Getting GST-ready Shun tobacco lobby Air India and Mallya
With reference to “A big step forward” (June 5), in its concluding observations in 2016, the committee headed by Chief Economic Adviser Arvind Subramanian on possible tax rates under the goods and services tax (GST) described the tax as a game-changing reform that would facilitate “Make in India by Making One India”. The GST is undoubtedly a landmark legislation that can potentially transform the Indian tax structure by subsuming all indirect taxes and unifying the country as a single market. It can not only help improve governance and strengthen tax institutions but also impart buoyancy to the tax base. The government must be lauded for doing a creditable job in removing systemic bottlenecks and addressing the issue of fiscal autonomy of states.
However, the tax rates arrived at by the GST Council are higher than the current service tax rates for certain goods and services. This would lead to an increase in cash outflow and constrain liquidity in the business. Also in new tax regime, credit of input tax will be available on the basis of matching concept, if there is mismatch of details as provided by the supplier/vendor vis-à-vis that provided by recipient, then input tax credit would be disallowed and the latter might have to pay tax (equal to input tax credit) along with interest. There might also be an increase in the compliance cost due to decentralised registrations which shall adversely affect the working capital needs of small businesses.
Further, the GST Council is yet to provide clarification on certain place of supply and time of supply rules and the antiprofiteering framework which might further affect the ease of doing business in India. The impact of GST cannot be realised unless a robust communication and logistics infrastructure is in place. It is time the government reassessed its preparedness for its transition to what is arguably the most significant tax reform since Independence than merely stick to the July 1 deadline which might result in an administrative nightmare.
Shreyans Jain New Delhi With reference to “Fewer Indians use tobacco, but India still world’s No. 2 consumer, producer” (June 4), the government’s action on dealing with tobacco addiction is like the old saying, “running with the rabbits and hunting with the hounds”. The government does not want to displease the tobacco lobby. However, by supporting the lobby, it is playing with the health of the people, especially youngsters. The government should take all-round efforts to curb the menace and rise above petty politics. In India, cinema plays a huge role on the mindset of people, especially the youth. One is saddened by the fact that instead of campaigning against tobacco consumption, film stars are endorsing tobacco products. No amount of statutory warnings on cigarette packs and antitobacco warnings in movies will deter people from consuming tobacco if they are not sensitised about its harmful effects.
Here, the role of NGOs, celebrities, students and medical professionals is crucial. The NGOs can visit public places and RTOs or construction sites to educate various sections including labourers. Students can also visit offices, public places like railway platforms and rickshaw stands, and organise street plays to spread awareness. It is only through awareness that people will desist from consuming tobacco. The lobbies should also be advised not to play with the health of the people and they should be given incentives and awards for leaving the lobby. Nothing is more important than the health of the nation. A visionary like Narendra Modi should not bow to the lobby but pay heed to medical professionals and anti-tobacco activists.
Veena Shenoy Thane With reference to “Oh, to be in Mallya’s shoes!” (June 3), given the consistently worsening financial conditions of India’s national carrier to severely impact the books of lenders it won’t be a surprise really if Kingfisher’s Vijay Mallya proved to be a lucky guy, in the ultimate analysis. In other words, the whole process of restructuring/recasting the debts of Air India — if it is to take shape — might also set the ball rolling for Vijay Mallya to come forward with similar or other suitable proposals and enjoy some relief in terms of a compromise settlement to clear the banks’ dues.
Srinivasan Umashankar Nagpur