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Old 16th March 2021, 19:40   #7111
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Originally Posted by NoLurkerForLong View Post
Instead of collecting taxes through fuel which is used by all and is essential to the whole economy, I would prefer increase in direct taxes on income.
Even capitalistic countries like US get more percentage of its revenue from direct tax (like income tax) while India receives much higher percentage of its revenue via Indirect taxes.
I agree as well point out some flaws in your technically correct approach. The issue is many fold.

First we cannot compare our country to USA or UK or any other country as in India even the peon wants chai pani on the side over and above his proper income. There is no satisfaction. Due to this people dont disclose their real income and pay proper tax, therefore as once the PM said that sales of cars over 10 lac rupees exceeding but the amount of tax payers is not in the same wave declaring above 10 lacs of income.

Two we could tax people who earn maybe 20 cr and higher maybe a higher tax rate but the problem is real disclosure of income once again. Many of these people become NRI to avoid paying taxes.

Three due to this issue of income disclosure, the GOI has to adopt these tax measures on items and fuel etc. Now i think we are heavily taxed in India, taxes need to be a fraction but then everyone also wants freebies like free housing, free water, free food, free gas, free power, free wifi etc etc. If you dont give then you loose elections, now who pays for all this ? You and me through high fuel price taxes.

So while taxes need to be brought down because the condition of a honest tax payer like us is like that of a lemon, the GOI and state gov keep squeezing and taking out juice, but then there will be one day that there will be no juice left dripping out due to so much rigorous squeezing. Then what will they do i would like to ask them ?

Even the GST rates & list of items in my opinion, along with other customs duty etc is flawed and needs course correction. A complete overhaul is required. They cant expect people to pay high taxes and keep consuming they have to lower taxes to boost consumption. High consumption means higher tax collection, lower consumption means lower tax collection, clearly they dont seem to understand such a simple economic theory.
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Old 16th March 2021, 20:48   #7112
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Default Re: The Official Fuel Prices Thread

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There is no satisfaction. Due to this people dont disclose their real income and pay proper tax, therefore as once the PM said that sales of cars over 10 lac rupees exceeding but the amount of tax payers is not in the same wave declaring above 10 lacs of income.
So getting a Rs. 10 lakh car is seen as "Rich" and hence cars are treated as luxury ? A person buying Rs. 10 lakh car on loan may not be making as much money as the way government thinks. Cars like Alto that cost somewhere in the range of Rs. 4 lakh are also bought on loans. This speaks a lot about what an income could be of individual buying Alto. Fact is, majority of the cars bought in India are on loans hence assumption that person is not disclosing income but driving a car is out of place in my view. How about looking at the same thing from a different perspective that car buyers are giving direct and indirect employment to many ? Should that not be incentivized ?

Secondly, the view that people not paying taxes. Even some toll roads are in bad shape, and government feels tax isn't being paid by citizens ? What are services that citizens get ? High fuel prices is a short cut to get revenue and its wrong to make honest tax payers suffer. A small google search on how India did in PISA test would suffice that we aren't getting services vis-a-vis taxes paid.

On another note, high fuel prices has tested my patience to the extreme. My cruising speeds on highway has come down to 80 kmph and my City petrol has rewarded me with good efficiency. Earlier, I used to drive at around 100 kmph, but now got down to 80. Thanks to poor lane discipline, bad roads, driving at 80 reduced stress on me and had much lesser braking instances. On certain stretches, I was cruising at 60 on state highway. Managed to eek out around 17.5 kmpl from a 370 kms drive that includes 150 kms. expressway, 165 kms state highway and rest in Ahmedabad and Vadodara.

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Old 17th March 2021, 00:21   #7113
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So getting a Rs. 10 lakh car is seen as "Rich" and hence cars are treated as luxury ?

Secondly, the view that people not paying taxes. Even some toll roads are in bad shape, and government feels tax isn't being paid by citizens ?
Like i said I agree with the views. But yes the GOI and state GOV consider 10 lac as rich and luxury even though they are not. I dont think cars today under 30 lacs should be considered a luxury but thats how the GOV considers ground realities.

