Mumbaikars to feel the heat with 18% GST for non-AC dining too

Har har moti
Ghar ghar moti

This is too much, 5-7% would have been good….

As a businessmen:

Rs.500 final bill

Rs.423 goes to his pockets and Rs.77 goes to govt. as GST
Consider Rs.200 as expense including rent/food stuff/labour and other charges

His income – Rs.223 less 30% income tax(Rs.67)
Rs.156 – Merchant income
Rs.144 – Govt. revenue in the name of tax (Rs.77+67)

Without efforts government is earning almost the same income as that of merchant.

Now home cooking would trend on youtube, related channels would gain

Tax bachao or khush raho

Only mumbaikars ??
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By the way here are complete slabs on restaurants , pre gst – 14% vat + 6% service tax , now -

Restaurants with a turnover of less than Rs 50 lakh will be levied a tax rate of 5%.

Non-ac restaurants will have a 12% tax rate.

AC restaurants will have to shell out 18% tax.

five-star restaurants will have to submit a tax of 28* , EDIT – on recent sunday meet , it is also reduced to 18% . so only 3 slabs now .

Taxes will be charged to owner – only on margin of restaurants , not on entire bill . taxes will be shared by state and centre both govt .

Source – moneycontrol , business standard reports .

Due to GST =>> product price increase ==>> people reduce the purchase ==> reduce the growth of industry ==>> low GDP or growth rate ==>> after big loss , govt reduce the tax …lolz

believe it or not, it is going to happen, this happened in other countries which introduced GST, just like new lauch product => high tax, then they reduce for sure.

Chote chote hotel mai khana khao…..400 ka Sabhzi…and 20 rs chapati …. ridiculous Gharpe banavo

then they shd abolish income tax ( since they charge gst on everything )

Few people really raised serious and awareness point – we pay taxes but why those Dept don’t serve us in time .
Taxes 50% but service 0 .
Tax se dar nhi lagta sahab corruption se lagta h .
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We dimers should be unite and make a unofficial group so that we can reach our points to high level . Alone we can’t do anything except comments .

GST effect how retailers are fooling people who are unaware of latest mobile and its features – one person whom I know went to local mobile retailer and just enquired about samsung phones. the person took out one model and said this is latest and priced at 13500/-

phone features – 5" display with 3+32 version without volte battery around 2500 mAh

then he started blah blah about GST said today this phone is costing 13500/- after GST it would cost 17000/-

With new tax rules for e-commerce firms set to come in under the Goods and Services Tax regime, small restaurants and vendors are pulling away from online delivery start-ups.

In the GST regime, e-commerce firms will have to deduct tax collected at source (TCS) when they make payments to restaurants or vendors using their platform. This can deter smaller restaurants with lower sales volume from going online.

“Besides, these vendors will receive their payment after a TCS of 2% (1% each of Central GST and State GST) which will cause disruption in their working capital supply,” said Anita Rastogi, Partner, indirect tax at tax advisory firm PwC.

Under this arrangement, restaurants will be able to claim input tax credit and get a refund for the TCS that they paid. But until that refund arrives, that amount of working capital remains blocked for the restaurant.

source – http://www.livemint.com/Industry/jttQ3O9QGhlsaO...

Will GST make Life simple? Not a chance!

In practice, GST will increase the pain of compliance, if not the cost, a lot.’
‘It also has clauses that offer scope to create a single market for corruption,’ warns Devangshu Datta.

http://www.rediff.com/business/column/will-gst-...

@Original

Well see bro, i was not bashing government instead i put the real scenario. What I said wrong ??

I was talking about all the other posts in the thread, all the comics etc trying to portray taxation as oppression by the govt.

We know bro, this is indirect tax and ultimately customer/ultimate consumer bears all the burden but see because of the merchant’s skill/effort, government earns the tax and this is what i pointed out.

Sadly, that is how taxes work. One puts in his skills/efforts to earn income and govt takes a % of it as income tax.

Also don’t you agree if tax would be more, the merchant would suffer with less sales ??

True. Lower tax also encourages more people to start paying taxes. But there’ll always be an optimum tax rate to maximise tax collected while not hurting demand…the govt. must’ve evaluated all macro-economic data before arriving at this figure. It also varies this rate yearly according to the situation.

To promote innovation, new industries, selling online, govt. should have started with 5-7% tax rate instead of this high tax rates.

So, you recommend it’d be better if the govt. changed the 14% VAT + 6% service tax to just 5-7% GST ??? Wow.

Read this to get a better idea on what GST is and how it impacts Food businesses
https://cleartax.in/s/impact-gst-food-services-...

