The Wrong Application Of The Tax On Goods:: Why The GST Fails And It’s Needs Correction
This is my last article on the GST and with this my entire writeup completes on the matter of the GST that I have covered so decrepitly and by all it's description and in length giving all the ingredients to this Indian Government to make all the amends regarding the GST and to imply it to the Indian consumers so that they do not feel the heat as well as the pinch of the GST when they make the necessary buying of the product or the materials for their own use.
It is here that I wish to mention that IT IS IMPERATIVE TO KNOW FIRST THE PRODUCT AND IT'S CATEGORISATION, AND THEN TO APPLY THE CORRECT AND A STANDARD OF A VERY PRECISE MEASUARBLE TAX ON THEM.
It is very necessary to know what amount of tax ought to be applied on the small scale, on the subsidiaries on the medium scale, on the large scale ands on the HEAVY industries as far as the tax structures are concerned so that the industry along with it work force remain afloat and survives.
The reason why so many an industries have dwindled with the time is that the TAX structure on the goods manufactured by them have been very WRONG and CRUCIFYING and it becomes very neccessary to read and analyse the industries and to apply the correct and the appropriate tax structure on them for those industries to grow and remain afloat. That ONLY is the RECEIPE to the success of employment growth.
Taxes in many a cases are those which the TAX PAYERS are paying it on a WRONG heads as the Government of India from 1947 till now are taxing the tax payers especially in the manufacturing sector WRONGLY .
Pic- :: The Nomenclature and the classification of the PRODUCTS and GOODS
Before moving ahead let me describe the term “ PRODUCT ” economically .It is economy that actually builds or makes or manufactures a product and more than the ENGINEERING that makes the product it is the economy which actually guides and controls it. As such product before everything falls under the ECONOMY of it’s manufacture before it falls into the laps or the arms of ENGINEERING which produces that and manufactures it.
What is a product as one might ask me. Well a “ PRODUCT” is the assemble of all the UTILITIES that it contains and that converts itself into a GOOD for a useful consumption and this is how it is defined economically.
To be more ACCURATE and PRECISE, a " product is the bundle of UTILITIES put together such that the end serves as a mean of a very useful consumption ".
“ A PRODCUT IS THE INPUTS OF ALL THE ULTILITIES SUCH THAT THE END OF THE SAME OR THE END OF IT SERVES AS A USEFUL MEANS OF CONSUMPTION ” .
A end of the means of every product at last becomes “ GOOD’S ” and thus we also define the term GOOD’s . This is how we define that economically - :
“ In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not transferable ” ..
This article or the chapter would completely focus on the GOODS that are used by the various sector and the implication or the application of the TAXES that falls under the GST or the taxes according to the GST which is implied upon it.
The various categories of the products that falls under the system of manufacturing is described or ascribed above in the diagram. We now straight away come directly to the products classifying them accordingly in the sector that it falls and analyse it as well to evaluate all about the rates of the GST that is applied on them as taxes and whether IS IT THE CORRECT MEASURE OF THE TAX APPLIED .If NOT then how to correct it with the right application or implication of the taxes on it and what ought to be done to make it correct.
Before I start, let me make it very clear that the EXPERTS of certain field are necessary and their inputs are required very much about WHAT RATE OF THE TAXES OUGHT TO BE IMPLIED ON PRODUCTS LIKE THE ONE’S THAT FALLS UNDER THE MEDICINES AND OR THOSE RELATED AREA however the examples that I put here to the one’s to read it and take some cognizance out of the same as it needs a real BOGGLING-RETHINK and application of the same after a thorough evaluation to apply the taxes under the GST .
It is NOT that the GST is a GALLOW of death. INFACT THIS IS THE BEST THAT HAS HAPPENED IN THE ANNALS OF THE INDIAN TAX SYSTEM AND A LOT OF CREDIT OUGHT TO BE GIVEN TO THE MODI GOVERNMENT. However the IMPLICATION of the taxes needs correction and that is what this article describes it. Once this is done and applied correctly the INDIAN SYSTEM OF “ GST ” WOULD BE THE BEST IN THE WORLD.
