Where are you, my audience?

This is take on change in the social fabric vis a vis plays, movies and entertainment industry, in general.

Advertisements

Sunil Barve actor, producer and a friend, wrote an article about a Marathi play produced by him under the banner Herbarium 2. Herbarium is a collection of preserved plants stored, catalogued, and arranged systematically for study later. The idea is to look at the plants and leaves after enough time has passed, and to view them in posterity. Sunil named his endeavor Herbarium for the old plays to be  enjoyed nostalgically after 3 to 4 decades. Herbarium 1, was extremely successful where Sunil revived five old Marathi plays, in 2010. The response from audience was exceptional, to say the least. Each drama had 25 performances all over Maharashtra. Herbarium 2, started with a Marathi play, Pati Gele Ga Kathewadi पती गेले काठेवाडी. This was in September 2017.

SunilPatiGele

Sunil wrote the article in surprise, to the reaction from the audience; he said where has the audience gone? It was just a matter of seven years. In that period, very good response for Herbarium 1, switched to ok response in Herbarium 2. Sunil was wondering what could have happened during this period? Sunil and I spoke on phone on the subject. I think that these seven years were crucial years where the generation which was nostalgic about the old plays, became much older and the younger people were not very keen about those plays.

Life meanders in a way where old likes & dislikes change, new thought processes come up, new technologies and media like Netflix become popular. The traditions and social ethos change with time. We may feel that certain things continue and do not change much. But they do change, though subtly! For example, foods and food habits change over a period. In my childhood drinking coffee in Maharashtra was almost non-existent; now we have so many coffee-shops and bistros. Drinking alcohol during my school times was taboo but now it is a socially accepted drink. Stadiums used to be full for Test matches, but slowly one-day matches took over; T-20 was the next step but IPL jamboree is the most popular now.

50’s in the last century had movies which were themes based on nation which had just earned freedom, मेरे देश की धरती सोना उगले, उगले हिरे मोती. 60’s films were more of sad stories and love stories. Then in the next decade came angry young man movies. So, trends keep on changing. Now the popular movies are, Salman Khan type of movies like Dabang. Connoisseurs of movies may like art movies with subtle stories, but general populace prefers Dabang. Connoisseurs may call such movies gross, but life’s realities are different! Ultimately, making movies and producing plays is business and their success will be dependent the masses and not classes. 

Connoisseurs of dramas would rather see Herbarium 1, but this number is dwindling. Are the days of such revivals numbered? Do people really care for plays in which Dr. Lagoo, Satish Dubashi, Nilu Phule and Kashinath Ghanekar acted? Do people now really care of writers & poets like Vi Sa Khandekar and Kusumagraj? If they are not in awe of such personalities, then there will be no nostalgia. Someone like Pu La Deshpande may remain in the lime light for a generation or two more. Do we hear the names Ga Di Madgulkar and Shanta Shelke these days? Pu La, Lata Mangeshkar, Mohamad Rafi are still on pedestal but for how long will they remain there? The most popular actors of yester years were Clark Cable, Vivian Leigh? Heard these names anywhere lately?

Another thing that comes to mind is the strong drama movement in Newyork’s Broadway and in London. Similarly, strong activity happens in Prithvi theater in Mumbai and NSD in Delhi. This continues at one location in one city! But, does it mean that going to different towns to perform, may not happen in future? The costs have gone up because of travel, and now GST. With these limitations it can be difficult to revive old plays in future. What lies in future for attempts like Herbarium is difficult to judge but indications are that it is going to be a tough call! Maybe equivalent of Prithvi theater in Pune, is the way forward!

I will share one more nostalgic experience with you. Recently, I purchased a device called “Caravan Saregama”. It looks like a Radio of the olden days with knobs and all! It of course, has a remote too! This device has 5000 songs stored on it and these songs can be played by mood, singer, music director and has Amin Sayani’s Binaca Geet Mala songs stored with his commentry. Songs are between the period 1950 to 2000! The moment I saw the advertisement I bought Caravan; nostalgia, love for olden days, not too much efforts to search songs,  were the reasons I bought it. How long this device will sell?  I don’t know. Maybe they can increase its life span by having songs between 1970 to 2010 and so on.  Audience for 50’s & 60’s songs is going to dwindle fast! But will the young gang buy this device for themselves? What is Amin Sayani for them? What is “Hava mein Udata Jaye” for them? I am not sure! In fact, I am sure it does not mean anything to them!

