Friday, 12 December 2014

States reject Centre’s Goods & Services Tax Bill


The States have rejected the draft Bill for the Goods and Services Tax (GST), dealing a major blow to the Centre’s resolve to roll it out at the earliest.
At a meeting of the Empowered Committee of State Finance Ministers, the States opposed the draft Bill and its proposal to extend the GST to petroleum goods and entry tax.
Areas of conflict:
  • Consensus eludes the Centre and the States on the three main issues of compensation, petrol tax and entry tax.
Demands by the States:
  • The GST will subsume all excise and service taxes. The States want compensation from the Centre for the revenues they will lose over five years from the shift to the GST regime.
  • They want a clause on the compensation to be inserted into the Bill. The Centre’s proposed draft does not have such a provision at present.

The Union government has agreed that its share of the revenue from the GST would go to the pool of tax revenues devolved to the States.
GST:The goods and services tax (GST) is a comprehensive value-added tax (VAT) on goods and services. It is an indirect tax levy on manufacture, sale and consumption of goods as well as services at a national level.



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GST is essentially a tax on value addition, and there is seamless transfer of input tax credit across the value chain.
Under GST, the taxation burden will be divided equitably between manufacturing and services, through a lower tax rate by increasing the tax base and minimizing exemptions. Currently, a manufacturer needs to pay tax when a finished product moves out from a factory, and it is again taxed at the retail outlet when sold.
Benefits:
  • GST will be is levied only at the destination point, and not at various points (from manufacturing to retail outlets).
  • It is estimated that India will gain $15 billion a year by implementing the Goods and Services Tax as it would promote exports, raise employment and boost growth.
  • It is expected to help build a transparent and corruption-free tax administration.
  • In the GST system, both Central and State taxes will be collected at the point of sale. Both components (the Central and State GST) will be charged on the manufacturing cost. This will benefit individuals as prices are likely to come down. Lower prices will lead to more consumption, thereby helping companies.
  • It is also expected that introduction of GST will foster a common or seamless Indian market and contribute significantly to the growth of the economy.
  • GST will broaden the tax base, and result in better tax compliance due to a robust IT infrastructure. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
 CASCADING EFFECT OF TAX
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GST around the world:
France was the first country to introduce this system in 1954. Today, it has spread to over 140 countries.
Then, why are the states opposing?
Some States fear that if the uniform tax rate is lower than their existing rates, it will hit their revenues.

Tuesday, 2 December 2014

HORNBILL FESTIVAL


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It is the biggest indigenous festival and the annual tourism promotional event of the Nagaland government. It is organized by the Government of Nagaland. It is celebrated every year in the first week of December.
Why?
  • To encourage inter-tribal interaction and to promote cultural heritage of Nagaland.
More details:
  • The Festival is named after the hornbill, the globally respected bird and which is displayed in folklore in most of the state’s tribes.
  • The program unites all the people of Nagaland and showcases different traditional arts which include paintings, sculptures and wood carvings.
  • It is the coming together of all the elements that make up the total Nagaland. The Hornbill festival is a collaborative celebration of all Naga tribes at one venue and has been coined as “Festival of Festivals”.
  • The Festival is a tribute to the great “Hornbill” which is the most admired and revered bird for the Nagas, for its qualities of alertness and grandeur. The Majestic bird is closely identified with the social and cultural life of the Nagas, as reflected in various tribal folklores, dances and songs. The awe and admiration for the bird is symbolically displayed on almost all tribal traditional headgears worn during the festival and is indicative of the commonness of the Nagas.
  • The Hornbill Festival of Nagaland is a cultural extravaganza to revive, protect and preserve the richness and uniqueness of the Naga heritage, while for the visitors to this event, it is a means for comprehensive understanding of the Naga People, their land and culture.
  • Since 2007, International cultural troupes have been taking part in it and it is slowly turning out to be an international event.


Universal Account Number
The Universal Account Number (UAN) has been designed to be an umbrella number of a member for all his employment with different establishments in organized sector.
Why was it introduced?
  • To provide one number to the Employees’ Provident Fund member for all his employments with different employers.
How will this help?
  • Earlier, whenever Employees’ Provident Fund Organisation (EPFO) member changed his job, he had to transfer his Provident Fund accumulations to his new Provident Fund number. With the introduction of UAN number, now, member has to give his UAN number to his present employer for linking his previous Provident Fund accounts with his present Provident Fund membership.
This would benefit the members initially in the following ways:
  • The member can get this updated Provident Fund balance through Universal Account Number (UAN) based member portal.
  • The system would enable portability of Provident Fund accumulations when the details of bank account, Aadhar and PAN seeded in UAN database of member are verified by employer on change of job.
  • The member would get message on his mobile number about the receipt of his PF contribution if he has registered his mobile number on Universal Account Number (UAN) based member portal.