Goods that we see and that we buy in the Indian market have been and are classified as 1 ) . CONSUMER DURABLE, 2 ) . CONSUMER CONSUMABLE, 3 ). INDUSTRIAL, 4 ). SPECIALITY, and 5 ) . FOOD ITEMS
I shall now take one by one the different one’s and would like to put the ideas of what the goods are and how ought to be the GST implied on them.
The main reason of the article here is that the WRONG implication of the GST has send many a small scale and mini scale industry for a TOSS and they are the one’s which are LANGUISHING, wanting to come back to the business but the application of the GST which is so heavy to them is making them a LAME-DUCK to fend them away from re-entering the business.
The resultant is that the employment at the lowest level where there are the workers who earn in between Rs 3500=00 per month to about Rs 6500=00 per month have gone in for a TOSS as their jobs do not remain now. Thaw , as one might term it , and those wrong implication of the GST on some product which one might term that as raw material at the time of manufacturing where those products are purchased for the sake of manufacturing have added more to the landing cost as a result the products have failed and the industries have seen the closure.
This is what nees to be reformed re-corrected and I’m DEAD SURE that the present Finance Minister Mrs Nirmala Sitaramanji who is working as HARD and as BUSY as a BEE will definitely make the necessary correction. Let us move forward for the same and start with the products under the various categories - ::
1 ) . CONSUMER DURABLE
Consumer durable are the products which has a DURABILITY of atleast a period of TEN or MORE than TEN years. To cite an example say the WALL-CEILING FANS or a refrigerators .
Here the taxes that ought to be applied to the raw materials which is required for these products to take the final stage of the product ought to be in the range between 8% to about 15 % . That is because the end product has a life-line to serve the end use customers for about say TEN years and even more.
However say in the case of the fans the electrical wire that is needed to make the electrical circuit which helps the fan to rotate or the remote control that is used to operate the fans should be taxed less .It is because these wires with the alteration of the fall of the supply of electric current loses it’s capacity to operates as it burns and that needs suck and a quick repair. That repairing cost are very heavy and as such that very item which is an important ingredient in the manufacturing of the fans ought to be taxed LOW so that the end use customer does not feels the heat to get his fans repaired . In India the supply of the electrical cuurent in the household ought to be 220 VOLTS at the minimum but the supply is between 190 to 210 volts which hits the fans and it’s revolution or operation. As a result the fans gets damaged as the copper wiring as that I have described gets worn out soon. The cost of the repair then adds to the problems and this is an example of where the GST for the RAW MATERIALS used ought to be LOW IN TAX. However the FINAL PRODUCT ie the FAN as the final product should bear a GST of about 25 to 30 %.It is because that fan would be used for a period of about 10 years on an average and the GST on an average would be 3% per annum which is AFFORDABLE in any case.
Similiarly in the case of the REFRIGERATOR the GAS that is used to operate the FRIDGE ought to be LOW in TAX allpied and some of the raw material ought to be TAX-LOW in terms of the taxes implied but the final product say the FRIDGE ought to be taxed at about 30% at the maximum because the Fridge will find it’s use for about TEN YEARS and the tax would be @ 3% per annum which is NOT a very HEAVY TAX implied in terms of per annum taxation. This is what ought to be followed , studied and the tax implied in the case of CONSUMER DURABLES .
DIFFERENCE IN IDENTIFYING DURABLES
There is a DIFFER in the classification of the DURABLES in MARKETING though the ECONOMICS might not take the job of doing it so. For example say an “ ALPIN ” which may last till TEN years , an AUTOMOBILE which will last to serve for about 20 YEARS and an electrical fan.
The ALPIN is a STATIONERY item which is consumed very quickly while attesting the papers in the office, the AUTOMOBILE though last for TWENTY YEARS it keeps on moving from one place to another and the electrical fan hanged on the wall which remains there till one gets it off.
The ECONOMICS or the subject that defines that as an item may not ascertain any difference to the same in terms of any definition but the MARKETING THEORY does it in abundance and thus there is the difference in the classification of these goods as per the marketing and it’s classification. This needs to be kept in MIND while applying the GST taxes on the same.
Now we move on to the consumer CONSUMABLE.
2 ) . CONSUMER CONSUMABLES
Consumables are the items that we consume. It could be RICE, ICE-CREAM, SWEET or even the MEDICINE but the categorization as per the THEORY of MARKETING for these items are different.
