All Fuss for an Indirect Tax
It has been more than a decade since the idea of a holistic indirect tax was pitched. After a considerably long time of deliberation and significant compromises, a newly envisioned Goods and Service Tax (GST) will make its way into the records from the first of July. The last one year has witnessed a significant amount of literature devoted to the phenomenon what is now GST. But as happens usually in India questions which ought to be asked was never raised and when sounded was drowned in the clamor of what should be the right tax rate for GST. Fundamentals: To understand the right questions we are obliged to revisit the fundamentals of taxation. Tax is a compulsory levy by the government for the services it provides to its citizens from security to sanitation. The government decides the different levies through which it can raise its revenue. The fundamental classes of taxes are two – direct and indirect taxes. Direct taxes are progressive in nature they are levied in proport...