Dr. Sanjiv Agarwal, FCA, FCS
The Constitutional (122nd Amendment) Bill, 2014 which is now pending in Rajya Sabha for passage faces challenge from main opposition party, Indian National Congress. It mainly wants the GST rate capped at 18 percent in the Amendment itself, removal of additional one percent tax for the manufacturing states (Gujarat, Maharashtra etc) and an independent dispute redressal mechanism.
In the present dispensation, the rate of GST shall be dealt with by the Empowered Committee which has representation of all the states and union Government. The additional tax of one percent has been agreed to by Empowered Committee with consensus of all states and GST Council shall deal with the dispute resolutions.
The GST Constitutional Amendment Bill is likely to be taken up in the Rajya Sabha this week but it may not be that easy. While the Business Advisory Committee of Rajya Sabha has allotted just four hours for discussion on GST Bill, it seems that if sensible discussions take place, this time may not be enough. However, if it gets passed (hopefully so) in the wake of disturbance by opposition, it may be yet another example of paralysis of political accountability. We have witnessed the Budgets being passed like that in the past.
The main opposition (congress) demands do not sound logical as the Bill was first moved by Congress only in 2011. Never before these issues have crept in and these are unwarranted too as the Empowered Committee of State Finance Ministers has approved of these proposals after due deliberations and considering all pros and cons. Congress can not sit over or overrule the collective wisdom of Empowered Committee as well as recommendations of the Standing Committee on the Bill without any strong logic. Congress knows that by raising a voice now on 18 percent cap may earn them some score but it may be a waste of effort. When congress was in power, the FM himself used to talk of a revenue neutral rate of over 20 percent.
Further, in none of the taxation laws in our country, the cap for tax rate is in the Constitution. It is either in the specific legislation or is varied by way of annual budgets or by way of notifications. Same should happen in case of GST depending upon the socio-economic considerations. If the rate is fixed in the Constitutional provisions itself, any change therein will be very difficult as it will require approval of both Houses with two-third majority followed by ratification by atleast half of the State Assemblies. This may take place only over a period of one year or so. Moreover, there was no such proposal when Congress was in power. Such an argument and demand is baseless and devoid of any economic reasoning. Yes, roll-back of additional one percent tax for manufacturing states can be considered for two reasons – one it is against the GST system itself and two, it would lead to discrimination within the states. Some states are rich in mines and minerals while others in agriculture. Law of averages will eventually settle this ground too.
Dispute redressed by GST Council is also a very thought after proposal and even former Finance Minister had advocated for the same. Now a U-turn on the same is not desirable.
What is required today is the clearing of mental blockage in the opposition which is in larger public interest and country’s welfare. Everyone knows that GST Bill was moved by Congress earlier and any ridiculous barriers created by them will only tarnish their image and country will never forgive them and their present leadership for the same.
Author Bio
what bjp done earlier now congress doing
GST is need of the hour for growth of the country and any attempt by any political party to scuttle it should be viewed as anti national since the investors insisting it’s implementation to put up their investments in India. Earlier Government could not get it done due to various reasons and opposition by various States including the States ruled by the Opposition party in view of disagreement in revenue sharing. Now this issue has been solved to the most extent and there is broad consensus amongst the States. The loss to the future generation can not be pardoned. People should start movement for it’s implementation treating it as their task rather than the task of the Government.
MY QUESTION TO ALL PRACTITIONERS AND LEGAL ADVISORS REGARDING GST.
IN THE CASE OF “DIRECT TAXES” AN ASSESSEE WILL PAY INCOME TAX ON HIS NET PROFIT EARNED AFTER DEDUCTING ALL HIS EXPENSES.
WHEREAS IN “INDIRECT TAXES” THE SALES TAX OR SERVICE TAX WILL BE PAID ON HIS SALES OF GOODS AND SERVICES . THE CONCEPT OF VAT INTRODUCED IN INDIA AFTER LOCAL STATES GENERAL SALES TAX ACTS IS DEFINED AS THAT A DEALER WILL PAY SALES TAX ON HIS PROFIT EARNED ON SALES AFTER DEDUCTING INPUT TAX CREDIT VICE VERSA SERVICE TAX ALSO IS IN SAME PATTERN.
I ASK A SIMPLE QUESTION TO OUR RESPECTIVE LAW MAKERS AND OTHERS ,THAT IN SALES TAX AND SERVICE TAX AFTER INTRODUCING VAT AND CENVAT IT IS NOT PAYING TAX ON SALES OF GOODS OR SERVICES BUT SURELY IT IS PAYING TAX ON PROFIT EARNED BY AN DEALER IS AN EXCESSIVE BURDEN BECAUSE AGAIN THE SAID VAT DEALER OR IN FUTURE GST DEALER OR ST DEALER WILL PAY INCOME TAX ON HIS PROFITS EARNED ,SIMPLY DILUTING THE DEFINITION OF INDIRECT TAXES AND CONVERTING INDIRECT TAXES TO DIRECT TAXES ,COMPLETELY DEMOLISHING CONCEPT OF INDIRECT TAXES, WHICH IS FOUND TO BE RIDICULOUS.
MAKING INDIRECT TAXES = DIRECT TAXES, THEN WHY DEALERS HAS TO PAY DOUBLE TAXES ,CENTRAL GOVERNMENT SHOULD IMPLEMENT ONLY ONE TAXES EITHER INDIRECT OR DIRECT TAXES. THEN WE CAN SAY THAT GOVERNMENT IS REALLY SUPPORTING AND ENCOURAGING TRADERS OR MANUFACTURERS IN INDIA AND OTHERS COMING FROM OUT.
