Servicing the fisc
This is apropos of the editorial “Servicing the fisc” (FE, December 22) wherein you have observed that there is one way to meet the cost of OROP and recommendations of the Pay Commission. Your suggestion is to hike the service tax rate from 14.5% to 16%, or even to 18%, as suggested by the chief economic advisor. According to me, first of all the current GST Bill is a flawed legislation. Second, I could not follow why crush the poor of this country by increasing service tax rates to 16% or 18%? This is an ill-advised suggestion to the government because it does not consider the interests of the poor. Economists or editors or journalists have to follow what is being taught to them in foreign universities. Industrialists will not mind even if service tax rate is fixed at 18% or GST at 27%, as recommended by CEA led panel and by the NIPFP, respectively, because they will get credit even under the law. However, service tax being a consumption tax—one that used to be a direct tax called expenditure tax under the Expenditure Tax Act, 1957—we can meet the cost of OROP and that of the pay commission recommendations if service tax is made a direct tax by amending the indirect tax laws so that input tax credit will not be allowed against the service tax collected. This is the only solution to fix the fiscal deficit problem.
The real lessons on Big Biz
Apropos of the edit “Star Wars lessons”, it is pertinent to note that the points that the franchise makes is trade is fine, but will always lead to monopolies, and with monopolies, will come entrenched corruption and war and crime. This is the real lesson. The Sith Lords’, especially Palaptine’s, arm-twisting of the Republic finds parallels in the MNCs that now decide policy in different countries—Big Pharma, Big Biotech being just a few relevant examples.
Sumona Pal, Kolkata
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