibagree/status/930836521921347584

Rishi Bagree
@rishibagree
10h10 hours ago

Until now we were blaming and brandishing the govt as thugs and looters but the real looters are Restaurant owners and Hoteliers.
They cant hide behind Input credit as most of their raw material are taxed at 0%

Image


How are they looting? No one is asking you to buy coffee at McDonald’s. Market prices will be affected by demand. One can buy coffee at lower prices at other establishments. We have to remember that money is not the property of government. Wealth is created by individuals and it belongs to them.

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Re: GST - Discussion on all aspects.

Postby putnanja » 16 Nov 2017 20:02

Mort, you are confusing the issue. The issue is that the restaurants were quick to raise prices when the GST was initially 18%, but now that its reduced to 5%, restaurants should have ideally reduced the prices, but they have raised the items prices itself.

They were blaming the govt so far for increase in prices. Now that govt has reduced prices, they still have retained same price. When a big restaurant like McDonalds does this, no prizes for guessing what the ordinary restaurants that majority go to will do. The smaller independently owned restaurants which were earlier not paying taxes, started charging 18% tax without valid GSTN, as shown earlier in this thread.

If big restaurants are saying they were claiming input credit earlier, need to check if they had reduced prices pre-GST and post-GST. If not, they are just profiteering, and putting blame on govt. The common people feel govt raised the prices, while in reality its these unscrupulous elements fooling people and making money, while blaming govt.

If that's creating wealth, its same as someone cheating you out of money and creating wealth.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 16 Nov 2017 20:25

putnanja wrote:Mort, you are confusing the issue. The issue is that the restaurants were quick to raise prices when the GST was initially 18%, but now that its reduced to 5%, restaurants should have ideally reduced the prices, but they have raised the items prices itself.

They were blaming the govt so far for increase in prices. Now that govt has reduced prices, they still have retained same price. When a big restaurant like McDonalds does this, no prizes for guessing what the ordinary restaurants that majority go to will do. The smaller independently owned restaurants which were earlier not paying taxes, started charging 18% tax without valid GSTN, as shown earlier in this thread.

If big restaurants are saying they were claiming input credit earlier, need to check if they had reduced prices pre-GST and post-GST. If not, they are just profiteering, and putting blame on govt. The common people feel govt raised the prices, while in reality its these unscrupulous elements fooling people and making money, while blaming govt.

If that's creating wealth, its same as someone cheating you out of money and creating wealth.


No I am not confusing the issue. You don't have to buy coffee from McD's as it is not an essential food item or fuel. This is a classic case of price gouging, it happens when wholesale prices fall, but retailer keeps prices high. If it is an essential food item or fuel, then it should be punishable by law. McD's or Hardcastle Restaurants are big entities that can be held accountable. Businesses are organizations to make a profit. Central and state governments do NOT have the right to make a profit.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 16 Nov 2017 20:33

Suraj wrote:Mort: please do your bit of google searching to post data you’re interested in, rather than expecting it of others .


I'm sorry this irritated you and I'll search on my own. What I was really asking is for a table of the fuel VAT levied by state. In other threads, you've provided GoI links and I thought you might have it on hand.

Now, that said, I don't think putting petroleum products under GST will lower fuel costs as the fuel VAT is a big source of revenue for states. Here is an older article from Chindu from September.

GST on Petrol & Diesel May Not Mean Cheap Fuel

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Re: GST - Discussion on all aspects.

Postby Supratik » 16 Nov 2017 21:52

Let price be determined by competition rather than govt dictat. Restaurants that gouge customers will loose in the long run.

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Re: GST - Discussion on all aspects.

Postby Gus » 16 Nov 2017 22:20

not really. you are assuming customers can understand what's going on and make informed decision and vote with their feet.

we are in a society where a roadside idli dosa shop raised price from 10 to 15 blaming GST and customers diss modi for that. when everybody raises prices, then it becomes the new normal.

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Re: GST - Discussion on all aspects.

Postby Suraj » 16 Nov 2017 22:27

Mort, its still upto you to find it . The reason is that it’s not helpful for this thread to just be a collection of opinions and rhetoric without reference to data . Its even worse when someone asks others to furnish them the data to continue making their arguments . This isn’t really a ‘nukkad’ thread; posters are being encouraged to seek reference data that fits their arguments.

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Re: GST - Discussion on all aspects.

