GST - Discussion on all Aspects

JayS · Post by **JayS** » 14 Jun 2017 15:14

How FMCG companies are trying to pocket reduced tax as profit rather than passing on to consumer...

http://economictimes.indiatimes.com/new ... 059361.cms

This is classic case of cartelisation. It seems it will take a while for "competition" to come into picture and drive companies to pass on the benefits of GST to consumers.

Lets say each company/service provider whose tax liability is reduced under GST, pockets it as profit somehow for now and every company which has higher taxes pass on the increase immediately to consumer, then net effect will be increase in expenditure for an average citizen in short term at least. Is this correct..? Am I missing something...?

M_Joshi · Post by **M_Joshi** » 14 Jun 2017 16:18

JayS wrote:How FMCG companies are trying to pocket reduced tax as profit rather than passing on to consumer...

http://economictimes.indiatimes.com/new ... 059361.cms

This is classic case of cartelisation. It seems it will take a while for "competition" to come into picture and drive companies to pass on the benefits of GST to consumers.

Lets say each company/service provider whose tax liability is reduced under GST, pockets it as profit somehow for now and every company which has higher taxes pass on the increase immediately to consumer, then net effect will be increase in expenditure for an average citizen in short term at least. Is this correct..? Am I missing something...?

The GST anti-profiteering ‘weapon’

We expect companies to cooperate. We hope we don’t have to use the weapon”. This was the threat issued by Hasmukh Adhia, India’s revenue secretary. Adhia was demanding “cooperation” from corporate India on pricing of their goods and services after the implementation of goods and services tax (GST). In other words, he implied that the pricing of goods and services should be in compliance with the government’s expectations. If companies failed to comply, he warned that the government has a weapon to unleash on them—the “anti profiteering” clause. This new “weapon” in the arsenal of the Union government has been designed and launched as part of the GST Bill. The government can now create a new “Authority” which will decide whether businesses have reduced their prices “enough” when there is a reduction in the GST rate of a particular good or service.

rahulm · Post by **rahulm** » 15 Jun 2017 08:23

GST days away, discount sales of gadgets, apparel flood markets

Readymade garments priced up to Rs 1,000 have been put in the five per cent GST tax bracket, while those costing over Rs 1,000 are under the 12 per cent bracket.

simplification ? Expect a lot of pants at Rs 999. Pants should be sold like a BMW-Easy access pant Rs 400, options - zip Rs 200 (not everyone may want one), pockets Rs 199, belt hooks Rs 78 etc etc.

jamwal · Post by **jamwal** » 15 Jun 2017 10:59

Cloth merchants in Chandani Chowk, puranil Dilli are on strike today over tax on clothing. Was there no tax before ?

Kashi · Post by **Kashi** » 15 Jun 2017 11:07

jamwal wrote:Cloth merchants in Chandani Chowk, puranil Dilli are on strike today over tax on clothing. Was there no tax before ?

What would they know? They never paid tax anyway.

JayS · Post by **JayS** » 15 Jun 2017 16:02

M_Joshi wrote:
JayS wrote:How FMCG companies are trying to pocket reduced tax as profit rather than passing on to consumer...

http://economictimes.indiatimes.com/new ... 059361.cms

This is classic case of cartelisation. It seems it will take a while for "competition" to come into picture and drive companies to pass on the benefits of GST to consumers.

Lets say each company/service provider whose tax liability is reduced under GST, pockets it as profit somehow for now and every company which has higher taxes pass on the increase immediately to consumer, then net effect will be increase in expenditure for an average citizen in short term at least. Is this correct..? Am I missing something...?
The GST anti-profiteering ‘weapon’
We expect companies to cooperate. We hope we don’t have to use the weapon”. This was the threat issued by Hasmukh Adhia, India’s revenue secretary. Adhia was demanding “cooperation” from corporate India on pricing of their goods and services after the implementation of goods and services tax (GST). In other words, he implied that the pricing of goods and services should be in compliance with the government’s expectations. If companies failed to comply, he warned that the government has a weapon to unleash on them—the “anti profiteering” clause. This new “weapon” in the arsenal of the Union government has been designed and launched as part of the GST Bill. The government can now create a new “Authority” which will decide whether businesses have reduced their prices “enough” when there is a reduction in the GST rate of a particular good or service.