Second point the GOV thinks that people dont pay income taxes properly, thats why they refer to indirect taxes like petrol, GST, customs, etc etc. That way they recover and spend and appease and get votes.

The worst part is they collect road taxes when we buy a car but still make us pay for tolls and then raising petrol diesel prices who is going to drive on these roads ?
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Old 17th March 2021, 11:52   #7114
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First we cannot compare our country to USA or UK or any other country as in India even the peon wants chai pani on the side over and above his proper income. There is no satisfaction. Due to this people dont disclose their real income and pay proper tax, therefore as once the PM said that sales of cars over 10 lac rupees exceeding but the amount of tax payers is not in the same wave declaring above 10 lacs of income.

Two we could tax people who earn maybe 20 cr and higher maybe a higher tax rate but the problem is real disclosure of income once again. Many of these people become NRI to avoid paying taxes.

Three due to this issue of income disclosure, the GOI has to adopt these tax measures on items and fuel etc. Now i think we are heavily taxed in India, taxes need to be a fraction but then everyone also wants freebies like free housing, free water, free food, free gas, free power, free wifi etc etc. If you dont give then you loose elections, now who pays for all this ? You and me through high fuel price taxes.
I think issues are mixed up here. I get that we have many folks who try to evade tax either totally or partially.

The issue at hand is, in the last couple of years, the share of direct tax has come down and indirect tax has gone up. Unless there is sudden increase of people evading tax, I dont see the reasoning to tie them both.

This trend is due to specific policies by the government and they ought to explain their thinking.

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Old 17th March 2021, 12:56   #7115
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I think issues are mixed up here.
.
I think you have not understood what I was trying to say. The issues are not mixed up, they are interlinked. The lack of compliance by citizens in paying personal income tax results in shortfall of revenue and results in fiscal deficit which shortfall is bridged by over dependence and over taxation for goods and services as that is one area where citizens cannot completely evade paying taxes. You quoted foreign countries but over there people are paying taxes as it’s mostly all done wirelessly and there is no black no white all same. Till the citizens don’t pay taxes properly this reliance over dependency on indirect taxes is going to keep increasing.

Regarding current gov I have said previously that entire tax system needs to be overhauled with lower taxes so that people consume more and pay more taxes but somehow even these learned economist don’t seem to think that. I see many flaws with the current gov taxation thought process and shortsightedness even by state governments. I even think that corporate taxes should be higher so that companies should pay their dues towards the country and more tax should be charged for industries which are polluting our air and causing more pollution but sadly gov officers take chai Pani and give clean chit when air pollution by industries is increasing day by day.
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Old 17th March 2021, 13:23   #7116
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I think you have not understood what I was trying to say. The issues are not mixed up, they are interlinked. The lack of compliance by citizens in paying personal income tax results in shortfall of revenue and results in fiscal deficit which shortfall is bridged by over dependence and over taxation for goods and services as that is one area where citizens cannot completely evade paying taxes. You quoted foreign countries but over there people are paying taxes as it’s mostly all done wirelessly and there is no black no white all same. Till the citizens don’t pay taxes properly this reliance over dependency on indirect taxes is going to keep increasing.

...
I agree with you fully on the part where people evade tax. People forever have been doing it and its not a new phenomenon. What changed recently?

Unless there is sudden increase in people evading tax, this cannot be a contributing factor for increase in indirect tax share.

My reasoning is, the government let go ~1.5 lakh crore revenue in corporate tax and consumption has come down in general due to Covid and govt somehow trying to make up for that in fuel.
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Old 17th March 2021, 13:35   #7117
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I agree with you fully on the part where people evade tax. People forever have been doing it and its not a new phenomenon. What changed recently?
What has changed is a vast list. Few of the top of the mind: unemployment among youth was increasing, so lack of taxes from there, sudden corporate tax cut has caused a loss which is unwarranted in my opinion, then COVID fight has resulted in increased expenditure coupled along with record lockdown which resulted in saving lives but a disaster to the economy and loss of GST etc, to add further China barging into Ladakh raising defence expenditure and defence priorities ( I have it on personal level that the troops have got advanced gadgets to track on the mountains which was not given to them despite repeated reminders in the last 70 years but with China moving in they were procured in an emergency and supplied to the troops which is a commendable feat but they should have been provided earlier by earlier governments ).

