...Vol. 4 (1) www.buget-finante.ro Goods and Services Tax (GST) in India: prospect for states by Mohd. Azam Khan1 and Nagma Shadab2 Department of Economics, Aligarh Muslim University, India Abstract: Goods and services tax (GST) is a broad based and a single comprehensive tax levied at every stage of the production and distribution chain with applicable set-off in respect of the tax remitted at previous stages. It is basically a tax on final consumption integrates the union excise duties, custom duties, services tax and state VAT. Presently around 140 countries have adopted the GST pattern, including India. The GST would be beneficial for the consumers as it reduces the final burden of taxation. For Government it leads the reduction of tax compliance efforts and administrative costs and for business units it leads transparency, complete set-off and removal of cascading effect of taxation. It is in this background that the present paper tries to explain the significance of GST in India and its prospects for states to generate revenue and ensure transparency in tax structure. This paper is organized into seven sections. Section two presents justification for dual structure of GST in India. The third part presents the rate structure under GST work in India. The fourth segment is concerned with the working of GST in India. The fifth part shows the international experiences of GST at state level in India. The seventh and final part is related to conclusion and policy recommendations...
Words: 8698 - Pages: 35
...strongest weapons to fight out tobacco,” said Arun Thapa, Acting WHO Representative to India. Hiking tobacco taxes by 320% between 1996 and 2013 helped the US reduce its per capita annual consumption of cigarettes from 1820 to 893 cigarettes, and cut the number of adults who smoke by about a third. In India, central-excise duty has increased 1606% on the shortest non-filter cigarettes available and 198% on the shortest filter cigarettes since 1996. Taxes constitute about 60% of the price of a best-selling pack of 20 cigarettes, against about 43% in the US. But India was not able to reduce its capita annual consumption of cigarettes in the same proportion. Cigarette smokers in India increased from 25 million to 46.4 million over 14 years (1996 to 2010), and per capita annual consumption of cigarettes declined marginally, from 101 to 96 cigarettes over the same period. With some assumptions, it can be shown that the tax on bidis can be increased to Rs. 100 per 1000 sticks compared with the current Rs. 14 and the tax on an average cigarette can be increased to Rs. 3.5 per stick without any fear of losing revenue. The government though has been taking rigorous initiatives to try and reduce the consumption of tobacco products it has not been able to achieve the results which it wanted to have. There have been many reasons for this to happen and we will look into it in this report. Introduction:- In India, tobacco consumption is responsible for half of all the cancers in men and a quarter...
Words: 1784 - Pages: 8
...The Government of India had released the draft Direct Tax Code (‘DTC’) along with a Discussion Paper in August 2009 for public comments. Various stakeholders have provided their feedback and the Government subsequently released a Revised Discussion Paper in June 2010 addressing some of the key concerns on the DTC. The DTC would replace the existing direct tax legislation constituted by the Income Tax Act, 1961 and the Wealth Tax Act, 1957 with effect from April 1, 2011. It aims to simplify the language with an intention to remove uncertainty in interpretation of the tax law and mitigate undue litigation. While most of the provisions in the DTC meet these objectives, there are certain provisions relating to Minimum Alternate Tax (‘MAT’), General Anti-Avoidance Rules (‘GAAR’) and Determination of Residential Status of Foreign Corporate, which could have adverse and undesirable consequences. This term paper provides an overview of the key proposals in the DTC and their impact on both domestic and international businesses in India. Introduction The compatibility and conduciveness of a taxation system plays an important lubricating role in the overall growth and direction of an economy. Tax laws are often seen not as a mere framework for the government to collect revenues, but as an effective tool to direct and propel the economy to higher levels, more so in a developing economy like Indian economy. The government of India proposed several changes in the tax system from time to time...
Words: 2890 - Pages: 12
...Briefly compare the political regime type in China and India. Which of the two would you prefer to do business in and why? The political regime of a country attempts to protect the interests of its citizens through social, environmental and economic goals. These objectives often have significant, yet varying impacts on organisations operating within the nation; depending upon the nature of their business and the political ideologies of the country in question. As a result, international companies looking to expand their operations overseas must carefully consider the nature of the political regime and the resultant factors which will impact their ability to conduct business and generate profits. The Peoples Republic of China and India are two vast nations which over the past several decades have undergone considerable development and economic growth and therefore represent substantial opportunity for international businesses to expand or outsource their operations. Despite their geographic proximity, China and India have very different political philosophies and regimes which have resulted in variations in their regulatory framework, taxation policies, stock exchanges, intellectual property rights and the consequential foreign direct investment and growth. The Peoples Republic of China operates through a single party political system led by the Communist Party of China. Traditionally, Marxist ideologies dominated the nation’s economic regulation, however reform in 1978...
