GST - Discussion on all aspects.

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Mort Walker
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Re: GST - Discussion on all aspects.

Postby Mort Walker » 17 Nov 2017 23:39

disha wrote: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.


But milk, meat and vegetables are not taxed. Why should ghee, butter, cream and yogurt?

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 18 Nov 2017 00:12

Gus wrote: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.


I understand that. GST was actually an idea from previous governments. However, It doesn’t seem like rate rationalization has any real process and is more by fiat and political expediency of the GST council. If in the future there is another government we don’t like, what stops them from arbtrily changing rates if they control the GST council?

I do agree that having a GST is certainly better than the previous system of mostly a patchwork VAT.
Last edited by Mort Walker on 18 Nov 2017 00:27, edited 1 time in total.

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Re: GST - Discussion on all aspects.

Postby periaswamy » 18 Nov 2017 00:16

Mort Walker: But milk, meat and vegetables are not taxed. Why should ghee, butter, cream and yogurt?


those products (ghee, butter, cream and yogurt) require significant processing of raw materials at an industrial scale, so they are not quite in the same category as milk or vegetables, since the "value added" factor in the manufacture of these items is significant.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 18 Nov 2017 00:22

periaswamy wrote:
Mort Walker: But milk, meat and vegetables are not taxed. Why should ghee, butter, cream and yogurt?


those products (ghee, butter, cream and yogurt) require significant processing of raw materials at an industrial scale, so they are not quite in the same category as milk or vegetables, since the "value added" factor in the manufacture of these items is significant.


I understand. You’re thinking of Amul and I’m thinking of my local doodhwallah.

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Re: GST - Discussion on all aspects.

Postby JayS » 18 Nov 2017 00:24

Mort Walker wrote:
periaswamy wrote:
those products (ghee, butter, cream and yogurt) require significant processing of raw materials at an industrial scale, so they are not quite in the same category as milk or vegetables, since the "value added" factor in the manufacture of these items is significant.


I understand. You’re thinking of Amul and I’m thinking of my local doodhwallah.


Un-branded food items are not taxed under GST.

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Re: GST - Discussion on all aspects.

Postby Gus » 18 Nov 2017 00:27

Mort Walker wrote:If in the future there is another government we don’t like, what stops them from arbtrily changing rates if they control the GST council?


what stopped previous govts from arbitrarily changing rates? you do understand that union govt had unilateral control over its portion of rates before, plus it only gave lower portion of revenues back to the states, right?

do you even understand composition and voteshare and such about the GST council. We are better protected now than before. We actually have visibility on taxes and can pressure state govt to put our case in front of council.

you really do need to do your homework.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 18 Nov 2017 00:29

JayS wrote:
Mort Walker wrote:
I understand. You’re thinking of Amul and I’m thinking of my local doodhwallah.


Un-branded food items are not taxed under GST.


What does unbranded mean exactly? It is in a box with a name, then it is branded?

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Re: GST - Discussion on all aspects.

Postby JayS » 18 Nov 2017 00:33

Mort Walker wrote:
JayS wrote:
Un-branded food items are not taxed under GST.


What does unbranded mean exactly? It is in a box with a name, then it is branded?


No claim can be made on name, as the brand/trademark would legally enable one such as copyright. Its not registered as unique brand name. I suppose brandname needed to be registered with some government agency.

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Re: GST - Discussion on all aspects.

Postby Suraj » 18 Nov 2017 00:42

Mort Walker wrote:I understand that. GST was actually an idea from previous governments. However, It doesn’t seem like rate rationalization has any real process and is more by fiat and political expediency of the GST council. If in the future there is another government we don’t like, what stops them from arbtrily changing rates if they control the GST council?

Actually the rest of your paragraph doesn't indicate you understood.

GST is not 'an idea from previous government'. It's an almost quarter century long process of implementing VAT on goods and services. VAT - e,g, CenVAT on goods - in some form has been around for quite a long time - probably the 1980s, certainly the 1990s. GST is just VAT applied upon goods+services , while eliminating a whole host of other taxes and duties.

'Another government' ? It seems you don't understand what the GST council is. It has 31 members - all state finance ministers plus Union finance minister. Central government has no power to set rates there itself. The council sits down and agrees. When they agree to what's the biggest ever economy transitioning to GST (Chinese economy was much smaller when they moved to GST in early 1990s), there's going to be a period of transition, where states first care about not destroying their revenue base, and then finetuning rates.