Postby A_Gupta » 16 Nov 2017 22:30

Mort Walker wrote: What I was really asking is for a table of the fuel VAT levied by state.


Excel file:
https://www.google.com/url?sa=t&rct=j&q ... 56oTrBi0Ek

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Re: GST - Discussion on all aspects.

Postby Supratik » 16 Nov 2017 22:44

I think regular customers do understand what price they paid and what they are paying now. Most customers will be informed that tax has gone down. Unless they form a cartel all over India competition is going to defeat price gougers as there will be many who will pass on the price cut. It is the same logic for all businesses.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 16 Nov 2017 23:20

Supratik wrote:I think regular customers do understand what price they paid and what they are paying now. Most customers will be informed that tax has gone down. Unless they form a cartel all over India competition is going to defeat price gougers as there will be many who will pass on the price cut. It is the same logic for all businesses.


I don't understand all aspects of the law, but price gouging should incur penalties to businesses by law. In the case of McD's it would be fairly easy, but I would venture to say they didn't do it to all items on their menu.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 16 Nov 2017 23:28

A_Gupta wrote:
Mort Walker wrote: What I was really asking is for a table of the fuel VAT levied by state.


Excel file:
https://www.google.com/url?sa=t&rct=j&q ... 56oTrBi0Ek


Thanks. I will continue to search on my own too. Replacing the VAT on fuel with GST may cause revenue losses to the states, but they may impose cess fees to make up for some of the losses. Right now when oil prices are low, a GST of 28% + cess fees may keep the price of fuel the same or a few Rs. higher, but when oil prices go up, fuel prices will cause inflation.

Pappu is arguing for a fixed 18% GST cap on fuel. Perhaps one of his (or sycophant's) better ideas. Rather they should complain about the GST council's incompetence rather than the NDA government.

Bring Petrol, Diesel Under GST; Cap Upper Limit at 18%, Rahul Challenges BJP

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Re: GST - Discussion on all aspects.

Postby JayS » 17 Nov 2017 00:03

Supratik wrote:Let price be determined by competition rather than govt dictat. Restaurants that gouge customers will loose in the long run.

Government gave something (effectively, by forgoing some that was due) to people, and some businessmen are taking a part and pocketing it. I see it as exactly like the corruption that babus/govt officials/goons/politicians do - taking a part of govt money meant for people.

Lets not forget, profiteering using the garb of GST is illegal.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 00:48

JayS wrote:
Supratik wrote:Let price be determined by competition rather than govt dictat. Restaurants that gouge customers will loose in the long run.

Government gave something (effectively, by forgoing some that was due) to people, and some businessmen are taking a part and pocketing it. I see it as exactly like the corruption that babus/govt officials/goons/politicians do - taking a part of govt money meant for people.

Lets not forget, profiteering using the garb of GST is illegal.


Earlier people were not prosecuted for evading income tax, so the same rationale is being made for evading GST. Get away with it as long as you can. The money was created by offering goods and services. It does not belong to the government.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 01:12

While there will be some degree of evasion, or rather overinvoicing to maintain profit margins, the problem with 'evading' GST as such, is that you can't do that if you are internal to the supply chain. If there's no record of you paying tax, you can't get an input credit. Someone else depends on you paying tax to get their input credit. In other words GST's primary benefit is that it is self-regulating once the implementation is smoothened out. By not paying tax you're not just screwing over GoI. You're screwing over your buyers - who depend on your tax payment for their input credit - directly.

The central GST Act comes with an anti-profiteering clause (Section 171) :
Central GST Act (PDF)
171. (1) Any reduction in rate of tax on any supply of goods or services or the benefit
of input tax credit shall be passed on to the recipient by way of commensurate reduction in
prices.
(2) The Central Government may, on recommendations of the Council, by notification,
constitute an Authority, or empower an existing Authority constituted under any law for the
time being in force, to examine whether input tax credits availed by any registered person or
the reduction in the tax rate have actually resulted in a commensurate reduction in the price
of the goods or services or both supplied by him.
(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge
such functions as may be prescribed.


Almost all countries saw this kind of profiteering upon introduction of GST, and it took effort to implement anti-profiteering clauses to bring this under control:
Price Monitoring and Control under GST: Lessons from Australia
An issue that has gained attention in the context of implementation of the Goods and Services Tax (GST) is the impact of the tax on prices of goods and services. In fact, concerns about the inflationary impact of value added tax (VAT), a variant of GST, was a characteristic feature of the switchover to this tax in almost all countries (Tait 1988). As a result, both in the run-up to and in the aftermath of the introduction of VAT, most countries have adopted extraordinary interventionist policies not only to limit price revision, but also to prevent any unjustified increase in prices by the businesses.