Caravan-Brown-9

 

Experiments like Herbarium are fantastic things that happened to Marathi theater, but the quality of the play and actors was not the only reason people flocked to see the first edition! Herbarium was “Amin Sayani”  & “Hava mein Udata Jaye”  of theater for them, nostalgia! Is my generation, which around 70, craving for Sehgal’s “Jab Dil hi toot Gaya”? No, it is not! The natural process of fading with the time, goes on all the time! I am quite sure that Sunil will definitely find the right path for more such experiments!

Sunil2

Since I am in filmy mood, let me end up with an appropriate Hindi song Ye Jeevan Hai! It says this is what life is all about! There is some happiness and there is some sorrow! Life goes on and on! 

 

Data, the New Oil!

Walk through of benefits of big authenticated data!

In one of my blogs, I had used a statement by Mukesh Ambani, “Data is New Oil” My friend Ajit suggested that I elaborate on the statement. So here we go!

We have been using oil and Petroleum products, extensively during last century! Initially, the approach taken by westerners was flamboyant! They went to the desert land of Arabs and extracted oil at a decent profit. In early 70’s in the last century, Arabs realized that they were sitting on a goldmine and rest as they say is history! From desert kingdoms, where the countries were mainly run by expats, these countries have become rich countries and are sitting on a mountain of money! This was all due to correct commercial exploitation of Oil as a resource and later squeezing non-oil producing countries!

Current century is the century of data as we have already started observing. A lot many things happen digitally and there is tremendous amount of data that is getting generated and obviously being stored somewhere! The country, the businesses which will harness the power of data, already available, will become leaders in their own field. How to exploit this data? For doing any digital transaction, authentication is mandatory. We started with passwords, spoken word and so on for authentication. Indian government had a foresight to start creating a database of people in India and issuing digital identity to people called Aadhar. Aadhar has Unique identification which is biometric. This is THE ultimate method of authentication. Aadhar UID is the largest such data of population with authenticated identities in the world.

Due to this authentication method, many things can be done digitally. First and foremost, what Aadhar has achieved is to bring large number of poor people in India into formal system; this allowed these people to open zero balance bank accounts, to start with. Large number of populace has been outside the formal system all along, because of non-inclusion! Non-inclusion was because these people did not have any formal identity! The inclusion will increase GDP as transactions made by these people will get added in the formal system. The same poor people, get subsidies from the government. There has been extremely high leakage of subsidy as this money did not reach the right people. In the system when black money gets generated, it goes out of circulation and formal economy gets affected. With Aadhar, subsidies go directly to people’s bank accounts.

These are some of the effects of large amount of authenticated data being available. There are more advantages of authenticated data. During GST returns filing, it is mandatory to share that month’s sales figures with authorities. Now government will link this data from GST returns to Income Tax returns filed. Naturally, the values must match. If they don’t, the tax evaders can be easily trapped. This change will happen because of linked data. According to some estimates India’s GDP is much higher than what is seen on paper; this is because cash or black money transactions remain outside the formal system. Black money is the money on which income tax is not paid. When all transactions happening in India become above board, real GDP figures will be known. Data is the way for that! GST data will be huge data but putting it to proper use is going to be the key to success. Initially people required PAN cards for some financial transactions but there was no real authentication done while issuing them. With the result that people had several PAN cards making it easy to cheat. With Aadhar linking of PAN cards, each person can have only one PAN card. Power of authenticated data!

What is being linked to Aadhar? Bank accounts & FD’s, LIC and other policies, Mutual fund investments, Cell phones and many more things. These instruments are used by all people irrespective of their status whether they have black money or tax paid money. Authorities can link all this data from huge data bank and link it with Income Tax data base. I need not elaborate what will happen as the result of this linking.

Ambani’s cell phone company Jio has sizable data of their subscribers. Subscribers are registered using Aadhar card. Jio has plans to compete with Amazons of the world with a different business model. It is said that not even 10% of population buy their stuff on the net! Jio will provide discount coupons to the subscribers for local shops, within their cities and preferably in the vicinity. These subscribers will go to the shops using their cell phones & linked coupons will buy things they want and pay the vendor. These vendors will be local grocers, fruit wallas and will compete with Amazons through Jio. The vendors phones and customers phones are linked via Aadhar to handle the payment part.

