Gooda and Services Tax.....GST
GST is supposed to be a key tax reform. The Subramanian Panel has suggested that a GST rate of 18 % is revenue-neutral. Tax on Goods will come down substantially from 27% now, but that on Services will go up. I would like to suggest that GST Rules should provide that Service Tax rate will always be Half of GST rate. For example if GST Rate is 20% then Service Tax would be 10%. I am sure that this formula will be acceptable to all Political parties and citizens. As it is common man is burdened by a very high rate 14.5% of Service Tax. Therefore the recommendation of 18% GST by Subramanian Panel will increase Service Tax to 18%. more
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Ours is a federal structure. State are not willing to forgo their right to tax. Once GST is implemented, things can be expected to improve. Later on with the consent of states( When states get confidence in the system), SGST can be removed and GST can be more simplified. Having only two assessing authorities will not be a problem. Rounds to several departments will end. If response of public is good, genuine and honest reporting of transactions, the assessments can be made like online ITR filing, assessment and refunds. Again having lower rates on services will hamper growth. Service is a very big sector and likely to grow faster. GST on services should not be lower because those who are using the services the most, they will pay more and those who do not use the services or use less, will pay less amount of GST. more
Nov 30
There is more corruption at states level. GST will address this problem. Numerous paper work will come down. State barriers will go. Free movement of goods within India encouraged. Shortcomings once identified can be addressed once implemented. Simple tax laws is the need of hour. We have already complexed the system that it stopped growth. more
Nov 26
I am agreed with FCA Sorabh Bansal but not 100% as until there is Central and State GST no reforms can be expected. The position will remain same as CST and VAT. Moreover for Central GST present day excise department will have jurisdiction and for State GST State Govt departments will have jurisdiction. So For a single trader there will be two assessing authorities for the same act while in todays senerio there is only one assesing authority for both CST and VAT. more
Nov 25
Tax rates are high because traders find ingenious techniques to evade taxes. Most of these maintain 2 accounts - one which is reported and other one for unreported transactions. Customers are quite happy - by not asking for a proper invoice & receipt, they get to pay a lower price. Such practices are so common that a customer asking for an invoice & receipt is considered a fool. more
Nov 24