While your passion is nice, you're adding a significant degree of noise too, when you keep posting like this. Please, take time to read about the topic rather than simply rushing in to post things like 'if they publicly executed a few profiteers' etc like you did in the past 24 hrs. This is not GDF or Nukkad. As much as you'd like to discuss politics, this forum no longer entertains that topic either.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 18 Nov 2017 00:56

I did read about the GST council before.

In any case I will stop posting in this thread. Thank you to everyone for enlightening me. GST is going to work wonderfully when rates are rationalized.

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Re: GST - Discussion on all aspects.

Postby Gus » 18 Nov 2017 01:56

JayS wrote:No claim can be made on name, as the brand/trademark would legally enable one such as copyright. Its not registered as unique brand name. I suppose brandname needed to be registered with some government agency.


brandname has to be registered and trademarked I think, to be considered as 'brand'.

Just putting in a bag and putting a sticker with a name on the bag does not make it branded. Plenty of people were crying that all bagged products are going to be taxed.

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Re: GST - Discussion on all aspects.

Postby manju » 18 Nov 2017 02:10

Mort Walker wrote:
JayS wrote:
Un-branded food items are not taxed under GST.


What does unbranded mean exactly? It is in a box with a name, then it is branded?


if my doodhwala also sells ghee to me that ghee is not taxed... can they?

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Re: GST - Discussion on all aspects.

Postby srin » 18 Nov 2017 08:32

Mort Walker wrote:
I understand that. GST was actually an idea from previous governments. However, It doesn’t seem like rate rationalization has any real process and is more by fiat and political expediency of the GST council. If in the future there is another government we don’t like, what stops them from arbtrily changing rates if they control the GST council?

I do agree that having a GST is certainly better than the previous system of mostly a patchwork VAT.


I would appreciate if you can justify your assertions here.

You should read up on the structure of GST Council. The central govt has only 33% of the vote, and all states combined have 66% of the vote. And for any resolution to pass, you need 75% of the vote. So neither solely the center, nor solely the states can "arbitrarily" change rates. Even more, so far, all GST council resolutions have been by consensus and not by vote.
And completely contrary to your statement, *both* the central govt and state govts have given up the ability to change rates by "fiat" and "political expediency". So the Union finance minister can no longer change the service tax or sales tax in the annual budget and the state finance minister can no longer change VAT rates in the state budget. They all gave up their powers (guaranteed under the constitution) to the GST council - such a change and so incredible in our current political setup !

Secondly, the rates issue has been two-fold: the first and primarily, during the VAT regime, each state had its own rate for different products and so, during the switchover to GST, all the states' concern had to be accommodated. So if electronics goods were 14.5% in Karnataka, and 4% in some other state and 20% in another state, what should the new rate be ? Second and as a consequence of the first, given all the budgetary commitments, neither central nor state govts could afford to lose tax revenue, so they erred on the side of higher rates (not really high, due to sales/excise not being cascaded anymore), and figured out they could always fine tune it. Which is what they are doing now.

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Re: GST - Discussion on all aspects.

Postby disha » 18 Nov 2017 09:36

Mort Walker wrote: But milk, meat and vegetables are not taxed. Why should ghee, butter, cream and yogurt?


Milk and Meat need to be taxed. You can live without Milk and Meat. Both Milk and Meat are cost to society in general. Vegetables & Fruits are the basic nutrition which everybody needs and from a societal perspective should be unrestricted.

All of the above is philosophical debate and for each action there will be an outcome which may be good or bad. For example., one might not want to tax milk for children (nutrition is important for the next generation if society can afford it) but then how do you implement partial tax? Can it be that anything processed beyond milk (paneer, lassi, condensed milk, ghee, cream, yogurt) be taxed but milk itself need not be?

Question on taxes should be at what point taxes become detrimental to overall "good of society"., at the same time taxes can be used to nudge a set of people to good behavior for overall "good of society".

This are some of the questions that PhD thesis writers at NIN/NIHFW/Statistical Institute/Babus/Law makers must grapple with and come up. In an ideal world they are pro-active., however in reality they all are reactive.

If your statistics suggest that condensed milk is the most beneficial while butter is the most harmful, then actually tax laws can be changed to nudge population towards an outcome where they will consume more condensed milk and less butter. In absence of that, tax laws can go towards neutrality.

Of course no tax law is perfect., it is a some total of compromises made by different sections of society.

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Re: GST - Discussion on all aspects.