According to the ECONOMICAL definition Consumables are goods used by individuals and businesses that must be replaced regularly because they wear out or are used up .
Another definition of the consumables could be Consumables are products that consumers use recurrently, i.e., items which " get used up " or discarded. For example consumable office supplies are such products as paper, pens, file folders, Post-it notes, and toner or ink cartridges.
The food grains too are consumables but that ought to be taken differently as those falls unde the food grains and it’s related items.
Now take the case of the OFFICE ITEMS .Here the use of the papers say of the A4 size is too large and too often the A4 size of the papare are used. Then there is the case of the TYPING RIBBON or the CATRIDGE INK that are used in the office as the consumable for the computers. Here the GST ought to be LOW as the TURN OVER of these ITEMS gives a HUGE revenue collection of the GST as compared to the computer that uses that as computer is a DURABLE item and once purchased it remain for about 15 years before ONE DISLODGES that.
Here the GST on the COMPUTER could be upto say 30 % to 35% but the GST on the consumables say the papers , ink-catridges could be at the most say 3% to 4% depending on the consumables.
Similiarly the GST on the ALPINS should be NOT-MORE-THAN-TWO-PERCENT so as in the case of the stapling pins, but the GST on the STAPLING MACHINE ought to be in the range of 8% to TEN percent as that is a machine which has a very long life and use.
REASON WHY THE GST OF ALPIN & STAPLING PINS OR GEL PENS BE MEAGRE
The reason why the GST on the ALPIN manufacturing industry or the STAPLING PIN manufacturing industry or the GEL-PEN manufacturing industry ought to be very NEGLIGIBLE and LESS is that these industries are under the MINI-SCALE-INDUSTRIES where the ultimate cost of the finished product is too less . So a negligible GST helps them to be in the business and as the ultimate cost or the landing cost of the product is too less, the payment to the labours and the workers are also less. However thee kind of INDUSTRIES at one point of a time in India use to employ about 75% of the working population in the industries and these industries would totally generate 75% of the tax revenue.
A high GST will sweep these industries and would dwindle away all the employment and it’s component. Thus a VERY MEAGRE amount of the GST tax is envisaged and ADVOCATED for these .type of the INDUSTRIES. It is suggested to critically evaluate all these type of CONSUMABLE PRODUCTS and the industrioes and apply or imply the taxes in that measures. A MEANINGFUL application or implication of the GST tax for these industries to keep them afloat is the NEED OF THE SECONDS-MINUTES-HOUR for the nation to allow these kind of industries to survive.
Every items at every time , of the CONSUMABLES that is required in the process of manufacturing for the end use product to serve as a very useful mean ought to be studied I details and then the GST taxes ought to be implied upon it. “ THAT IS THE NEED OF THE HOUR.”
Here in the CONSUMABLES as an example I have taken the OFFICE-CONSUMABLE as an example as I had the opportunity to work for GESTENER INDIA LIMITED which was INDIAN DUPLICATORS COMPANY LIMITED once. This organization was in OFFICE CONSUMABLES and Office machine and the WRONG TAXES then when I was working overe there made many a small industries manufacturing these office items to get away itself with a blow of the WIND. This needs to be recorrected with the RIGHT kind of taxes applied as the low taxes in these sector will add up to the HUGE collection of the revenue.
Also I have taken the FOOD and the MEDICINE sector differently and I would come to that as those ector does needs an different kind of an outlook to apply the taxes on the same..
3 ) > INDUSTRIAL PRODUCT
Industrial products are those kind of the GOODS or the FINAL-FINISHED-PRODUCTS that is used by an industry to run it’s organization especially it’s field where those goods are needed to keep the cycle of the industrial production moving ahead.
There are various kind of Industrial product. Say for an example a “JSW ” brand of Earth mover. It basically is a MAXI-MEGA automobile but it cannot be classified as an automobile as it is a HEAVY MACHINE. Hence the definition of the same also makes it worth defining the INDUSTRIAL GOOD before we talk about the application of the GST on these type of goods.
I have defined the Industrial Good and now I boil my study to the facets of the GST that ought to be applied on the same.
