Industry sees India hitting 10% GDP post GST rollout

[Jlaw]

They have HST too and that sucks too

HST is really GST combined with another tax.

 

[Crixus]

In India there are many subsidies for below poverty line people under Mudra scheme they can get enough loan to improve their living ...GST is more to make environment suitable for business and to attract FDI .

We have many tax defaulters and we need to bring more and more people under Tax umbrella to decrese the fiscal deficit . We welcome transparency even if we have to pay more tax in the end tax money is going to be spend on people only.

A person who earns 1000 rupees will pay the same GST on everyday items like petrol , food items , phones etc as a person earning 10,000 rupees... that puts more pressure on the low income groups , it's not proportional tax

Yes the government will be able to show that it has more money in its bag at the end of fiscal year but overall this is not good for low income group , who will slowly but surely get shafted as a result of this

There is no transformation here , GST is indirect taxation , it is just a way of taxation on the low income groups who tend to part of the "undocumented" economy and out of the tax net

 

[Śakra]

you do not understand direct and indirect taxes. Indirect taxes always have same implication on all whether rich or poor. Like sale tax, vat, excise duty, custom etc. Anyone who avail these items they will have to bear the burden, that why rich consume more and poor less. But GST will lower this cost mostly on consumer goods as the present scenario the total taxes both of state and central are like 22-24% on most of items, this will be lowered to 18% thus beneficial to all.

Indirect taxes are never counted as progressive tax as it is a burden on poor and rich alike. Hence the developed and developing economies try to forcus more on direct taxes such as income, corporate and wealth, where the poor pay less and rich pay more. In 91-92 Indian indirect to direct tax ratio was very skewed, approx 80:20, which has come down to 45:55.
But all this does not mean indirect taxes should be not made more progressive, and GST is one of those step.

Leave it he won't accept he is wrong. He is arguing for the sake of arguing.

 

[randomradio]

It seems to me this GST is like a hidden VAT tax correct?

Generally we see multiple taxes on our bills. Service tax, sales tax, VAT, luxury tax, entertainment tax, education cess, Swach Bharat cess etc. And this control was distributed and always caused confusion. Now it will be centrally controlled and there will be only one tax.

Now India will be a single common market, kind of like the EU, but better.

http://economictimes.indiatimes.com...e-winners-and-losers/articleshow/53532907.cms

This should give you an idea.

A person who earns 1000 rupees will pay the same GST on everyday items like petrol , food items , phones etc as a person earning 10,000 rupees... that puts more pressure on the low income groups , it's not proportional tax

Yes the government will be able to show that it has more money in its bag at the end of fiscal year but overall this is not good for low income group , who will slowly but surely get shafted as a result of this

There is no transformation here , GST is indirect taxation , it is just a way of taxation on the low income groups who tend to part of the "undocumented" economy and out of the tax net

GST reduces the tax burden on the poor and taxes the rich. Buying a two wheeler will be cheaper. Buying a movie ticket will be more expensive.

 

[Abingdonboy]

Nothing good will come from this , just typical modi spin

It has been mooted by most analysts that 1-2% of GDP growth can be added to the economy FAR before Modi was even PM (the GST itself was first formulated under the UPA) so your assertion is totally false.

 

[AugenBlick]

It has been mooted by most analysts that 1-2% of GDP growth can be added to the economy FAR before Modi was even PM (the GST itself was first formulated under the UPA) so your assertion is totally false.

He is simply extrapolating from his country. Since IMF pushes pak to increase tax-to-GDP ratio and pak is unable to do so, they jack up indirect taxes for the next IMF installment. He is parroting lines he heard his countrymen say while stashing money abroad and has no Idea what GST actually is.

 

[Abingdonboy]

He is simply extrapolating from his country. Since IMF pushes pak to increase tax-to-GDP ratio and pak is unable to do so, they jack up indirect taxes for the next IMF installment. He is parroting lines he heard his countrymen say while stashing money abroad and has no Idea what GST actually is.

Well he should rest easy knowing that India won't be taking lessons in how to manage their economy from Pakistan

 

[oprih]

Just like most of the civilized world, I will never trust fake indian economic growth rate.

 

[Mista]

Sounds great if it really unifies the tax system.

 

[proud_indian]

Ready For Take-off
The ecosystem created by GST will facilitate manufacturing hubs

Written by Rana Kapoor | Published:August 5, 2016 12:20 am

Union Finance Minister, Arun Jaitley with Chief Economic Advisor Arvind Subramanian after a Press Conference on the Goods and Services Tax in New Delhi on Thursday. (PTI Photo)

India’s post-independence history has seen a few game-changing reforms like institutionalisation of centralised planning, the green and white revolutions, bank nationalisation, economic liberalisation, savings rate deregulation, FDI liberalisation and the golden quadrilateral project. These have exalted India’s economic status.

The latest move by the government to pass the Goods and Services Tax (GST) bill is a jewel in the crown of economic reforms. The GST will unify and strengthen India’s tax architecture and bring it in sync with some of the best tax systems in the world. It will make manufacturing efficient and boost the ease of doing business. In doing so, the GST will usher a virtuous growth cycle in India for several decades.

A landmark change like the GST involves assiduous consensus-building in a federal political-economic structure. Countries that have implemented the GST have gone through a similar experience. The Narendra Modi government has, in fact, in a short span of a little over two years displayed deft floor management and outreach skills. It has brought together various stakeholders who now agree on the contours of the GST. The implementation of the 14th finance commission’s recommendations and gradual harmonisation of tax rates in the manufacturing and service sectors clearly gave a fillip to the consensus-building process for the GST.