Contrary to this worldwide experience, when VAT was introduced in India from 1 April 2005, no credible price monitoring and control mechanism was put in place by the government to protect the interest of the consumers. Instead, the Empowered Committee of State Finance Ministers (ECSFM)1 publicised that VAT would have no adverse impact on prices because the VAT system, by way of effectively eliminating the cascading effects of commodity taxation, helps reduce the price level. Also, the changes brought out in the tax rate structure of the commodities by the VAT system involve a reduction in the rates of many commodities compared to the sales tax regime.

Australia leads by example in this respect. Australia introduced GST on 1 July 2000 to replace a number of existing indirect taxes, including the wholesale sales tax (ACCC 2000a). The GST implementation had a three-year transition period from 1 July 1999 to 30 June 2002, during which the national competition regulator and consumer law champion—namely, the Australian Competition and Consumer Commission (ACCC) —was legally entrusted with the responsibility for overseeing the pricing responses to the GST and taking action against businesses that adjust prices inconsistent with tax rate changes consequent to the GST implementation (ACCC 2000a, 2001a).

Towards this end, the government has conferred many statutory responsibilities on the ACCC. Important among them are the responsibility to (i) formulate guidelines about what constitutes price exploitation; (ii) seek information from businesses to effectively monitor the price movements; (iii) issue notice to the businesses in case they indulge in price exploitation; (iv) seek penalties before the federal court for breach of price exploitation provision by businesses and individuals; (v) accept undertakings from the businesses which are enforceable in a court; (vi) investigate complaints and issues of public concern; and (vii) provide information to both businesses and public on price exploitation provisions (ACCC 2000a, 2001a, 2003).

In summary, throughout the process of implementation of CenVAT earlier, and GST now, GoI has been somewhat idealistic in assuming prices wlil find a natural lower level on account of elimination of cascading taxes. However in reality that's not how companies respond. A robust anti-profiteering agency with teeth needs to work as a watchdog agency, atleast for 1-2 years until the dust settles.

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Re: GST - Discussion on all aspects.

Postby vijayk » 17 Nov 2017 02:11

Lets say doctor charges 100 for his consultation and avoids IT by hiding income.
Now Govt. is catching him for evasion and force to pay for 30% tax. SO the doctor increases rate to 140.

Everyone in India blames Govt. regardless of doctor was cheating or not. Same goes for GST. It is how it operates in India.

In case of GST, why are hotels increasing prices?

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Re: GST - Discussion on all aspects.

Postby JayS » 17 Nov 2017 02:29

vijayk wrote:Lets say doctor charges 100 for his consultation and avoids IT by hiding income.
Now Govt. is catching him for evasion and force to pay for 30% tax. SO the doctor increases rate to 140.

Everyone in India blames Govt. regardless of doctor was cheating or not. Same goes for GST. It is how it operates in India.

In case of GST, why are hotels increasing prices?


Bingo. On one hand people justify/ignore profiteering on the account of GST while on the other hand blame government for price hikes. Thats being disingenuous to say the least.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 03:02

The GST as it is presently is a regressive tax. Income taxes are progressive. In India in both cases, service businesses will try to evade taxes to maintain a profit margin. Until law and order can be enforced, there will be no silver bullet for the government to get revenue. Tax evasion should see serious jail time.

GST so far has brought in more revenue than the indirect taxes. GST was needed, but implementation has been a patchwork, and rates are high. Maybe in time it will get better.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 03:12

Why is GST a 'regressive tax' ? It's not even an income tax for the general progressive vs regressive classification to apply. It attempts - if very crudely at this point, because the rate setting mechanism is still in its infancy - to tax sin/luxury items at higher rates.

If it's regressive in the sense that the larger number of those who previously didn't pay any taxes were merchants selling goods and services to the poor, that's not a reflection on the tax itself, but the social milieu of basically avoiding paying legitimate taxes, that's endemic and particularly so in the informal economy.

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Re: GST - Discussion on all aspects.

