'Multiple taxes collected at different points on the same transaction by different agencies' - welcome to the taxation system in India!
‘Multiple taxes collected at different points on the same transaction by different agencies’ – welcome to the taxation system in India! Wait, the good news for us is that now this is set to change with the passage of the Goods and Service Tax, which is set to be rolled out from the month of July. At the All India Seminar on Economic Reforms related to electoral issues, the legal fraternity expressed mixed views on tax reforms in the current scenario and on GST as well.
Former Additional Solicitor General Biswajit Bhattacharya raised several questions related to the prevailing taxation system in India, “How is India being run? Are we going in for tax terrorism?”
“At a macro level, we are left with little,” Biswajit Bhattacharya pointed out.
Clearly, there are mixed views on GST and how it impacts every Indian.
“In India, 29 states behave like 29 countries when it comes to taxation – whereas in the European Union which comprises of several countries that have serious problems – they stand together when it comes to issues related to economic reforms and growth,” quipped V Lakshmikumaran, an eminent tax litigation lawyer who is the founder of a leading law firm with 11 offices across the country including one in London and another in Switzerland.
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“FM Arun Jaitley has taken the enormous pain to push through with GST – it is remarkable,” he said. “It is important to remember that 87 lakh assessees are going to come into this; everyone will have to file electronic tax returns,” V. Lakshmikumaran added as a word of caution. According to V Lakshmikumaran, there are several aspects of GST that are noteworthy.
“For the first time, Centre and States have decided to pool their powers. What makes the GST remarkable is also that for the first time, Centre and states will have equal power,” he pointed out. He also referred to the comprehensive way in which supply is defined under GST and how this will impact most transactions including hotel and travel bookings.
“Through the electronic system, taxation itself becomes transparent,” V Lakshmikumaran said.