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Old 13th January 2017, 16:55   #2041
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sachinpk View Post
The bolded part is very subjective. For me a reasonable tax rate is in which government pays me, when I buy some thing (rather than the other way round) . For some others it could be that even a 10% sales tax is okay.
The macro number to look at is tax/GDP. This tells us what percentage of the nation's earnings is taken by the government as tax. For India, this is about 18%. Perusing the list of nations arranged by this number is instructive.
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Old 13th January 2017, 17:24   #2042
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Are you speaking about any specific businessman or woman?
Reliance?
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If we keep accusing the government of favouring those who benefit every time a decision is taken, then the government will not be able to take any decisions at all.
yes, but when questionable decisions are taken (of which this is very much one of them) one can't help but wonder. If the govt wanted to help out such a person - this is one of the better ways it could be done.
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The bolded part is very subjective.
In my opinion, the law as a whole is becoming more and more subjective as govts say one thing and then do something else after they get elected. Sometimes one wonders if there is a point to the democratic process after all

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Old 14th January 2017, 01:52   #2043
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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In my opinion, the law as a whole is becoming more and more subjective as govts say one thing and then do something else after they get elected. Sometimes one wonders if there is a point to the democratic process after all
I do agree, its all about caveats, by-laws, sections, procedures, rules, rules for rules and other illogical constructs to confuse the heck out of people and push papers up their nose when anyone protests.

Lets go back to the basics, the essence of a free nation.. so to speak. All it should be concerned about is equality of holdings, equality of opportunities and upholding of democratic rights for the larger good of the world at large.

- Crimes if indeed committed, must be proceeded with strictly as per the legal books, stature, monetary capacity and gender must play NO role in differential treatment.

- Tax payers must be rewarded, at least in some small form.

- Utilization of resources for 100% benefit.

- Clean and systematic, transparent procedures sans bureaucracy.

- Consumer protection.

I'm sick and tired of propaganda, politics and 1 vs 1 parties.. we need to completely start ignoring them, ASAP.
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Old 14th January 2017, 10:15   #2044
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Ideally yes, but in reality the shopkeepers just hike the price to effectively get the same amount he would get if not paying any tax. In simple words, shopkeepers will just transfer his tax liability to the customers. This happens all the time if you want to pay using credit card at organised markets like nehru place, gaffar market, sarojini nagar market etc (read any market in India), they charge 2% extra, citing that the bank charges 2% from them on credit card sales.
So he was looting the state, and is now trying to loot us. I guess the mail order cos pay the central taxes at least. Maybe there is some hanky-panky in the local taxes. I think our market is in a period of coming to terms with the fact that the good (bad?) old days are history. Many of them, who were operating nearly totally in the parallel economy are also worried that their old accounts will be open to scrutiny. I remember ages ago, one retailer in Kanpur was accepting cards reluctantly with a surcharge etc. Well he folded up. About a year ago I have bought (about 40k worth) from Reliance Digital on my Debit Card after negotiating a decent discount (~10%). They went through the charade of talking to the boss, etc. Finally came round.
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Old 14th January 2017, 11:49   #2045
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

One of my ex-employee now runs a grocery store. Yes, software engineer turned grocer.

I met her recently at a wedding and she was telling me the troubles they have with tax evading vendors. This was two days before the demonetization. Hers is a proper store with digital POS, with all cashless payment options. Every customer gets a tax bill for everything they buy. However, none of their vegetable suppliers want any money trail. They won't accept cheque or NEFT payment. When a business makes payment (even cash), they must take an invoice or a payment receipt from the vendor for the accounting. The vegetable suppliers won't even sign for payment received or provide an invoice. This causes massive accounting headache to grocers who have to keep the whole vegetable purchase off the books, while providing tax bill for the same to the retail buyers.