The article I posted describes various methods that FMCG companies using precisely to defeat this anti-profiteering measures by government. Of coarse, government can look at the overall picture and filter out these tricks and shot it down. But question is will govt do that and if yes, how much time and efforts it will take them to do it and make the companies comply. May be making example out of a few biggies could make all fall in line, but it would be almost impossible to make sure the benefits are passed on to the customer. Only competition can do that but it might take a while for it to come into picture. Thats my thinking.

Yagnasri · Post by **Yagnasri** » 15 Jun 2017 16:05

Few serious cases with massive name and shaming campaign will teach them a lesson.

rahulm · Post by **rahulm** » 15 Jun 2017 18:08

Our finest are past the fines and naming and shaming. (Tumhe kya karna hai kar lo ji, hum dekh lenge is the new normal)

Stuff like public toilet cleaning or rubbish removal and posting pics on SM and full page colour mug shots etc may work. Will,also help swacch Bharat cause.

JayS · Post by **JayS** » 15 Jun 2017 19:42

^^ Hit where it hurts the most. If the brand value takes hit even for short time, its a big deal for any company, particularly in FMCG. That's the only way to teach lesson. No amount of fine or punishment will have any effect on corporate morality otherwise.

arshyam · Post by **arshyam** » 16 Jun 2017 07:20

x-posting from the Economy thread.

If true, this will have a big impact on the construction sector and perhaps help it revive. But can it be enforced? What do maulaners think?

Here’s why you shouldn’t buy a house till GST rollout on July 1 - M Rajendran, TNIE

NEW DELHI: Are you planning to invest in a house? Wait till the government rolls out the new universal tax regime, in all probability by next month, and you might end up saving a substantial amount in the form of taxes.

The Finance Ministry has issued a clarification directing construction companies to pass on benefits of lower tax burden under the GST regime to consumers in the form of reduced prices and instalments. Else, they can be prosecuted for profiteering under Section 171 of the GST law.

The clarification has come after the CBEC and States received several complaints that customers who have booked flats by making part payments were being asked by builders to deposit entire amounts before July 1 or face higher taxation for payments made later.

“This is against the GST law,” said a Finance Ministry statement.

“Construction of flats, complex, buildings will have a lower incidence of GST as compared to a plethora of indirect Central and State taxes suffered by them under the existing regime,” the statement added.

Currently, there is a cascading of input taxes on constructed flats. For instance, a Central Excise duty is payable on most construction material at the rate of 12.5 per cent, and it’s higher in the case of cement. In addition, most States levy an Entry Tax and Value Added Tax in the range of 12.5 - 14.5 per cent on most building materials.

“As a result, incidence of Central Excise duty, VAT and Entry Tax on construction material is currently borne by builders, which they pass on to the customers as part of the price charged from them. This is not visible to the customer as it forms a part of the cost.” This, the ministry adds, will change under the GST regime.

The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers. “Despite this clarity on law position, if any builder resorts to such practice, the same can be deemed to be profiteering under section 171 of GST law.”

“The Finance Minister has also made it clear. Any tax credit that the builder gets after GST is implemented has to be passed on 100 per cent to the consumer,” says Samantak Das, Chief Economist at Research Knight Frank India.

“This is a great move and will help clarify the cloud hovering around the consumer that they may have to pay higher taxes.”

Reality check Example

Cost of buying house: Rs 10 lakh
Input tax: Rs 32,000
Tax paid on final product (including input tax): D1 lakh
Tax paid under GST: Rs 68,000

Current regime
12.5% Central excise duty
12.5-14.5% VAT
Entry tax for construction materials (charges vary from state to state)
4.5% Service tax
1% VAT under composition scheme

Under GST
■ Full input credit would be available for input taxes
■ So input taxes embedded in the flat can’t form a part of the cost of the flat
■ Builders must pass on the benefits of lower tax burden under GST to buyers by way of reduced prices

JohnTitor · Post by **JohnTitor** » 16 Jun 2017 13:39

Only in india can a simple tax % be turned into a complex affair so that the right people can make money. What a joke india has become.

JayS · Post by **JayS** » 16 Jun 2017 14:34

arshyam wrote:x-posting from the Economy thread.

