Charge GST on MRP at production point
To make things easy for retailers and all intermediaries in the whole supply chain from factory to retailer – be it distributor, stockiest, wholesaler, etc, the government needs to take cognizance of the fact that it is easy to tax packaged branded goods with MRP (maximum retail price) right at the stage of removal from factory. Single point levy of tax on MRP at the point of production and supply, can address all compliance issues of small businesses and traders.
This is not an alien concept. We had that in Excise in Sec 4A wherein excise duty was levied on a product valued at MRP less abatement. Government can do away with abatement and directly charge GST on MRP and collect it from manufacturer / packing unit. This way, government can easily collect tax at the point of production and supply, eliminate tax leakages, reduce cost of tax collection, and reduce compliance and related issues. It will also simplify GST and its implementation and reduce hassles faced by government in implementing GST. more
This is not an alien concept. We had that in Excise in Sec 4A wherein excise duty was levied on a product valued at MRP less abatement. Government can do away with abatement and directly charge GST on MRP and collect it from manufacturer / packing unit. This way, government can easily collect tax at the point of production and supply, eliminate tax leakages, reduce cost of tax collection, and reduce compliance and related issues. It will also simplify GST and its implementation and reduce hassles faced by government in implementing GST. more
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Oct 31
It is fruitless to discuss what is not going to happen . Academically speaking , GST is a good system . The only drawback is the multi slab system which I am sure that the Government will address over the years more
Aug 07
GST or VAT is a multi point consumption based tax which taxes value addition at each stage. This is in complete contrast to single point origin based tax like Central Excise duty, sales tax etc. which is actually regressive. GST is a progressive tax which eliminates cascading, provides seamless input tax credit for both inter and intra state transactions fro both central and state tax and is thus consumer frindly as bas value of most of the supplies would go down. Sufficient provisions are available to take care of concerns of small businesses. more
Aug 06
Let us blindly not say that GST implemented now is better. We are being told it is better. However, we as common citizens and not finance persons need to see real benefits of it.
GST has always been done with intentions. The government needs to cut down on all the loopholes in the system fast before the problems require a gigantic problem that cannot be solved.
For the government to achieve this doing it right is very important just keeping the scale of this operation.
Please explain how the previous system was regressive. more
GST has always been done with intentions. The government needs to cut down on all the loopholes in the system fast before the problems require a gigantic problem that cannot be solved.
For the government to achieve this doing it right is very important just keeping the scale of this operation.
Please explain how the previous system was regressive. more
Aug 07
No no, there is a massive malpractice of inflating MRP for the benefit of everyone excluding the customer in the system of single point tax at supply exit point from Production point. Also this results in huge manipulation of MRP by the factory, hand in glvoe with the wholesaler. more
Aug 06
very very true.....still the indian business men are not able to digest the thought of they paying Taxes properly and the Tax Public servant not being greased....! more
Aug 09
The OP would like to go back to the previous system of taxation, and which led to cascading taxes. For example, I am manufacturing textiles, and I pay the MRP + GST as you want it. Okay, then it that case when the goods are sent to the wholesaler or the dealer or even the consumer direct, when I move from one state to another, I have to pay CGST also. How to calculate the Cost, because I am incurring transport costs, and the wholesaler would in turn have to ship to retailers, while maintaining a margin fo himself, and so on. So GST is NOT possible to be collected at the factory premises. And that is what GST means. The wholesaler will take delivery of the goods, and claim costs of taxes paid by the manufacturer, after the manufacturer has deposited his part of the taxes to the government. one tax he would pay if he were shipping the goods from the factory to another state, then he would be paying IGST and local CST and SGST. all this IGST, CST, SGST, can be claimed by the wholesaler when he in turn pays the same kind of taxes or lower, when he is doing so. That makes the cascading effect of taxes that we have all beeb used to. In the previous system, the costs of taxes were simply added on to each point of purchase or sale. tht is why car buyers used to buy them in Pondicherryt where the motox rtax was lower than Tamilnadu, and similar with other such union territories. Please READ THE GST DEFINITION WHICH IS GIVEN COHERENTLY IN www.cbec.gov.in more
Aug 06