Postby disha » 18 Nov 2017 09:42

Mort Walker wrote: However, It doesn’t seem like rate rationalization has any real process and is more by fiat and political expediency of the GST council. If in the future there is another government we don’t like, what stops them from arbtrily changing rates if they control the GST council?


Straw man argument. It is like asking what happens if Sun goes super nova tomorrow & collapse into a black hole how will government save us? Physicists could be wrong you see.

Having said that., in democracy if you have a government you do not like you will change the government. There is a word called "anti-incumbency" and it was demonstrated very well in 2014.

And it is okay to assume that the entire GST council are bunch of insane, luddite and total uneducated morons who will set the rates arbitrarily. But in the past 3 months they have not demonstrated such a behavior so the chances of an arbitrary new tax rates happening in next 3 months are slim. One can do the math from there., until you hit a black swan event.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 18 Nov 2017 22:40

disha wrote:It is like asking what happens if Sun goes super nova tomorrow & collapse into a black hole how will government save us? Astrophysicists could be wrong you see.


It won't. Our star will turn in to a red giant and gobble us up, but before then we need to worry about the Andromeda galaxy colliding with our Milky Way in about 5 billion years. Even before then, India will mash up into the Asian continent in another 40 million years, so GoI better figure out where our future generations will live in a Naya-Bharat. Either on earth or another planet in our galaxy.

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Re: GST - Discussion on all aspects.

Postby VKumar » 18 Nov 2017 23:25

Mort Walker wrote:
Gus wrote: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.


I understand that. GST was actually an idea from previous governments. However, It doesn’t seem like rate rationalization has any real process and is more by fiat and political expediency of the GST council. If in the future there is another government we don’t like, what stops them from arbtrily changing rates if they control the GST council?

I do agree that having a GST is certainly better than the previous system of mostly a patchwork VAT.



First of all there is simply no comparison between the previous regime of a clutch of taxes like SAD, Octroi, VAT, Service Tax, CST, EXCISE, with their individual documentation, filing, assessment, multiple inspectors and a single GST, with monthly input credit. More over with GST you don't need a distributor or C&F agent in other states but can sell directly from any state to any other in India. No need for wayleave forms etc.


Secondly, the entire taxation system is based on the HARMONIC SYSTEM CODE. it is a universal classification of items, starting with unprocessed, raw, live animals and plants, and successively going on to semi processed and fully processed products.

The guiding principle being that more processing means more value added and hence attracts higher tax rate. This coupled with input tax credit makes the system rational and just.

The only thing left to descretion is rate of tax for a commodity. And government must decide that so as to encourage or discourage it's consumption.

As people get used to GST and as the system itself improves, the benefits of GST will become apparent.

One of the benefits is that it discourages black marketing by denying input credit for unbilled transactions.

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Re: GST - Discussion on all aspects.

Postby Suraj » 19 Nov 2017 02:59

Great post, VKumar.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 19 Nov 2017 04:39

VKumar wrote:

First of all there is simply no comparison between the previous regime of a clutch of taxes like SAD, Octroi, VAT, Service Tax, CST, EXCISE, with their individual documentation, filing, assessment, multiple inspectors and a single GST, with monthly input credit. More over with GST you don't need a distributor or C&F agent in other states but can sell directly from any state to any other in India. No need for wayleave forms etc.


Secondly, the entire taxation system is based on the HARMONIC SYSTEM CODE. it is a universal classification of items, starting with unprocessed, raw, live animals and plants, and successively going on to semi processed and fully processed products.

The guiding principle being that more processing means more value added and hence attracts higher tax rate. This coupled with input tax credit makes the system rational and just.

The only thing left to descretion is rate of tax for a commodity. And government must decide that so as to encourage or discourage it's consumption.

As people get used to GST and as the system itself improves, the benefits of GST will become apparent.

One of the benefits is that it discourages black marketing by denying input credit for unbilled transactions.


No one is arguing that the previous regime was good. GST is in fact a GOOD thing. GST should also reduce/remove the interstate checkpoints for tax and toll collection. These checkpoints cost India over $20 billion/year. A truck going across half-dozen states need not stop half-dozen times at these backed up toll locations and pay taxes every time.

Yes GST is a harmonic tax system, BUT the rates don't make any sense looking at the GST schedule. The taxation rates are not well thought through. This doesn't mean the previous system was better, but it doesn't make the current GST schedule leaps and bounds better.

We have to see how well the ITC (Input Tax Credit) works. Apparently it will be at the end of the tax year and can be reversed if the tax return filling is wrong. The good thing about it is that IT dept. will know how much profit a producing company is making and can thus be taxed for actual income.