If true, this will have a big impact on the construction sector and perhaps help it revive. But can it be enforced? What do maulaners think?

I doubt about large impact. At max 1-3% in complete cost. That too if the builders pass on the tax benefit honestly. But how would a consumer know how much tax builder has exactly paid as Input tax and how much is the difference in Tax on final product and this input tax...? There is no system which can keep track of input and final G/S taxes on output for individual apartment. Even if GST creates this system, there is no way a comsumer can get that data unless the developer willingly give it. Even now builders get CENVAT credit which is substantial if they are outsourcing entire construction as most of the big developers do. But do they pass on the benefit to consumer..? No. Whenever GOI does something it does, but until then there will be confusion and lot of folks will have to forgo benefit of GST because you can't always wait for months.

Another stupid complication that govt has put in ST is that while a under construction house attracts tax, if sold after completion the house does not attract any tax. It is considered that the builder was making house for himself so no ST. Also there are two type of contracts where Service cost to goods cost split is different either 60:40 or 70:30. It depends on how the developer company is registered under ST law. I don't know who comes up with such stupid things. Why can't they keep it simple and logical.

So one good thing with GST is one complicated law is replacing 17 of them. Hopefully GST is made more simple and logical in later iterations with lesser slabs and no cess et al stupidity.

Ideally GST should have subsumed stamp duty as well in it along with ST and VAT. But I am sure State governments would be too greedy to let go stamp duty.

srin · Post by **srin** » 17 Jun 2017 07:31

I worked on a GSP implementation in my last job, so here's a writeup on GST ecosystem, an aspect that isn't often talked about, before I start forgetting the details ...

One of the core principles of GST is invoice-matching. In a B2B transaction (eg: distributor to retailer), the supplier needs to upload sales invoices to the GSTN before 10th of a month and then e-sign it. The purchaser needs to upload his purchase invoices before 15th of a month, and the invoice numbers, the GSTINs of the seller and purchaser, and the amount and date must match. Otherwise, the purchaser won't get input tax credits (ITC). This is the self-policing mechanism: if the purchaser wants to avail of the ITC offset, he needs to buy from the supplier who pays taxes. For ease of business, B2C (shopkeepers etc) don't need to upload individual invoices unless the invoice amount exceeds Rs. 2.5L (or was it 1.5L ? I forget). Unless the business is selling cars or gold, they don't need to upload individual invoices (and if they are, they are so big they will have accountants anyway).

The GSTN operates a portal which currently offers registration of businesses and when GST goes live, will offer facility to file returns. To the best of my knowledge, you can't pay taxes directly on the portal. You generate a challan online and use that to pay tax with a bank (similar to personal IT returns today).
However, the above is the most cumbersome way of filing returns.

Most big businesses (manufacturers for instance) have team of accountants, whose job it is to figure out the taxes. Most traders outsource to their trusted CA friend who keeps track of invoices, balances books and files taxes on their behalf. Most of these would use an ERP software (SAP etc for big guys, Tally for CAs and small guys) to keep track of transactions. So, the problem now is how would an SAP or an Oracle or a Tally or a Cleartax pay taxes. How would a Flipkart or Amazon pay taxes ?

Enter the GST ecosystem. The GSTN provides REST API to be accessible by select entities called GSP (GST Suvidha Providers) over a dedicated MPLS line. The GSPs can themselves offer services or they can sublicense it to an ASP (Application Service Provider). The GSTN has periodically publishes list of permitted GSPs - there are financial and revenue criteria to apply, and then the GSPs need to demo their solution to GSTN for approval. The GSTN also maintains a public Google groups list to answer the queries on the APIs.
The GSPs are bound by a very restrictive agreement with non-collusion and non-monopolistic clauses, and they need to get their infrastructure security-audited by CERT-IN empanelled auditors - both to start operations and periodically, to continue operations.
The API also ensures that the communication between ASPs and GSTN is encrypted, which means GSP is just a router of the APIs.

Filing returns needs e-signature, so the digital signature dongles and/or Aadhaar-based e-sign providers (such as eMudhra) now need to integrate with the ASP's application. The GSTN APIs also recognize the role of a Tax Consultant (TC) or Tax Return Preparer (TRP) in filing taxes. GST is unlikely to make tax filing simple, you need to have a CA with you. GST requires a business to register in every state it is doing business in. Only concession is unlike today, you don't have different rates for the same good in different states, and you don't have entry tax when you transport it across state border. So those who made a career choice to get into accounting (unlike me) aren't going to lose out: accounting is an evergreen occupation.

