Archives for March 2018

The Goods and Services Tax is one of the most complex taxes in the world with the second highest tax rate, the World Bank has said.

The GST was implemented by the Union Government on July 1 last year. GST has the second highest tax rate in the world, the World Bank has concluded after studying 115 countries that have similar indirect tax regimes.

The Goods and Services Tax was launched by Prime Minister Narendra Modi’s government with five tax slabs that are 0 per cent, 5 per cent, 12 per cent, 18 per cent, and 28 per cent.

Currently, around 49 countries have a single slab tax structure, while 28 countries use two slabs and there are only five countries, including India, which use five or more slabs. The other countries are Italy, Luxembourg, Pakistan and Ghana.

The World Bank’s biannual publication, ‘India Development Update: India’s Growth Story’ expects the economy to clock a growth rate of 6.7 per cent in the current fiscal.

“High compliance costs are also arising because the prevalence of multiple tax rates implies a need to classify inputs and outputs based on the applicable tax rate. Along with the need to apply the correct rate, firms are required to match invoices between their outputs and inputs to be eligible for full input tax credit, which increases compliance costs further,” it added.

The World Bank report further says accelerating the growth rate would also require continued integration into the global economy.

“Key to success is a policy design that minimizes compliance burden, for example by minimizing the number of different rates and limiting exemptions, with simple laws and procedures, an appropriately structured and resourced administration, compliance strategies based on a balanced mix of education and assistance programs and risk-based audit programs,” it said.

“The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors — that is, to about 7.5 per cent a year,” the report said.

(Agencies)

Mumbai: The ruling Bharatiya Janata Party’s tally may drop by 100-110 seats in the next Lok Sabha polls in 2019, if the current trends and the results of the recent bypolls are an indicator, its ally Shiv Sena said in a gloomy prediction here on Friday.

“The twin wins by the Samajwadi Party in BJP bastions like Gorakhpur and Phulpur has created panic in the BJP camp even as they were busy celebrating the party’s victory in a small state like Tripura last week,” the Sena said in a tough edit in the party mouthpieces, ‘Saamana’ (Marathi) and ‘Dopahar Ka Saamana’ (Hindi).

Though the BJP claims that by-elections do not reflect the mood of the country, ever since Prime Minister Narendra Modi took over, the party has lost nearly nine seats in Lok Sabha by-polls, slashing its tally from 282 to around 272 – the half-way mark in the 543-strong Lower House, the editorial said.

“It was barely a year ago that the BJP won the Uttar Pradesh assembly polls, creating a record by winning 325 seats. The saffron-clad Yogi Adityanath, who has never lost the Gorakhpur seat since 1991, became the state Chief Minister. So despite the huge popularity they enjoyed, why was their citadel shattered,” the Sena wondered.

It could be said that in 2014, there was a huge “wave” of popularity and water had blocked the eyes and ears of the masses, leading to (BJP’s) victory, but, now the wave has receded and people can “see” everything clearly, the edit said.

The BJP is now blaming “poor voter turnout”, “lack of enthusiasm” or “a deal between the Samajwadi Party with Bahujan Samaj Party” for its rout in the two critical seats in Uttar Pradesh.

“Since 2014, how many deals has the BJP entered into for power… What about Naresh Agrawal, who was inducted in BJP with such fanfare? In Tripura, the BJP could win only after the entire Congress and Trinamool Congress ‘merged’ with it” the Sena pointed out.

Referring to the polls, the Sena said the SP candidates secured big margins in both Gorakhpur and Phulpur, indicating that the people went out of the way to defeat the BJP in both seats which were won with huge margins of two-three lakh votes in 2014.

On the winning spree of the Rashtriya Janata Dal in Bihar’s Jehanabad and Araria, the Sena said some BJP leaders were living in a fool’s paradise as they attributed it to “a sympathy wave” for the jailed RJD President Lalu Prasad Yadav.

“Lalu is in jail for corruption… and that could be a politics of vendetta. Despite that if he can get ‘sympathy’, then it’s a big blow to both Nitish Kumar and Modi… The outcome has thrown down the BJP from the sky to the ground,” the Sena said.

“Amidst all this, it is clear now, that in 2019, the BJP’s numbers will not be 280, but it will plummet by at least 100-110 seats. The elections are not being fought in Russia, America, Canada, France or Israel, but in India. So they (BJP) should keep their feet on the ground here,” the Sena warned.

(IANS)