An industrial product is a good used by a company for business consumption. Human or manual consumption is very DIFFERENT from the industrial consumption. It is distinct from a consumable good, which is purchased by individuals for personal and family consumption .The examples of business consumption at the time of manufacturing the Industrial goods are as defined and exemplified-:
· Installations — Example: Machinery.
· Accessories — Example: Power Generator.
· Raw materials — Example: Cotton, timber, etc.
· Manufactured parts — Example: Radiator, battery, etc., needed by a car manufacturer.
· Supplies or Consumables — Example: Lubricants, oils, etc.
Say a TRANSFORMER. It is an INDUSTRIAL GOOD or an Industrial product . Now the GST on the parts that are needed by the transformer at the time of production ought to be studied carefully and the GST of the raw materials that is needed to manufacture the transformer ought to be low in and for some materials that are needed to manufacture it and the GST for the other prodcuts depending o the product ought to be between say 8% to 15 % but the GST on the TRANSFORMERS ought to be about 30% to 40% depending on the capacity of the transformer that is being sold.
This is how the small scale industry which supplies the raw material to the tyransformer ought to be billed in terms of the GST and the transformers that ought to be billed in terms of the GST . A 440KWS of power balancing transformer obviously cannot be sold by an application of 5% of GST and the small GIRD of the transformer cannot be billed at 15% as the small raw material that is used for manufacturing the transformer.
For if you do that then the entire small scale manufacturing company that supplies the small and ther micro elements or the raw materials that is needed to manufacture the TRANSFORMER will dwindle away without any real cause. That and this si where a careful study of the application of the GST ought to be done before applying the GST on these kind of heavy industrial product.
Another example is of the PUMP-MANUFACURIBG-COMPANY. Molasses as a raw material is needed to manufacture the IMPELLORS of the pump. Molasses comes from the sugar producing factory. The Government gets a good tax when the sugar is manufactured. However the BY-PRODUCT “ GUR ” or the JAGGERY ought to be taxed much lower as this is the BY-PRODUCT which only adds to the VALUE-ADDITION of the sale to the manufacturer. Last comes the MOLLASSES which ONLY finds it’s use to the pump manufacturer . Now if a HUGE amount of GST is implied on the MOLLASES then these MOLLASES will NEVER fins a place in the market and the PUMP MANUFACTURERS will go away to their DETH-BED and the employees engaged in the pump manufacturing companies will loss their jobs as without the IMPELLORS the PUMP cannot be manufactured at all and without the MOLLASES the IMPELLORS cannot be made at all. One who has worked in the PUMP MANUFACTURING industry like I was, will understand the IMPORTANCE of this.
The problem is MOLLASSES are charged at such a HIGH rates that the manufacturing system of the pump industry has GONE to the BED-OF-DEATH. The MOLLASES are just the THROW AWAY kind of a goods that adds only to the VALUE-ADDITION to the sugar manufacturing industry and the GST on these should NOT-BE-MORE-THAN-TWO percent.
This kind of the CORRECT implication and application of the GST rates will keep these kind of industries afloat.
Similarity are there cases of the ACCESSORIES that are manufactured by the HEAVY INDUSTRIES and these kind of Industries which manufactures the industrial good. The classifications in terms of the ACCESSORIES ,RAW MATERIALS & MANUFACTURING PARTS ought to be kept in mind and the GST rates applied on it. Only this will keep these industries afloat and the employment intact. It is HIGH time the Government of the day makes an INDEPTH studies on the same and apply the correct taxes. That is the need of the moment.
4 ) > SPECIALITY GOODS
These are the items or the finished prodcuts such as the DIAMOMD NECKLESS , the GOLD ORNAMENTS, to cite as a few.
These items are NOT purchased on a repetitive basis and some of them such as th DIAMONDS etc are purchased by the SPECIAL CLASS of FILTHY RICH people. These kind of items are HIGHLY PRICED.
As such the GST on these items ought to be HIGH. There would be NOTHING LOST if the GST on these items are more than 35% because the ONE-TIME purchase theory holds and the industry also has to survive which manufactures these kind of items. Here a HIGH GST will not only give a HIGH returns of collection to the Government but a high taxes implied on the raw material manufactured in thee kind of an industry will enable them as well to price the product at a high price.