This ecosystem offers possibilities of automation (batch filing of returns directly from ERP, etc) and usability (mobile apps, portals etc) that GSTN is hard-pressed to provide, but a lot of startups and established vendors easily can.

Now for the challenges.
I'm not sure if the GSTN would be ready for API services when GST goes live. You see, if you are GSTN and if you want to tell the babus and netas that GST is ready, all you have to show/demo is the GST portal working. But will it scale to thousands of invoices ? Most netas and babus won't know or care about APIs, until a couple of months later when they suddenly figure out that the big taxpayers aren't actually able to pay tax.

While I've personally met and can vouch for the competency of the GSTN guys, the GSTN IT (portal and APIs) development and maintenance are outsourced. Wonder how that dynamic is going to work out ...

Viv S · Post by **Viv S** » 17 Jun 2017 09:46

There seems to be a great deal of confusion on GST and the one stop solution is to simply watch this workshop by GoI's revenue secretary himself - Shri Hasmukh Adhia.

I doubt there's a more concise or effective exposition on the subject anywhere else. Only for Hindi speakers though.

rahulm · Post by **rahulm** » 22 Jun 2017 15:46

I am half way through Hasmukh Adhia's vdo. It's delivered in a typical,boring babu style but he explains everything simply and nicely.(No crooked teeth though

)

It's seems IGST is a washout tax to be collected for a period of time on imports and interstate movement of goods

IGST Rate = CGST + SGST ie it is not a separate rate. Therefore, imported goods will have the same duty(tax rate) as locally manufactured goods. Customs duty remains and is not subsumned within the GST. This probably means bye bye to the same imported goods out pricing locally produced goods.

No industry is exempt form GST. If a state wants to give incentives, The industry will have to first pay GST and then claim a refund from the respective state. state will have to make a budgetary provision for this reimbursement.

Alcohol will continue to be taxed by states. States also have the power to levy additional entertainmeant tax to fund local bodies.

Gems and jewellery will have another rate.

There are too many rates.

What gladdens and warms the cockles of my heart is that no manual returns possible and tax due can on,y be paid online or by cheques. No cash except for amounts upto Rs 10,000.

Arvind Datar is vehemently against the GST. He also opposed DEMO. Anybody familiar with this chap and his agenda or does he make sense ?

Atulya P · Post by **Atulya P** » 22 Jun 2017 16:07

Looks like J&K is not moving to GST before deadline. If this is true, no one will supply to J&K. If they do, they will have to take double taxation (iGST + local VAT). The jammu trader association is firmly behind gst and is threatening to down shutters if not implemented.

http://www.tribuneindia.com/news/jammu- ... 25858.html

Yagnasri · Post by **Yagnasri** » 22 Jun 2017 16:12

http://www.livemint.com/Opinion/PpU22IZ ... r-GST.html

I for one not so keen on allowing any brakes to this industry. Most of it is funded with BM anyway. Why bother except for the huge employment it is giving. There is 0% chance of any benefit being given to normal artists technicians. So let them suffer.

rahulm · Post by **rahulm** » 22 Jun 2017 16:50

Market place aggregators like Amazon, Flipkart etc will have to deduct 2% tax before paying MSME who sold the goods. MSME Will have to file a return to claim the input tax credit.

rahulm · Post by **rahulm** » 22 Jun 2017 16:51

Market place aggregators like Amazon, Flipkart etc will have to deduct 2% tax before paying MSME who sold the goods. MSME Will have to file a return to claim the input tax credit.

Refunds from government within 60 days and 90% provisional refund within 7 days if goods are exported. Refunds only into bank accounts details of which have to be provided during GST registration. No PAN no GST regustration.

Exporters will get 100% refund of all taxes paid unlike the current regime. This will make Indian exports more competitive.

For goods mnanufactured prior to 1 July 100% input tax credit against invoices or 40% credit if no invoices

For job work, Compliance onus not,on job worker but on the industry sub contracting to job worker.

