The govt made four mistakes on GST, apart from the problems in implementation. It now has to break heads in the GST Council and work out new slabs and rates.
Congress leader Ibobi Singh becomes first big name to be caught with such a huge amount in demonetised currency. CBI booked him Thursday in a Rs 332-cr corruption case.
Urjit Patel wrote to Arun Jaitley in 2017, pointing out problems of electoral bonds, and said govt had diluted RBI’s monopoly by taking away its exclusive right to issue them.
Survey, released by LocalCircles Friday, also found that contrary to Modi govt’s intentions Rs 2,000 note has made it easier for people to keep cash in stock.
Sonia Gandhi said PM Modi and his colleagues stopped speaking about demonetisation since 2017, but the Congress would not let the nation forget or forgive.
Mini deal will likely see no cut in 10% baseline tariff on Indian exports announced by Trump on 2 April, it is learnt, but additional 26% tariffs are set to be reduced.
The Chinese are said to have hired ex-fighter pilots & air force operators from NATO countries over the past several years to help them fine-tune their operational & flying capabilities.
Public, loud, upfront, filled with impropriety and high praise sometimes laced with insults. This is what we call Trumplomacy. But the larger objective is the same: American supremacy.
Mistake # 3 can be rectified. Vide # 2, guaranteeing 14% growth to the states was clearly infeasible. Although it will hurt the states, it will have to be scaled back. The famed execution capabilities, the trusted bureaucrats from one nook, have come up short when faced with the complexities of a subcontinent. What one remembers is Parliament House lit up like a new bride, India’s second tryst with destiny moment. The choreography would make Sanjay Leela Bhansali feel jealous.
The problem is not with the rates and a county like ours cannot have one or two rates. The process has to be simplified. Do away with RCM. Supplies to SEZ should be made simpler. Give up matching of invoices for now. Is is a complicated process with no end at all. Let sample scrutiny assessments take care of wrong invoices etc. Simplify e-way bill in line with tbe practical issues. e.g putting a vehicle no. is often difficult when you will hire one from a stand. hy do you need TDS on Govt supplies ? Some aspects of this GST are so illogical and an absolute nonsense . Allow businessmen to do business rather than fiddle with GST compliance all the time.
Ninan has alluded in passing to the fundamental flaw — people finding all sorts if ways to turn black money into white, even in a tax structure where compliance was supposedly built in.
Since our natural genius is to circumvent any law, the implementation and enforcement mechanism is key.
GoI’s dilemma was further made worse by promising assured year on year (14%) increase in share to the states to get their buy in, and how to ensure revenue neutral rates.
CRUX: to repeat again, weak moral fabric of Indians….and desire to manipulate/circumvent/game any system — not only in India but wherever we go. For that reason the enforcement has to be extra vigilant.
Banking Transaction Tax should be the only form of tax.
Make 200 rupees or similar the highest currency.
This is almost like a prepaid plan vs post plan. Prepaid plans make more money to telecom companies than post paid.
It is also similar to selling a product in bulk packets vs selling in Rs. 1 capsules. Those Rs. 1 capsule make more profits to FMCG companies.
Now 30% of the population i.e. salaries class has to fund the taxes of the remaining 70%.
With a Banking Transaction tax – CASH WILL BECOME KING AGAIN. Cash can come out from ATMs – 1% of the amount gets automatically paid.
NO IT DEPARTMENT, NO BUREAUCRACY.
Taxation must be moved to respective states with a percentage of the BTT tax going to the central government.
There is also misuses of funds the most biggest wastage is Hindi imposition, Hindi promotion, second biggest wastage is “Freebie” scheme.
We need to first have politicians who can speak basic English and basic educational qualifications -especially the education and financial sectors.
Education must be removed from the concurrent list – this Corona pandemic examination fiasco represents a bitter failure of the system.
BTT is solution for this.
Excellent article.
Can we have an estimate of the GIQ (General IQ) of this government? Seems to be very low.
5th point: if I remember correctly, Infosys was paid a royal sum of $400 million for this mammoth exercise. This is peanuts.
And if this government can’t get the GST right, what hope is there for the NRC?