A higher price of the prod or the product by these kind of an industry will help them to get a heavy and a high collection of money collected by them as the sale price and that will help them to stabiles the manufacturing and the production system of these kind of an industry. These items that I have mentioned are NOT purchased by the buyer on an instant basis, hence the taxes implied ought to be strong, hard and more in and as compared to any other items that I have mentioned here as a final and finished product.
Some of the furniture's like the DRAWING-ROOM-SOFA, the GALLRY-SOFA, the LOUNGE –SOFA and certain furniture's also are classified under this sector and the GST implied on them ought to be very high.
A DRAWING-ROOM-SOFA once purchased is used for about 10 years at the maximum and for about FIVE years at the minimum. A high GST tax on the same say a GST tax of about 20 percent will mean that the tax borne by the end use customer works out to be 2% per annum if that sofa is used for 10 years or 4% if that sofa set is used for 5 years. That is NOT aa all a HIGH tax implied for anything and that works out to the advantage of both the manufacturer who sells that and who uses that.
However the MPORTED Sofa set that are sold in this country ought to be separately studied ands taxed. It is because the IMPORT DUTY plus a HEAVY system of GST taxation will NEVER allow the IMORTED SECTOR of FURNITURE to set and have it’s business grow. There the GST ought to be studied carefully and the taxes applied. There are many FURNITURE-INDUSTRY where the TAXES ought to be implied after a careful study as they only deal with the IMPORTED furniture. A common tax structure will send these kind of IMPORTED FURNITURE and it’s sale in terms of th industry to their death bed very soon.
This arena and this sector of the Industry is really looking for the Government and it’s lateral aids to boil them down for a cooling effect of a good business to flow into them ie to flow into the system .The Government needs to read the same carefully and device a method as well to keep the industry afloat.
5 ) . FOOD ITEMS
This is the ACTUAL consumable item and in this sector the food items such as Rice, Dal, Wheat, and the Medicine items are the one’s which requires an indepth study by the Government of the day to apply the actual and the real tax which not only helps the consumers to survive and live well and also consume the items accordingly which keeps their health and the medical care well within their lines of acceptability and use.
Food items like RICE that I had observed were taxed at 24% by the shopkeepers selling that. Say if the rate of the rice is Rs 60/Kgs and on it if one has to pay 14.40=00 as the taxes then on a purchase of Rs 100=00 he is paying Rs 24=00 as the tax. HOW DO YOU EXPCET TO-
1). RICE TO SELL IN ABUNDANCE IF ONE HAS TO BEAR Rs 24=00 FOR EVERY PURCHASE OF Rs 100=00 ON THE SALE OF RICE
2 ) . HOW DO YOU EXPECT THE PRODCUTIVITY OF THE WORKER WHEN HE CUTS HIS CONSUMPTION BECAUSE OF THE HIGH PRICE RATE AND HIGH TAX STRUCTURE OF TAX HE OUGHT TO PAY ON CONSUMABLES
3 ) . HOW DO YOU EXPECT THE FARMERS TO GROW MORE AND MORE WITH THESE KIND OF A FALL IN PURCHASE BY THE CUSTOMER OR END IN USE CONSUMERS
4 ) . THE SHOPKKEEPR TO KEEP HIS BUSINESS AFLOAT IF THERE ARE CONTINUOS FALL IN THE DROP-IN OF THE CUSTOMER .
The GST here also needs an careful evaluation as well. To cite an example say, take the case of Dal. Say the TUAR DAL sells in the ratio of 3:1 or 3:2 as compared to the MOONG DAL .
In this case the Tuar dal ought to be taxed at a high price say about 3% of GST and the Moong Dal ought to be priced @ 2% of the GST. It is because the sale of the Tuar Dal is more it brings a more revenue in terms of TO ( Turn Over) and the Moong Dal ought to be pushed more for purchase as that would benefit the Farmers.
If the Farmer finds that the sale of say the Moong Dal is less and over it the GST is making the sale to fall down, the fallibility factor of the sale of Moong dal will impute and impulse the farmer NOT-TO-GROW-THE-MOONG-DAL more and the fall in the production of the same will leads to a SURGE of the price in the market which will hit the end use customers.
Hence keeping these factors in the mind the rates of the GST ought to be implied.