Vegetable farmers don't have to pay tax, so why is this reluctance? It is the middlemen who are reluctant, since they are liable for tax. The middlemen collect the produce from the farmers and supply it to the grocery shops. They also make the most profit in this chain. When demonetization happen, it was the middlemen who couldn't buy from the farmers for lack of cash and let the vegetables rot all around the country. Therefore, farmers are suffering all over the country.

Yet I don't see anybody holding middlemen accountable. Blame is entirely being shifted to Government for not providing cash for these middlemen to continue tax evasion.

Last edited by Samurai : 14th January 2017 at 14:43.
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Old 14th January 2017, 14:42   #2046
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Visited Bengaluru RBI yesterday to exchange 9 notes that I had, only to be asked to fly to Chennai RBI to do so. Now, how many NRIs are going to turn in their notes? Surefire windfall gains to the Govt, and will be part of the percentage labelled 'black' and not coming back into the system.

The intention might be good but this is plain robbery.
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Old 14th January 2017, 15:39   #2047
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

@Sebring; I suspect the number of surrenders will be near zero. Whomsoever, had the money has surrendered. Why will someone bother with the RBI when your friendly bank was doing it for fifty days. Most banks had zero (or near zero) queues after the first month or so.
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Old 14th January 2017, 15:56   #2048
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Sebring View Post
Visited Bengaluru RBI yesterday to exchange 9 notes that I had, only to be asked to fly to Chennai RBI to do so. Now, how many NRIs are going to turn in their notes? Surefire windfall gains to the Govt, and will be part of the percentage labelled 'black' and not coming back into the system.

The intention might be good but this is plain robbery.
Yes it is, but atleast you are better off being abroad away from all this BS. Almost all the demonetised currency has come back, somebody goofed up somewhere which ensured that the final tally to come back to the RBI might be more than the 15.4 lakh crore officially announced. Now the govt is trying to make it as hard as possible for citizens to exchange their hard earned money, so as to save their derriere.

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@Sebring; I suspect the number of surrenders will be near zero. Whomsoever, had the money has surrendered. Why will someone bother with the RBI when your friendly bank was doing it for fifty days. Most banks had zero (or near zero) queues after the first month or so.
Not all NRI's would have found it convenient to fly in to before end December to exchange their currency. Many more might not even be able to fly in before end March, they would just write off their losses. the citizens believed the Prime Minister when he announced on the night of November 8th, that they could exchange their cuurency at RBI counters till 31st March. Most of us knew you cannot trust this man, so they got their currencies exchanged well before the end of December.

Now, because this govt is in deep trouble, their are trying to save their behinds by stopping as many people as possible from exchanging their legally earned money. Otherwise, why the hell can you not exchange your money at RBI, Bangalore when it can be done at RBI, Chennai? Is the Bangalore unit printing counterfeit notes?

Last edited by Rudra Sen : 16th January 2017 at 10:14. Reason: No slang word please
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Old 14th January 2017, 16:35   #2049
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

I doubt if any NRI has flown down in the 50 days spending so much, just to exchange notes. The Govt. if it was earnest, should have at least extended some kind of exchange facility at the cosulates or money exchanges abroad.

Now calculate all the NRI's living abroad and (at the least) even at 1K per head, its quite a sizeable income. Stood in queue at customs to declare and got authorisation even, going strictly by the book. Wonder if I can tweet any minister on this!

Was applauding this scheme till it bit me on my backside.

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@Sebring; I suspect the number of surrenders will be near zero. Whomsoever, had the money has surrendered. Why will someone bother with the RBI when your friendly bank was doing it for fifty days. Most banks had zero (or near zero) queues after the first month or so.
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Old 15th January 2017, 23:46   #2050
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Visited Bengaluru RBI yesterday to exchange 9 notes that I had, only to be asked to fly to Chennai RBI to do so. Now, how many NRIs are going to turn in their notes? Surefire windfall gains to the Govt, and will be part of the percentage labelled 'black' and not coming back into the system.

