Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: form 3cd :: TDS :: VAT Audit :: articles on VAT and GST in India :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: cpt :: VAT RATES :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4%
 
 
News Headlines »
  Best ways to save tax in 2017
 8 unknown stocks that could yield huge returns
 Government may set threshold for probe into deposits to prevent harassment of taxpayers
 How to calculate capital gains tax
 April 1 still the target for GST: FM
 How to respond to CBDT’s tax compliance notice
 Goods & Services Tax (GST)(As On 01-01-2017)
 Excise, service taxpayers to migrate to GST portal by January 31
 Tax numbers belie slowdown: FM
 Income tax (1st Amendment) Rules, 2017
 Anti-avoidance tax rule to kick in from April 2017

Dump multiplicity of tax rates
March, 02nd 2010

Finance minister Pranab Mukherjee believes that indirect tax proposals in this Budget would pave the way for a smooth transition to the goods and services tax (GST) regime. Agreed, the tax rate for goods and services has converged at 10%, which is one pre-requisite for GST.

The other is to have a clutter-free tax system. But the Budget has faltered here. It has introduced multiple import duty rates, lower excise rates and service tax exemptions to specific sectors in an arbitrary manner. The government should shun a cluttered tax system and withdraw exemptions if it is serious about implementing GST from April next year.

The model GST, recommended by the Thirteenth Finance Commission (TFC) and accepted by the Centre in principle, allows for no exemptions other than a small common list that includes health and education. The government should implement TFC recommendations in this regard. It must expand the service tax net to cover all services including Railway passenger fares.

Area-based exemptions must also end as it would be difficult to subsume such schemes under GST. Multiple indirect tax rates favour some goods at the expense of others, leading to inefficient allocation of resources and dent the governments revenue. The revenue forgone on area-based excise exemptions alone is estimated at Rs 1,70,765 crore this fiscal year, significantly higher than the Centres excise duty collection of Rs 1,02,000 crore.

Successive governments have struggled to reform indirect taxes, to bring about low and uniform rates. From over 100 excise duty rates in the 1980s, reform-minded finance ministers compressed the rates to three by the late 1990s. The introduction of the modified value added tax for select commodities at the central level in 1986 began the process.

It was extended to all commodities through the central value added tax (Cenvat). But distortions crept in due to pressure from industrial lobbies. The point is to move to a low, single, uniform rate, not create room for lobbying, patronage and, worse, by creating multiple rates.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions