Most advanced countries have just ONE TAX
for sale of GOODS and SERVICES
We will introduce our own GST ( Goods and Services Tax ) from 1st
July , across entire country
GST will replace some
70 + different taxes currently in force , for different products / services and
in different States
This will lead to :
·
Higher collection of tax
·
Increase in productivity
·
Reduction in litigation
·
Simplified administering…etc
To further improve “ Ease of Doing Business “ ( - and attract many more foreign
companies to set up their Manufacturing / Marketing operations here ) , I
suggest NDA government follow this up with , introduction of :
·
ARM ( Allowances and Reimbursements Merger ) Act
Most economically advanced countries just pay
consolidated “ SALARY “ ! Nothing else !
As against this ( utter simplicity ) , we have , one or more of the
following elements of PAY
STRUCTURE , depending upon factors such as,
·
Geographical
location
·
Industry-sector ( organized vs unorganized )
·
Public Vs Private
These elements are :
·
Basic Salary ( in a Scale of rising minimum annual increments )
·
Dearness Allowance – DA (
usually linked to CPI / WPI rise )
·
House Rent Allowance – HRA ( varies from city to city )
·
Transport Allowance / Conveyance Allowance / Petrol Reimbursement
·
Food Allowance ( Coupons ) /
Lunch Allowance
·
Leave Travel Allowance
·
Medical Allowance / Reimbursement / Insurance Premium Reimbursement
·
Telephone Reimbursement
·
Hardship Allowance / Hazardous Jobs Allowance
·
Entertainment Allowance
/ Club Membership Fees
·
Driver’s
- Gardener’s Salary Reimbursement / Servant
Allowance
·
Double
Machine Operation Allowance
·
Milk Allowance ( - it exists
! )
·
Temporary Posting Allowance
·
Children's Education Allowance
* Outstation
Allowance
* Washing Allowance / Soft Furnishings Reimbursement
* Shift Allowance ( if required to work
in second shift )
* Overtime Wages @ 250 % of normal wages
* Compensatory Working Allowance
The list is by no means, exhaustive !
And do not overlook the “ Monetary Value “ of the following :
* Casual
Leave / Sick Leave / Accident Leave
* Accumulation / Encashment of PL
* Paid Holidays
* Supply of Uniforms / Safety Shoes / Umbrellas etc
* Providing of Creche ( for Employee's
Children )
* Maternity
Leave of 26 weeks
* Contribution to ESIS / EPF / Gratuity … etc
And , if juggling all of these was not difficult enough
, a news report in Times of India ( 29 March 2017 ) adds following further complications :
“ GST would be payable if there is supply of free
goods or services to an employee exceeding the stipulated sum
If an employee avails of a company asset for
personal use, it would trigger GST
Input tax credit will not be available on supply
of various facilities to employees, including life and health insurance “
Gifts
to staff worth up to Rs 50k will be GST-exempt
[ http://timesofindia.indiatimes.com/business/india-business/gifts-to-staff-worth-up-to-rs-50k-will-be-gst-exempt/articleshow/57881920.cms
]
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I hope harried HR
Managers would support my suggestion to implement ARM ( - to the extent possible )
ARM would leave
them with more time to attend to the tasks of Talent Acquisition / Training /
Human Resource Development
What shape should the New Compensation Structure
take ( after ARM ?
)
This could be the subject matter for debates /
essays / case-studies etc among students specializing in HR at Management
Colleges
By offering to enrich their Professional lives , ARM makes them, a “ Party
with Vested Interests “ !
PS :
Robots do not ask for ANY of these , nor form a UNION to submit a “ CHARTER OF DEMAND “
29 March
2017
www.hemenparekh.in / blogs
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