Nightmare of GST ?

HINDUSTAN TIMES  ( 01 May 2017 ) carries following news report :

“ You may have to fill 37 forms a year to be GST compliant “

GSTR

The tax returns under GST will be 37 in a year for a company; GSTR-1, GSTR-2 and GSTR-3—for each month, and one annual return. For a company with operations in 20 states, it means 740 annual returns.

The finance ministry officials said they are trying to further simplify the process so that small businesses are not overburdened with filing returns.

Experts point out the huge reporting requirement under GST that has be handled and understood by taxpayers, be it businessmen or professionals. This is in contrast to the half-yearly returns mandated under the present service tax regime.

TRACKING TRANSACTIONS:

A businessman registered under GST, will have to upload all sales and stock transfer details on the GSTN. Every transaction will also have to invoiced.

COMPLIANCE:

Those paying tax under GST, will have to make investments to ensure compliance. Taxpayers will have to raise invoices and bills in the correct format laid down by the GSTN. E-way bills will have to be generated for every stock movement. Debit and credit notes will also have to be maintained along with books of accounts in the approved format.

Can this nightmare be turned into a day-dream ?

It is not merely , a question of  “ can “  !

It is a question of  “ how ? “

By implementing my following blog ( earlier sent as email to NDA Ministers ) :

Wednesday, 7 December 2016

 

 

From UPI to UTI

Of late, UPI ( Unified Payment Interface ) is talk of the town

It is high time , we also start talking about UTI ( Unified Transaction Interface )

Without naming it as such , Income Tax Department has already started compiling and analyzing , high value sales / purchase transactions , to figure out instances of suspected tax evasions

IT recently sent out notices ( Emails ? ) to some 7 lakh parties involved in 14 lakh high value non-PAN transactions, asking them to furnish their PAN details

Under several laws / rules / regulations , IT requires various agencies / entities / individuals , to furnish a lot of information whenever money changes hands

Following are a few examples :

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Who must report ?   :  Banks / NBFC / Post offices

What  ?                   :  Time Deposits ( if totaling Rs 10 L or more in a year )

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Who must report ?  :  Companies / Mutual Funds

What  ?                  :  Purchase of shares / Mutual Fund units (if Rs 10 L or more in a year )

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Who must report ?  :  Professionals / Businessmen

What  ?                  :  Cash receipts exceeding Rs 2 L from any person for sale of

                                goods / services

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Who must report ?  :  Jewellers

What  ?                  :  TCS ( Tax collected at Source ) for sale of bullion exceeding Rs 2 L or

                                jewellery exceeding Rs 5 L in cash

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Who must report ?  :  Any Seller

What  ?                  :  Sale of any other Goods / Service exceeding Rs 2 L

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Who must report  ?  :  Property Buyers

What ?                    :  TDS ( Tax deducted at Source ) for purchase of property with a value

                                 exceeding Rs 50 L ( to be reported before paying the seller )

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Who must report ?  :  Person making any payment

What ?                   :  Lottery / Game winning prizes exceeding Rs 10,000

                                ( to be reported before paying the winner )

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Who must report ?  :  Buyer

What  ?                 :  Quote PAN while buying / paying / depositing ,

                               *  Property exceeding Rs 10 L

                               *  One time payment at hotels / restaurants, exceeding Rs 25,000

                               *  Depositing cash exceeding Rs 50,000 in a day with a bank

                               *  Purchase of Foreign Currency exceeding Rs 50,000

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Who must report ?  :  Seller

What  ?                  :  Verify PAN and furnish a statement to IT department on

                                transactions

                                beyond a certain threshold

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Who must report ?  :  Banks / Mutual Funds / Companies / Registrars

What  ?                  :  Annual Information Report ( AIR ) on high value 

                                 transactions

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{  Source  :  Maulik Madhu / Business Line / 05 Dec / Government on Data Trail  }

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Considering the effort involved in compiling / collating and analyzing such a massive data , coming in continuously from lakhs of sources , it was natural for the IT department to make use of computer based BIG DATA analytics , to narrow down those suspicious cases

In our goal to make India , a LESS CASH  economy , UPI / AEPS ( Aadhar Enabled Payment System ) , was an important  FIRST step

But UPI / AEPS , just does NOT cover those sale / purchase transactions which take place using Credit / Debit cards and private brand Mobile Wallets !