Words: 1943 - Pages: 8
... 3 Objectives of Tax reforms ............................................................................................................................. 5 Implementation of the Existing System .................................................................................................. 11 Shortcomings of the Existing Tax Structure .......................................................................................... 13 Alternatives Available in the implementation ....................................................................................... 18 Tax base and Rates ........................................................................................................................................ 25 Implementation of GST in other countries......................................................................................... 37 Data Analysis and Interpretation........................................................................................................... 38 BIBLIOGRAPHY ............................................................................................................................................. 40 LEGAL ASPECTS OF BUSINESS | GST-the next big reform Page 2 INTRODUCTION Probably the biggest tax overhaul system, which independent India has seen could be the introduction of Goods and Services Tax, leave apart the Direct Tax Code (which could replace the Income Tax Act, 1961). Though the implementation date of GST is still...
Words: 14431 - Pages: 58
...| | | | | | INDIRECT TAXATION CIA – II INDIAN TAX STRUCTURE TAXATION SYSTEM IN INDIA India has a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies. Central Government levies taxes on income (except tax on agricultural income, which the State Governments can levy), customs duties, central excise and service tax. Value Added Tax (VAT), stamp duty, state excise, land revenue and profession tax are levied by the State Governments. Local bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc. Indian taxation system has undergone tremendous reforms during the last decade. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India. Direct Taxes In case of direct taxes (income tax, wealth tax, etc.), the burden directly falls on the taxpayer. Income tax According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the Finance Act. Such income tax shall be paid on the total income of the previous year in the relevant assessment year. Assessee means a person by whom (any tax) or any other sum of money is payable under the Income Tax Act, and includes - (a) Every person...
Words: 3542 - Pages: 15
...the institute of cost accountants of india(ICAI) (A Statutory body under an act of parliament) SYLLABUS 2012 STRUCTURE & contents Evaluation Synthesis ANALYSIS ANALYSIS APPLICATION APPLICATION COMPREHENSION COMPREHENSION COMPREHENSION KNOWLEDGE KNOWLEDGE KNOWLEDGE LEVEL A LEVEL B LEVEL C FOUNDATION COURSE - Syllabus 2012 the institute of cost accountants of india(ICAI) (A Statutory body under an act of parliament) SYLLABUS 2012 STRUCTURE & contents The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1 FOUNDATION COURSE - Syllabus 2012 The Following table lists the learning objectives and the verbs that appear in the syllabus learning aims and examination question. Learning objectives Level A COMPREHENSION What you are expected to understand List Make a list of. State Express, fully or clearly , the details/ facts of. Define Give the exact meaning of. Communicate the key features of. Distinguish Highlight the differences between. Explain Make clear or intangible/state the meaning or purpose of. Identify Recognise, establish or select after consideration. Illustrate What you are expected to know Definition Describe KNOWLEDGE Verbs used Use an example to describe or explain something. The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) ...
Words: 18528 - Pages: 75
...“TAXATION OF E-COMMERCE AND ITS CHALLENGES” The advancement in the technological world gave rise to E-commerce. It is the new buzzword of the 21st century. In terms of accounting "E-commerce is the process of buying, selling, or exchanging products, services, or information via computer networks through the use of internet”. It offers a new way of conducting, managing and executing business transactions using modern information technology without any geographical barriers. It has redesigned the traditional mode of business which is based on –physical presence and physical delivery of goods and services. E-commerce is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services. This article is an attempt to highlight the key issues in the area of ecommerce taxation analyzing and understanding the existing tax legitimate. Since EC can be conducted virtually instantaneously around the globe and around the clock, the question where the profits should be taxed becomes crucial. Taxing the Internet is a topic haunting governments from all over the world. The Need To Tax The e-commerce industry of India is one of the fastest growing segment in the Asia Pacific region. With a staggering CAGR of 34.58% from 2009 to 2012, the Industry has expanded from INR 19249 Crore (USD 3.49 bn) to INR 47,349 Crore (USD 8.60 bn) in a matter of 3 years. Electronics and Apparel are the biggest categories in terms of sales...