Postby vijayk » 17 Nov 2017 03:32

GST is not regressive. It is all there in some form or the other and we were are all paying for it. If someone pays excise/octroi, they will collect from the customer. The business get input credit now and hence they are not indirectly paying tax.

Previously, business can hide 90% of sales now they have to show all sales to claim input credit and also supplier forces it to claim his own credit.

But now they think they can't hide sales hence to pay taxes. That means they want to collect their IT also from customer hence raise the prices. That is problem. We don't negotiate salary+30% to cover taxes. we pay taxes in our salary but people who evaded all taxes want taxes from customer

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 04:50

Suraj wrote:Why is GST a 'regressive tax' ? It's not even an income tax for the general progressive vs regressive classification to apply. It attempts - if very crudely at this point, because the rate setting mechanism is still in its infancy - to tax sin/luxury items at higher rates.

If it's regressive in the sense that the larger number of those who previously didn't pay any taxes were merchants selling goods and services to the poor, that's not a reflection on the tax itself, but the social milieu of basically avoiding paying legitimate taxes, that's endemic and particularly so in the informal economy.


Because GST taxes consumption as opposed to income. It is the poor who spend their entire incomes on consumption. Those merchants who didn't pay taxes until now, have raised prices to compensate for losses due to GST being enforced. It is the poor who bear the biggest brunt of rising prices.

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Re: GST - Discussion on all aspects.

Postby vijayk » 17 Nov 2017 05:04

But all these taxes are there before. Not new taxes.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 05:49

Mort Walker wrote:Because GST taxes consumption as opposed to income. It is the poor who spend their entire incomes on consumption. Those merchants who didn't pay taxes until now, have raised prices to compensate for losses due to GST being enforced. It is the poor who bear the biggest brunt of rising prices.

But GST is not a new tax. It's just a replacement structure in place of several cascading taxes and duties, that arguably lowers the net tax burden . The very fact that states are trying to ensure they stay revenue neutral implies there's no substantially greater tax burden being applied. The number of tax assessees has risen substantially, but the projections for tax revenue increase do NOT correspond to the rise in assessees, indicating that the tax burden per person is lower.

The problem right now is an enforcement one pertaining to profiteering. Everyone's been paying taxes before GST when it comes to largescale produced goods. The problem is that many traders at the customer facing end have been collecting but not actually remitting tax, instead keeping it as profit margin while operating under the radar. Now that they *have* to pay it due to the self-enforcing nature, they're simply collecting extra.

This is a situation where GoI needs to give teeth to an enforcement agency. It will also lead to quite a few businesses being hurt, because that non-payment of tax was what gave them the minuscule margin to survive. Any business model operating on such wafer thin margins that depended on tax evasion to remain solvent is about to be hurt significantly.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 05:54

The timing of this article is perfect - written today just as we're talking of this:
Cabinet clears setting up of GST anti-profiteering body
The Cabinet on Thursday set the ball rolling for establishment of a national anti-profiteering authority amid reports that restaurants were not passing on the benefits of reduced goods and services tax (GST) rates to consumers.

The Cabinet cleared the creation of the posts of chairman and members of the authority, which will ensure consumers receive the benefits of reduced prices in the new indirect tax regime.

“This paves the way for immediate establishment of this apex body,” said Union law minister Ravi Shankar Prasad.

“The National Anti-Profiteering Authority is an assurance to consumers. If any consumer feels the benefit of tax rate cuts is not being passed on, he can complain to the authority,” the minister added.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 08:59

Suraj wrote:
Mort Walker wrote:Because GST taxes consumption as opposed to income. It is the poor who spend their entire incomes on consumption. Those merchants who didn't pay taxes until now, have raised prices to compensate for losses due to GST being enforced. It is the poor who bear the biggest brunt of rising prices.

But GST is not a new tax. It's just a replacement structure in place of several cascading taxes and duties, that arguably lowers the net tax burden . The very fact that states are trying to ensure they stay revenue neutral implies there's no substantially greater tax burden being applied. The number of tax assessees has risen substantially, but the projections for tax revenue increase do NOT correspond to the rise in assessees, indicating that the tax burden per person is lower.

The problem right now is an enforcement one pertaining to profiteering. Everyone's been paying taxes before GST when it comes to largescale produced goods. The problem is that many traders at the customer facing end have been collecting but not actually remitting tax, instead keeping it as profit margin while operating under the radar. Now that they *have* to pay it due to the self-enforcing nature, they're simply collecting extra.