Another business process that is being tested in China which can be adopted with or without modification in India. Someone wants to buy stuff from a vending machine. After items are selected, the person gives iris scan. This scan is linked to Aadhar card to Credit Cards (if they survive technology onslaught) or bank account. Payment is done using iris scan. Can it get easier? Just imagine that your Iris scan is going to be your credit/debit card, online banking and wallet all rolled in one!

Already there are apps like True Caller! If you have True Caller installed on you cell, any unidentified call received is checked by the app on huge data, thereby displaying you the name of the person calling you!

Another large data that is captured these days is the data from cars. Cars these days have a lot of censors to track and send the data to servers. Such sensors are now functional on normal cars like VW Golf also! High end cars are even more data hogging. What do we do with this data? I will give a couple of examples. Vehicles performance like engine performance, oil levels are captured. In case of some issues in the car, diagnostics is done quickly as data is always available. In VW Golf, if you get flat tyre, and someone else is using your car; your registered cell phone will receive a text message “Your front right side tyre shows reduced air pressure”! There are lot of such messages received when something goes wrong with the car. Driverless cars and EV’s are next in line. They will all capture very large data from all cars. How this data will help? Diagnostics, design improvement, performance fine tuning. Important thing is nobody must go and capture data!

I feel that, in India, data is going to help reduce corruption and black money due to Aadhar linkage. Data has already brought large number poor people in the formal financial system. Data will give true picture to the planners of the nations. All this will allow the nation and thereby people to prosper. The correctly authenticating data is the way to go forward. Looks like iris scan is the proverbial golden wand to do it!  On the technical side data will allow new business processes to evolve; some of which don’t even exist today. Speed of doing research and analysis will become fast. New products, new methods, new medicines will get evolved much faster. All the speed and accuracy due to authentic data will be a real boon to human race!

1407351650 

1407351650

Has living in India become easier?  

Ease of use on day to day basis for common man has increased by 60 points!

I read a news item in newspaper that India has jumped 30 places in “Ease of Doing Business” ranking, given by world bank. (Later our PM also said that general living has become easier in India.) These experts have used pre-defined methodology; the same methodology is used all over the world. This indicates India’s ranking is compared with world’s other nations.

This made me think of us common people. Has our life changed? Has “Ease of doing things” changed for us on day to day basis? I am not talking of general infrastructure and holiday destinations and that kind of things. It is day to day mundane things that we are required to do. It is like shopping, making bill payments, availability of services, standing in queues. It is also about travelling from place A to place B which is part of our daily things that we do.

I am talking about city dwellers who have access to wi fi,  and internet on cell phone.  This infrastructure has improved a lot during last five years. Proliferation of cell phones is really deep. This has made life easy for the people, who have adapted to the use of this technology, irrespective of their location. Payment procedure of regular monthly bills like cell phone, electricity, insurance policy premium has become extremely simple. These are done by card, net banking or even simpler “standing instructions”. New system of wallets is also spreading quite fast. But how many of us have really started taking advantage of this change? I still see many people going physically, to pay these bills, standing in queue! Reason no belief in the system! Systems are available and they are making things easier. More people should be encouraged to use such systems.

Daily transportation is one of the biggest hassles in daily life! In this aspect, things are definitely improving. Main difference is due introduction of Metros in a big way, in many large cities. Metros definitely ensure that people travel from place A to place B in world class comfort and in shortest possible time. Just to give an example in city of Pune, going from Pimpri to Mandi area in peak hours takes about 75 to ninety minutes. After Metro is introduced, this will be reduced to 30 minutes! This one world class solution does overcome daily hassles, reduces traffic on road. Metro is operational in Kolkata for a long time, Delhi was the second city and now in coming three to five years 10 to 15 cities will have Metro. Another advantage of Metro is world class system has changed the mindset of people in public, they are quite disciplined while using the Metros. Of course, they go back to original ways, once they are out of Metro concourse! But I am sure slowly this conduct will improve outside Metro system too!