Words: 1064 - Pages: 5
...SOCIALISM OF SOCIETY IN INDIAN ECONOMY INTRODUCTION Impact of Dr. B.R.Ambedkar's thoughts on Indian economy is evaluated under the following main heads: * Reforms on agricultural lands. * Currency problem. * Financial problem in public. * Taxation policy. * Industrial growth on national level. * Economic development. * Socialism of state. * Miscellaneous economic Problems. I. Economy enterprises. II. Over population III. Upliftment of women for economic development. IV. Human capital. V. Hindu economy. (1) Reforms on agricultural land:- After long study on Indian agriculture Ambedkar recognised that problems of agriculture related to farmers should be solved, in one of his article i.e. "Small Holdings in Indian and their remedies"(1917) and also in "Status and minorities"(1947) he has suggested some reforms which has included in the manifesto of the "Swatantra Majdur Paksha"and the Scheduled caste Federation. Ambedkar recognized that small subdivided and fragmented holdings of land are the major problem of Indian agriculture with affects. It has resulted in various disadvantages, and there were difficulties in cultivation and utilization of resources increasing cost, low productivity, inadequate income, Low standard of living etc. According to Dr. Ambedkar reforms on agriculture is not related only with the size of holdings but also with other factors such as capital, labour and other inputs, so the concept of "Idea of...
Words: 2054 - Pages: 9
...Indian and Chinese policies to tackle inflation Abstract: India and china the two Asian giant, have shown economic growth in last few decades. The expansion of the economy brought high inflation in both countries. Inflation impacts all types of the consumers while rich or poor, it will become a real problem if the countries didn’t adopt policies to decrease the inflation rate. India and china have a very fast economic growth with fast population. The government and the central bank have to work beside to curb the inflation using two main policies are monetary policy and fiscal policy. In the monetary policy the central bank has to manage the many supply in the market and also control and decline the inflation, in terms of fiscal policy the government try to see the tax level to impact in the inflation rate. Monetary policy has more effect than fiscal policy, but also there are challenges implementations of the policies. Argument 1(monetary policy) India has faced a hyperinflation in years 2009 to 2011 to unprecedented level. The inflation in India affects the saving of the Indian household which decreased the value of saving in that nation. The monetary authorities are trying to impact the money supply directly without creating deformation in the economy by changes CRR (cash reserve ratio), repo and reverse repo rate. The main objective is to maintain price stability. The RBI (reserve bank of India) trying to control the money supply by using which called contractionary...
Words: 2383 - Pages: 10
...of DTAA How do treaties remove Double taxation Structure of a typical DTAA and major Models Conventions used in world Applicability of DTAA Interpretation techniques of DTAA How to determine which DTAA is applicable and how to apply that DTAA Some important concepts used in DTAA Some important points to remember 3 Problems faced while uploading • Form 15CA • • • CA Dayavanti Khilolani 28th January 2012 CA Dayavanti Khilolani 28th January 2012 4 Tax Payer resident of State A Operating in State A State B State C Each state having its own tax system and rights over taxpayer Double taxation of Income in the hands of taxpayer Economic Double taxation Juridical Double Taxation Same Income taxed in two states in the same period in the hands of different taxpayer Same Income taxed in two states in the same period in the hands of same taxpayer Elimination of Double Taxation Via Double Taxation Avoidance Agreements CA Dayavanti Khilolani 28th January 2012 5 CA Dayavanti Khilolani 28th January 2012 6 CA Dayavanti Khilolani 28th January 2012 7 CA Dayavanti Khilolani 28th January 2012 8 CA Dayavanti Khilolani 28th January 2012 9 Scope of the Convention Definitions Taxation of Income (Active and Passive)...
