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Merger of Sales Tax, Service and Excise to Confusion and Inconvenience
March, 29th 2011

The new plan of merging of the excise, sales and service taxes in the country is bound to create quite some inconveniences for the authorities as well as the public.

With the introduction of the new bill by Finance Minister Pranab Mukherjee to make amendments in the Constitution of India the age old Indian Service Tax, Excise and Sales Tax are set to be replaced by a single tax entity. But this is set to affect different sections of the business and trade differently.

Since the bill aims to provide simultaneous powers on the center and state governments to levy taxes on goods and service, there is a risk of increase in taxes for certain sections; especially the small scale sectors where as for certain others it might reduce their tax amounts to their delight, but taking a hit on the countrys annual figures and economy.

In addition to that, there will be an obvious merger of the three departments in the Government.

This again, will create problems in hierarchical structure, bands and grade cluster and most importantly this will redundancy of a large number of employees.

With merging of the three departments, there would be extensive differences in utilization of employees once the three departments are brought together and unless there are exhaustive trainings and plans to deploy the employees within correct roles and responsibilities, efficiency of the entire department would be in stake.

The re-shuffling of employees across offices, departments, locations, reportings and roles is going to be tough task for the authorities and knowing how Indian Government authorities have always functioned, the employees would be the most to suffer.

It would not be a surprise if we see strikes and protests of the employees of service, sales and excise taxes departments in near future over these issues.

 
 
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