Abundance of various items, has definitely improved. Vegetables, fruits, groceries, milk, grain, medicines, and what have you, it is available in abundance! Days of shortage have simply gone. Availability of services of technicians like electricians, plumbers are easily found through yellow pages!

During 90’s when people’s aspirations started increasing, getting admissions to schools, colleges and professional courses became very tough. But since last few years seats in many courses and school/colleges remain vacant. This indicates that supply has become much more than demand.

In Banking system, there is marked difference due to technology. Processing of documents has become easier and many types of personal loans are available quite quickly provided all documents are ready. In fact, some banks offer pre -sanctioned loans to some elite customers. ATM’s have made access to cash simple.

Since India is huge democracy many things take time to happen. But they happen. Income levels have gone up and easiest indication of this is the sale of two wheelers in India. India has become the largest manufacturer of two wheelers in the world! Ok this creates its own problems. But expressways are coming up all over and authorities are trying to improve infrastructure to the best of their abilities.

I will share with you a very efficient system created by Pune Municipal Corporation. This is about their yearly property bill. They send the property bill details by SMS or text message. On clicking the link in the message, I was taken directly to their site with all required details filled in! They only showed a button “Pay”; when clicked it asked the normal payment options and  I paid the tax. Time taken 1 minute. Very similar system is created by vehicle insurance companies; insurance renewal time required is similar. Flipkart, Amazon and all such companies have made doing daily purchases very simple. Don’t forget ease of buying Bus tickets, Air and Train tickets.

Why people do not use the systems is due to apprehensions, lack of knowledge and simply because they have techno phobia. I know of an eighty-year-old lady who decided that she wanted to use all the modern payment systems and she has done the switch in about one month!

Most important change for business community is the GST! This one change has made things very simple. There were many taxes before GST and doing business was a nightmare to which we were used to! But talking to many factory owners, people from trading community, they find things much simpler than before!

Of course, there are minuses! Main issue is confrontational politics, there are naysayers like “development experts” whom I call zolawallas! There are people who are really upset because of Government drive against parallel economy! According to me there is an improvement of 60 points and not 30 points in our day to day lives.

GST ground realities!

Hype and noise over GST implementation is it justified?

Some human emotions and reactions are excitement, frustration, ignorance, arguments! I never thought that GST, Goods and Services Tax, a drab subject will invoke so much of emotions. GST was implemented by Government of India effective from 1st July 2017. Before GST, the tax structure was extremely complicated and each state had its own tax rates and taxes. Doing business and managing tax compliance was an extremely complex thing with many different tax agencies, with many obstacles in doing business, it was almost like a hurdle race. I am not going to write about technicalities of implementation or real life details but about the human angle in GST implementation.

This change is supposed to be a game changer in the business ecosystem of India. GST was being planned since last ten years. But usual political lack of will, government change and horse trading delayed the implementation. First date declared for implementation was 1/10/2016 which was changed to 1/4/2017 then finally to 1/7/2017. Humans are of different types and the tendency in some is to crib about everything. On one side people said how can this government implement GST when they cannot even fix up the date of implementation! Though GST is being discussed for more than 10 years, when it really happened main refrain was “we were not given enough time”. How do you define enough time? Main preparation required for any business reform, other than infrastructure, is the change in mental setup. If you are mentally not ready, 20 years also will not be good enough time for getting ready!

All the big industry and many in trade have been under some tax regime all the time. Laws under excise regime were very strong but it was easier to play around in other tax types. Why do people avoid taxes? Is it with the noble cause of selling goods at a cheaper rate? No way! They do it basically to avoid showing the real volume of business they do, thereby saving on income tax. This is the so called parallel economy or cash economy. This is nothing new and it happens world over. When you have complex laws and equally complex systems, those who want to play around are happy because they can tweak the system and reach their ultimate goal, hide the real income. A friend Mahesh always used to say, “Pramod excise is the best thing that has happened to India.” Mahesh headed a manufacturing organization. He would say, “These laws mandated people to complete their work every day, only because of fear of going to jail!” Many people will be sloppy if allowed and would not complete their daily! It is fear that mandated people to complete the work.

