Wednesday, 27 July 2016

GST : Light at the End of the Tunnel ?



Hindustan Times ( July 28 , 2016 ) reports :

On Wednesday , government agreed to drop the contentious 1 % manufacturing tax and fully compensate states for five years for potential revenue losses after GST system kicks in

Even at this stage , there can be " Many a slips between the Cup and the Lips "  !

But then , " Where there is a Will , there is a Way " , too !

Let us hope that when the bill comes up for discussion / voting in Rajya Sabha next week , political parties will find a compromise solution , based on my following suggestion ( sent to all Ministers / MPs as email , 8 months back ) :

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 Saturday, 28 November 2015


 

GST / GIVE AND TAKE



Dear Shri Modiji / Shrimati Soniaji :


It was statesperson like for you, to reach out to each other last evening , in order to arrive at an agreement on GST

All negotiations have two , initially opposing , parties

No agreement can be arrived at , on the " Terms " of only one of the parties

A customer sold against his will , ceases to be a customer  !

Agreements imposed through numerical strength of membership , are bound to get sabotaged

To arrive at a " Lasting Solution " , there must be give and take


Here is my suggestion :


NDA  GIVE  / OPPOSITION  TAKE  :


*    Accept a cap of 18 % for GST in the Constitutional Amendment Bill


OPPOSITION   GIVE /  NDA   TAKE  :


*    A provision in Bill to enable the Government of the day , to raise the GST % in
     subsequent years , through an enabling provision
     
     This provision ( not mandatory ) , will allow the Government to raise the GST %
    through the Annual Central Budget each year

      ( anyway , Union Budget has to be passed in Lok Sabha , each year )



*   The amount by which GST " may " get raised , to be calculated as follows :

     #    Starting GST %   =    18 %

    #     Assume that , in 2016-17 , CPI rises by 10 %

    #     Take  5 %  of that 10 % rise in CPI .   That works out to 0.5 %

    #     So , in 2017-18 , GST may be raised by 0.5 % , to become 18.5 %

    #     This is the UPPER LIMIT . Government may choose to revise GST to any
           figure less than 18.5 %


This is a perfect  FACE SAVING  FORMULA / a WIN-WIN situation for both  !

This is not a matter of , " WHO is right ? "

This is a question of ,   " WHAT is right ? "


Carpe  Diem !  Cease this moment to strike a deal by today evening  !


Good Luck  !
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28  July  2016
www.hemenparekh.in / blogs


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