Hello Taxation

By: Chandra Goswami

Image Source: Merinews

So how many of you have followed the news on GST? Before I begin, I must put it as a disclaimer that I am not an authority to speak on this subject, because I am a blissfully ignorant citizen of this country. But, I will speak anyways. Why? Because anything can happen over a cup of coffee!

You can suddenly turn into a budget analyst at a cafeteria, after paying a surcharge tax on chocolate and cream that you gulped with your drink. Frankly, these surcharges are pushing me towards a healthier lifestyle, something that even my mum could not persuade me to do. But, on days when I really feel upbeat to gamble away my hard-earned fortune, I make a turn towards the fine-dine restaurants of my city. The final bill looks like a letter of my bankruptcy status. There's a long list of fields that speaks of entertainment tax, luxury tax, Swachh Bharat cess, education cess, service tax, VAT... I am sure they tax me for being alive as well!

You may carefully choose the cheapest dish, and order just one plate for four people thinking that you will return home saving at least 500 bucks in the pocket. But at the end, you are as much surprised as a Hindi movie hero who learns about his girlfriend’s pregnancy following a rainy-night dance sequence. While you gauge at those numbers like a glaucoma patient, there grows an intense desire to puke out the expensive dish and check whether you missed the sparkling gold or diamond garnishing on the food. Finally, you either borrow money from your friends, or mortgage your belonging to pay that bill. Thanks to taxation!

With GST, these thousand and one taxes listed on your bill will come under the single tax purview.  But, one must understand that GST won't magically vanish all other taxes like surf excel vanishes stains (is someone from Unilever reading this?). In fact, GST will not cover taxes on the petroleum product, alcohol, electricity, entertainment and amusement tax levied by district boards, municipal councils and Panchayats. Ah! Did I just hear you flush away your Saturday plan in the toilet? Ummm, temples are still tax-free; try something spiritual for a change… or just feed the cow, I am sure you’ll feel good.

Coming back to our discussion, GST also does not cover the unorganized small-scale sector, which means your local Food Joint will continue to sell you food at the same rate. The new tax reform will not affect the prices of the essential food supply either.

And NO, essential food supply does not include weed!

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So, why are people saying that GST will reduce prices of goods?

With GST, states will have to imply uniformity in taxes and end multiple tax system. For instance, now you pay 20% extra on the processed food manufactured in China, since it passes through several states having their own tax regime before reaching your grocery shop. With GST, you will at least have the satisfaction of paying less for the Chinese plastic rice and artificial eggs that you consume. Simply put, GST will kill financial diversity to make packaged food cheaper. Now that sounds like a plan!

But don’t take my advice on the face value, because I still appreciate the fact that GST is a step forward towards an efficient revenue system. I mean something is better than nothing. At least with GST, I will not have to read ten different fields while paying my bill. It will be one gigantic figure staring back at me, urging me to sell my organ if I wish to pay for the meager meal I consumed for an elitist dinner.

And before I end the article, let me remind you that many a times we are wrongly overcharged because of our ignorance. Take the example of service charges. Do you know it is not an indirect tax at all!  Service charges should be between 5-10% of the total value of the bill. Yet, restaurants have been cleverly pushing them up our throat.  Sometimes making us pay more than 40%. But, we hardly bother or make a query while paying the amount.

I think for a non-finance plebeian, I made quite a cut today. Frankly, I have high hopes from GST.  So let’s just wait and see how the drama unfurls.