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Re: GST - Discussion on all aspects.

Postby Suraj » 19 Nov 2017 04:56

Mort, I thought you said you were not going to post here ? :)

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Re: GST - Discussion on all aspects.

Postby chetak » 19 Nov 2017 10:57

Mort Walker wrote:
VKumar wrote:

First of all there is simply no comparison between the previous regime of a clutch of taxes like SAD, Octroi, VAT, Service Tax, CST, EXCISE, with their individual documentation, filing, assessment, multiple inspectors and a single GST, with monthly input credit. More over with GST you don't need a distributor or C&F agent in other states but can sell directly from any state to any other in India. No need for wayleave forms etc.


Secondly, the entire taxation system is based on the HARMONIC SYSTEM CODE. it is a universal classification of items, starting with unprocessed, raw, live animals and plants, and successively going on to semi processed and fully processed products.

The guiding principle being that more processing means more value added and hence attracts higher tax rate. This coupled with input tax credit makes the system rational and just.

The only thing left to descretion is rate of tax for a commodity. And government must decide that so as to encourage or discourage it's consumption.

As people get used to GST and as the system itself improves, the benefits of GST will become apparent.

One of the benefits is that it discourages black marketing by denying input credit for unbilled transactions.



No one is arguing that the previous regime was good. GST is in fact a GOOD thing. GST should also reduce/remove the interstate checkpoints for tax and toll collection. These checkpoints cost India over $20 billion/year. A truck going across half-dozen states need not stop half-dozen times at these backed up toll locations and pay taxes every time.

Yes GST is a harmonic tax system, BUT the rates don't make any sense looking at the GST schedule. The taxation rates are not well thought through. This doesn't mean the previous system was better, but it doesn't make the current GST schedule leaps and bounds better.

We have to see how well the ITC (Input Tax Credit) works. Apparently it will be at the end of the tax year and can be reversed if the tax return filling is wrong. The good thing about it is that IT dept. will know how much profit a producing company is making and can thus be taxed for actual income.


Many shops are still selling and are able to sell goods without bills. Some of them are dealers and stockists of very reputed companies. I know this for a fact and I personally attest to it. I got a kaccha bill for some stuff that I had bought and when I insisted on a proper bill the owner turned really nasty. In the end, I did get my bill.


The GST, in it's current form, has been buggered up by some of the more rapacious states and of course political parties along with some powerful self interest groups which have conspired and also blackmailed the govt into going ahead with this deliberatedly b@st@rdized version of the GST, knowing and hoping that the implementation of this GST with multiple rates and slabs would result in a backlash from the trading community as well as the consumers at large.

Coupled with this, it is highly suspicious how some param poojiya software companies who should have been able to develop the required software with their eyes closed have managed to completely screw up the online filing system. The highly inadequate hardware and server farm infrastructure which is currently running out of a facility at whitefield in bangalore could not have been more effed up had it been deliberately planned and sabotaged and done with the single objective of causing the maximum embarrassment to the govt.

Looking at the big picture, it is decidedly beginning to look less like teething troubles and more like concerted enemy action. The govt is scrambling to correct the deficiencies but its the same old story of the horses and barn doors. This govt is either too naive or has some elements which are conspiring with the enemy. I would support the second hypothesis.

Rapacious self interest groups like restaurants have greedily piled on to the GST bandwagon by needlessly jacking up their prices and raping their customers knowing full well that the central govt will take the hit and in many cases, especially in states like KAR, the state govt is slyly encouraging such wanton behavior. Carpenters and plumbers are now jacking up rates by using GST as the excuse.

Had this GST infrastructure, separately as a stand alone project, been given to someone/anyone with the proven project management capabilities like Nitin Gadkari with emphasis on efficient timely delivery and performance oriented reliable operation it would have been better. Instead, the govt seems to have itself prepared the minefield by hobbling the GST system with the needless participation of private players in the GSTN.

I am hearing that the taxes collected are being routed in part through the financial companies run by the GSTN partners before it reaches the govt coffers. If true, this would be the very rich and thick cream that is being skimmed off the top for "services" provided.

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Re: GST - Discussion on all aspects.

Postby chetak » 19 Nov 2017 12:25

Infosys will configure GST network to help traders file 3B returns:Sushil Kumar Modi



Infosys will configure GST network to help traders file 3B returns: Sushil Kumar Modi


Infosys would configure the editing facility in the GST Network by November 20 to enable traders to file their three-page summary return (3B), said the GST Group of Ministers (GoM) Chairman Sushil Kumar Modi on Saturday.