GST compared to previous tax regime before 1/7/2017, is a very simple system. It is addressing many demands of business groups about cascading effect of taxes, causing heavy/double taxation on end products and services. Tax levels all over India for same product are same, so are tax levels on services. When the government decided to go ahead with GST, it was required to fix tax rates for each item based on available information, knowledge and discussions with trade and business groups. With such a large exercise there can never be 100% acceptance and there are bound to be changes over a period, and modifications made on the fly. The affected groups were bound to be unhappy and made a lot of noise! Authorities listened to most but some demands were unreasonable, so government ignored them. Human learns from birth that if you cry loudly mother will give you milk. These people are crying loudly to grab attention. The implementation phase saw cribbing at its best!

In some cases, there were errors and flaws which were not corrected even on approaching helplines, writing to right authorities and making genuine attempts. There were no resolutions coming, initially. This is a small group of businesses and these are the groups that are bound make maximum noise, in some cases justifiable. There were interpretation errors by consultants which resulted in chaos. But there are some groups who on one side say that GST is the best thing that has happened to India but and in the same breath say that it is a draconian system! The system has just started  since last ¾ months. How draconian nature of system can be viewed or experienced by these people in such a short period? I doubt that other than non-resolution of their queries there is hardly any interaction with government agencies. Government is already publishing advertisements in newpapers showing FAQ’s for various group of businesses. I get a feeling that GST system will make life difficult for those who want to avoid taxes, but nobody can openly say so! So beat the drums and trumpets against the system!

People tend to tell false stories to complain against the changes. One person claimed that he was required to spend Rs. 80000/ for getting his organization registered for GST. There are no fees for registration. Governments drive for digitalization requires digital signature during registration. This person claimed that Rs. 30000/ was spent for digital signature process. It is false, consultants charge Rs.1500/ to get this done. Digital signature is valid for two years! So real expense was Rs.1500/. On asking about Rs.50000/ expense he claimed that he could not take Rs.50000/ tax credit because of the delay. This is again false because he could easily have taken it had he registered on time, maybe he did not know the right procedure or his consultant was not competent. Such false stories are floated because of lack of knowledge. Throwing tantrums due to lack of knowledge pretty easy.

Humans don’t want a change, if it is possible, as per Newton’s law of inertia. They will make statements like “Change is the only constant!” But in real life change management needs new systems, processes, retraining and change in thought process. This needs leadership to encourage people to change. Absence of these things will create situation where it is easy to blame everything on GST! Government or GST is a faceless entity so it is very easy to make such a drama if you get an audience. Some people have reached very high in life’s station, but this does not mean that they have total knowledge about GST. In cocktail parties they will make “knowledgeable” statements. When they meet a person with knowledge they tend to drift to join another group for discussion!

I feel that by Diwali next year, these strong emotions, discussions, reactions will taper off. People will then start singing praise of GST as if the whole world is reformed by GST, it is only a change in tax system! People will get used to GST, Newton’s law of inertia will set in and discussions during next Diwali maybe about North Korean nuclear bomb!

[PP1]

100 Hundred शंभर सौ!

Thank You from bottom of my heart! Your encouragement is what really puts my blog writing in turbo charge mode!  Keep commenting, keep criticizing, keep liking too! 
धन्यवाद, आभार, Love you!

As I have reached  blog number 100, I am excited, apprehensive, and reflective. Many emotions come to mind, one definite one is surprise! I started writing in 2011, and expected that my stint as a person who can write, will be short lived as happens with most of things in our life. Now in 2017 I am reaching the milestone of 100 blogs.

100th-post-image

We start some activity with a great enthusiasm, we think that we are going to do this thing for ever and before you come to know, you have simply stopped doing it, not because you don’t want to do it but that is how life takes you around.  Since last three years my blog writing frequency has increased. All of us see something happening in our lives, a small episode in our day to day life, or a normal interaction with people. Afterwards, thoughts keep on meandering in mind about that event and inner thought process starts automatically. This chain of thoughts stops only when I write something.

It is said that humans age and wine matures!  But those close to me, say that I have aged but my writing has matured!  I feel that maturity in anything is a matter doing something regularly, or some event takes place which makes you more reflective in turn matures you. This is the difference in how I looked in 2011 and how I look now. I don’t know if by blogs written then and now look equally different! 