Similar Is the case of the medicine. I’m not a PHARMACEUTICAL SPECIALIST neither a DOCTOR or a MEDIC. What ought to be the prices of the medicine according to the need of the hospitals or the clinics etc ought to be consulted by a team of HIGHLY EFFICIENT Doctors like say Mr Devi Shetty and the likes of the medics of the AIIMS and so many such a medics working in the reputed medicine and hospital industry and their view point and suggestions ought to betaken for implying the GST on them
Food items and the MEDICINE as well as the HOSPITALS are the one’s where the GST ought to be applied and implied very sincerely as these sector and these industries only adds to the LIFE and the LIFE is that which adds LIFE to the nation.
If a WRONG GST taxes are applied and implied on this sector that provides the services or adds the fuel to the body to live and to work to live, it is impertinent that the GST taxes that is applied on these are correctly implied.
This is where the GST needs an overall evaluation and implication so that the life becomes easy, the industry survives and the JOBS-ARE-SCALED-UP-FOR-MORE-AND-MORE-EMPLOYMENT and that is what is the need for the nation to do immediately.
6 ) .Industrial Goods
Industrial Product
Let us
define what is an INDUSTRIAL PRODUCT
Industrial
goods are materials
used in the production of other goods . A starting process in the manufacturing of any material that is
purchased can or could be the raw material for the Industrial product and a
finished product during the process of manufacturing could be the raw material
for any industry to use that product as the raw material for manufacturing a product
which could be the end product.
Here is the complete illustration in the form of the
diagram which could be termed as the
product categorised as the Industrial product ::
Picture
- : A picture or a diagram of an Industrial product
In common parlance
A PRODCUT THAT IS USED IN
THE PROCESS OF MANUFACTURING BY AN INDUSTRIAL HOUSE OR A BUSINESS HOUSE IS AN
INDUSTRIAL PRODUCT.
An INDUSTRIAL PRODUCT differs from the CONSUMER
PRODUCT as the consumer product is the final and in the stage of something
which could be consumed by a consumer as an end-finished product say a piece of
ROSSOGOLLAS is the end use finished product and the COTTAGE CHEESE that is used
for it’s manufacturing is the raw material which could be termed as an INDUSTRIAL RAW MATERIAL
product for the Rossogollas manufacturing industries.
DEPENDING UPON HOW A END PRODUCT IS USED
, IT COULD BE TERMED EITHER AS AN CONSUMER PRODUCT OR AN INDUSTRIAL PRODUCT.
The following illustrations and explanation will
make the write up clear and precise about how a finished product by an industry
acts as an raw material for the another industry and how and where are the tax
structure that needs to be addressed very meticulously and properly to be
implied on them so that the industry not only only survives but the employment
remains intact and the process of manufacturing, the supply and the factor of
demand remains constant and in flow.
Industrial product as that I have demarcated is
generally categorized in four different sector-:
A ) . Finished Good , B ) . Semi – Finished Good C ) > Bye-Product and D ) . Raw Material
Now let us discuss the Finished Goods first. Say in
the manufacturing of the SUGAR, the raw material needed to manufacture sugar is
the sugar cane. Here the MSP fixed by the Government ought
to include the tax as the Government buys this sugarcane from the Farmers and
it is the Government which is paying the taxes through it’s pocket.
It could be that the sugarcane and the sugar
manufacturing industries that buys the sugarcane directly from the farmers on
the MSP fixed by the Government and the industry here pays the tax.
THIS IS THE FIRST POINT TAX that is here and that
comes in the picture and the one who buys it , be the Government or the
industry pays the tax for the first time.
Now during the manufacturing of the sugar cane there
are TWO items which adds to the BYE – PRODUCT during
manufacturing and these ar the 1 ) . JAGGERY and B )
. the MOLLASES .
Now the SUGAR comes in the form of the END-USE-PRODUCT and that becomes a CONSUMER PRODUCT, the JAGGERY too add to the
value addition of the manufacturing process and it also is an end use product and
thus it becomes the consumer product but the molasses that comes out in the
manufacturing process while producing
the jaggeries is a RAW MATERIAL for the industry which manufactures the PUMP as
the IMPELLORS which is the HEART of a pump is manufactured by the use of the jaggery. The
SKELETON or the “ DHAANCHA ” as we call it while manufacturing these impellors
at the foundry station of the pump manufacturing industry/ place is made up by the clay and is mixed with
the molasses to prepare the impellors.