Words: 2077 - Pages: 9
...Acknowledgment 2. Introduction to Indian economy 3. Meaning of fiscal policy 4. Need & importance of EP 5. Use of fiscal policy by Indian government 6. Fiscal policy before & after liberalization 7. Indian tax system & fiscal policy 8. Role in development of Indian Economy 9. Shortcomings or deficiencies in our fiscal policy 10.Findings & suggestions on Indian fiscal policy ECONOMY OF INDIA The economy of India is the eleventh largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). The country is one of the G-20 major economies and a member of BRICS. On a per capita income basis, India ranked 140th by nominal GDP and129th by GDP (PPP) in 2011, according to the IMF. After the independence-era Indian economy (before and a little after 1947) was inspired by the Soviet model of economic development, with a large public sector, high import duties combined with interventionist policies, leading to massive inefficiencies and widespread corruption. However, later on India adopted free market principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P.V. Narasimha Rao the then Prime Minister who eliminated License Raj a pre- and post-British Era mechanism of strict government control on setting up new industry. Following these strong economic reforms, and a strong focus...
Words: 5763 - Pages: 24
...or as its labour equivalent (often but not always unpaid labour). India has a well developed taxation structure. The tax system in India is mainly a three tier system which is based between the Central, State Governments and the local government organizations. In most cases, these local bodies include the local councils and the municipalities. According to the Constitution of India, the government has the right to levy taxes on individuals and organizations. However, the constitution states that no one has the right to levy or charge taxes except the authority of law. Whatever tax is being charged has to be backed by the law passed by the legislature or the parliament. Article 246 (SEVENTH SCHEDULE) of the Indian Constitution, distributes legislative powers including taxation, between the Parliament and the State Legislature. Schedule VII enumerates these subject matters with the use of three lists; • List - I entailing the areas on which only the parliament is competent to makes laws, • List - II entailing the areas on which only the state legislature can make laws, and • List - III listing the areas on which both the Parliament and the State Legislature can make laws upon concurrently. Separate heads of taxation are provided under lists I and II of Seventh Schedule of Indian Constitution. There is no head of taxation in the Concurrent List (Union and the States have no concurrent power of taxation). Any tax levied by the government which is not backed by law or...
Words: 4564 - Pages: 19
...critical thinking skills you have gained so far and referring to the materials provided for this assignment, identify two possible strategies that Thomas Hutchinson or Samuel Adams likely used to develop and improve their thinking as those historical events unfolded prior to taking a stand and acting according to their beliefs. Samuel Adams may have used strategy one: analyzing a single statement for what is means by asking yourself if the statement makes sense and if so responding with a yes or no answer. Adams was not only an extremist but a political writer speaking to issues that directly affected colonies like the Stamp Act and tea distribution from East India. Both of these events affected many colonists in a negative way because the Stamp Act added taxation to certain products, while India tea imports, caused some colonists to lose money from their own tea sells. Adams would have had to ask himself why these acts where just or unjust by analyzing them individually in a literal sense. He publicly came to the conclusion that these acts were unjust because they both caused colonists to lose money and also put a damper on their personal values and liberty. Another strategy he may have used it number 3, which is when something that is presented as factual isn’t and therefore needs an explanation on why it can or can’t be validated. By evaluating and concluding in his writings that colonists should not be taxed without the proper representation to back up this very...
Words: 2387 - Pages: 10
...What are the Challenges in Designing an Effective Personal Income Tax System? Introduction Taxation, as a primary media of the implementation of fiscal policies of various national governments, generally has three primary functions, which come as follow: * Raise funds as a main source of fiscal income of national governments * Stabilize the market and macro economy against market failure * Distribute and redistribute the income among individuals to reduce social wealth inequality The priority of those functions varies from country to country and changes in different phases of social and economic development. For most developing countries, the widening gap between the rich and the poor is not only a major economic issue arousing public concern but also a major social issue. The developed west, yet is in need of effective taxation system to tackle with problems such as everlasting heavy deficit and dim market outlook. Table 1 World Gini Indexes for Major Global Economies in 1990, 2000 and 2010 Year | U.S. | Canada | U.K. | Switzerland | Germany | France | Russia | China | Brazil | India | Japan | 1990 | 42.8 | 35.2 | 36.5 | 34.1 | 34.2 | 29.2 | 25.9 | 32.7 | 60.4 | 31.2 | 26.4 | 2000 | 44.2 | 33.3 | 37.5 | 33.4 | 30.3 | 31.1 | 42 | 40.7 | 58.5 | 32 | 27.6 | 2010 | 47 | 33.6 | 35.9 | 32.4 | 30.5 | 33.2 | 35.9 | 48.1 | 49.5 | 35.6 | 32.1 | Among the taxes of all kinds, personal income tax is one of the most effective monetized tools targeting at individual...
Words: 558 - Pages: 3