Computer system will auto generate compliance ratings (a bit like ebay and amazon supplier ratings)

Infosys, the managed system provider was appointedand started work on the GDT portal in 2013 - the reason why it's ready now.

No input tax credit for me if I buy from unregistered supplier and the liability for the tax inthus instance is with the registered dealer.

JayS · Post by **JayS** » 22 Jun 2017 17:38

Yagnasri wrote:http://www.livemint.com/Opinion/PpU22IZ ... r-GST.html

I for one not so keen on allowing any brakes to this industry. Most of it is funded with BM anyway. Why bother except for the huge employment it is giving. There is 0% chance of any benefit being given to normal artists technicians. So let them suffer.

+1. Also I read somewhere that earlier taxes were higher only. Not sure how true is that though.

rahulm · Post by **rahulm** » 22 Jun 2017 19:12

2 useful links from the CBEC webiste

GST

GST awareness campain

I am going through the GST rate schedule and my head is spinning just reading it. Looks like they took the existing complex tax schedule and just shoved it under different GST rate slabs.

Bicycle and cycle rickshaw tyres and tubes @ 5%
Car, bus, truck, moto cycle tyres and tubes @ 28%

On balance Condoms and contraceptives @ 0% is great news. Thankfully, they didn't try to slice and dice finer categories in this case. Eg with out dots 0%, with dots 5%, with dots and ribs 18% and with the whole,lot plus fruit flavours 28%. Thank goodness for small mercies

whereas, as I read it, sanitary napkins and tampons @18% is ridiculous. This is a basic necessity for women. Were nomow,en consulted or where they consulted and ignored ? E&OE.

Toilet WC's and sanitary ware @28% ! How does this encourage getting rid of open defeacation ?

All dutiable personal baggage (over the duty free threshold) @. 28%. Not clear if this is in addition to customs duty but since it's GOI I suspect it will be customs duty + 28%.

Unless a computerised billing system is used by the corner shop it's going to be interesting to see how the Proprietor is going to generate a manual hand written bill for a shopping basket of eclectic goods having different GST rates.

For those who want a fast track method to do,their head in read the schedule here.

guru.shetty · Post by **guru.shetty** » 22 Jun 2017 20:57

Noob Pooch:

I hear there is a "composition scheme" where traders/entities with less than 75 lakhs of turnover/revenue need not register with GST (unless they sell tobacco/pan masala/ice-cream). And they pay a fixed 1% taxes. How does this work when it comes to smaller shopkeepers? Do they get goods (after having paid the correct taxes to the trader from whom they bought it) and sell it at a markeup price(input cost + tax paid to trader + profit margin) and only pay 1% tax? If that is the case, do they really need billing software that handles multiple types of goods with different taxes?

Atulya P · Post by **Atulya P** » 23 Jun 2017 12:08

guru.shetty wrote:Noob Pooch:

I hear there is a "composition scheme" where traders/entities with less than 75 lakhs of turnover/revenue need not register with GST (unless they sell tobacco/pan masala/ice-cream). And they pay a fixed 1% taxes. How does this work when it comes to smaller shopkeepers? Do they get goods (after having paid the correct taxes to the trader from whom they bought it) and sell it at a markeup price(input cost + tax paid to trader + profit margin) and only pay 1% tax? If that is the case, do they really need billing software that handles multiple types of goods with different taxes?

I think the limit is 50 lakhs. Whatever they buy would be GST paid by seller at shopkeeper's purchase price. Shopkeeper to pay 1% (under composite) on total sale value. The other option is to pay applicable gst on their margin.

chandrasekaran · Post by **chandrasekaran** » 27 Jun 2017 14:29

GST for temple revenue ?

http://www.indiadivine.org/temple-pujas ... overnment/

JayS · Post by **JayS** » 27 Jun 2017 16:55

^^ The article says:

Obviously the revenue from sale of famous laddu prasadam of Tirumala would be exempted from GST but the TTD will pay GST on all raw materials it purchases for preparation of the laddus.

But isn't all the food items in 0% bracket I.e. no tax basically..?