Policymakers will now work towards building the facilitating architecture in order to roll out GST from April 2017.

Implementation of GST is expected to create a shift from a complex, multi-layered and cascading indirect tax system to a single unified indirect tax system that permits tax set off across the value chain, both for goods and services. This will lower the cost of production, making Indian goods competitive, vis-a-vis imports and enhance their profitability. Efficiency will drive economies of scale, leading to harnessing of inflation.

Inter-state barriers to the trade of goods in the form of location-based tax requirements have led to deadweight losses with respect to transportation transit time. This has created inefficiencies in the supply chain. GST is expected to reduce the compliance scrutiny thereby leading to seamless movement of goods between states.

Restructuring of inter-state transactions is expected to create a level playing field with the creation of a common national market. In this context, the government’s decision to scrap the one per cent inter-state levy was correct as it would have undermined the true benefit of GST by increasing compliance costs. Statistics suggest that, on an average, truckers lose about six hours daily in tax compliance-related matters at various entry points, adding to inefficiencies in logistics and transportation.

Presently, all decisions with respect to supply and distribution are guided by the need to minimise the impact of indirect taxes. With the advent of GST, the supply chain decisions are likely to be a function of economic factors such as costs and proximity to markets rather than non-economic factors such as the VAT rate differentials between states. This shall lead to efficient reallocation of resources in the economy.

The government’s push at making India the global hub for manufacturing is likely to be founded on the ecosystem that GST will create. A favourable environment for supply chains, seamless movement of goods between states and improved efficiency will foster higher growth in the manufacturing sector. This will, in turn, facilitate the fruition of the “Make in India” dream.

At a macro-level, the benefits of GST should start unfolding over two-three years. The most significant impact would be the structural enhancement of India’s potential GDP growth by 1.0 per cent-1.5 per cent – a disinflationary impact led by a revival of the investment cycle and improvement in the government’s tax buoyancy.

The formation of the monetary policy committee (expected to be in place by September 2016), the clearing of the insolvency and bankruptcy code and the GST will fortify India’s economic system. It will prepare the economy for the next take-off.

The writer is MD & CEO, YES BANK and chairman, YES Institute

http://indianexpress.com/article/opinion/columns/gst-will-facilitate-manufacturing-hubs-2954250/​

 

[Abba_Dabba_Jabba]

A person who earns 1000 rupees will pay the same GST on everyday items like petrol , food items , phones etc as a person earning 10,000 rupees... that puts more pressure on the low income groups , it's not proportional tax

Yes the government will be able to show that it has more money in its bag at the end of fiscal year but overall this is not good for low income group , who will slowly but surely get shafted as a result of this

There is no transformation here , GST is indirect taxation , it is just a way of taxation on the low income groups who tend to part of the "undocumented" economy and out of the tax net

Any indirect tax is always regressive in nature, GST will have a uniform rate on all the manufactured goods but I think there will be some exception in the budgets to avoid more tax on the basic products used by the poor section of the society.

The Cereals & Pulses prices won't get affected by GST hence it won't affect the people living in lowest level of poverty. But it will promote the other luxury consumer goods like AC, Refrig.,TV, Laptop,etc. coz their rate is way too high.

 

[liall]

I know thats what the politicians tell us, but the ground reality, is it true? Canada is losing it's competitiveness due to high taxes whether corporate or provincial. But let's not derail the thread about Indian GST.

The GST in India aims to bring efficiency in the system of taxation, easier and faster flow of goods. Whether the implemented GST rate is too high or too low remains to be seen.

 

[Abba_Dabba_Jabba]

Just like most of the civilized world, I will never trust fake indian economic growth rate.

So which uncivilized world trusts India's growth rate ? And BTW who are these "civilized world" ?

Summary of this GST phenomenon :
Pros :
1. Efficiency in Taxation system.
2. Will bring more entities in the loop.
3. Foreign companies will be benefited.
4. Manufacturing & Services companies will benefit.
5. Will help in smooth clearance in inter state transactions.
6. Will reduce the Inspector raj.

Cons :
1. Regressive tax.
2. Not good for MSMEs, will have to pay same tax as the large corporates.
3. Doubt about its implementation and complete form.
4. Doubt about revenue increase.

Plus I am still skeptical about its effect on GDP growth rate, coz I think GST only promotes manufacturing of goods which are highly taxed at the moment but at the same time it will affect the production of the goods with less taxes.

 

[neem456]

Just like most of the civilized world, I will never trust fake indian economic growth rate.

No body is trying to convince you. You can bury your head back into sand, dont take it out yet.

 

[Soumitra]

A person who earns 1000 rupees will pay the same GST on everyday items like petrol , food items , phones etc as a person earning 10,000 rupees... that puts more pressure on the low income groups , it's not proportional tax

Yes the government will be able to show that it has more money in its bag at the end of fiscal year but overall this is not good for low income group , who will slowly but surely get shafted as a result of this

There is no transformation here , GST is indirect taxation , it is just a way of taxation on the low income groups who tend to part of the "undocumented" economy and out of the tax net

This is where you are wrong. Lets say a person earns 1000 a month. He will be spending say 800 a month on goods and services and assuming GST of 10% will be paying 80

A person earning 10000 will buy 8000 worth of services and will pay 800

The rates are same but the rich and poor are charged differentially as they buy and use different goods and services

A poor person will not go to 4-5 star hotel and spend 1000 on a meal. He will go to the local dhaba and have the meal at Rs. 100