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Old 4th July 2017, 09:57   #31
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

1 Central GST
29 State GSTs (Additional returns for every if you're supplying thru the country.)
12 TDS Returns
Compliance with Reverse Charge mechanism.
Moreover, States can levy additional local taxes (like Corporation Tax etc)

And with multiple rates of taxation, HOW is this a "Simple Tax" Regime ? Its NOT.

"For every complex problem, there is an answer that is clear, simple, and wrong." - H. L. Mencken

India is primarily a cash economy. People will move to cash. Not just because of the heavy taxation, but because they'll be confounded by the system & methodology, moreover the compliance cost will not be low.

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Old 4th July 2017, 10:18   #32
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Originally Posted by GrammarNazi View Post
"For every complex problem, there is an answer that is clear, simple, and wrong." - H. L. Mencken
LOL. That is why we will never go for the banking transaction tax.

That will add to the job creation challenge - of unemployed bureaucrats. And funding issues for their masters.

What does it matter that it will vastly simplify the life of all the rest that are the ones that add real value to others on a day to day basis. Parasite welfare takes precedence.
PS: Actually, the unemployment problem isn't a big one; the country can afford to have this entire population sit at home on full pay doing nothing. But the loss of "perquisites" will mean that even with this solution, it will never come about.

Last edited by Sawyer : 4th July 2017 at 10:28. Reason: PS
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Old 4th July 2017, 15:47   #33
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

@GrammarNazi; The main purpose of GST was one nation, one tax, which seems to be occurring. Of course TN is messing up by putting a local tax on top of GST on movie tickets. I hope they are told to lay off.
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Old 4th July 2017, 17:56   #34
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@GrammarNazi; The main purpose of GST was one nation, one tax, which seems to be occurring. Of course TN is messing up by putting a local tax on top of GST on movie tickets. I hope they are told to lay off.
I too was rather optimistic earlier, but since the past month couldn't completely ignore the genuine concerns raised by many.

When TN imposed corporation tax, as you said I thought they'll be told to lay off. But then a fairly rich State like Maharashtra (ruled by BJP!) increased road tax by 2%.

If this continues, I guess next it could be West Bengal for something else and then another unhappy (non-BJP) State.

Let's see.

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...Parasite welfare takes precedence...
True story.

Last edited by GrammarNazi : 4th July 2017 at 18:16.
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Old 5th July 2017, 09:39   #35
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I am surprised that the FM has not read the riot act yet. Also, what is the situation about J&K. They are so used to subsidies that they may jolly well do what the want, and expect to be bailed out.
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Old 5th July 2017, 11:35   #36
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Since states have right to taxation, this GST will never be one nation, one tax.

Dark days ahead...

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Old 5th July 2017, 13:49   #37
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Originally Posted by sgiitk
Also, what is the situation about J&K. They are so used to subsidies that they may jolly well do what the want, and expect to be bailed out.
GST not applicable in J&K at the moment, because of the special provisions (read as "goof up") in our Constituition.

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Originally Posted by GrammarNazi
When TN imposed corporation tax, as you said I thought they'll be told to lay off. But then a fairly rich State like Maharashtra (ruled by BJP!) increased road tax by 2%.
GST is "Goods & Services Tax". Other taxes like Road Tax is different. There could be for example land taxes (which each land holder has to pay), which is neither for a Goods nor for a Service.

In overall, there seems to be lots of heavy churning in the economy undergoing. And hope these things just do not carry on for long, as people would be demoralised. But one thing for sure, the motto seems to be get every penny in which government has a right, to be tracked down and taken. Demonetisation, GST and the linking up of Aadhaar with pretty much every government funded initiative all seems to point in that direction.
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Old 5th July 2017, 13:59   #38
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One nation, one tax is just another nifty little PR slogan among many that abound now, because we will still have:
1. Income Tax
2. Property Tax
3. Entertainment Tax
4. Customs duties
5. Wealth Tax
6. Securities Transaction Tax
7. Professional Tax
8. Dividend Distribution Tax
9. Stamp Duty and Registration Fees
10. Toll Taxes
to name just ten.
GST just combines VAT, service tax and Excise into one. And maybe some of the above, that I might have erred in listing in this list of ten. If yes, I am sure there are replacements to go on it.
Banking transaction tax on the other hand proposes to be the true one nation, one tax with one exception - customs duty because that is a part of the country's method of regulating external trade. It would replace all the above including GST. But it is too easy to be implemented to be worthy of us, a people of towering intellectual capability. Not enough challenge there for tax lawmakers, tax administrators and collectors, tax payers, tax consultants and the courts to sit in judgement on. Too many of us would have to devote time to real work, God forbid.
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Old 5th July 2017, 15:15   #39
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^^^
I thought GST would replace most of the indirect taxes.
Many of the above taxes you have mentioned are direct taxes.
Regards
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Old 5th July 2017, 16:01   #40
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"One Nation One Tax" means bringing all the different indirect and state controlled taxes to a single net. It does not mean that hence forth the nation will have only "one" tax.