There is a debated on twitter regarding this and it seems this article is little misleading. Take it FWIW, I haven't checked everything thoroughly.

jayasimha · Post by **jayasimha** » 27 Jun 2017 18:23

http://www.gstcouncil.gov.in/

Received Update from this site.

disha · Post by **disha** » 28 Jun 2017 07:34

All the folks arguing for a "single tax rate" or a "simple tax rate" must realize that GST is not a "single tax rate system" but a single goods & services taxation system. I will come to that later.

Indians are conditioned to say "Jeehaad" the moment they hear "tax". And Indian #mediapimps are conditioned to pimp outrage.

For example:

Obviously the revenue from sale of famous laddu prasadam of Tirumala would be exempted from GST but the TTD will pay GST on all raw materials it purchases for preparation of the laddus.

Obviously.

And quite valid too.

And TTD Laddu's are not free. Neither they are sold for profit. Neither they are sold at cost basis. They are "sold" at a nominal charge to ensure that people do not waste the prasadam., there is a value in a nominal charge instead of giving away free.

Now TTD is a non-profit org and gives away laddus at below cost as prasadam and they may keep the records of revenue and sale for internal purposes but they do not charge tax on it.

However TTD sources ingredients of its laddus from various places and some of them are commercial establishments and they will charge appropriate tax which TTD has to pay. It is like me buying 1kg of Ghee in retail and 10 Kgs of boondi in retail for total cost of Rs. 250 with Rs. 50 being taxes on Ghee and prepared boondi, put in effort to make 100 laddus and give it away for Rs. 1/- per laddu. Since I run a non-profit., I am exempted from GST but will pay GST on all raw materials I purchase for preparation of the laddus.

Obviously. #mediapimps.

disha · Post by **disha** » 28 Jun 2017 07:44

Single goods and taxation system does not mean that it is a single tax rate system. Neither it means that the tax slabs are simplified.

It basically means that the tax rate you pay in AP (Andhra Pradesh) is same as you pay in AP (Arunachal Pradesh) for the same goods or service. The tax system is single., there is no ambiguity. You can purchase milk powder in bulk from Arey milk colony in Mah., transport over two days to Assam., repackage it into small batches and sell it for profit. Or sell it to a distributor who sells it to retail who sells it the consumer.

For your efforts., you do not have to pay octroi or entry tax or way bill or fill up C-Form or B-Form or D-Form or any crap in between. You pay tax to the manuf. and your distributor gives you tax. You true it up. The retailer gives tax to the distributor., he trues it up. The retailer if she is above a certain threshold has to report the tax otherwise just submits revenue receipt every 3 months. Which the distributor verifies for true up.

So in effect., not just India is a continent sized single tax system., it also enables reporting.

The real losers are the dogs. And the dog biscuit manufacturers.

disha · Post by **disha** » 28 Jun 2017 07:50

rahulm wrote: Arvind Datar is vehemently against the GST. He also opposed DEMO. Anybody familiar with this chap and his agenda or does he make sense ?

Airwind Datar is a great lawyer. Has many many good qualities., including being a fine gentlemen and very intelligent.

When it comes to GST - Airwind Datar is *IDIOT*.

Airwind Datar never ran a business where he had to stand at octroi naka in sweltering heat looking at all your priceless goods getting spoilt and the naka wallah wants more dog biscuits. At the same time commenting on how bad business people are profiteering from hard working tax payers like him.

Again., Airwind Datar is an *IDIOT* when it comes to GST.

UlanBatori · Post by **UlanBatori** » 30 Jun 2017 06:27

How does GST work for the following transaction?
Entity X located in Chenai, TN, puts out a global bid for 1,000 different parts that go into an assembled biogas-burning electric generator gas turbine. On the Internet. All drawings specified via Internet. Dr. Appiah Chocklalingam Singh Mithaiwala sitting in his native village in Jharkhand responds via the Internet of Things and submits his company's credentials and proposal for 15 of those parts. His company runs a metal matriz 3D printer that can make compressor blades. He bought metal powder from a vendor in Odisha a month back on credit. His bid is approved, he has 36 hours to deliver items in Chennai. Up-front 50% payment (Rs. 5,000) is transferred to his bank account in Bhilai, via his Android phone from the Chennai entity, brokered through BlockChain clearinghouse in Bengaluru. Next day the 5 parts, packed, get picked up by a UAV operated by Bhubhaneshwar-based PushpakaViman Ltd and delivered to the Delhi-Chennai Express, 12 hours out of Chennai. Item is picked up at Chennai and delivered via motorcycle courier to Entity X. Rest of payment is transacted with thanks, same way via BlockChain Bengaluru, to the bank account in Bhilai.

rahulm · Post by **rahulm** » 30 Jun 2017 07:09

On GST road, there’s no checking India

Check- posts will not go away per se. Rather, checking of vehicles by only commercial taxes department officials would be stopped in adherence to rollout of GST," said a Bihar government officer.