EARLIER THERE WAS FIRST SALES AND SECOND SALES AND TOT ,WHICH IS A BEST CONCEPT ONLY SINGLE POINT TAXES ,SECOND AND SUBSEQUENT SALES ARE EXEMPTED AND TOT TAXES ARE TAXED @ 1% .WHICH IS A VERY GOOD TAX STRUCTURES FOR SALES OF GOODS ACT.
JUST FOLLOWING OTHER COUNTRIES ACTS AND PRINCIPLES IS NOT GOOD TO THE ECONOMY OF INDIA AND TO THE DEVELOPING COUNTRY OF INDIA.
G.S.CHANDRA SHAKER
SALES TAX PRACTITIONER
9395323341/9951038001
TODAY CENTRAL GOVERNMENT IS TALKING ABOUT IMPLEMENTATION OF GST in coming 2016 Year and wants to Abolish STATE VAT AND CENTRAL CST ACTS for the same , IT is true to say that SIMPLIFYING INDIRECT TAXES MEANS CREATING DISASTERS TO THE STATE ECONOMY. As we all know that OUR Country India from 1947 to 2015 its only 68 Years Old and We are in Developing Stage, our country Need more REVENUE for the purpose of Development. Encouraging Business people and Consumers is a Good thought but it Creates a lot of hurdles in development of EVERY STATE.
As we know that Majority of Revenues generated only by INDIRECT taxes which in turn the State Government Utilizes for VARIOUS SCHEMES AND PROJECTS and ALLOCATES or RESERVES CERTAIN AMOUNTS TO VARIOUS PROJECTIONS IN EVERY BUDGET .
CENTRAL GOVERNMENT ADVERTISING ABOUT GST – to all Consumers or common man or to Dealers saying that it will not be a Tax Burden to any one for the same MYSELF ASK A SINCERE QUESTION TO THE CENTRAL GOVERNMENT , whether the GOVERNMENT is going to assure to all the Consumers or to common people that THERE WILL BE NO FLUCTUATION or FUTURE INCREASE in COST Prices of ALL GOODS TRADED OR MANUFACTURED or whether they can assure that they will Control the Cost prices of all Goods in coming years by grouping all Goods in CERTAIN PRICE FIXED SCHEDULES or PRICE FIXATION OF ALL GOODS FROM THE GOVERNMENT END to All consumers or Common man. IF THIS IS NOT GOING TO BE HAPPEN OR NOT GETTING IN CONTROLS THEN RESTRICTING TAX OR BRINGING TAX RATES DOWN AND INTRODUCING GST WILL DEFINITELY SHOWS A HUGE EFFECT IN DIMINISHING THE ECONOMIC STANDARDS THEREBY OTHER INFRASTRUCTURE DEVELOPMENTS WILL LITERALLY BECOME HANDICAP AND OUR DEVELOPMENT LINK BREAKS.
ACTUALLY IN MY OPINION “ THE central Government wants to Get CONTROL over State Governments Revenue Earnings AND wants to keep TREASURE KEYS into their hands and to distribute share to Every State According to their Interest . “USING G.S.T AS A WEAPON TO CONTROL ALL STATE
s REVENUE”
Inviting, Welcoming And Promoting All National And International Companies To Setup Business In India Is A Good Concept And Appreciable Thing But Simultaneously We Should Also Think Of Our People And Country , Our Indian Government
should always keep in their minds That We Should Be Always Like A Big Diamond In The Crown And Other Small Diamonds Should Become As A Part Of Decoration To The Said Crown To Lead Ourselves As A Completely Developed Country.
MY FINAL CONCLUSION IS THAT We Should Go With Vat/Cst Or Individual State Acts Till FEW DECADES THEN ONLY OUR GOVERNMENT WILL BECOME STRONG AND ABLE TO BEAR ALL CIRCUMSTANCES.
There is nothing political in the article… very true content
To oppose the bill without any discussion/logic is not the true quality of the opposition
Who is right? Read P.Chidambaram’s article below:
thestatesman.com/news/latest-headlines/chidambaram-debunks-govt-stand-on-capping-gst-rate-in-statute/111708.html
GST is much awaited by all of us.
I would fully agree with the views put forth. Neither there is any such precedence in the history of Indian Economic laws to include the rate of taxation in the Constitution nor the administrative prudence warrants it.
In fact, the game plan of the main opposition party seem to delay the passage up to the third year of the NDA rule so that they try to encash from the chaos created due to the expected teething problems during the implementation of GST.
It does not behove of a party that has ruled the country for over 60 years. They are setting a bad precedent that will be very harmful for the nation.
B J P is saying that opposition parties is not supporting in passing the bill of G S T, at every place, seminar, but the question is whether B J P has presented the G S T BILL in the RAJYA SABHA, WHEN the G S T bill has not been presented in the RAJYA SABHA for discussion , how B J P can say that opposition is not supporting G S T,
WHETHER THE STAND OF B J P IS FAIR.
It is the bounded duty of Congress, who are main cause for introduction of GST in India, when they were in power , now they should concede for GST in the large interest of public and country at large.
Unfortunately a one sided article. Looks more political than factual.
The contents are very true