The intention might be good but this is plain robbery.
I agree, had some overseas relatives who couriered small amounts of INR in these banned denomination notes to me. The customs chaps have seized the notes and have provided no receipt, acknowledgement etc or even an intimation of seizure. The money was all accounted for and yet has been illegally seized by the Indian customs. Such is the state of affairs. This move has eroded their faith in Indian currency and they're appalled at the brazen loot that's happening.
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Old 16th January 2017, 03:05   #2051
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Visited Bengaluru RBI yesterday to exchange 9 notes that I had
So what is the procedure. Declare them at customs when you enter and then go to the RBI? I'll be in Madras this week, may try if I find time.

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Why will someone bother with the RBI when your friendly bank was doing it for fifty days.
There were no friendly banks outside India. SBI Singapore hung a placard as early as November 9 that they wouldn't exchange demonetised notes. This is in a country where the presence of Indian diaspora is significant, Don't even get me started on the country I live in now.
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Old 16th January 2017, 06:19   #2052
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Sebring View Post

The intention might be good but this is plain robbery.
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Originally Posted by longhorn View Post

Almost all the demonetised currency has come back, somebody goofed up somewhere which ensured that the final tally to come back to the RBI might be more than the 15.4 lakh crore officially announced. Now the govt is trying to make it as hard as possible for citizens to exchange their hard earned money, so as to save their derriere.
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Now, because this govt is in deep $hit, their are trying to save their behinds by stopping as many people as possible from exchanging their legally earned money.
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Originally Posted by Sebring View Post

Was applauding this scheme till it bit me on my backside.
I, too, was a whole-hearted, hardcore supporter of the demonetisation process. I still am an ardent supporter of the idea of demonetisation of paper notes as a matter of principle - I believe fiat currency itself (with zero intrinsic value of its own) is a bad idea, and high value paper notes are a very, very bad idea (the extreme manifestation of high value paper notes was seen not too long ago when Robert Mugabe of Zimbabwe merrily churned out million, billion & trillion Zimbabwean dollar notes).

Despite supporting the idea of demonetisation, what I realised midway was that the government & RBI (there is no difference - the RBI is basically an arm of the central government and has no legally-defined autonomy) were rapidly losing control of the whole exercise. This was very obvious with the way things were proceeding.

Now, the RBI itself is not releasing the amount of money that came back into the banking system (that they were freely doing till the first week of December or thereabouts), while informing parliament that there would be no transfer of the gains of demonetisation to the government.

Taken together, it makes one suspect that all their calculations have gone wrong, and way, way more money has made its way back than they expected. Everyone is very eagerly waiting for the RBI to release the final numbers!

As long as it's even 500 rupees less than the amount of demonetised notes that were in circulation, it would be theoretically okay. What if the amount that has come back into the banking system exceeds the amount of demonetised notes?

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I doubt if any NRI has flown down in the 50 days spending so much, just to exchange notes. The Govt. if it was earnest, should have at least extended some kind of exchange facility at the cosulates or money exchanges abroad.

Now calculate all the NRI's living abroad and (at the least) even at 1K per head, its quite a sizeable income.
What about all the labourers and other blue-collar workers slogging away in places like the Gulf countries? There's no way they can afford to fly back home even if they could (in many cases they even cannot), just in order to exchange a couple of thousand rupees or so.

Exchange counters could (& should!) have been opened at the Indian embassies & consulates in every country, with a reasonable limit set for Indian passport holders, and entries could have been made in passports (in order to prevent the laundering of money through non-citizens).

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Most of us knew you cannot trust this man, so they got their currencies exchanged well before the end of December.
NO government can or should be trusted, period!!!

While peoples with collective memories of the horrors of totalitarianism & tyranny know very well that governments (of any kind) should never be trusted and should always be very carefully watched & scrutinised, others without such memories or past experiences become quite complacent and believe democratically-elected governments can be trusted blindly.

