“Goods and services tax as an unfinished agenda”

News– GST was launched in July,2017 with the vision of  “one nation one tax”, it has seen quite some adaptations since then but still lacks in some key aspects.   What was the vision behind GST’s Introduction  It was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices. Many exemptions,… Continue reading “Goods and services tax as an unfinished agenda”

Freebies, handouts and other myths loved by income taxpayers

Synopsis: Instead of blaming the government to offer freebies, people should decide what all services/ benefits they want from the government. Introduction Recently, the idea has been floated by an income tax officer to have a” taxpayers union”. A section of the people welcomed this idea as they think that income taxpayers are the main funders… Continue reading Freebies, handouts and other myths loved by income taxpayers

GST rationalisation: Challenge and response

Synopsis: A revision of GST slab rates may create some disquiet, but, if cleverly crafted, it could be a game-changer for manufacturing. Introduction Recently, the group of ministers (GoM) was formed by the GST Council for rate rationalisation and correcting the inverted duty structure. The GoM has a very difficult task of balancing a number… Continue reading GST rationalisation: Challenge and response

The state of states: On lack of data on state’s finances

Source: This post is based on the article “The state of states” published in Business Standard on 13th October 2021. Syllabus: GS3 – Indian Economy and issues relating to Planning, Mobilization of Resources Relevance: Significance of data on states’ finances Synopsis: Data of the Union Govt’s finances is made available at the end of every… Continue reading The state of states: On lack of data on state’s finances

Pandora papers reveal legislative limits of preventing tax dodging

Synopsis: Pandora Papers reveal complex issues associated with offshore investments. Introduction Pandora Papers consist of as many as 12 million documents belonging to 14 global corporate services firms, which set up about 29,000 off-the-shelf companies and private trusts in obscure tax jurisdictions. Must read (Only new points are covered in this article): Pandora Papers and… Continue reading Pandora papers reveal legislative limits of preventing tax dodging

A time to introspect: On GST Council meeting

What is the news?  Recently, GST Tax Council held its first physical meeting during the pandemic. It approved various changes. Concessional tax rates on vital COVID-19 equipment such as oxygen concentrators will lapse on Sep 30, while the lower rates on medicines were extended till December. As there are no signs the virus and its variants… Continue reading A time to introspect: On GST Council meeting

New hope in private investment?

Synopsis: After long, India has witnessed an increase in private investment. This article explains the reasons for the current shift and significance of Private investment. What is the significance of Private investment? Private investment is the most important source of economic and cultural dynamism in a country. Most gross domestic product (GDP) and most jobs… Continue reading New hope in private investment?

Structural changes in GST

Synopsis: Several important decisions taken during the Goods and Services Tax (GST) Council’s 45th meeting in Lucknow last week. What are the important decisions taken during the GST Council’s 45th meeting? Concessional rates for Essential medicines: The council extended concessional rates for several drugs, such as Remdesivir, used to treat Covid-19. It also reduced duty… Continue reading Structural changes in GST

Recommendations of 45th GST Council Meeting

What is the News? The Finance Minister has chaired the 45th Goods and Service Tax (GST) Council meeting. This was the first in-person GST meet since the Covid-19 pandemic. What are the key recommendations made at the GST Council meeting? Concession on Medicines Life-saving drugs Zolgensma and Viltepso used in the treatment of Spinal-Muscular Atrophy… Continue reading Recommendations of 45th GST Council Meeting

There finally seems to be a path forward for GST. Centre and states must strike bargain

Synopsis: After one and a half years of dispute, and with the economy showing signs of recovery, a path forward for the GST finally seems visible. This opportunity needs to be seized What has set back the GST for the past year and a half? Lack of revenues: In 2016-17 the various taxes that were… Continue reading There finally seems to be a path forward for GST. Centre and states must strike bargain

The repeal of the retrospective tax shows Modi government means business on reforms

Source: The Indian Express Relevance: This article explains government actions to boost investor confidence Synopsis: Along with the taxation Laws (Amendment) Bill, India has taken many steps to boost investor confidence. Introduction: The government has recently introduced the Taxation Laws (Amendment) Bill, 2021, in Parliament. The bill seeks to nullify the contentious retrospective tax law by amending the Income Tax (IT)… Continue reading The repeal of the retrospective tax shows Modi government means business on reforms

The sovereign right to tax is not absolute

Source: The Hindu and Livemint Relevance: This article explains India’s sovereign right to tax and its limitations Synopsis: India has a sovereign right to tax, but that right is subject to certain limitations. Introduction: The government has recently introduced the Taxation Laws (Amendment) Bill, 2021, in Parliament. The bill seeks to nullify the contentious retrospective tax law by amending… Continue reading The sovereign right to tax is not absolute

Does bill scrapping retro tax go far enough? Worries are the no interest clause, later I-T interpretation

Source: The Hindu, The Indian Express and Times of India Relevance: This article explains issues with the 2012 amendment which provide retrospective taxation and the challenges with the recent bill. Synopsis: Delayed reset on retrospective tax is only the first step to regaining investor confidence Introduction: The government has recently introduced the Taxation Laws (Amendment) Bill,… Continue reading Does bill scrapping retro tax go far enough? Worries are the no interest clause, later I-T interpretation

A grand tax bargain in danger of coming apart  

Source: The Hindu Relevance: Issues with GST regime Synopsis: A version 2.0 of GST may have to be designed sooner rather than later. Issues existing with GST Non-expanding tax base: The tax base of GST does not appear to be expanding. The Tax to Gross value addition (GVA) is only about 5% to 6.5% though… Continue reading A grand tax bargain in danger of coming apart