Ninan has rightly analysed problems with GST. These were essentially political decisions to get GST going in the first instance and later, usual election time tinkering and beyond that, bureaucratic bungling. Hence, the issue is how do we sort out issues from here, given that GST collections have fallen short of targets and there are substantial leakages and black money generation in the system. We need to a have ideally single or at the most two tier GST for all products and services and have a DBT for the poor who would end up paying higher GST rate. If UK can live with a 15% GST or Singapore with a 7% GST, we should be able to live within that range. Any fiscal shortfall must be managed by other means, including reducing unnecessary government expenses, PPP, sale of PSUs and PSBs and ultimately by RBI giving OD to Govt of India (long live FRBM!) . There are no easy answers to the issue but a process which will require continuous tuning as we go ahead. We also need to have economy which is world competitive and hence, our tax structure needs to be rationalized, lowered and simplified. Let us not start blame game for the problems of GST but recognize the problems and work to find solutions as we go ahead. Unfortunately, Ninan has not offered any solutions in this regard, beyond identifying and analyzing the problems.
Mistake # 3 can be rectified. Vide # 2, guaranteeing 14% growth to the states was clearly infeasible. Although it will hurt the states, it will have to be scaled back. The famed execution capabilities, the trusted bureaucrats from one nook, have come up short when faced with the complexities of a subcontinent. What one remembers is Parliament House lit up like a new bride, India’s second tryst with destiny moment. The choreography would make Sanjay Leela Bhansali feel jealous.
The problem is not with the rates and a county like ours cannot have one or two rates. The process has to be simplified. Do away with RCM. Supplies to SEZ should be made simpler. Give up matching of invoices for now. Is is a complicated process with no end at all. Let sample scrutiny assessments take care of wrong invoices etc. Simplify e-way bill in line with tbe practical issues. e.g putting a vehicle no. is often difficult when you will hire one from a stand. hy do you need TDS on Govt supplies ? Some aspects of this GST are so illogical and an absolute nonsense . Allow businessmen to do business rather than fiddle with GST compliance all the time.
Ninan has alluded in passing to the fundamental flaw — people finding all sorts if ways to turn black money into white, even in a tax structure where compliance was supposedly built in.
Since our natural genius is to circumvent any law, the implementation and enforcement mechanism is key.
GoI’s dilemma was further made worse by promising assured year on year (14%) increase in share to the states to get their buy in, and how to ensure revenue neutral rates.
CRUX: to repeat again, weak moral fabric of Indians….and desire to manipulate/circumvent/game any system — not only in India but wherever we go. For that reason the enforcement has to be extra vigilant.
Lastly, dear Ninan = any solutions?
SOlution is very simple.
SCRAP INCOME TAX.
SCRAP GST.
SCRAP CESSESS.
Banking Transaction Tax should be the only form of tax.
Make 200 rupees or similar the highest currency.
This is almost like a prepaid plan vs post plan. Prepaid plans make more money to telecom companies than post paid.
It is also similar to selling a product in bulk packets vs selling in Rs. 1 capsules. Those Rs. 1 capsule make more profits to FMCG companies.
Now 30% of the population i.e. salaries class has to fund the taxes of the remaining 70%.
With a Banking Transaction tax – CASH WILL BECOME KING AGAIN. Cash can come out from ATMs – 1% of the amount gets automatically paid.
NO IT DEPARTMENT, NO BUREAUCRACY.
Taxation must be moved to respective states with a percentage of the BTT tax going to the central government.
There is also misuses of funds the most biggest wastage is Hindi imposition, Hindi promotion, second biggest wastage is “Freebie” scheme.
We need to first have politicians who can speak basic English and basic educational qualifications -especially the education and financial sectors.
Education must be removed from the concurrent list – this Corona pandemic examination fiasco represents a bitter failure of the system.
BTT is solution for this.
Excellent article.
Can we have an estimate of the GIQ (General IQ) of this government? Seems to be very low.
5th point: if I remember correctly, Infosys was paid a royal sum of $400 million for this mammoth exercise. This is peanuts.
And if this government can’t get the GST right, what hope is there for the NRC?
Ninan has rightly analysed problems with GST. These were essentially political decisions to get GST going in the first instance and later, usual election time tinkering and beyond that, bureaucratic bungling. Hence, the issue is how do we sort out issues from here, given that GST collections have fallen short of targets and there are substantial leakages and black money generation in the system. We need to a have ideally single or at the most two tier GST for all products and services and have a DBT for the poor who would end up paying higher GST rate. If UK can live with a 15% GST or Singapore with a 7% GST, we should be able to live within that range. Any fiscal shortfall must be managed by other means, including reducing unnecessary government expenses, PPP, sale of PSUs and PSBs and ultimately by RBI giving OD to Govt of India (long live FRBM!) . There are no easy answers to the issue but a process which will require continuous tuning as we go ahead. We also need to have economy which is world competitive and hence, our tax structure needs to be rationalized, lowered and simplified. Let us not start blame game for the problems of GST but recognize the problems and work to find solutions as we go ahead. Unfortunately, Ninan has not offered any solutions in this regard, beyond identifying and analyzing the problems.