Shape of Economy – Interview with CFO Magazine

 

V Kumaraswamy, CFO, JK Paper Ltd says the new indirect tax law will bring rural economy into the formal fold and, thus, help create an inclusive economy

GST : deceptively uncomplicated everywhere it looks like.

Last Night I had a dinner with a Dutch Govt agency person in Indian Accent, supposedly Top ranked amongst Delhi’s fine dining restaurants – an endless procession of snacks and starters. Great taste but beyond sometime gets more on your nerves than stomach. I ordered the set menu to avoid spending time on choice and then they kill you with choices at each stage.
In between he started discussing Modi and it veered off to GST and I said that he is taking a big gamble in implementing this huge tax exercise.
Me: Where you there when Netherlands implemented GST; when did your country implement GST?
Him: Hm.. don’t know it has been there as long as I remember.
What’s the GST rate?, I ask.
Him: 6% for most food items, then there is 19% for some luxury goods and 21% for some more items.
Me: How many such rates? You mean there is no one rate.
Him: There are three. And then they vary it in certain years to 18.5 or19.5 depending on the budget situation to mop up more or less money. Or say 21.5%.
Me: You guys move around freely between various countries inside the European Union. Do you pay GST when you arrive back in Netherlands everytime. Are the rates same in all these neighbours.
Him: Dont know… cant recollect.
Him: But I know that it is cheaper to buy Cars in Germany.
Me: No taxes?
Him: No, we pay taxes on them But it depends whether it is a 2nd hand car or 1st Hand. They collect it when you go for the number plate. Then there is an Import duty which is non vattable … meaning you get no credit or offset.
My breadth was beginning to sigh and hopes sag. I did not ask him about alcohol, petrol, services …
…the conversation went off somewhere.
Looks like GST is a deceptively uncomplicated soul everywhere.