All of these and more and increasing the fiscal deficit from projected 3.5 to 9.5 in one year which means you’re spending more and more but earning less and less. How to bridge this shortfall ? Raise personal income tax ? Then people will be like we are not earning help us, so gov going towards indirect tax route to bridge the requirements.

Next 2-3 years are critical for the economy to recover its path deviated from due to COVID. We cannot compare ourselves to USA, somehow they printed 3 trillion usd but their currency did not depreciate, but if we were to do that we would be in a soup with record depreciation which is also not advisable or appropriate for us. The US treasury believes in printing and printing and it does not even affect them and this same principle is followed by the China now.

Add to all of this: free loan waiver to farmers, higher MSP and other free benefits to farmers and other people are all being given from these earnings.

Last edited by M00M : 17th March 2021 at 13:36.
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Old 23rd March 2021, 13:32   #7118
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Default Re: The Official Fuel Prices Thread

The prices of fuel has remained flat for a little over 3 weeks coincidentally from the time elections were announced in 4 states. We should probably wish for elections every month, in one state or the other.
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Old 23rd March 2021, 15:08   #7119
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Ya. We can expect it to remain unchanged atleast till Apr 6th when the elections will be over in TamilNade and Kerala. Not sure if they will keep it that way till the Bengal elections in May. And then they will unleash new prices to recoup all the "notional" losses.
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Old 23rd March 2021, 15:37   #7120
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What has changed is a vast list. Few of the top of the mind: unemployment among youth was increasing, so lack of taxes from there, sudden corporate tax cut has caused a loss which is unwarranted in my opinion, then COVID fight has resulted in increased expenditure coupled along with record lockdown which resulted in saving lives but a disaster to the economy and loss of GST etc, to add further China barging into Ladakh raising defence expenditure and defence priorities ( I have it on personal level that the troops have got advanced gadgets to track on the mountains which was not given to them despite repeated reminders in the last 70 years but with China moving in they were procured in an emergency and supplied to the troops which is a commendable feat but they should have been provided earlier by earlier governments ).

All of these and more and increasing the fiscal deficit from projected 3.5 to 9.5 in one year which means you’re spending more and more but earning less and less. How to bridge this shortfall ? Raise personal income tax ? Then people will be like we are not earning help us, so gov going towards indirect tax route to bridge the requirements.

Add to all of this: free loan waiver to farmers, higher MSP and other free benefits to farmers and other people are all being given from these earnings.
Very clear and lucid points, I fully agree about the tax evasion laws and draconian loop holes in it. It’s so hard to believe that Politicians and actors claim to be farmers, just to evade tax..I mean come on!

It’s a tricky situation because, us Indians are wired to evade taxes, everywhere possible. More so if we own business/es. People will accuse me of painting everyone with the same brush but unfortunately exceptions to the rule are very few. The collective tax paying base is so abysmal that the unfortunate salaried employees/professionals get milked to the hilt. And raising taxes further exacerbates the problems for the tax paying employees. And to compensate for non-tax paying, tax evaders & extortionist politicians & govt services, there are indirect taxes. I wonder if anyone has calculated total taxes (direct & indirect) paid for 34.5% tax bracket individuals on earnings & consumption.

I also agree regarding unexpected trouble on the border and increased spending for it. We all know what happened with the defence money for so many years.

Equally, ruling central govt has been the beneficiary of extremely low oil prices. Despite that, there have been increases in the Excise/cess/what-have-you-tax levied by the Centre. So much that I feel they are addicted to easy revenue coming from Oil. Now that the prices are inching slightly above, suddenly the finance & oil ministry‘s stark inability to raise revenue is for exposed. The Oil minister‘s statements are truly appalling, to the point where he thinks all of us are collective bunch of idiots.
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Old 23rd March 2021, 16:06   #7121
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Now that the prices are inching slightly above, suddenly the finance & oil ministry‘s stark inability to raise revenue is for exposed. The Oil minister‘s statements are truly appalling, to the point where he thinks all of us are collective bunch of idiots.
I am supportive of the GOI in foreign policy and defence but i am very disappointed that like you said they have gotten so used to free easy money from Oil that they are squeezing it like no tomorrow. I mean they benefitted with low crude which benefit we never got and now with COVID tax on it theyre going even crazier. It is sad.

