The Goods and Services Tax, the biggest tax reform of the country since Independence, came into effect at midnight yesterday and traders and service providers alike are scampering to understand and institute the invoice format and bill format. He retired as Corporate Affairs Secretary of Government of India after 37 years in service.
While large companies have put GST systems in place, medium and small businesses seem to be grappling with it. Premium bikes though will see a marginal increase in prices in certain states, but in states where Value-Added Tax and octroi slabs were higher earlier, these bikes may actually see a reduction in on-road prices.
Meanwhile, sections of trade and industry in various states, including Rajasthan and Uttar Pradesh, went on strike against the new levy, saying it could increase taxes. It completely relies on the Central Government.
This made each State function like individual islands. The new tax system has four slabs of 4,12, 8, and 28 percent irrespective of the location of purchase. "No section can claim I have not paid taxes, so I will not pay".
"Yamaha welcomes the change through one nation, one market and one tax". So the price will become competitive. It would be prudent to ensure that any profits which accrue as a result of the transition to GST are passed on to customers by adjusting prices. The tax for garments priced over Rs. 1,000 is 12%.
Aggarwal Bikaneri's Palwal Kumar said: "We were aware that there is going to be a tax of 12 per cent on snacks and 5 per cent on candies". It will be clear in two to three months if GST will overall increase the prices or not. States in eastern belt like Bihar, West Bengal, Odisha have lagged behind in industrial development. The President recalled the efforts put in by various governments and political parties to make GST a reality.
It is not at all a step taken in a hurry. However, there are no such problems in GST.
Speaking about naming children after a government measure, Rashtriya Janata Dal chief and former Union minister Lalu Prasad had named his eldest daughter Misa, after the draconian Maintenance of Internal Security Act of the then Indira Gandhi government in the early 1970s. "So, legally and logically there can't be implementation of the new system".
"The GST may be a destination tax, but for India it will begin all together a new journey". Growing India's tax base will be a battle of wits.
Currently, it takes an average of 241 hours per year to pay taxes in India - compared to 110 in Britain and 175 in the United States.
Besides certain essential items like health care services, salt, unpacked food grains has been kept at zero rated. Luxury items including motorcycles, perfume and shampoo, which account for about 19 per cent of all taxable items, will be taxed at 18 per cent or higher. "We will continue the strike till this 30 percent tax is removed". Alcohol, electricity, real estate and petroleum are exempt. Is there any scope to include these in future?
"I was closely involved in the design and implementation and had the occasion to meet the Empowered Committee of state finance ministers, formally and informally, as many as 16 times".
Under GST regime, one will find it hard to hide one's income. The states did not want Petroleum products to be included in GST as it is a major revenue source for the states. "We would call her GST at home, but when she is grown up and gets admission in a school, we would give her a proper name", said Jasraj.