Saturday, November 18, 2017

Increase in Prices After GST Reduction



Arun Jaitley announced the reduction of GST for restaurants from 18% to 5% starting Nov 15th. The above receipts are before and after Nov 15th. From the receipts, it looks like, Sangeetha Restaurant charged extra instead of reducing the tax. But, actually, Sangeetha Restaurant did correctly. The tax did not reduce. The tax got increased for all the restaurants.

GST has a concept of Input Tax Credit. For example, if you buy a product for Rs.100 and paid 18% GST, and if you are selling it for Rs.150, you can pay tax only for Rs.50. For Rs.100, for which tax already paid, you don't need to pay because of Input Tax Credit.

Starting Nov 15th, Union Government abolished Input Tax credit for restaurants. But, the tax got reduced to 5%. It means, if a restaurant is buying raw materials for Rs.100 and paid 18% GST, and if they are selling it for Rs.125 (Rs.100 Base Price + Rs.18 GST + Rs.7 Profit = Rs.125), then they have to pay 5% GST for Rs.125, and not just on the profit of Rs.7.

In the above receipt of Sangeetha Restaurant, they charged Rs.125 before Nov 15th, and charged Rs.130 after Nov 15th.

For example, before Nov 15th, if Sangeetha was paying Rs.100 (+ GST 18%) for raw materials, and other expenses, and if they were charging Rs.6 profit, then the total amount would be Rs.125. After Nov 15th, since there is no input tax credit, they have to pay 18% for the GST for Rs.100. Then along with that, for the entire amount, they have to pay additional 5% GST. In that case, the total amount is Rs.100 (for raw materials) + Rs.18 (GST on raw materials) + Rs.6 (Profit of Sangeetha) + Rs.6 GST (5% of Rs.100+18+6), which is Rs.130. If Sangeetha was paying less than 18% GST on the raw materials and other expenses, then the total amount could be less.

It looks like, Sangeetha was unable to explain Input Tax Credit, and they started giving discounts after they got bad name of increasing the prices after pseudo decrease in the prices.

What I hate is, Arun Jaitley increased the prices, but, they are propagating as if they decreased the prices.

Courtesy: Jeevanram Kasiviswanathan

Sunday, September 03, 2017

Sonia Gandhi Renunciation of the Prime Minister Post

During our meeting with V.P.Singh, Natwar Singh told V.P. that Soniaji's children were concerned about her security and feared that like their grandmother and father she might also be killed. He told V.P. that the children were firm that she should not accept the post of prime minister. When we came out of the meeting I told Natwar Singh that he should not have disclosed how the family felt to outsiders and that this had cast a shadow on her act of renunciation. Even on the earlier occasion, Soniaji had wanted Dr Manmohan Singh to be the PM. The objection by her children thus appeared to be inconsequential. Soniaji was genuinely disinterested in the PM's post. However, the utterances by Natwar Singh had undermined her sacrifice.

From The Chinar Leaves: A Political Memoir by M.L.Fotedar.

Monday, August 21, 2017

Informing others when we think they don't have correct ticket

Whenever I travel by local train in Chennai in first class, if I feel any person is not having the first class ticket, then I inform him/her that, it is first class. If they know that it is first class ticket, they say so. If they know the difference between the first class and second class, and if they are having second class ticket, they would change the compartment at the next station. If they cannot understand anything, then I tell them that, they are having general ticket, and they should change to the next compartment at the next station.

Of course, the guessing is done by many factors including the dress/shoes/sandals/chappals that they wear, age, sex and many others.

For example, if a person is dressed in village grand mother style (and satisfying other qualities that I see in a person who does not have first class ticket), and gets into first class compartment, then I would definitely tell her that, it is first class compartment. If she starts asking about what is first class compartment and what is general compartment etc, then, I would assume that, she is having a general ticket, and advise her to move to general compartment at the next station.

In case if she turned out to be the wife of the founder of the second largest indian software company, she will write about me in her book, saying, a person in Chennai local train had discriminated her by her dress.

If TTE catches anyone in the first class without first class ticket, the fine would be upto 60 times to the general ticket. My intention is only to tell them that, if they don't have first class ticket, they would be liable for the fine. I felt bad many times, when I did not inform few people and later they were caught by TTE and had to pay huge fine. Just because, one person got offended, I am not going to stop informing the next person.

When that super rich woman was travelling by business class, the women infront of her might have feared that, if she is having economy ticket, then, she had to stand in the queue for few mins more because of the mistake. They might have advised her so that, she can stand few minutes less in the queue. But, that super rich woman got offended.

Another article about the same woman - http://blog.tnsatish.com/2014/07/no-money-to-start-business-famous.html

Sunday, July 16, 2017

Vote of Conscience

In 1969, when there were elections to the President of India, after then President of India Dr.Zakir Hussain passed away, Congress Party chose Neelam Sanjeeva Reddy as its candidate. But, Indira Gandhi chose V.V.Giri as her candidate. Indira Gandhi asked everyone to vote by conscience and finally, V.V.Giri won with the smallest margin in the presidential elections.

In the book, "The Chinar Leaves: A Political Memoir" by M.L.Fotedar, Fotedar says, he suggested then Chief Minister of Kashmir to ask the MLAs to vote openly. The Chief Minister told the MLAs that, after voting they should show the vote to Fotedar. If anyone does not show their vote, they would assume that, they did not vote for V.V.Giri. Only five MLAs did not show their vote to Fotedar.

And for decades after that, followers of Indira Gandhi says, her candidate won the elections by "Vote of Conscience".

Sunday, June 25, 2017

Reservations Should Be Used Once per Person

If abolishing reservations is going to take time, atleast as a first step, reservations should be changed to single use per person. The idea of reservations is, those who are deprived of privileges would get extra boost to be equal with others. If they have used reservation once, it means, they have been "made" equal with others. Then, why do they need reservation again?

Many people start using reservations at school (mostly unknowingly), and then at college for graduation, then post graduation. Later while applying for jobs, they may get a normal job (with reservation), then may apply for state service jobs, and finally may try for civil services. Giving these many chances is very unfair.

The person should be given only once chance to use the reservation and let them decide to use at college or at civil services or wherever they feel it is more appropriate.