To ensure that these transactions too get into the database of the Income Tax department , I suggest following :

STEP  #  2

All other PRIVATE brand Mobile Wallets ( Paytm / MobiQuick / ItzCash / FreeCharge etc ), must be integrated with UPI, so that the sale / purchase TRANSACTION DATA generated through use of such private mobile wallets too gets integrated into the COMMON database of the Income Tax department

STEP  #  3

All Card-Swipe / PoS machines must be UPI / AEPS compliant, so that all sale / purchase TRANSACTION DATA generated through use of all CREDIT / DEBIT cards, too gets integrated into that COMMON database of IT Dept

STEP  #  4

All sale / purchase transactions by all other Electronic Fund Transfer Network ( EFTN ), too must be also transmitted / deposited , into this COMMON DATABASE of TRANSACTIONS

IN  NUT-SHELL  :

All sale / purchase transactions of any kind ( goods or services ) , MUST all get into a COMMON / CENTRAL database , through introduction of a UTI ( Unified Transaction Interface )

UPI + UTI = " Less Cash " + " Less Evasion " + " Less Black "

I request Shri Arun Jaitley-ji to consider my suggestion

02  May  2017

www.hemenparekh.in / blogs

Everything Else being Equal

WHAT  ?

·         Last week , Donald Trump reduced Corporate Income Tax from 35 % to 15 % for American companies

·         Earlier , UK had announced reduction in Corporate Tax from 30 % to 20 % . Several EU countries are planning similar reductions

·         Closer at home , in his last budget , Shri Arun Jaitleyji had reduced Corporate Tax from 30 % to 25 % , for companies with annual revenues of less than Rs 50 crore

·         News reports say that the Finance Ministry is considering to extend this benefit to companies with revenues of less than Rs 500 crores , in the forthcoming budget

There is sufficient evidence to show that :

·         Lower tax rates lead to better tax compliance and higher , overall tax collections

·         Lower tax rates also result in expanding the tax-base ( of tax payers )

This phenomenon assumes significance in view of the following declaration by Shri Hasmukh Adhia , Union revenue Secretary , last Saturday :

“ Close to 9 lakh registered companies have not been filing annual returns with the Ministry of Corporate Affairs ( MCA ) and are a potential source of money laundering

Focus should be now on technology . There should be no need to call anybody a thief. The machine should itself catch the thieves “

WHY  ?

·         To attract investment ( both local as well as Foreign ) in  Mfg / Services / Infrastructure ( by enabling companies to plough back increased profits )

·         To generate jobs for millions of unemployed youth

·         To prevent companies from going abroad to make more profits in countries where tax rates are lower

·         To make companies globally competitive

·         To increase share of international trade by increasing exports

WISHFUL  THINKING  ?

Not entirely  !

But , by itself , lowering of Corporate tax is not a “ sufficient “ condition for achieving the five “ Objectives “ listed above

For sure , no company hires more number of people than it needs , just because it can now “ afford “ ( due to bigger profits ) !

If we are smarter than those other countries , we should link lower Corporate Tax liability with each “ ADDITIONAL UNIT OF NEW JOB CREATION “ , as explained in :

Incentivizing  Employment ?  ( 24  Aug  2016  )

{ https://myblogepage.blogspot.com/2016/08/incentivizing-employment.html }

NEXT :

By “ Globally Competitive “ , I suppose , Economists ( - and Politicians ?  ), mean :

Creating a LOW COST ECONOMY

That is not going to happen just because of  “ LOW CORPORATE TAX “ !

It will happen only when we implement measures to facilitate  “  LOW INPUT COSTS  “

Inputs of all kinds as explained in :

·         SolarPower at Rs 1 per Kwh ?  ( 29  Jan  2017  )

     { https://myblogepage.blogspot.com/2017/01/solar-power-at-rs-1-per-kwh.html }

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·         OneUp on Donald Trump ?  ( 16  Dec  2016  )

       { https://myblogepage.blogspot.com/2016/12/one-up-on-donald-trump.html  }

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·         Automationis Inescapable   ( 30  Nov  2016  )

       { https://myblogepage.blogspot.com/2016/11/automation-is-inescapable.html  }

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·         Howto break the Vicious  Circle  ?   (  03  July  2016  )

      {  https://myblogepage.blogspot.com/2016/07/how-to-break-vicious-circle.html  }

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·         Level  Playing  Field  ?  (  11  June  2016  )

      {  https://myblogepage.blogspot.com/2016/06/level-playing-field.html  }

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·         BackFactory of the World  ?   ( 09  Sept  2016  )

      { https://myblogepage.blogspot.com/2015/09/back-factory-of-world.html  }

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·         Create  Wealth to  Create  Jobs   (  26  Feb  2014  )

     {  https://myblogepage.blogspot.com/2014/02/create-wealth-to-create-jobs.html  }

If there is a political will , India can beat the menace of “ Anti-Globalization / De-Globalization “ , by turning itself into a LOW  COST  ECONOMY

By itself , reducing Corporate Tax will not take us very far  !

   

01 May  2017

www.hemenparekh.in / blogs

Ignoring the Real Value ?