A complete tax collection and tax rates overhaul is required and not some knee jerk reaction and consistent up down in GST rates. we need a 10 year tax rate stability after a complete tax rate overhaul is carried out. Sadly present GOI was expected to do this but theyve proved themselves grossly incompetent especially when you have someone blaming past gov for present over dependance on oil when you have been in power for 7 years already. Also stupid comments from ministers who think that temporary spikes are ok. I would humbly tell them to please pay for their own fuel and own living expenses on one salary or income and then talk to us.

We need a FM who is an economist and nothing less, we need a law minister who is a lawyer and nothing less, we need a Defence minister who is ex army and nothing less. People who have been in the field and practiced will know whats wrong and how to fix it . No disrespect to any other person or entity .
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Old 23rd March 2021, 16:30   #7122
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I am supportive of the GOI in foreign policy and defence but i am very disappointed that like you said they have gotten so used to free easy money from Oil that they are squeezing it like no tomorrow. I mean they benefitted with low crude which benefit we never got and now with COVID tax on it theyre going even crazier. It is sad.
Logical, but do look at how much more is being spent on infra, and the amount that had to be spend last year when economy was pretty much at a stand-still. Plus the investments in defence infrastructure. We are woefully short of required number of war-ships and fighter aircraft, to name just a couple.

The returns will take some time. I will be patient for some more time, because the returns will not be overnight in the above areas.
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Old 23rd March 2021, 17:20   #7123
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Logical, but do look at how much more is being spent on infra,
How much more is being spent on infra? Do you have a figure? As a percentage of GDP?

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and the amount that had to be spend last year when economy was pretty much at a stand-still.
Again how much did they spend?
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Plus the investments in defence infrastructure.
Again, do you have a figure? How much as a percentage of the GDP?

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The returns will take some time. I will be patient for some more time, because the returns will not be overnight in the above areas.
Not expecting returns, but economy went downhill after 2017, right? We were already on a downhill path before COVID.

Last edited by carboy : 23rd March 2021 at 17:22.
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Old 23rd March 2021, 17:29   #7124
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The returns will take some time. I will be patient for some more time, because the returns will not be overnight in the above areas.
Indian taxpaying public is most patient. The problem is deep rooted as each GOV blames the other and keeps promising and we keep falling for that promise. While present GOV is tougher on defence and foreign policy and infra and more pro active but economic over haul and excessive taxation on oil is largely unchecked.
Infra has improved but then they do also charge tolls from us so youre taking money from all sides. For example roads, theyre building quick roads, great, charging tolls ok, but if you keep taxing petrol making it un buyable then who will drive car on this road, it will stay empty and unused.

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Not expecting returns, but economy went downhill after 2017, right? We were already on a downhill path before COVID.
Yes economy globally was slowing down and we are now integrated into the world economy and we were suffering too. The freebies that everyone demands and protests and sits on dharna and gets, needs to stop. Theyre ruining the economy with all these actions because tax is raised elsewhere and money is paid to them.
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Old 23rd March 2021, 17:38   #7125
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... but economic over haul and excessive taxation on oil is largely unchecked.
Looking at only the prices of crude vs price at pump is a very very micro-view of things. Even an average householder earns one place and has to spend in a 1000. Imagine any govt that has to look at all the places money needs to come in, and all the places it has to go to.

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Again how much did they spend?

Again, do you have a figure? How much as a percentage of the GDP?

Not expecting returns, but economy went downhill after 2017, right? We were already on a downhill path before COVID.
Even basic numbers like number of km's road constructed per day itself should give you an idea.

Last edited by GTO : 26th March 2021 at 07:06. Reason: Please be calm, polite & respectful even in debate. STRICTLY NO PERSONAL ATTACKS or rude posts on Team-BHP
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