What about service sector?
It refers to media reports about lowering GST on many more items so that 99 per cent items will be under 18 per cent or lower GST slab as yet another unneeded financial gimmick. It is not proper to reduce GST slab on items of long-term use like air-conditioners, refrigerators etc. because it is a one-time payment. Lower GST slabs are beneficial on items of day-to-day use.
But the government has never thought of lowering GST slab on invisible service sector where it needs urgent lowering from existing 18 per cent slab to 12 per cent. Such a high rate of GST slab hurts badly those honest taxpayers where professional service providers have to pay from their pocket a heavy dose of 18 per cent GST when those having availed service do not pay GST. For example, even government departments and TV channels do not pay GST on delivering lectures or participating in TV debates. While on the other hand, those availing service in unorganised private sector pays professionals in cash to avoid GST thus, resulting in heavy revenue loss through the lower declaration of incomes in Income Tax returns.
Central and state governments should direct all their departments to add GST on payments to professionals who are registered under GST. Similar direction should be given to organised sector like TV channels to compulsorily add GST on payments made to participants in TV debates if participants are registered under GST.
Best is to have two GST slabs of 10 and 30 per cent abolishing all other slabs including lower ones of 0, 3 or 5 with most items and service covered under 10 per cent slab while items of long-term use and luxurious goods may be under 30 per cent slab. For extra luxury items presently attracting cess, additional slabs in multiples of 50 or 100 can be introduced. Tax evasion can then be tackled by retaining Input-Tax-Credit ITC system only on trading, abolishing from manufacturing and service sector. Presently, ITC has become a tool for big tax evasion where manufacturers are purchasing unused GST invoices at a premium to avail false ITC. The system will be of ultimate advantage to everyone concerned including commoners even if they have to pay 10 per cent GST on items presently under lower slabs of 0, 3 or 5 per cent.
– Subhash Chandra Agrawal
Credit Cards
The Union government and the Reserve Bank of India (RBI) should take note of malpractices of Banks in respect of credit cards. Arguments put by Banks to have an extraordinary interest rate to overcome heavy cost in credit card operation is in itself confessional for giving banks permission to levy ‘hidden charges’ to befool customers. Banks can instead levy charges on issuing and transactions made through credit cards.
Even credit card statements are designed in a manner like ‘Minimum Amount Due’ to befool customers that they put themselves in a heavy dose of interest rate. Banks also resort to malpractice by deliberately not sending credit cards statements to make customers defaulters forcing them to pay heavy interest dose apart from the penalty. Any shortfall in payment attracts penalty and interest on complete dues. The penalty imposed for over limit use of credit cards should not be permissible. Instead, banks can refuse payment on crossing limit. It is ridiculous that an overpayment of just Rs 100 may attract a heavy penalty of Rs 500 plus GST.
The Union government and the RBI should make necessary amendments whereby there may be uniform rules in respect of credit cards including interest rate and penalties. Banks may, however, be at liberty to charge issue and transaction costs to meet operational costs. But in no case, they should be permitted to levy ‘hidden costs’ in form of extraordinary interest rates for profit earning.
– Madhu Agrawal
Horrific incident in Mumbai
It was heart-wrenching to read about the incident of massive fire that broke out at the government-owned Employees’ State Insurance Corporation Hospital (Kamgar Hospital) in Marol, Andheri (east). The incident left eight people died and 151 others injured while 14 are in critical condition. Really, it is a big tragedy that shocked every one of us. It must be investigated who is responsible for this horrific disaster. I request the government of Maharashtra to provide the victims with all the possible assistance and should announce an appropriate amount for the bereaved families. Also, the government must ensure the safety of common people in public places, so such incidents should not take place again.
– Mohd Faheem
Kudos to Indian govt to assist Maldives
It was pleasing to learn that India is going to give an amount of $1.4 billion financial assistance to the Maldives as budget support, currency swap and line of credit for the social and economic development of Maldives. It is a highly appreciated step taken by the PM Modi for its neighbouring country to assist it. I would like to extend my deepest gratitude to PM Modi for such heart-touching move which shows India’s generosity and humanity. Also this move will provide India to an opportunity to undertake high-profile infrastructure projects as China does. I expect hopefully that the government of Maldives will be immensely pleased to receive such amount from India and it will lead both the countries to a better relationship.
– MFU Tandvi
(The views expressed by the author in the article are his/her own.)