Bengaluru | Published:November 19, 2017,

Infosys would configure the editing facility in the GST Network by November 20 to enable traders to file their three-page summary return (3B), said the GST Group of Ministers (GoM) Chairman Sushil Kumar Modi on Saturday. Infosys would configure the editing facility in the GST Network by November 20 to enable traders to file their three-page summary return (3B), said the GST Group of Ministers (GoM) Chairman Sushil Kumar Modi on Saturday. (File Photo)

Software vendor Infosys would configure the editing facility in the GST Network by November 20 to enable traders to file their three-page summary return (3B), said the GST Group of Ministers (GoM) Chairman Sushil Kumar Modi on Saturday. “Over 2 lakh tax payers were unable to file their summary returns (3B) in August and September due to the non-provision of the editing facility in the GST Network. By November 20, the editing facility will be operationalised by the GST Network,” Modi told reporters after the GoM met for the fourth time here.

The GST Network (GSTN) is the backbone of the Goods and Service Tax (GST) on which the new indirect tax regime is operated in real-time, as all its functions are automated, he said. The city-based IT major bagged the Rs 1,300-crore contract in 2015 to design, develop, maintain and operate the GSTN for three years across the country. “All forms related to tax payers will have editing facility for previewing, downloading, printing and displaying specific error messages – to make the portal more user-friendly,” said Modi.
The GoM is also incorporating suggestions of states into the system to make the Network more user-friendly and interactive.

“As filing of returns is the ‘atma’ (soul) of the GST, everything is getting stabilised. We are trying to operationalise everything based on the timeline we had given to Infosys,” claimed Modi, who is also the Deputy Chief Minister of the JD(U)-BJP coalition government in Bihar. The GST Network is also hiring people to analyse the data of the states. “We have also asked Infosys to deploy more ingenious and qualified professionals,” asserted Modi. Infosys has hired 100 more engineers in the last one month, taking the total number of its employees working for the GSTN to 621, he shared. “In the first meeting (September), as we told Infosys to deploy a resident engineer in every state, the company has deputed 30 of them in each of the 30 states across the country to address any issue related to the Network,” he said.

Instead of tax payers writing e-mails and making calls for glitches, an engineer has been posted in every state capital. In September, Rs 93,141 crore were received as indirect taxes, which increased to Rs 95,131 crore in October, shared the Deputy Chief Minister. The average revenue shortfall of all the states for August was 28.4 per cent, which declined to 17.6 per cent in October, he said.


Cabinet Approves Establishment Of National Anti-profiteering Authority Under GST

“The average revenue shortfall has declined from July to October, indicating that the system is stabilising. People are becoming in tune with the GST as the complaints are also coming down.” At least nine states have the least revenue shortfall with Delhi achieving a break-even point with its revenue turning to positive from negative, said Modi. The GoM has also planned to meet Infosys co-founder and Chairman Nandan Nilekani to brief about the working of the GST Network, he added.

Besides Modi, other GoM members are Chattisgarh Minister for Commercial Taxes Amar Agarwal, Karnataka Agriculture Minister Krishna Byregowda, Kerala Finance Minister TM Thomas Issac and Telengana Finance Minister Etela Rajendar. GSTN Chairman Ajay Bhushan Pandey and GSTN Chief Executive Officer (CEO) Prakash Kumar assist the GoM in addressing the technical glitches, which have marred filing of returns by the traders since the new indirect tax regime was launched on July 1.

Odisha Finance Minister Shashi Bhusan Behera, Modi, Pandey and Gowda were present at the fourth GoM meet held here on Saturday. The decision to form the GoM was taken at the GST Council in Hyderabad on September 9 after several member states complained to Union Finance Minister Arun Jaitley, who heads the Council, that the glitches were causing problems for taxpayers in filing returns and making payments.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 19 Nov 2017 12:27

Suraj wrote:Mort, I thought you said you were not going to post here ? :)


I wasn't but saw so many replies that I changed my mind. I will try not to derail this thread, but will comment. If you wish me to stop, please do tell me and I shall.

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Re: GST - Discussion on all aspects.

Postby Suraj » 19 Nov 2017 22:20

Mort Walker wrote:
Suraj wrote:Mort, I thought you said you were not going to post here ? :)


I wasn't but saw so many replies that I changed my mind. I will try not to derail this thread, but will comment. If you wish me to stop, please do tell me and I shall.

:rotfl:

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Re: GST - Discussion on all aspects.

