Entire design of GST is faulty

[hyperbole]

here is a nice write up on the issues faced by the states and center.

GST collections have remained subdued, with average monthly mop-up in the first eight months of the year at Rs 1 lakh crore as against the target of Rs 1.1 lakh crore. With the government looking at an annual shortfall of around Rs 1 lakh crore, states seem to be bearing the brunt as under GST, they have given up their power to fix tax rates and, hence, depend largely on the Centre for making up any revenue shortfall. But with the Centre itself facing a revenue crunch, it has started delaying the payments provided for under the GST law.

https://www.businesstoday.in/magazine/cover-story/gst-shock-for-states/story/392562.html

 

[pottipotato]

Just now, lovemystate said:

comparing venezuela with india. Do people know anything about venezuela? they have egalatarian christian culture. last time when they measured their gdp "Per capita GDP for 2016 was estimated to be US$15,100, ranking 109th in the world". And india per capita is 2500 something now in 2020. Their cities are hundred times cleaner, with better air, better car ownership. The youth date freely and party freely not like us looking at castes and nonsense.

Venezuela is heaven dude. It is now run by an idiot. but that idiot still listens to his people. is not a fcukface like Modi.

I would settle in Venezuela in a flash, over India any day.

[pottipotato]

19 minutes ago, Android_Halwa said:

Every nation is different and there is no proper scale to measure success/failure.

India is hugely successful considering where it started, from hunger deaths to better meals, we have cover quite a distance although lot more to cover. 

If India is hugely successful, then the word 'success' has no meaning.

literally every country in its neighbourhood is doing better than India. 

[pottipotato]

5 minutes ago, lovemystate said:

comparing venezuela with india. Do people know anything about venezuela? they have egalatarian christian culture. last time when they measured their gdp "Per capita GDP for 2016 was estimated to be US$15,100, ranking 109th in the world". And india per capita is 2500 something now in 2020. Their cities are hundred times cleaner, with better air, better car ownership. The youth date freely and party freely not like us looking at castes and nonsense.

Venezuela has collective farms, factories, and I think people born in Venezuela are blessed. Govt literally encourages anarchist communes in Venezuela.

They are struggling now, but some day, they will find their nirvana.

[hyperbole]

The 'Design' Problem

Though the central government had promised states compensation for any losses due to implementation of GST for the first five years, this may not solve the problem for many states who feel they sacrificed a lot of revenue due to the GST design. The manufacturing states, which are not necessarily also consuming states, say they are at a loss as GST is a consumption tax, collected in the state where the goods/services are consumed. It is not a new debate, but with the compensation arrangement coming under stress, manufacturing states have started raising questions about the viability of GST after the central compensation stops. "States like Chhattisgarh, which are not consuming states, will suffer heavily after the five-year period ends in June 2022 when compensation from the Centre stops," says T.S. Singhdeo, the Commercial Tax Minister of Chhattisgarh.

Chhattisgarh is facing a GST revenue shortfall of around 25 per cent assuming 14 per cent revenue growth since 2015/16. There are others like Puducherry, with a shortfall of around 40 per cent, Punjab (36 per cent), Himachal Pradesh (35 per cent) and Uttarakhand (32 per cent). The reason in case of Puducherry is specific to it. Before GST, it was over-reliant on central sales tax (CST). While the average contribution of CST to tax collections of states was 8 per cent, in case of Puducherry, it was 27 per cent. These deficits are unlikely to be wiped out by June 2022 when the five-year compensation period gets over. The Centre now expects these states to find alternative sources of revenue.

Only a few North-eastern states have been able to wipe out the deficit so far. In case of Punjab, 25 per cent of its 2015/16 revenue came from agriculture purchase tax and infrastructure development tax. These got subsumed in GST and, hence, the wide shortfall in GST collections. The Punjab finance minister says with the Centre wanting states to fend for themselves after the five-year compensation period, there is a need to rethink the design of GST. He says maybe it is time for GST 2.0.

 

[lovemystate]

1 minute ago, pottipotato said:

Venezuela has collective farms, factories, and I think people born in Venezuela are blessed. Govt literally encourages anarchist communes in Venezuela.

They are struggling now, but some day, they will find their nirvana.

Yes and once the struggle is over they will quickly go back to their standards of life like japan or germany did. These people think these are some hell holes compared to india haha. I dont know about zimbabwe but i wont be surprised if thats also going ahead.

