Mr. Paresh, is an NRI who is of the opinion that the Indian Financial system is very weak and requires a lot of reforms. After returning to India, he noticed that India runs on Chai (Unlike the country from where he comes from which runs on other drinks) and enters a tea shop to have a hot chai as he wants to understand the madness behind Chai. There, he meets Mr. Naresh, who runs the Tea shop and engages with a conversation with him.
Paresh: GST seems very complicated!! Every day there is a notification affecting crores of people.
(Orders ek garam Chai)
Naresh: Aree Paresh, those who pay GST can appreciate the changes of GST and those who do not pay, will find GST complicated.
Paresh: (Shocked!) What? You mean to say that GST Is simple to understand?? You pay GST??
Naresh: If I sell unprocessed tea leaves, it is Nil rated; If I sell processed tea leaves, it is 5%; If I sell instant tea powder it is 18%; If I sell hot chai, along with other refreshments, it becomes a restaurant service taxable at 5% without ITC and 18% with ITC; I can also opt for a composition scheme @ 5%!!. In short, If am willing to pay GST, it becomes simple as there are a lot of options available to plan the tax structure efficiently.
( Paresh gulps tea to buy time, so that he can corner Naresh. He is amazed by the Naresh’s knowledge)
Paresh: Acchaa, then why is the rate so high where majority of services is taxed @ 18%?
Chowkidar: Abhi ka changes dekha nahi kya Paresh? Now, the service providers apart from restaurant service providers can opt for a composition scheme @ 6% if the turnover is less than 50 Lakhs. 12% straight reduction on services! SME industry will be very much benefitted. Fill two simple forms by April 30, 2019 and you will enjoy the benefit.
Paresh: (orders two biscuits) GST has been brought to reduce the burden of taxes on the common man! Why is a common man finding it very difficult to buy a small 2 BHK?? Why are the real estate companies advertising that there is “No GST” on their properties, indicating indirectly that GST is a burden on common man!
Naresh: Aree Paresh, GST can’t be held responsible for how the real estate sector advertises to sell their properties. GST is one nation one tax. Previously Service Tax was levied on under construction properties, now it is GST. Previously Excise Duty on Inputs is a cost to the builder, but now it’s a credit. As the prices were not reduced and to also simplify the tax structure, Sarkar has now made welcome moves by reducing the rates to 5% and 1% on non-affordable segment and affordable segment respectively.
A common man can also avail the benefits of PMAY Scheme if he is a first-time home buyer and can get interest subsidy for loan amount upto Rs. 6 Lakhs. Besides the builders are also given tax exemption schemes if they construct in affordable segment. The Sarkar has an agenda-to provide a pucca house by 2022 and all these tax changes are inclined towards it.
Paresh: (Thinks of his mother and grandmother for divine intervention to outwit the Naresh) What about Direct Taxes, there are no reforms made by the Govt. to simplify direct taxes. Sarkar has concentrated only on GST!
Naresh: Beta, have you not gone through the recent Interim Budget announcements? A lot of changes were made to the middle class families where a rebate has been announced for those who earn upto Rs. 5 Lakhs, where they need not pay tax. This time Income tax forms have been notified very early so that people can start filing their returns well before the deadlines. Standard Deduction has been increased upto Rs. 50,000/-Capital gains exemption is now allowed if invested in 2 properties as a one-time option. TDS on deposits increased to Rs. 40,000/- and TDS on rent increased to Rs.2,40,000/-. E-Assessment would be introduced very soon, resulting into a paperless and corruption less assessment benefitting the taxpayers.
Sarkar has also set up a committee headed by eminent finance professionals for drafting an appropriate direct tax legislation, the report for which is due to be submitted by 31.05.19. So, one can expect some changes after considering the recommendations of the committee.
These are very recent changes that I am saying. If you can recollect 8th November 2016 announcement, then one can understand why many people are now filing income tax returns.
Paresh: (winks) Saab, demonitsation resulted to a 99% deposit of the currencies that were circulated! So, what’s the use?
Naresh: Garam Chai! Garam Chai! Garam Chai!! Kadak chai! Adrak wali Chai!!(Markets tea to those who are passing by!).
Some people are confusing note ban with the amount of money which has come back!!
Paresh:(Completes the last sip of tea-cannot understand the depth of Naresh’s last statement): Teek hei saab!! Sarkar has done something, but compared to the country from where I come from, it still has lots to do! People will decide who has been correct!!Let me leave for now!!
Naresh: Pay for the tea and then leave…
By the time Paresh runs away from the tea shop.
Naresh: Abhi, kown Chor hei!!
***************************End of Conversation***********************
Disclaimer: The above article is an entertainment based article comprising tax related updates along with spoofs of news, articles, events and incidents. The author does not intend either directly or indirectly to hurt the sentiments of any individual, community, race or religion. Readers are advised to read the article purely in the spirit of infotainment. Any information contained in this article is subject to change. Readers of this article are advised to seek their own professional advice before taking any course of action or decision, for which they (the readers) are entirely responsible, based on the contents of this article. The author expressly disclaim any liability arising from the same.
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