Postby disha » 20 Nov 2017 07:18

Mort Walker wrote:
No one is arguing that the previous regime was good. GST is in fact a GOOD thing. GST should also reduce/remove the interstate checkpoints for tax and toll collection.

BUT the rates don't make any sense looking at the GST schedule. The taxation rates are not well thought through. ...


So we are circling back to taxation "rates are not well thought through" argument!

Interestingly., when significant economy never paid taxes and coming into tax net for the first time., how will one come up with a 'rational' tax rate replacing some 40-52 various taxes and cess across 26 territories of India and be revenue neutral?

GST Council did say that they will rationalize it post implementation and also indicated their rationale behind rationalization and the goals of rationalization as well., so when they are rationalizing the tax rates., it becomes an interesting take to say "taxation rates are not well thought through".

Indeed why not?

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 20 Nov 2017 09:45

disha wrote:So we are circling back to taxation "rates are not well thought through" argument!

Interestingly., when significant economy never paid taxes and coming into tax net for the first time., how will one come up with a 'rational' tax rate replacing some 40-52 various taxes and cess across 26 territories of India and be revenue neutral?

GST Council did say that they will rationalize it post implementation and also indicated their rationale behind rationalization and the goals of rationalization as well., so when they are rationalizing the tax rates., it becomes an interesting take to say "taxation rates are not well thought through".

Indeed why not?


No one claimed the previous regime was rational at all. When you are replacing a convoluted tax system and replacing it with rules that are too complex or don't make sense, does bring this in question. You don't have to believe me, but just go through the GST table of items in various slabs.

To have the public and businesses embrace the GST, it should make sense and be easy to follow. The GST bill passed in August 2016 and implemented July 2017, so there was some time.

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Re: GST - Discussion on all aspects.

Postby Suraj » 20 Nov 2017 09:58

Sigh, I suggest that the posters involved stop this argument and move on. Absolutely nothing new has been stated in this repeated whining about GST rates.

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Re: GST - Discussion on all aspects.

Postby arshyam » 20 Nov 2017 10:27

GST is here and done. Can we please stop this "big bad GST" nonsense and focus on how to make it better? I don't understand this constant whine (sorry Mort-ji, but that's what it sounds like to me) that GST is bad, broken, or whatever adjective one wants to describe it with. Any new system will have flaws and on hindsight will always looks like why it wasn't done better - but the more useful thing would be to continuously improve the issues as they show up.

I'll give an example here, anecdotal, but also real: some people I know have company leased cars, whose taxation jumped by 15% or more after GST came into effect (for small cars, the tax rate went from 14.5% to 29%). This was because leased cars were not explicitly placed into any slab, so this category defaulted to a 28% rate (plus a 1% cess). This resulted in EMIs increasing by at least 4k p.m. and there was of course a lot of heartburn. It took 2-3 sittings of the GST council, but last month they addressed this and brought the rates down to 18% for small cars, effectively being a few percentage points higher that the previous VAT regime. Not only that, the reduction was made applicable from Jul 1 itself, so the excess tax paid would be refunded to the payers.

Point is, the system is not perfect, but the council is being responsive and addressing challenges. Trying to find out such issues and bringing them to light is much better than simply stating something is arbitrarily taxed based on one's own perceptions.

JMT and all that.

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Re: GST - Discussion on all aspects.

Postby Vips » 21 Nov 2017 19:06

12% & 18% GST slabs may be merged, 28% for demerit goods: Arvind Subramanian.

The government may combine the 12 per cent and 18 per cent slabs for goods and services tax (GST) into one in the near future and reserve the 28 per cent rate only for demerit goods, said chief economic adviser Arvind Subramanian. (If the goods in 18% tax band are moved to 12%, this will be huge. Question is when will this be implemented, Wait for buoyancy in tax collection or will it be before the next Lok Sabha elections?)

While India will never move to a single GST rate, over time there would be a “poor man’s” rate (0 per cent and 5 per cent), a “core” rate (the 12 per cent-18 per cent combination), and the demerit rate (28 per cent), Subramanian said during the course of a 90-minute interaction at the ET office.

Cement and white goods are not demerited goods, but the government was deliberately “going slow” on those items due to revenue considerations.

The chief economic adviser, who had last year proposed a revenue-neutral rate of 15.5 per cent, said GST collections were not doing badly and the government would take a call on the overall fiscal situation in a few weeks. “I think we are certainly heading in the right direction (on the GST structure),” Subramanian said.

