[ani_meher]

Opening up just fine. Is it blocked on your firewall/ network by some new rule?

[Shashwat B]

Originally Posted by alpha1

I am able to view the page.
You are talking about the https://www.gst.gov.in/ ?

It is opening fine.

These might help.

1. Delete cookies and browsing data.
2. Use Chrome or Firefox
3. Try opening the same via incognito window.

If all fails, reinstall your browser.

I have tried it on Google chrome for android and Firefox for windows ( about a minute ago)

Hope this helps

[Prowler]

Originally Posted by ani_meher

Opening up just fine. Is it blocked on your firewall/ network by some new rule?

Actually I posted the message with a screenshot of the result page. I have tried the site with my desktop Firefox Enterprise Edition as well as Chrome. I thought my ISP must have blocked the site - although I can't think of any reason why anyone inside India would block a Government site.

So I tried with another ISP - no luck. I checked our firewall for any new ruleset. Nothing.



Looks like it is rejected by the GST site itself.

[Samurai]

Parle is about to fire 10000 people and lays the blame entirely on GST.

https://www.news18.com/news/business...t-2278225.html

[imidnightmare]

Originally Posted by Samurai

Parle is about to fire 10000 people and lays the blame entirely on GST.

https://www.news18.com/news/business...t-2278225.html

This is all so silly though. The way FMCG works is very different to most B2B. There's an MRP. Now, the facts if one studies them are:
1. MRP has not really changed for most products over time - as firms would rather adjust size / weight of packet than the price
2. FMCG is growing even now - just slower than before; it's now projected to grow at 9-10% this FY (as per Nielsen) as compared to 10-12% expected previously by Nielsen.
3. These firms have been lobbying for a reduction in GST for ages - as lower GST would mean better margins for them (since MRP will remain unchanged)

All in all, they've seen the pressure on the government lately and are using the threat of job-cuts to force the government into a cut that will benefit their bottomlines. It may sound cynical - but it's the truth.

Note: Was previously a Management Consultant focused on FMCG for almost a decade, so know a bunch about how the industry works on pricing, packaging etc.

[vrprabhu]

Originally Posted by imidnightmare

... MRP has not really changed for most products over time - as firms would rather adjust size / weight of packet than the price....

I agree - good observation with regard to food items, at least.

But what the article says is that due to reduction in pack size / weight, customers were obviously aware that they were getting lesser number of biscuits and hence stopped buying (even though the price remains un-changed).

Correct me if I am wrong - in the lowest priced segments, margins must be thin, and volumes should compensate the margin foregone, right?

Falling sales = lower volumes => less profit => question arises whether it makes business sense to offer low priced products.

If they can't increase prices beyond a point (price sensitivity, competition etc.) what would they do?

In my opinion, the impact of GST resulting in higher costs initially is now being felt now - benefits will come in longer term once the GST rates are rationalised in two or three slabs.


Chota pack of Parle-G was colloquially termed as 'puda' in interior Maharashtra. Cutting chai and a puda as breakfast is a staple in many small villages - imagine what happens when the size of puda becomes smaller and smaller?

[imidnightmare]

Originally Posted by vrprabhu

I agree - good observation with regard to food items, at least.

But what the article says is that due to reduction in pack size / weight, customers were obviously aware that they were getting lesser number of biscuits and hence stopped buying (even though the price remains un-changed).

Correct me if I am wrong - in the lowest priced segments, margins must be thin, and volumes should compensate the margin foregone, right?

Falling sales = lower volumes => less profit => question arises whether it makes business sense to offer low priced products.

If they can't increase prices beyond a point (price sensitivity, competition etc.) what would they do?

In my opinion, the impact of GST resulting in higher costs initially is now being felt now - benefits will come in longer term once the GST rates are rationalised in two or three slabs.


Chota pack of Parle-G was colloquially termed as 'puda' in interior Maharashtra. Cutting chai and a puda as breakfast is a staple in many small villages - imagine what happens when the size of puda becomes smaller and smaller?