You have every right to disagree with me but please don’t tag this as skewed

Your assessment started out with a bill of 500 Rs. and ended up with 156 Rs. as Merchant income(profit incorrectly labelled as income) and Rs.144 as tax. You might not have intended it this way, but it appeared to me that you tried to show that the merchant deserved 500 Rs. but all he got was 156 Rs. and an almost equal amount goes to Govt. as taxes. This is the reason I called your assessment skewed.

I see men, women and children on the streets starving to death day and night. I also see a handful of people utilising the resources of nature and experiencing the luxuries of life which are the birthright of every living thing on this planet. If anyone says the system is perfect and has nothing to do with the poverty and suffering around, then I would say he’s not seen anything in reality but arrives at conclusions based on mere figures and words on a paper.

@Original

In my city there are sweet shops getting cashflows above 10 crores but they do not file VAT returns. Incase income tax officer raids, they finally settle the case by taking bribe. So all i want to say is with just 5-7% tax government can book enough revenues if they implement rules without skipping people.

I objected to your 5-7% figure in the context of VAT to GST transition. The govt. would want as small changes as possible between the two tax regimes so as to make the transition seamless. Your 5-7% figure for complete tax inclusion might be right/might be wrong, but I’m pretty sure such a tax rate reduction will be implemented in a phased manner over many years after thorough data collection reinforces that the amount of total tax collected is not dwindling…it’s not something that’ll be done overnight.

Government would definitely reduce the rates in coming years but for the start businesses would face much difficulty. One tax system is good but high rates would again force people to evade taxes.

I agree. Tax reduction encourages more people to start paying taxes.

slight relief to sellers -

The government announced on Thursday it will be lenient in enforcing penal laws for violations during the initial period of implementation of Goods and Services Tax (GST) regime that comes into effect from July 1. “Our intention is to have a smooth landing of GST. Intention is not to harass everyone in the first month,” Revenue Secretary Hashmukh Adhia said here at a Town Hall session on GST.
http://www.newsx.com/business/67042-gst-enforce...

Don’t be lazy, cook at home. If you don’t have a facility to cook, eat form these guys – no GST.

@micke

Paying or collecting this tax is responsibity of the merchant and not the consumer.

Collecting and paying it back to the govt. is, but the money is from the consumer’s pocket not the merchant’s.

Consumer will go to that merchant who is not paying taxes at all. Or the one that is offering products at lowest price (lowest prices can be offered if you are getting the products by evading taxes)

True, the onus is on the govt. to increase tax compliance. GST is one minor step towards that goal as it helps create a single tax system.

Product cost = 600 Import Duty (10%) = 60 Pre – IGST product cost = 600+60 = 660 Product cost aftet IGST = 739.2 (Assuming 12% IGST = 79.2) Selling Price = 1000 Final IGST = 120 Rs (Assuming 12% IGST ) Tax collected by Government = 120(IGST) + 60 (Import Duty) = 180 Rs Profit to Merchant = 220 Rs

Can you help me understand how you arrived at 220 Rs. Cost to the merchant = 600+60. The profit he expects is 340 as he wants the Selling Price at 1000. The IGST he pays is refunded to him after he sells the product, AFAIK. Cost to consumer = 1120 ( = 120 (tax) + 340(profit) + 600(product cost) +60(import duty) )

This is assuming that we can find product that can be purchased for 600 Rs and sold for 1000 Rs. There are many products that are sold at loss and near about purchase price

That just sounds like bad business practice.

Do you think merchants will happily give more than 50% of their income to government?

Merchants aren’t giving away their income. If taxes were all to vanish suddenly, as per your example, the product cost would be 600Rs. and because he wants to make a profit of 340 Rs. he would price it at 940 Rs. He will still earn the same….the only one to benefit is the customer.

I thought that after GST, State entry taxes will be abolished. But NO. Government is still planning to introduce entry taxes

That’s because the States didn’t agree to forego their share of taxes that are being subsumed under GST. Maybe 5 years down the line States will adjust to GST and entry taxes can be removed. More on this here https://qz.com/943504/gst-answers-to-all-your-q...

Government thinks that Basic customs duty of 10% is less and is thinkning of increasing it to 15%

Custom duty differs for different products. Do you have a source for this info? Sometimes an increase in duty for a particular product is done to encourage domestic products.

My above calculations were for mobiles which have 12% IGST. Do the calculations for air conditioners with 28% IGST, and you will see how much tax government pockets on each sale.

That is how things are. Luxury goods are generally taxed more compared to staple goods. One cant have a single tax for all types of products.

If government reduces their taxes, consumers will benefit.

Sure, I’ve never argued otherwise. Reducing taxes also increases tax compliance. But as I said before, you cant expect the govt. to cut the taxes in half overnight and expect it to run the country smoothly. Such a tax reduction takes place in a phased manner over many years and decades.