 

DSC_4298WhatsApp Image 2017-08-12 at 11.56.55

I had never planned to be a blogger but it appears that after my Cancer treatment in 2013/14 my frequency of writing increased and I became a reasonably regular writer (though my professional work comes in the way even today!) My thoughts are more about human interactions, human reactions, human thinking and human nature. The event that induces me to write a blog could be taking my grand-daughter for small walk to a Mandir when she was two years old, or watching a lady suddenly going in a trance, reading about new tech products like Electric car being suddenly pushed hard by all.  My thinking in most cases looks into human aspect of the situation. Very few of my blogs are like an “article” which I recently wrote about GST implementation in India. Another subject that has kicked in a lot of thought processes in my mind are electric cars and non-conventional energy generation systems.

Events that stimulate my blog writing are of two types, divergent or convergent. Now let me explain. Some ideas are such that, in the beginning they look big, they look promising; but as I start writing, a very narrow thought or a conclusion comes out of it. These are convergent ideas for me. In case of divergent ideas, process is exactly reverse; I start with something very small but end with some idea which is universal and/or very big! 

Writing on different subjects needs a lot of study and has become much easier because of Internet. There is no dearth of information if one is willing to dig. When I started writing, it never touched my mind if anyone will ever read what I write. I would share my blogs with family and a few friends. Then I started understanding the techniques of sharing with others. A reasonable number people not known to me are followers of my blogs now. Later on I realized, that I can publish the blogs simultaneously on Facebook, Linked in and so on. I am also a member of a few groups on WhatsApp. I share my blog on these groups too! Out of curiosity I check the statistics that are available on WordPress site and I come to know how my blog has been “found”! It is found from search engines (Tagging helps!) on FB and so on. I also get to know the geographical locations where the blogs are “seen”. The main areas are naturally English speaking ones like US, Canada, Australia besides India but sometimes these are accessed even from Scandinavia or Eastern Europe countries! English speaking people from these places are doing this. Another information that I want to share is that in the whole year of 2014, I published 28 blogs and these were viewed by about 1000 people; till my last blog I have published 28 blogs in 2017 but the viewership is 3500! This does not mean that my blogs have suddenly become popular but I have improved the distribution! I have also observed that a couple of my friends from Facebook, share my blog with others. People give their comments on the blog itself or they send separate email to send comments. There are friends who prefer to call and discuss. My blog writing, comments, discussions also show that I am doing what I have been preaching! I have been saying, all the time in different blogs, please do something that will keep you reasonably busy during the course of the day, other than exercising, watching TV and time on Facebook/WhatsApp! I am also lucky that I love what I am doing.

My main criteria for publishing is that I myself should find the blog “readable”. My definition of “readable” is a bit stringent. If a person starts reading my blog then he should finish reading the blog in one go! Many of you have told me that my blogs are readable!

What next? Well in cricketing terms, I am taking fresh guard, will adjust my pads and will check my bat!  Next hundred should be possible in two years time. Frequency of my writing improved from 2014 and it took me about 3 1/2 years to reach 100. 2011 to 2013 were real baby steps! I think my blog theme will always be human relations and relationships! But it appears that I will pepper you folks in between on Solar Energy and Electric cars too!

Till then .. so long ! Thank You from bottom of my heart! Your encouragement is what really puts my blog writing in turbo charge mode!  Keep commenting, keep criticizing, keep liking too! 

धन्यवाद, आभार, Love you! 

 

 

 

GST pluses and minuses

This is not a blog  in the usual sense! But I thought GST is very important  subject in India and it touches our life everyday. In my software business, we have handled GST related changes for our customers hence I know a bit about the subject. So I thought why not write about GST in simplest possible language without using accounting buzzwords.

This is not a blog  in the usual sense! But I thought GST is very important  subject in India and it touches our life everyday. In my software business, we have handled GST related changes for our customers hence I know a bit about the subject. So I thought why not write about GST in simplest possible language without using accounting buzzwords.

It’s more than a month after introduction of GST in India. There has always been a question why GST? Modern world has switched over to Goods & Services Tax (GST) over a period of last 15 years or so. I felt that there is a need to explain GST in the format that will make it easy to understand the simplicity as well as complexity of the system.

Why GST?