As such the taxes on the sugar which is a final
consumer product ought to be different as compared to the jiggery that comes
out while during the manufacturing process and at last the molasses that comes
out at the last as as the bye-product and which finds it’s place only in the
FOUNDARIES ought to be taxed very LIGHTLY and in a meagre manner as this serves
as an raw material to the foundries and in the pump manufacturing industries.
A heavy tax on the molasses will curb down the
buying process and will cut the purchases in the foundries and in the pump
manufacturing industry and overall the volume of the manufacturing unit will
suffer. This will act upon the employment generation as the workers mostly in
the foundries are the illiterates and the unskilled labours who during a long
process make themselves a master in the process of manufacturing these
impellors.
Obviously if there is a huge tax applied or implied
on the molasses ten the foundry industry will be hit high with the employment
receding to the lowest and coming down. Also a careful thought ought to be
applied on and about what is the tax
that ought to be applied on the Jaggeries as jaggeries are the bye-product in
the manufacturing process of the sugar and it only adds to the value in terms
of the addition of the profit to these industries. It is here that the careful
application of the taxes ought to be implied
I take another example of Petrol manufacturing which
at different temperature while it’s manufacturing process gives different product
but the two which finds a tremendous use are the Bitumen and the Damar
which are used by the road manufacturing
engineering companies . These are the bye products and it adds to the value
addition of the manufacturing process while constructing the road , and a heavy
tax on these product will only limit the use of these materials in the process
of road manufacturing.
The end result is and would be that the QUALITY
of the roads where these materials are used will and would be poor
, and the labours that are engaged in the process of road manufacturing will
start diminishing in the long run because if a high tax is implied on these two
bye-product of road laying process, then
, ther raod manufacturing industry will
take a hit. It will at the last have a repercussion on the industry and it’s
impact would be on the employment especially on the daily wages paid labour.
Let me move down to the semi finished good.
Semi-Finished
Goods
A
semi-finished goods are the , a semi-finished products are goods,
such as partly finished goods, used as inputs in
the production of other goods including final goods . For example in the manufacturing process of
cements , the slurs which again throws up many an item including the lime are
the raw material for the other industry.These acts as an bye product and as a
raw material to the the industry and again when the impure lime is processed in
the lime industry the ACIDS that comes out of it are the bye product of the
lime manufacturing industry which could be used in the factories where the
batteries are manufactured..
Coming back to the semi finished good, say an IRON BOLT which
is manufactured by a bolt manufacturing company which of course is and would be
a small scale manufacturing company , the bolt is a finished product for that organization
or the company which manufactures that and it is a finished consumer good for
that organization , which again is a semi – finished product for a car manufacturing company.
Now either the implication and the application of the taxes
ought to be carefully studied and applied . A heavy taxation IN this industry on
these semi finished good will have a
CURSING-IMPACT on the car industry which will ultimately add to the
final LANDING COST of the car and if that happens the sale of the cars would
take a hit and the production factor would be hit.
Once the production of the car manufacturing is HIT then the
industries which are the SUBSIDIARIES to these GIANT CAR manufacturing organization,
would be there for the DROWNS and the employers there, employed will again go
in for the ROADS with a BEGGING BOWL.
It is here that one needs to understand that a CAR as a FINAL
PRODUCT for use or a TWO-WHEELER as a FINAL product to be used are the
MINI-COMPONENTS of many a parts which satart from the CHASIS to the ENGINE and
that ends up with the TYRES, WHEELS, BREAKS, ACCELATORS to cite as an example
is a CONGLOMERATION of many a SEMI-FINISHED parts and product which totally
hinged on the supply of those parts from the SMALL-SCALE and SUBSIDIARIES and
the taxation process of these industries will really make the
industry of the cars either to SWELL or DIMINISH and that will at the end have
a bearing on the EMPLOYMENT
generation.
This is where our tax implications and the applications have
NOT been clearly segregated and as a result almost 90% of the small scale
industries have gone away from their business. These 90% of the small scale
industries employ about 80% of the work force from the SKILLED, SEMI-SKILLED
and UNSKILLED labours , and it’s sector and it is now for this Government to
completely RELAY and RESTRUCTURE this through the proper application and
implication of the tax structure.