NDA / BJP  governments at Centre and at States , are trying to make a hit out of Biometric Attendance

A DNA report ( 27 April 2017 ) says :

“ Now , time is money for civic staff

Latecomers to face salary cuts as biometric attendance will be made mandatory from next month

Employees who are on-field can apply for outdoor ( OD ) attendance through the MCGM HR app

The HoD will receive an SMS soon after an employee applies for OutdorDuty through the app

The HoD can then accept or reject the request made by the employee “

It seems a pity that despite several emails , the Policy Makers are unable to grasp the ENORMOUS IMPACT ( Social / Economic / Political ) of my following suggestion :

Wednesday, 1 June 2016

From BAD to MAD

BAD   =   Biometric Attendance Device

MAD   =   Mobile Attendance Device

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Here is my idea of a technology that we need to create for a better India :

Today Employee Attendance Systems in India work at three levels as follows :

#   Entirely Manual

     Attendance Register and Wage/Salary payment in cash or by Cheque

#   Partly Automated

     Punch cards or Bio-metric recording of attendance but manual calculation

     of wages / salaries and payment by cash or cheque

#   Fully Automated

     Bio-metric Attendance Devices ( BAD ) , integrated with a home-grown or

     bought-out Salary Payment Software , running on a local Server.

     Salary payments could be by cheques or thru Electronic Transfer to

     concerned employee's bank account

Once in a while , if a company has several establishments within a city , those local servers are connected to a Central Server , doing all processing

In a rare case ( although , I am not aware of any ) , it may be that all the local servers of all the establishments of a company , all over the country , are networked with its central computer in its head-quarter

Now imagine this :

#  All smart phones to evolve as Bio-metric Attendance Devices , with built-in

    Bio-metric Recorders , GPS , a mobile attendance App ( called MAD ? )

#  App to have 2 buttons ( Green = IN  /  Red = OUT )

#  Employee to touch IN upon reaching his work-station and touch OUT ,

    while leaving work place , at the end of work-shift . That's all  !

#  Being GPS enabled , buttons will get activated ONLY when the employee

    has reached the work place ( not while he is on his way ! )

#  All 100 million establishments in India ( factories / offices / shops / clinics

    NGOs / Govt Depts ) to ensure that the MAD app is installed on the smart

    phone of each employee , when he joins

   

#  All of these smart phones to be connected ( IoT ? ) , with the Servers of ,

    *  Labour Ministries ( Central and States )

    *  HRD Ministry ( Central )

    *  Skills Development Ministry / NSDC

    *  Finance Ministries ( Central + States )

    *  NITI Aayog

    *  Income Tax Department

    *  Any other server that you may want to

#   MAD app is integrated with a STANDARD / COMMON , software system

     for computing daily wages / monthly salaries of ALL the persons working

     in those 100 million establishments ( whether they are casual /

     contractual  / trainee / apprentice / probationer / permanent / retained

#   As each person joins in any of these establishments , data re  that

     person must be inputted by the Employer into the App , such as :

   

     *  Name / Contact Details / DOB / Aadhar Card No / Employee Number

         ( Each unique Employee Number will be auto-generated by the

         common Salary Payment Software , running on IT Dept Server )

     *   Employee's Jandhan Yojana Bank Account Number for salary EC

     *   Employer's Jandhan bank account / Unique Employer Number

     *   Payment Mode ( Hourly / Daily / Monthly Rated , wages / salaries )

     *   Leave provisions / PF rate / TDS rate / Allowances / Reimbursements

     *   Any other relevant data ( either about employee of for employer )

WHAT  ARE  THE  ADVANTAGES  ?

#   For employees , no need to file a separate annual Income Tax Return

#   Direct deposit of PF / TDS amounts into bank accounts of Govt Depts

#   Direct Benefit Transfer ( DBT ) to every Employer for Stipend Subsidy ,

     based on number of total trainees / apprentices employed

#   Total number of employees in India ( category / region / industry )

#   Employment Density ( Industry wise / Region wise / Skill wise etc )

#   Net Employment Growth Rate ( weekly - monthly / Industry-wise )

#   Co-relation with no of persons graduating at various levels

#   Data about those Unemployed ( " Graduating " less " Employed " )

#   Overtime Statistics ( Use / Abuse )

#   Work-hour Analysis ( Ave hours / week - month )

#   Wage / Salary Rates ( Rs per hour ) - Industry wise / Region wise

     ( of great interest to Foreign Investors looking to bring down

       manufacturing costs , by outsourcing to India / manufacturing in India )

#   Compliance with labour laws / tax laws / Apprentice Act etc

#   Job Market Forecasts through BIG DATA ANALYTIC ( region / industry )

#   Demographic  Profiles of employees  ( Rural to Urban migration )

#   Per Capita Income Growth for persons using MAD app  ( MOM / YOY )

#   Changing composition between Blue Collar and White Collar employees

29  April  2017

www.hemenparekh.in / blogs