This is a situation where GoI needs to give teeth to an enforcement agency. It will also lead to quite a few businesses being hurt, because that non-payment of tax was what gave them the minuscule margin to survive. Any business model operating on such wafer thin margins that depended on tax evasion to remain solvent is about to be hurt significantly.


I'll give you the example of some food items such as ghee, milk cream, yogurt, cheese, and condensed milk that has anywhere from 5%-12%, 18% GST. The VAT for these food items weren't collected before and in some states the VAT was lower than current GST. The savings was passed to the consumer. To say the producers were tax evading isn't always the case as the VAT wasn't enforced. The net result is that the customer is paying more with GST for these basic food items and is unhappy. Now the govt. can blame the producer and the producer can blame the govt.
Last edited by Mort Walker on 17 Nov 2017 09:02, edited 1 time in total.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 09:00

Suraj wrote:The timing of this article is perfect - written today just as we're talking of this:
Cabinet clears setting up of GST anti-profiteering body
The Cabinet on Thursday set the ball rolling for establishment of a national anti-profiteering authority amid reports that restaurants were not passing on the benefits of reduced goods and services tax (GST) rates to consumers.

The Cabinet cleared the creation of the posts of chairman and members of the authority, which will ensure consumers receive the benefits of reduced prices in the new indirect tax regime.

“This paves the way for immediate establishment of this apex body,” said Union law minister Ravi Shankar Prasad.

“The National Anti-Profiteering Authority is an assurance to consumers. If any consumer feels the benefit of tax rate cuts is not being passed on, he can complain to the authority,” the minister added.


If there are a few executions of the most blatant profiteers, like those who do it on life saving medicines, then perhaps profiteering will quickly stop.

Along with this should be a method of complaint and review of the different category of items within the GST slabs. The GST council needs to have some clear rationale and should be able to explain each item to the public in writing. I will say this over and over again, the GST council is arbitrarily putting items in various slabs for revenue. Be it harmful or not to a particular industry or the public.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 10:00

Mort Walker wrote:I'll give you the example of some food items such as ghee, milk cream, yogurt, cheese, and condensed milk that has anywhere from 5%-12%, 18% GST.

That's not an example of a regressive tax. Processed foods are taxed higher than unprocessed foods. That's the basic concept. GST is a value added tax.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 10:31

Suraj wrote:
Mort Walker wrote:I'll give you the example of some food items such as ghee, milk cream, yogurt, cheese, and condensed milk that has anywhere from 5%-12%, 18% GST.

That's not an example of a regressive tax. Processed foods are taxed higher than unprocessed foods. That's the basic concept. GST is a value added tax.


Come on, Suraj. These milk products have been in use in India since the beginning of time mentioned in the Vedas and requires the minimal of bronze age household tools. To say these items are processed is ridiculous. In that sense, the GST is regressive.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 11:20

Sorry, 'regressive' isn't a definition you make up as you go along, cherrypicking items that suit you.

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Re: GST - Discussion on all aspects.

Postby JayS » 17 Nov 2017 12:19

Clearly, considering GST in absolute sense is going to lead one to wrong conclusion. We need to remember that GST is merely simplifying the existing indirect tax regime and is not a new tax regime per se. Any argument in absence of historical context is going to be difficult to be taken at its face value. A lot of desired changes are eminent and in fact are much easier to implement now with GST than what was possible with previous highly complicated tax structure. The aim currently is to unify and simply the tax system and to that extent GST is doing alright. In fact it brings on the table the added benefit of increased compliance both in the indirect as well as the direct taxes. The bottom-line is there is no way in hell that any damn decision taken by government would make all the 1.3Billion citizens happy in one shot. In fact its said that a good decision is often the one which leaves everyone a little bit unhappy.

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Re: GST - Discussion on all aspects.

Postby putnanja » 17 Nov 2017 14:17

Mort Walker wrote:
Suraj wrote:That's not an example of a regressive tax. Processed foods are taxed higher than unprocessed foods. That's the basic concept. GST is a value added tax.


Come on, Suraj. These milk products have been in use in India since the beginning of time mentioned in the Vedas and requires the minimal of bronze age household tools. To say these items are processed is ridiculous. In that sense, the GST is regressive.