It is here that the Hon’ble prime Minister, the Finance
Minister and the Confederation Of The Indian Industries as well as the Chamber
of Commerce of the various industry will really have to sit down immediately
from the month of January along with the experts to devise a careful tax
structure.
This CAREFUL tax structure will only help the GST and the
TAXATION to fall in it’s groove and in it’s proper place and that will help the industries to be at it’s
flowing best and the employment in the various industries to be alive.
It is here that Mrs
Nirmala Sitaram will make herself as the BEST of the Finance Minister that
India had in it’s history or will be one of those where many have handled this
ministry and have earned an SOBRIQUET of being the WORST.
Independent India NEVER
ever had a Finance Minister who was GOOD
for anything. They have been in the race, running , between the lanes of either the BAD or the
WORST for them to be either the BAD or the WORST.
It is an GOD-SEND-OPPORTUNITY for Madam Sitaraman to work
very hard on the same and to change the complexion to be the FIRST to run on a
GOOD track or else the GOD-SEND opportunity to her also would go to the DRAIN.
It is the CAREFUL taxation on the INDUSTRIAL items as
demarcated there in the picture which needs to be addressed and applied as the
taxation on them careful which would make the GST and EMPORER with the industries afloat with that or would make
them the BEGGAR and a LOT would depend on the BRAIN-SCHEMES
of the Finance Minister.
NOT A HARD
TASK , BUT A TOUGH ONE
HENCE THE CORRECTION ON THE IMPLICATION AND APPLICATION OF THE “ GST ” IS WHAT WOULD MAKE IT BETTER OR THE BEST.
It is just a deep rooted studies coupled with the correct evaluation and application which will make this GST, as ONE says – GABBAR SINGH TAX , a “ GRAND SYSTEM of TAXATION ” for ever for India.
I have in a very BEST manner written as many as EIGHT articles on this and have covered the entire GST in MINUTES and in DETAIL and I would like the Ministry and the Government especially the Finance Department and the Finance Ministry under Madam Nirmala Sitaraman to read all those articles along with her experts and apply the CORRECT procedure to completely make the GST as the BEST that exists in the world and if they fall onto my article and it’s MOOT POINTS they will be able to achieve that HONOUR.
" TAXES ARE THE RECOVERABLES THAT THE CONSUMER PAYS TO KEEP HIM AFLOAT AND NOT THE INCOME FOR THE GOVERNMENT TO KEEP ITSELF " AFLOAT"
" BOTH " the Farmer Krishi Bill and the GST are correct in it's approach and the BEST that the Government had DONE it to put it on the floor but both needs some CHANGES here and there to suits all the modules and that is what is needed for this Government to do it fast.
It is for the Government to UNDERSTAND it and apply or imply the TAXES on the GST , very correctly and " appropriately "
As I have mentioned above,...........
NOT A HARD TASK , BUT A TOUGH ONE
Well , that is it
Regards and Thanks
Pics
Shyamal Bhattacharjee
Mr Shyamal Bhattacharjee, the author was born at West Chirimiri Colliery at District Surguja, Chattisgarh on July 6th 1959 He received his early education at Carmel Convent School Bishrampur and later at Christ Church Boys' Higher Secondary School at Jabalpur. He later joined Hislop College at Nagpur and completed his graduation in Science and he also added a degree in B A thereafter. He joined the HITAVADA, a leading dailies of Central India at Nagpur as a Sub-Editor ( Sports ) but gave up to complete his MBA in 1984 He thereafter added a Diploma In Export Management. He has authored THREE books namely Notable Quotes and Noble Thought published by Pustak Mahal in 2001 Indian Cricket : Faces That Changed It published by Manas Publications in 2009 and Essential Of Office Management published by NBCA, Kolkatta in 2012. He has a experience of about 35 years in Marketing .
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Painstakingly jotted on a matter very poorly implemented directive the brunt of which is borne by the aam aadmi (common man).
ReplyDeleteThoroughly jotted down the all complex matter in the most suitable manner for a commoner to make a sensible wise decision in contributing as one's own tithe in the nation's coffer.
ReplyDelete