MR. JAITELY YOU MUST PASS THIS BILL, GST!!!

Let’s talk about my favorite topic-economics. Economy is the prime reason of giving employment to the citizen of a nation in the modern era. If a nation has a ruined economy, believe me! The world is not going to invest in that nation. To improve economy Government should impose good tax system in the nation. In the financial budget of India, Finance Minister Arun Jaitley proposed that GST will be applicable from 1 April, 2016. Analysts believe that the execution of the goods and services tax (GST) could offer the rate of increase of productivity. GST will increase the GDP of India & will counter the tax terrorism of the nation. Today I am going to explain the various benefits of GST for the Indian economy and how it will help the common man. The benefits of GST are:-

1) FUSED MARKET- The GST will cut down the various numbers on taxes obligated by the central government, i.e. Central VAT or excise duty, services tax, central sales tax on interstate sales, etc. And states, i.e. entertainment tax, VAT on sales, luxury tax and octroi. This will result in the creation of a combined or unified market, which would ease the endless movement of goods across states and decrease the transaction revenue of businesses.

2) LOWER ENCOURAGEMENT FOR TAX EVASION: In present scenario, companies have to pay taxes on complete original value of the product/service, but under GST, companies will have to pay tax only on the value-addition (means cost of a product will decrease for consumer). Therefore, the actual tax paid will likely be small and decrease the incentive for evasion.

3) WIDEN THE TAX BASE: GST will provide credits for all taxes paid prior in the goods/service chain incentivizing taxpaying companies to spring inputs from other known or recognized dealers. This will carry in extra revenues to the government as the unorganized sector, which is not part of the value chain, would be drawn into the tax net. Moreover, states will be provided for tax services (as opposed to only the central government) under the GST.

4)  DECREASE IN THE COST OF PRODUCT/SERVICE: The biggest beneficiary of GST will be the common man of this nation. The common man is tired of the high cost imposed on everything. A biscuit packet whose weight is 100gms costs 10-15 INR (based on company) will cost 8-12 INR, it will help to control inflation for the common man. Fuel prices will decrease as Govt. would not impose tax on taxes.

According to the National Council of Applied Economic Research, government's tax income will augment by about 0.2 per cent because of GST execution, while GDP growth could increase by 0.9-1.7 per cent. Exports will also get a enhance as they are zero-rated for taxes and also as the fall in cost of produced goods and services under GST will increase the competitiveness of Indian goods and services in the foreign market.

However, the rate will be decided by centre & state on the services which may vary from 16%-27% on the original cost.

THINK- Cost of a biscuit packet is 10 Rs. after all taxes, its original cost is 6 Rs. Now if GST applied on this & we delete the rest of the taxes its cost would not go above 8 Rs. That’s how GST will benefit the common man and it will be a huge game changer. Now it’s on our parliament to pass it & then impose it from 1 April, 2016. I hope this will solve a number of problems related to our nation.

Thanks for Reading!

ON A RIGHT PATH!!!

Let us talk about my favorite subject – Economy. Being an entrepreneur, especially for a start-up it is extremely important to have a financial knowledge. The financial knowledge relates to the saving, spending, investing and returning the taxes to the Government. A business owner/entrepreneur needs to learn about the various aspects of finance, even a person who is an employee or a household must know about it. Today the finance minister of India presented his full-fledged general budget for 2015 in Lok Shabha. Mr. Jaitley is a well known lawyer and right now he is our finance minister, when he became the minister I was not sure how he will manage this department as it is a highly sensitive department and it affects the nation's economy directly. I am happy with the budget, and I will tell you how and why I liked this budget!!

INFRASTRUCTURE-

The infrastructure sector is the backbone of every economy and it is highly necessary that we should invest more and more in infrastructure. Countries like Japan, China, USA, Australia, etc. invests so much in infrastructure and that is why they have better infrastructure than us. This time the Government of India has invested Rs 70,000 crores on infrastructure, it means investment in Roads, Schools, Highways, Ports, Airports and Hospitals. It will boom the infrastructure sector and it will provide jobs for a number of people like me, who are associated with this field. Also, the Government will set up AIIMS in J&K, Tamil Nadu, H.P. and Assam with IIMs in Arunachal and in other parts. The Government has also decided to plant 5 ultra mega power projects for 4,000 MW each.

ECONOMY-

The biggest hurdle or headache in India is inappropriate tax system or sometimes people call it ‘tax terrorism’. A number of businesses don’t invest in India due to this, Mr. Jaitley has done the first reforming step and that is reducing the corporate tax from 30% to 25%. It will help a number of businesses all over the world to come and work with great dedication in India without any fear of high tax. Also, abolishment of wealth tax on rich people will allow rich people to invest more money, now they will be given surcharge of 2% of their wealth. It will help to control the black money and it will generate revenue for Government from rich people of the nation.

Yes, we did not get any rebate in income tax like raising the income tax slabs, but indirectly by investing money in road and rail bonds will generate money for them in the long term. He raised the travel allowance(TA) up to Rs 1600 that was not raised since 1998, which is also a great move and a person can save up to Rs 19200 throughout the year by this TA. GST will be applied from April 1, 2016, which will abolish a number of unnecessary taxes in India that are a curse for our economy. Govt. has reduced the custom duty on 22 items and also introduced a PAN number mandatory for the purchase above Rs 1 lakh.

OTHER INITIATIVE-

The best I liked about the Government is that they have invested Rs 2.46 lakh crores in the Defense sector. We need to improve our defense, so that our Army can match the world best Army in the means of the technology. They have allotted visa on arrival for 150 nations, which is going to boost the tourism sector and it will provide work and revenue for the people. People may take it lightly, but this sector has so much potential to enhance Indian economy.

There are a number of schemes such as PM rural irrigation scheme, PM banking scheme, Clean Ganga initiative, etc. that makes this budget better than the previous one. They have touched every sector and every group of society by this budget. They have focused on Industry and as well as on poor. If you have a salary of Rs 37000 every month, you are free from any tax. They have diverted money for every field and left no side. They have taken necessary measures for the black money squirrels by making laws and punishment clauses in the upcoming bill.

I liked this budget and being an entrepreneur, I am happy and I hope intellectual people will like this budget and thank you for reading this.

Jaitley’s Calculator-

Investing money by 80C & 80 CC = Rs 2, 50, 000

Investment in PPF, LIC, Insurance, Mutual Fund = Rs 1, 50, 000

Medical Insurance = Rs 25, 000

Travel Allowance = Rs 19, 200

Total = Rs 4, 44, 200 (0 Income Tax)

Hence, if you are earning this much in India, you have to pay no income tax. Also if you are earning Rs 2, 50, 000 per annum you will get Rs 0 tax. It means if you have an income of Rs 6, 94, 200 you can save full money in your account.