Obviously income tax, road tax, property tax etc are different.
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Old 7th July 2017, 11:48   #41
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Dark days ahead...
Should I be surprised to see no reaction from people on this thread to this thought provoking video?

Last edited by SDP : 7th July 2017 at 13:54. Reason: fixed broken quote
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Old 7th July 2017, 13:09   #42
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Devil is always in the detail, and most people don't want to get their hands dirty.

The basic premise of centralizing anything and for it to be effective is nobody in its purview should create/implement a parallel structure to double-dip and undermine the central methodology.

Given the current situation with state-level taxation autonomy, all this is going to do is create more parallel taxation, and the common tax payer will end up paying more and more taxes, for less and less returns (if there were any in the first place, leftover after what another forum member called 'parasitic welfare').

GST in its current form appears to be a glorified double-dipping scheme, and not much else. Obviously, most people affected by it will never bother to check how it actually impacts them, because plugging one's ears and singing 'can't hear you now' is far easier.

Our problem is two-fold. Not enough people pay taxes, and not enough of what gets paid is spent with any degree of accountability.

Heightened tax compliance may solve the first problem partially (more taxes paid, though it's far from a foregone conclusion because GST makes tax compliance more complex, never mind loud exhortations to the contrary), but the second one (arguably the far more important one) is something nobody is even willing to talk about, forget doing something to solve.

Last edited by Chetan_Rao : 7th July 2017 at 13:14.
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Old 8th July 2017, 07:17   #43
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Originally Posted by Chetan_Rao View Post

Given the current situation with state-level taxation autonomy, all this is going to do is create more parallel taxation, and the common tax payer will end up paying more and more taxes, for less and less returns (

Our problem is two-fold. Not enough people pay taxes, and not enough of what gets paid is spent with any degree of accountability.

but the second one (arguably the far more important one) is something nobody is even willing to talk about, forget doing something to solve.
All good points and with reference to the three above:
1. This is a situation that has been aggravated by EVERY government that has come to power, since 1947, with no exception. Along with creating more and more complex laws and rules that attempt to plug every loophole as it is discovered, and to nullify court judgements that affect collection of revenue.
2. I would turn the statement around to better reflect cause and effect. No one like paying taxes, but they are less resisted by fair means or foul where taxes collected are spent with accountability and consequently, visible returns for the tax payer. It is the how our taxes are squandered cause that drives the not enough people paying taxes effect.
3. It is indeed a big question, the last point. It is as if all of us have been muzzled and are victims of clever slogans and flavour of the month campaigns and drives.
I had not realised how easy it is to pull the wool over our sheep eyes and if true, we deserve the consequences that inevitably follow.

The other thing is we are, by the nature of our constitution, a federal style of government. States have been given wide powers, to balance the power of the Centre, to prevent the rise of an autocratic Centre. Perhaps our founding fathers were wiser that even they may have consciously realised, about our propensity to be carried away by strong and autocratic leaders. Another thing that has seen no diminution since 1947.

I am therefore amused at the description of the FM reading out the riot act to democratically elected State Governments. The republic is designed to work on a foundation of Centre and States working in tandem and partnership to govern the nation. Managing that way of doing things requires a lot of work and trust on both sides, as opposed to talking down approaches on either side. But given how diverse we are as a nation, more diverse than the entire EU for example, I do not know that there is better model for us to adopt. The reason why we have a lot more states than what we started out in 1947 is also evidence of a preference for self government at a more local level that what was permitted by overly large and internally diverse states as they existed in 1947.

GST and any one nation one tax dream cannot be at the cost of overthrowing this governance model. In any case, I can't see State Governments surrendering their constitutionally granted and voter supported rights, and IMO, more power to them in that. Anything that moves power and governance closer to those governed can only be good.

We have seen what happens when the SC, sitting in remote Delhi, passes down decrees that are to run the length and breadth of the country, as just one example of why local government is far better. The highway liquor ban that has taken a farcical turn is an excellent example.

Last edited by Sawyer : 8th July 2017 at 07:40.
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Old 10th July 2017, 12:38   #44
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Old 10th July 2017, 13:52   #45
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Sawyer View Post
Banking transaction tax on the other hand proposes to be the true one nation,
I have heard a lot of people talk about how good this tax can be, but according to me, this is not the answer to the taxation problems.

And that is because, in my opinion, it has one biggest flaw. It discourages the money withdrawn in cash, to come back into the banking system. That will further fuel the cash-only parallel market. This will allow people to run their entire business without paying a single penny in tax.
And then it will come to the same. Increase the transaction tax on those who cannot avoid banking, like salaried class, legit businesses, etc.

According to me, this banking transaction tax is best avoided.
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