I'm not 100% sure, but the way I see it, previously there was 6% excise and 12.5% VAT (13.5% in some states). Now it's 18% GST. There is an argument that "GST is higher than VAT", but that completely misses the point that MRP includes all duties and taxes. Therefore, the picture should be seen in entirety. Also, as someone running a business, I can say with certainty that for large companies, GST has been a blessing in terms of cost saving overall. There's no headache of excise - and net burden is actually lower as all GST is offset, doing away with the whole CENVAT being different to Service Tax being different to Sales Tax etc. etc.

The fact of the matter (and there are some articles that voice this very well) is that industry in India has (over several decades) become lazy and accustomed to the idea that if they lobby well - and threaten job cuts etc. - the governments of the day ultimately crumble and give them what they want.

E.g. I was working a consulting case with a large FMCG that had a "1 rupee pouch" for a best-selling product; they were debating (this was back in 2008) how to adjust the contents and packaging to accommodate price inflation in raw materials and in marketing costs and headcount. This while they were "carrying" a self-admitted 10-12% "organizational flab" in terms of personnel and also spending about 2X of industry average on television advertising etc. while under-spending on distribution. Core issues were being ignored - assuming that consumer can be shafted more easily than setting one's house in order.

This issue isn't about taxes. It's about how firms manage the supply chain and their own organizations. Costs aren't so simple. For most firms, the actual product costs just <1 Re. The costs are all on overheads - marketing, distribution, promotions etc.

[vrprabhu]

All your points are fully valid and I agree with you.

You have hit the nail on the head about the spends on ads and internal overhead cost being passed on to the customer.

But the greater issue is this -

1. Govt. wants its pound of flesh in the form of taxes.

2. Manufacturer doesn't want to reduce his margin.

3. Fuel price keeps increasing - do the transporters bear the burden of rising prices? My guess is - no.

4. Middlemen (distributors) won't part with a penny of their share in the MRP.

Who bears all this?

The customer. No wonder the people (at least those in lower income group) cut their consumption when prices rise.

People like me (and probably you too) are in the 30% tax bracket = sizeable direct tax paid to Govt. Most of the items are now in the 12 or 18 per cent GST bracket (most of auto spares are taxed @ 28% ). Further indirect tax shelled out from your pocket (all utilities and services have moved from 15% to 18%, so there is a direct 3% hit on your spends by way of additional tax).

So, has the Govt. benefited through introduction of GST? No idea. (From what I understand, GST collections are far short of the target and have stagnated. And, there are loopholes being exploited through ITC - which is a totally different story altogether). The one visible benefit which I see post GST is that the intra-state check posts have become infructuous. (Any one travelling from Coimbatore to Palghat would have surely observed the difference then and now at Walayar )

Taking a leaf from your own argument, have the manufacturers passed on the benefit of GST to the customer?

I remember an item whose MRP had come pre & post GST (bought the same can of 250ml brake fluid with MRP of Rs. 80/- now, which had a MRP of Rs. 85/- in Nov. 2017, which is about 6.25% drop in the price). If there is so much saving in margin, shouldn't you and I customer get the benefit of lower input costs due to GST? How many such items have you come across?

I am not competent to judge whether the call for reduction in tax rates is right or wrong - all I can say is that the end-user doesn't have much option. It is more like grin and bear it or forego......


PS - Please refrain by quoting the full post, especially when there is a back to back reply. Thanks!

[imidnightmare]

Originally Posted by vrprabhu

If there is so much saving in margin, shouldn't you and I customer get the benefit of lower input costs due to GST? How many such items have you come across?
I am not competent to judge whether the call for reduction in tax rates is right or wrong.

Spot on. Well said. Personally, I see it as a double-whammy we're facing and part of it is a fallout of the famous "hockey-stick" that GST causes - while the other part is caused by socialist policies and bungling on demonetisation and follow-through of removing the 1K and bringing in 2K.

1. No - most firms did diddly-squat about the pass-through of benefits - and the government did bugger-all apart from sending a stern circular threatening strict action if we (businesses) didn't pass on benefits of GST. Issue is - companies like us who sold at "ex-works" with all taxes and duties extra did nothing anyway, since our prices were always clear; firms that should have been targeted were those with "MRPs" - but they weren't.