[lovemystate]

1 minute ago, hyperbole said:

The 'Design' Problem

Though the central government had promised states compensation for any losses due to implementation of GST for the first five years, this may not solve the problem for many states who feel they sacrificed a lot of revenue due to the GST design. The manufacturing states, which are not necessarily also consuming states, say they are at a loss as GST is a consumption tax, collected in the state where the goods/services are consumed. It is not a new debate, but with the compensation arrangement coming under stress, manufacturing states have started raising questions about the viability of GST after the central compensation stops. "States like Chhattisgarh, which are not consuming states, will suffer heavily after the five-year period ends in June 2022 when compensation from the Centre stops," says T.S. Singhdeo, the Commercial Tax Minister of Chhattisgarh.

Chhattisgarh is facing a GST revenue shortfall of around 25 per cent assuming 14 per cent revenue growth since 2015/16. There are others like Puducherry, with a shortfall of around 40 per cent, Punjab (36 per cent), Himachal Pradesh (35 per cent) and Uttarakhand (32 per cent). The reason in case of Puducherry is specific to it. Before GST, it was over-reliant on central sales tax (CST). While the average contribution of CST to tax collections of states was 8 per cent, in case of Puducherry, it was 27 per cent. These deficits are unlikely to be wiped out by June 2022 when the five-year compensation period gets over. The Centre now expects these states to find alternative sources of revenue.

Only a few North-eastern states have been able to wipe out the deficit so far. In case of Punjab, 25 per cent of its 2015/16 revenue came from agriculture purchase tax and infrastructure development tax. These got subsumed in GST and, hence, the wide shortfall in GST collections. The Punjab finance minister says with the Centre wanting states to fend for themselves after the five-year compensation period, there is a need to rethink the design of GST. He says maybe it is time for GST 2.0.

 

Ultimately thse central b@stards will force our states to encourage drunkuness and collect excise on liquor. 

[lovemystate]

Time to scrap GST in complete and go back to VAT.

[pottipotato]

2 minutes ago, lovemystate said:

Ultimately thse central b@stards will force our states to encourage drunkuness and collect excise on liquor. 

So KCR CBN were sleeping when they said okay to GST aa? dumbfcuks.

[lovemystate]

Just now, pottipotato said:

So KCR CBN were sleeping when they said okay to GST aa? dumbfcuks.

They cant fight. If united Ap maybe different thing. How could a broken AP completely orphaned in 2014 fight ? Thats one reason those b@stards closed parliament and bifurcated the state. Only TN fought as far as I know.

[hyperbole]

Just now, pottipotato said:

So KCR CBN were sleeping when they said okay to GST aa? dumbfcuks.

14% increase/year for 5 years supplement chesta annaru...ippudu revenue growth ledu ani chetulu ettesindru

 

[pottipotato]

6 minutes ago, lovemystate said:

Time to scrap GST in complete and go back to VAT.

No. GST is needed. India had taxes at multiple levels which was not worth going back to.

GST can be redesigned to be administered by the states, with the states fixing their own rates, and collecting taxes, and paying backtaxes to other states.

It works in Europe, when they are not even a single country, and with different VAT rates. 

Center dipping into states tax revenue is absolutely unacceptable.

[pottipotato]

5 minutes ago, lovemystate said:

They cant fight. If united Ap maybe different thing. How could a broken AP completely orphaned in 2014 fight ? Thats one reason those b@stards closed parliament and bifurcated the state. Only TN fought as far as I know.

Jayalalitha asked modi to fcuk off. all they had to do was join her. Pinarayi was also with her.

may be thats why they killed her.. who knows.

[pottipotato]

9 minutes ago, lovemystate said:

Time to scrap GST in complete and go back to VAT.

VAT means going back to the era where you had to pay multiple entry and exit taxes. Its useless.

[hyperbole]

5 minutes ago, pottipotato said:

No. GST is needed. India had taxes at multiple levels which was not worth going back to.

GST can be redesigned to be administered by the states, with the states fixing their own rates, and collecting taxes, and paying backtaxes to other states.

It works in Europe, when they are not even a single country, and with different VAT rates. 

Center dipping into states tax revenue is absolutely unacceptable.

problem is that the whole country runs on indirect taxation. less than 5% people pay income tax and center has no other major sources of income and at the same time  they can't trust the states fully to handle it's share of taxes.