Before GST there was a plethora of taxes by different names, different authorities, different rates, different procedures, and different forms, making things extremely complex. What GST has done is that it has helped the system to go away from all these taxes. All these various taxes have been merged into two taxes one is under Central Govt (CGST) and other by State Govt (SGST). Central Govt portion takes care of previous excise tax and State Govt portion takes care VAT and Service tax.

Definition of GST

It is very simple. GST is a tax which is based on Supply and it is destination based. This means that whatever you supply Products or Services, there will be only one type of tax, GST! The beauty of this system is that there is same tax percentage for a supply all over India.

CGST/SGST & IGST

When a supply is a made within the state there are two elements of tax, CGST and SGST. If supply is made outside state then there is only one tax element, IGST. If tax percentage is defined at 18% for an item, then IGST is 18% for interstate transaction and intra state tax is 50% of 18%, each for two elements i.e. 9% CGST and 9% SGST.

Why so many tax percentages in GST?

India is a very complex heterogeneous country. Diversity of Income is quite extreme in India. Hence to take care of such issues tax % have been defined from 0% to 28%. This is a compromise that was needed to achieve the social goals as well as fiscal goals of the Govt. World over, taxes have been from 6% to 20 plus % depending on the particular countries requirements. But majority of the countries in the world are as big only as some of our states are or even smaller than them, with reasonably homogeneous population. If we take 28% GST, which is supposed to be on luxury items, in case of cars the prices of most cars did come down post GST. There are some cases where post GST, prices went up and they came down in others.

Input tax credit

At every stage, the seller can take Input Tax Credit of tax charged to him at the buying stage thereby taking care of double taxation. This means that seller charges the tax based on his profit margin and not on the complete price.

Immediate benefit of GST to Govt

Govt is all the time looking to increase the tax base in the country. With GST implementation, a large number of new entities have opted to register under GST, thereby helping in reduction of transactions in parallel economy or so called Black economy. There is an interesting rule. An entity buys something from another entity, which is not registered under GST and does not charge GST for the transaction. The onus of paying GST in this case is on the buyer. The buyer has to raise a self-Invoice for the amount equal to purchase value and charge GST as % defined in the system. He then pays that tax to the Govt. System of “Purchi” will have tough time in future.

Ease of use

For traders who make a large number of sell transactions every day, there is a system that allows them to be under Composition Scheme. They are required to pay GST to Govt every quarter, at a fixed % based on their turnover.

Why people Love to Hate GST?

First and foremost, the reason is ignorance! Second most important aspect is the transactions will come above board requiring the entity to pay correct amount of Income Tax! Hiding Income can become tough over a period because the transactions, and returns of different entities are now going to be entangled with each other.

GST Returns filing

This is another reason for hating the GST. Except for those who have opted for composition scheme, returns need to be filed on a monthly basis. In previous tax system returns were allowed on a quarterly basis. In GST returns, more information is required to be shared with Govt, every month. For example, when returns for July are filed, one has to fill up gross turnover value of that entity between 1st April and 31st July and so on. This will put the limitations of “playing around with figures” at the end of the year! You hate GST, of course many will hate GST!

Entanglement with each other

By a certain date of every month, sales details are to be shared with Govt and these are more detailed than was previously done. This includes names and GSTIN number of customers! This is to be uploaded to Govt site. In next couple of days after this is done, your customers will have visibility of these Invoices and are required to “approve” your Invoice, online. There is dispute resolution mechanism; in case of dispute, two months are allowed to resolve the dispute. There is one more entanglement. To claim set off the customer must “approve” your Invoice. Your customer will finally avail Input Tax Credit during payment of GST, only when you have shared the proof of actual payment of your liability of GST amount on the site! Now, now you hate GST more, you will hate Govt more. But what Govt is trying to do is to bring more discipline in the society and more compliance. The effect of this is even trickier. Everybody’s compliance rating, adhering to discipline will be made available in public domain. This will lead to getting lower business in case compliance rating is down! This is because the lack of compliance indicates indiscipline and financial burden to your customer. You cannot avail tax credit if your vendor has not paid taxes. What do you do in such cases, go to a better compliant vendor! Simple?

I have tried to explain the gist of GST in non-technical way and have tried not to use accounting jargon! Its early days for GST and we will see improvements over a period. This GST system will probably create world’s largest data under one roof and will be a challenge to data analysis experts too! Happy GSTing!