“I never liked the 28 per cent slab, which I think has created some of the transitional challenges. I think we are very close to making 28 per cent just for demerit goods… 0 per cent and 5 per cent has quite a lot of the tax base and there I think we will not be able to make that much progress as we have to protect the poor. But the 12 per cent and 18 per cent, at some point, can be combined in the foreseeable future into one rate,” the chief economic adviser said, outlining the structure.

“In India, we will never get one slab. We have too much of a socialist mindset and for a good reason,” said the IIM-Ahmedabad and Oxford-educated Subramanian, whose tenure as CEA was recently extended by a year. Subramanian said land, real estate and natural gas could soon come within the purview of GST, and added that he supported the early inclusion of electricity as well. “Last time, land and real estate were on the agenda of the GST Council, but we couldn’t discuss it. I think that will happen sooner rather than later. I want electricity to come in very early because it will enhance competitiveness and help meet the ‘Make in India’ objectives,” he said.

GST collections were in line, Subramanian said, adding that everyone would be surprised by how much the tax base would expand.

“I think broadly on GST we are not doing badly. We are doing a growth of 12 per cent-13 per cent. Broadly, we are in line,” he said and added that states would not see a shortfall.

“At the risk of sounding a little over-enthusiastic, I think we would be pleasantly surprised about how much the base can expand. If you look at the number of registrants or if you look at implied tax base in the next six months we are going to look at a bigger tax base than we thought before starting this enterprise,” he added. Responding to a question about the rupee, Subramanian agreed that there was a section of the political class that wanted a strong rupee.

“There are parts of political class which like a strong rupee. I think that’s something that’s true and that’s something we need to deal with,” he said, pointing to how the Asean economies have used the exchange rate tool to grow.

He said India’s excessive focus on foreign capital has meant lesser control on exchange rate, which in turn had implications for export competitiveness.

“One of my pet peeves against all policymakers in India of all stripes is that we just seem to love foreign capital of all sorts. Every time there is a crisis we open the capital account even more and then the more you open the capital account the less able you are to control the exchange rate,” he said, adding that it is not possible to grow at 8 per cent-plus without strong contribution from exports. “If you love foreign capital then you have to pay the price for it. There is no free lunch in this business.”

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Re: GST - Discussion on all aspects.

Postby Supratik » 21 Nov 2017 21:00

October GST collections up at 95000 crores.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 21 Nov 2017 22:02

Supratik wrote:October GST collections up at 95000 crores.


Is that the net amount after ITC obligations?

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Re: GST - Discussion on all aspects.

Postby Supratik » 21 Nov 2017 22:26

Not clear. This is from twitter. Have to wait for news reports. But prediction is crossing 1 lakh crore by end of fiscal. Also the tax base has increased according to the CEA (see above). How much will be known by end fiscal. My estimate is GST will be nearly 8-10% of GDP. This will be without revenue generators like petroleum products, tobacco and alchohol.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 21 Nov 2017 22:42

That’s certainly good news. So 8% of GDP means around $200 billion for the fiscal year. For FY 16-17 all indirect taxes were Rs. 8.5 lakh-crore according to ToI. I assume that included fuel and alcohol taxes too.

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Re: GST - Discussion on all aspects.

Postby Schmidt » 22 Nov 2017 10:16

GST on property / real estate is a real downer

Can you imagine a net effective rate of 12% on a huge outlay such as property ?

For this reason alone I have given up on new developments and focussing my search on resale units

Some developers are offering to absorb GSt as they are desperate to clear inventory , but many others are charging GST and it makes a huge difference

This will definitely adversely impact real estate market in the coming months and years

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Re: GST - Discussion on all aspects.

Postby disha » 22 Nov 2017 12:54

^^ Why?

I do agree though that there should be property tax instead of GST and the property tax is flat rated with some inflation adjustment built in.

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Re: GST - Discussion on all aspects.

Postby Mort Walker » 22 Nov 2017 18:21

Schmidt wrote:GST on property / real estate is a real downer

Can you imagine a net effective rate of 12% on a huge outlay such as property ?

For this reason alone I have given up on new developments and focussing my search on resale units

Some developers are offering to absorb GSt as they are desperate to clear inventory , but many others are charging GST and it makes a huge difference

This will definitely adversely impact real estate market in the coming months and years


Shouldn’t a developer get ITC on cement and contstruction materials for new developments? So that 12% GST could be absorbed by the developers. Unless construction material was being stolen like the sand scam in MP a couple of years ago.

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Re: GST - Discussion on all aspects.