These items were taxed earlier too before GST. It was under excise tax and state tax. And the MRP price covered all such taxes and people weren't aware of tax rates given the multiple taxes (central excise, state taxes, local levies, octroi where applicable etc). MRP would usually include the highest taxes in the country, which meant the traders would profit in lower tax states.

Now under GST, with tax rates published, people are coming to know of the GST rates. But majority don't understand that the GST rates applied to these items were similar to combined taxes that was being levied earlier to make it revenue neutral for govt, and not to increase prices for consumers.

However, now that there is higher awareness, people now stand up and shout that govt shouldn't tax this or that, or reduce something else.

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Re: GST - Discussion on all aspects.

Postby JayS » 17 Nov 2017 15:01

putnanja wrote:
Mort Walker wrote:
Come on, Suraj. These milk products have been in use in India since the beginning of time mentioned in the Vedas and requires the minimal of bronze age household tools. To say these items are processed is ridiculous. In that sense, the GST is regressive.


These items were taxed earlier too before GST. It was under excise tax and state tax. And the MRP price covered all such taxes and people weren't aware of tax rates given the multiple taxes (central excise, state taxes, local levies, octroi where applicable etc). MRP would usually include the highest taxes in the country, which meant the traders would profit in lower tax states.

Now under GST, with tax rates published, people are coming to know of the GST rates. But majority don't understand that the GST rates applied to these items were similar to combined taxes that was being levied earlier to make it revenue neutral for govt, and not to increase prices for consumers.

However, now that there is higher awareness, people now stand up and shout that govt shouldn't tax this or that, or reduce something else.


Which is good in a way. Just that I hope its out of real proactive democratic sense rather than due to falling pray to anti-GST propaganda for political purpose. And people will continue to also demand quality public services and results on public expenditure from governments in return of the paid taxes. I have always maintained an opinion that increasing tax compliance will make people question government more and thus its important to make every eligible person/entity pay taxes.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 19:06

Suraj wrote:Sorry, 'regressive' isn't a definition you make up as you go along, cherrypicking items that suit you.


I disagree. Income and wealth should be taxed. Taxing essential items for living is regressive whether it is sales tax, VAT, or GST. Clearly cost of essentials has gone up.

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Re: GST - Discussion on all aspects.

Postby disha » 17 Nov 2017 21:01

Is carbonated sugary Soda & Tobacco & alcohol essential items of living?

In fact all items need to be taxed., a cost borne by the consumers to mantain the ‘system’!

Yes that includes milk. There is a cost that larger society makes so that an individual can buy milk. Tax is reflection of that cost.

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Re: GST - Discussion on all aspects.

Postby A_Gupta » 17 Nov 2017 21:22

Moody's upped the Government of India's credit rating.
https://www.bloomberg.com/news/articles ... t-for-modi
India’s First Moody’s Upgrade in 14 Years Bets on Reforms
https://www.bloomberg.com/gadfly/articl ... stmas-gift
More importantly, the rationale for the upgrade cites two of his most destabilizing measures of the past year -- demonetization and a national goods and services tax -- as ingredients of a reform program that may have upset the economy temporarily, but should improve its shock-absorption capacity eventually.

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Re: GST - Discussion on all aspects.

Postby Suraj » 17 Nov 2017 22:16

Mort Walker wrote:
Suraj wrote:Sorry, 'regressive' isn't a definition you make up as you go along, cherrypicking items that suit you.

I disagree. Income and wealth should be taxed. Taxing essential items for living is regressive whether it is sales tax, VAT, or GST. Clearly cost of essentials has gone up.

No it hasn't. *Some* items have gone up, while others have not. Again, you're derailing this thread by making up definitions as you go along.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 23:31

I would request that people look at the GST rates as published.

http://www.gstcouncil.gov.in/gst-rates

Looking at the many categories/items within a slab, it certainly does appear that the GST council has not given enough thought to each item as which slab it puts it in.

The big test is going to be for putting fuel in GST and if it really brings fuel prices down.

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Re: GST - Discussion on all aspects.

Postby Gus » 17 Nov 2017 23:36

Mort - read up from the beginning. rates were fixed from revenue neutral pov to get states to agree and have no revenue impact to start with.

rates will get adjusted and rationalized as tax base increases and adjustments are needed. its an ongoing process. it still needs states to agree. until now all decisions have been unanimous. This is intentional from bjp as it undercuts opposition arguments about gst.

you are just throwing comments without understanding the timeline and sequence of how GST came into what it is now.


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