In Karnataka, the role of the physical verification centres will be to stop trucks and verify if the goods are as declared on the GSTN web portal.

Check posts virtually did the same job and officers suggested this system will continue till the replacement in the form of Electronic Way Bills takes off.

UP has a similar system in the form of the mobile or flying squads, whose number has only gone up - and they play havoc at night.

thqere are lathi-wielding inspectors and employees from the commercial tax department, who often erect barricades and stop almost every commercial vehicle, often throwing the stick (quite literally).

these chaps should be booked for intimidation and assault. Are we in the 14th century ?

And, this has not changed despite change of administration. So, in case of several states, check posts have been removed, only on paper.

Free aur haram ki kamai kaun chodega. Distract and engage the people in animals and peacocks while the loot continues.

When discussions on transition to GST began, the Centre was keen on reforming the current system to ensure trucks can move across borders freely.

After all, road transport accounts for 65% of freight volume. Although road infrastructure has vastly improved, stoppages at the state borders — some of which are notorious such as the one between Assam and West Bengal — have meant that average distance travelled by vehicles have remained constant for three years and are estimated to cost the economy around $6.6 billion (over Rs 40,000 crore

Officers said that discussions have focused on merging several of the 20 checks that authorities from the states and the Centre conduct. But the complicated rules and a strong lobby from the states has meant that the reform initiative has had to be postponed

While state commercial tax department's check posts will go away, local bodies will still need trucks and commercial vehicles to stop and pay taxes,

srin · Post by **srin** » 30 Jun 2017 07:28

Simple RoI. It takes a lot of "capital investment" to get a post of revenue inspector, excise inspector etc. They won't let a simple thing like GST let all that go down the drain.

geeth · Post by **geeth** » 30 Jun 2017 07:55

UlanBatori wrote:How does GST work for the following transaction?
Entity X located in Chenai, TN, puts out a global bid for 1,000 different parts that go into an assembled biogas-burning electric generator gas turbine. On the Internet. All drawings specified via Internet. Dr. Appiah Chocklalingam Singh Mithaiwala sitting in his native village in Jharkhand responds via the Internet of Things and submits his company's credentials and proposal for 15 of those parts. His company runs a metal matriz 3D printer that can make compressor blades. He bought metal powder from a vendor in Odisha a month back on credit. His bid is approved, he has 36 hours to deliver items in Chennai. Up-front 50% payment (Rs. 5,000) is transferred to his bank account in Bhilai, via his Android phone from the Chennai entity, brokered through BlockChain clearinghouse in Bengaluru. Next day the 5 parts, packed, get picked up by a UAV operated by Bhubhaneshwar-based PushpakaViman Ltd and delivered to the Delhi-Chennai Express, 12 hours out of Chennai. Item is picked up at Chennai and delivered via motorcycle courier to Entity X. Rest of payment is transacted with thanks, same way via BlockChain Bengaluru, to the bank account in Bhilai.

Simble onlee...For everything that 'x' purchases, he has to pay tax. items purchased with tax invoice, will be matched with sales bill in GST portal. For items without bill, reverse charge has to be paid by buyer and recorded in GSTN. All taxes of purchase with invoices will be adjusted against sales tax by 20th. Reverse charges will have to be paid from pocket initially, but will be adjusted against balance salestax in the electrinic book..may be after a month of two by the GSTN portal.
So every purchase tax paid will be adjusted against sales tax collected.

UlanBatori · Post by **UlanBatori** » 30 Jun 2017 08:00

You think they will get to the point where all that is done automatically as the BlockChain transactions occur? That would be awesome. What I described is probably the future of massively distributed trade in India.

JohnTitor · Post by **JohnTitor** » 30 Jun 2017 09:53

In Karnataka, the role of the physical verification centres will be to stop trucks and verify if the goods are as declared on the GSTN web portal.