2. GST impact is to reduce net collected amount per transaction - but to widen the overall net therefore bringing more business to the organized sector and ensuring that with increased transparency, there is less evasion. Also, you leave more money in the hands of the consumer - thereby increasing spending power (less tax paid, so more can be bought with the same disposable income). But these are just not happening. Nominal GDP is growing faster than GST collections - implying that there is a return of business to the "informal" sector - which brings us to Points 3 and 4.

3. When demonetization was announced, a key assumption I had was that we'd see more lower-denomination (100) notes than higher ones like 500 and 1000. Instead we got 500 and swathes of 2000s! While it may not be like it was in the early 2010s, there is no doubt that "cash is back" and there remain businesses that are "off the radar" completely. From start to end, there is no value chain seen at all on accounts seen by the digital world - so that's one impact gone - which leaves you with the benefit only of each consumer buying more, but...

4. ...direct tax (IT) went up! I'm paying a massive surcharge over and above peak tax. So effectively, I am left with less in hand than I used to have. My spending power is therefore reduced. This is obviously not just restricted to me alone. Also, tax rates at the higher income brackets are now so high that evasion is very attractive for someone with the means for it. I typically put the cost of evasion at 15% of amount evaded. Then there is "risk premium" of evasion, which people value at 5-10% based on risk appetite. At a tax rate of 25% or so, most people would not evade. But at 35%+, bang! It makes sense for many who can afford to do it (basically those who are not in professional businesses).

But our governments are run by socialists - all parties advocate "take from the rich" so tax rates just don't fall. Even if Modi wants to reduce them (he doesn't it would seem, so this is moot), he can't because he will be derided for being a "suit boot" PM.

On reduction of rates, I don't think firms in FMCG, durables etc. can justifiably ask for reductions in GST. That said, we are all entitled to demand a reduction in IT rates. They're at a shamefully high level.

TL/DR:
1. GST isn't the flaw; we've not brought "unorganized sector" online
2. "Cash is back"
3. IT rates are way too high; GST on FMCG, durables etc. is also fine.

[hothatchaway]

Help!

A friend just quit his job and at the time of leaving could only serve 15 days of his 3 month notice period. As per the clause, he had a net recovery since 75 days recovery - 15 days worked. The company, a major Indian conglomerate, levied GST @ 18% on the amount deducted from him!!

The explanation given by their HR was that the government will view this recovery as income earned by the company and will levy GST on them. The company is merely passing this on to the employee!

I asked him to check how is this possible when the separation clause comes under an employment contract.

Views from tax pundits requested.

[vrprabhu]

Originally Posted by hothatchaway

I asked him to check how is this possible when the separation clause comes under an employment contract.

The explanation given by their HR was that the government will view this recovery as income earned by the company and will levy GST on them

You are right that employer-employee relationship does not come within the ambit of 'service' and hence incidence of GST should not arise. Especially given that the concept of 'supply of service (or goods)' is apparently failed to be established in such cases.

There is a High Court judgement on this (under service tax regime), wherein it has been ruled that levy of service tax on 'notice pay' is not valid. HC order uploaded for reference.

However, there are instances wherein companies / businesses have been served demand for payment of tax on the severance pay (which is apparently referred by your friends company too) and nobody wants to fights the tax-man when the burden can easily be passed on the consumer :-(

[hothatchaway]

Originally Posted by vrprabhu

You are right that employer-employee relationship does not come within the ambit of 'service' and hence incidence of GST should not arise. Especially given that the concept of 'supply of service (or goods)' is apparently failed to be established in such cases.

There is a High Court judgement on this (under service tax regime), wherein it has been ruled that levy of service tax on 'notice pay' is not valid. HC order uploaded for reference.

However, there are instances wherein companies / businesses have been served demand for payment of tax on the severance pay (which is apparently referred by your friends company too) and nobody wants to fights the tax-man when the burden can easily be passed on the consumer :-(

Thank you for sharing this. Indeed, theoretically very small companies may come under the scanner for routing money through employees in the name of notice pay recovery, but fail to see how this applies to large publicly held companies. I think this is a case where common sense has taken a back seat

[Samurai]

https://www.youtube.com/watch?v=VHPiBagdSuE