It's a h-u-g-e folly! Folks who trust authorities (of any kind) blindly may end up becoming victims of Kool-Aid eventually, more so when the said Kool-Aid is being gleefully served in unlimited quantities by the mainstream media morons.

Last edited by RSR : 16th January 2017 at 06:35.
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Old 16th January 2017, 10:07   #2053
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Sebring View Post
I doubt if any NRI has flown down in the 50 days spending so much, just to exchange notes. The Govt. if it was earnest, should have at least extended some kind of exchange facility at the cosulates or money exchanges abroad.

Now calculate all the NRI's living abroad and (at the least) even at 1K per head, its quite a sizeable income. Stood in queue at customs to declare and got authorisation even, going strictly by the book. Wonder if I can tweet any minister on this!

Was applauding this scheme till it bit me on my backside.
Nine notes, all of ₹9,000 at most. The rules were laid down on Day 1 (or maybe 2). I am surprised that you did not have one of your friends visiting India earlier to take care of this. Would have been trivial to deposit in you bank account.

I am sure you knew but did not bother.

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I agree, had some overseas relatives who couriered small amounts of INR in these banned denomination notes to me. The customs chaps have seized the notes and have provided no receipt, acknowledgement etc or even an intimation of seizure. The money was all accounted for and yet has been illegally seized by the Indian customs. Such is the state of affairs. This move has eroded their faith in Indian currency and they're appalled at the brazen loot that's happening.
I think sending currency through post/courier is illegal, so customs did the correct thing. I am happy they did not serve you a notice of impending prosecution.

Last edited by navin : 16th January 2017 at 12:13. Reason: personal statement.
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Old 16th January 2017, 10:23   #2054
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so why is this reluctance?
Because even for legit institutions, the govt goes out of its way to make tax compliance a headache, and for smaller players, compliance is so tough that a lot of them think that it is easier and cheaper to stay off the radar than try to be tax compliant, and shoulder the related costs

I struck up a conversation with a gentleman several years ago, a few years ago during a train journey, who was a mobile phone distributor. We were talking about some of the challenges he was facing, and one of the big challenges he said was taxation - apparently it was a big headache - Sales tax authorities had decided that the charger that is sold as part of a mobile phone box had to be taxed at 12.5%, and not at the 4% the phone is taxed at, and everybody in the business had been hit with massive demands for back taxes. Nokia being the eminent manufacturer at that time, had taken up the case and had fought the way all the way to the SC, but then disaster struck. Nokia was in financial trouble, and they starter winding down operations in india. Seizing this opportunity, the tax authorities got a judgement in their favour, and now everybody was supposed to pay this amount.

Now smaller players fly under the radar, and the manufacturers can absorb the risk (or as in the case of nokia, leave india altogether), but people like him, who were running a legit business got hit hard.

you can read more about the case here
http://www.simplifiedlaws.com/suprem...ia-punjab-vat/
https://home.kpmg.com/content/dam/kp...14/12/NIPL.pdf

Last edited by greenhorn : 16th January 2017 at 10:25.
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Old 16th January 2017, 10:58   #2055
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Sales tax authorities had decided that the charger that is sold as part of a mobile phone box had to be taxed at 12.5%, and not at the 4% the phone is taxed at
Just so that the back story is clear, this is a Punjab-only oddity. Since VAT is a state subject, each state has its own table of goods and their VAT rates. In my view, the lawyers for the vendors should have noticed the discrepancy with the Punjab version of the law and the law elsewhere and flagged this to their clients; so that they could have made necessary provisions in their financials while they sorted this matter out.

The Kerala VAT act (which pre-dates the Punjab one by a good 2 years) has these three entries:

Mobile phone 5%
Mobile phone charger sold along with mobile phone in sealed pack 5%
Battery Chargers 14.5%

So the law here is very clear that only extra chargers are taxed at the higher rate.
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