Check posts virtually did the same job and officers suggested this system will continue till the replacement in the form of Electronic Way Bills takes off.

So post GST nothing will change in reality. Trucks that were stopped to "ensure tax was paid" will now be stopped to "ensure they aren't carrying the wrong goods".

Trucks will be stopped, bribes seeked, goods perish. Everyone barring the consumer will be happy as it is effectively status quo.

So much for 1% addition to GDP. Only in india does progress lead to stagnation. What a joke this country is.

rahulm · Post by **rahulm** » 30 Jun 2017 10:03

Whose bright idea was it to give so much power to the States ?

Everything will happen inc block chain ......

except......

Except.....

under the constitutional powers granted to States, each block chain transaction will have to be printed on a dot matrix printer with no ribbon and signed off with appropriate seal affixed by Inspector Grade IV, Block 'E', Annex XIV, 50 feet road, Phursungi and we can all be happy - electoral compulsions to get re-elected etc etc

At least states with BJP governmnts should do away with the check posts but I doubt it's going to happen.

Babucracy survives governments - they will just wait it out.

chetak · Post by **chetak** » 30 Jun 2017 10:21

JohnTitor wrote:
In Karnataka, the role of the physical verification centres will be to stop trucks and verify if the goods are as declared on the GSTN web portal.

Check posts virtually did the same job and officers suggested this system will continue till the replacement in the form of Electronic Way Bills takes off.
So post GST nothing will change in reality. Trucks that were stopped to "ensure tax was paid" will now be stopped to "ensure they aren't carrying the wrong goods".

Trucks will be stopped, bribes seeked, goods perish. Everyone barring the consumer will be happy as it is effectively status quo.

So much for 1% addition to GDP. Only in india does progress lead to stagnation. What a joke this country is.

This is the blackmail by individual states as their price for accepting GST. It is only an idiot who has conceded so much power to states in taxation matters.

Why exempt fuel and liquor?? Should one not expect uniform rates across the country?? Why does fuel cost so little in J&K, in relation to its transportation costs??

Why are other consumers and tax payers subsidising these jehadi a holes??

JohnTitor · Post by **JohnTitor** » 30 Jun 2017 10:48

Absolutely. I'm surprised modi hasn't pushed doing away with check points. He's worked on daily movement of fuel prices as per market rates. Without free movement of goods, trade will still be a bottlenecked process. Funny how the EU has managed border free trade over 28 countries but India cant do it with 29 states.

Modi should use political pressure if he has to, to ensure truly free trade between the states.

A_Gupta · Post by **A_Gupta** » 30 Jun 2017 10:54

Checkposts:
1. Tamil Nadu
http://www.newindianexpress.com/states/ ... 22044.html

Though just two days are left for the implementation of GST, the State is yet to take a decision on the closure of inter-state sales tax check posts. Tamil Nadu has 29 check posts across its borders with Andhra Pradesh, Karnataka and Kerala. About 300 employees of the enforcement wings are deployed at these check posts.

Once the migration to GST regime begins, online tax invoice would be sufficient for transporting goods from one state to another. Dealers need not produce their tax receipts at check posts. States like Kerala and Andhra Pradesh became proactive way back in March and announced plans to close their check posts.

Official sources in the Commercial Department here told Express that the TN government is exploring the option of converting some check posts into joint surveillance centres in consultation with the Central Excise Department. “GST rules stipulate that vehicles carrying goods should be inspected by officials, under CCTV coverage, besides recording the reason for stopping them.

A_Gupta · Post by **A_Gupta** » 30 Jun 2017 10:59

2. Karnataka
https://news.webindia123.com/news/Artic ... 23821.html
(June 13 article)

Karnataka government will close down all theCheck posts set up by Commercial tax Department in the State afterintroduction of GST from July one, Chief Minister Siddaramaiah said today.

Replying to a question by Umesh Katti (BJP) in the LegislativeAssembly during Question Hour, he said there were 20 Commercial taxcheck posts in the state and all of them had been automated toensure transparency.

He said to the members query that due to non existence of waybridges near the check posts on Maharashtra-Karnataka border leading to harassment to transport operators will become irrelevant once the GST come into force as all those check posts will be closed down.