September 5, 2015 No.9
https://www.facebook.com/mehtarahulc/posts/10153015645391922
A "feature" of SoMoKe's GST --- how big manufactures / big traders will benefit over small manufactures / small traders
.
Say manufacturer M decides to sell goods to trader T1 for base price of Rs 1000. And T1 agrees
.
Say trader T1 decides to sell goods to trader T2 for Rs 1020.
.
Say trader T2 decides to sell goods to trader T3 for Rs 1050.
.
Say SoMoKe's GST rate is 20%.
.
Then bills will be
.
M's bill to T1
Price = Rs 1000
GST = Rs 200
Total = Rs 1200
So GST M has to pay directly to govt = say Rs 200
.
T1's bill to T2
Price = Rs 1020
GST = Rs 204
Total = Rs 1224
So GST T1 has to pay directly to govt = Rs 204 - Rs 200 = Rs 4
.
T2's bill to T3
Price = Rs 1050
GST = Rs 210
Total = Rs 1260
So GST T2 has to pay directly to govt = Rs 210 - Rs 204 = Rs 6
.
Now say M did pay GST of Rs 200 to govt
.
But T1 doesnt pay GST and escapes.
.
Then T2 will have to deposit full Rs 210 !!! He wont get credit for whatever GST M has collected from T1 !!!
.
=====
.
How will this benefit large manufacturer and large traders over small manufacturers and small traders?
.
Consider 10 large manufacturers or large traders say L1 ... L10
.
Consider 1000 small manufacturers or large traders say S1 ... S1000
.
Now none of L1 .. L10 will default on GST. Because they cant escape as they have too much assets. Beside, L1 ... L10 would rather create NPA than get into provable white collar tax frauds.
.
But some 1% of S1 to S1000 will commit tax fraud i.e. will collect GST and escape without paying.
.
So now, all remaining 990 honest small traders too will be seen with doubt and fear. And so many will reduce doing trade with them.
.
So due to fault of 1% defaulters , remaining 99% too will lose a lot of business !!
.
=====
.
IOW, SoMoKe's GST is a masterstroke to damage small businesses and manufactures, and benefit the large ones.
.
Solution I propose si CANCEL GST \ VAT \ Service Tax \ Excise.
.
And instead use wealth tax.
.
Pls see Wt details athttps://www.facebook.com/mehtarahulc/posts/10152686291831922
.
If you like above wealth tax law-draft ,. then pls send following SMS to your MP --- "https://www.facebook.com/mehtarahulc/posts/10152686291831922 "
https://www.facebook.com/mehtarahulc/posts/10153015645391922
A "feature" of SoMoKe's GST --- how big manufactures / big traders will benefit over small manufactures / small traders
.
Say manufacturer M decides to sell goods to trader T1 for base price of Rs 1000. And T1 agrees
.
Say trader T1 decides to sell goods to trader T2 for Rs 1020.
.
Say trader T2 decides to sell goods to trader T3 for Rs 1050.
.
Say SoMoKe's GST rate is 20%.
.
Then bills will be
.
M's bill to T1
Price = Rs 1000
GST = Rs 200
Total = Rs 1200
So GST M has to pay directly to govt = say Rs 200
.
T1's bill to T2
Price = Rs 1020
GST = Rs 204
Total = Rs 1224
So GST T1 has to pay directly to govt = Rs 204 - Rs 200 = Rs 4
.
T2's bill to T3
Price = Rs 1050
GST = Rs 210
Total = Rs 1260
So GST T2 has to pay directly to govt = Rs 210 - Rs 204 = Rs 6
.
Now say M did pay GST of Rs 200 to govt
.
But T1 doesnt pay GST and escapes.
.
Then T2 will have to deposit full Rs 210 !!! He wont get credit for whatever GST M has collected from T1 !!!
.
=====
.
How will this benefit large manufacturer and large traders over small manufacturers and small traders?
.
Consider 10 large manufacturers or large traders say L1 ... L10
.
Consider 1000 small manufacturers or large traders say S1 ... S1000
.
Now none of L1 .. L10 will default on GST. Because they cant escape as they have too much assets. Beside, L1 ... L10 would rather create NPA than get into provable white collar tax frauds.
.
But some 1% of S1 to S1000 will commit tax fraud i.e. will collect GST and escape without paying.
.
So now, all remaining 990 honest small traders too will be seen with doubt and fear. And so many will reduce doing trade with them.
.
So due to fault of 1% defaulters , remaining 99% too will lose a lot of business !!
.
=====
.
IOW, SoMoKe's GST is a masterstroke to damage small businesses and manufactures, and benefit the large ones.
.
Solution I propose si CANCEL GST \ VAT \ Service Tax \ Excise.
.
And instead use wealth tax.
.
Pls see Wt details athttps://www.facebook.com/mehtarahulc/posts/10152686291831922
.
If you like above wealth tax law-draft ,. then pls send following SMS to your MP --- "https://www.facebook.com/mehtarahulc/posts/10152686291831922 "
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