Postby Schmidt » 23 Nov 2017 08:17

Mort Walker wrote:
Shouldn’t a developer get ITC on cement and contstruction materials for new developments? So that 12% GST could be absorbed by the developers. Unless construction material was being stolen like the sand scam in MP a couple of years ago.
[/quote]

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There was always input credit - even in the previous Excise + VAT regime , so what is new ?

Like I said , very few builders are offering to absorb GST

Most others are simply calculating at 12% for new developments

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Re: GST - Discussion on all aspects.

Postby JayS » 23 Nov 2017 08:50

Schmidt wrote:
Mort Walker wrote:
Shouldn’t a developer get ITC on cement and contstruction materials for new developments? So that 12% GST could be absorbed by the developers. Unless construction material was being stolen like the sand scam in MP a couple of years ago.


----------------------------------------------------------------

There was always input credit - even in the previous Excise + VAT regime , so what is new ?

Like I said , very few builders are offering to absorb GST

Most others are simply calculating at 12% for new developments


ST was 4.5-5% on RE while VAT was 1-6% in various states = 6-11%. Now its 12%. No ICT was available on ST component. While ICT is available for full GST now. I have posted details of my observations on this topic in initial pages of this thread. A new property starting up post 1st July is basically almost tax neutral under GST. There is a grey area for under construction properties and nothing can be said without having a look at how much work was done pre and post GST and how much inventory held on 1st July and stuff like that. But GST should have a positive impact on RE for buyers. One needs to read the laws and be able to negotiate. I saw one case where a builder charged GST on items post GST for which he should have charged ST by 15% rate but didn't earlier. Now the buyer thinks its hike due to GST. While in reality the hike of only 3% because tax on services have gone up from 15% to 18%. Most probably the builder wasn't paying taxes properly on whole sale value but not has to. Hence the addition of tax.

One needs to negotiate with builders on this. They of coarse will try to cheat (Majority of builders are crooks by default). Show them rule books. Even the FM has multiple times said that RE should be tax neutral now. I did not pay a single penny extra on the property I bought on account of GST. I had been asking for discount in fact due to GST. The builder didn't give discount of coarse, but neither asked more money too. And I was happy with status quo. Whereas I see some others who didn't bother doing homework ended up paying "extra tax".

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Re: GST - Discussion on all aspects.

Postby Vips » 23 Nov 2017 09:28

GST compliance improves with 56% filing GSTN-3B before deadline.

The filing of GSTR-3B returns saw a substantial increase in October with as many as 4.37 million businesses filing the initial returns for October - the highest monthly return filing within due date, GST Network said on Tuesday. Around 56 per cent of the registered taxpayers filed their GSTR-3B returns for October within the due date.The last date for filing GSTR-3B, the initial sales return, for October was Monday 21 November.

"The number of taxpayers filing their GSTR-3B returns is showing marked improvement month after month with about 43.67 lakh (4.37 million) of them filing their GSTR-3B returns for October till November 20, 2017, the highest so far," GSTN said in a statement.

As many as 3.93 million returns were filed within due date for September against 2.85 million for August and 3.40 million for July.

"There is steady rise in the number of taxpayers filing their GSTR-3B returns every month which is encouraging to see. The trend of taxpayers filing their returns on the last day continues though. Taxpayers are urged to file their returns early to avoid last minute hassles," GSTN CEO Prakash Kumar said.

As many as 1.48 million taxpayers filed their returns on the GST Network portal on Monday.

Punjab accounted for the largest number of over all other states in filing the highest number of GSTR-3B returns for October. About 73.09 per cent of the taxpayers in Punjab filed their GSTR-3B returns for October so far, GSTN said.

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Re: GST - Discussion on all aspects.

Postby Dipanker » 25 Nov 2017 12:54

GST should be all fixed in the next 6 - 9 months:

GST May Have Fewer Slabs In Future, Says Chief Economic Adviser

Hyderabad: Chief Economic Adviser (CEA) Arvind Subramanian today said going forward the Goods and Services Tax (GST) may "probably" have fewer rates by "collapsing" 12 per cent and 18 per cent tax slabs into one.

He said the new tax regime, rolled out from July 1, will stabilise in the next six to nine months and become a "model" for other countries. "I am confident that over the next six to nine months the system will stabilise. It will also be a model for other countries to emulate... "Then over time, the 12 per cent and 18 per cent rate can probably be collapsed into one rate. So over time we will see fewer rates. We would not ever have one rate because that is too difficult to achieve," he said.


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