Saturday, April 29, 2017

Frequently Asked Questions on GST (Goods and Services Tax) - Part VI

This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).

Below mentioned Q&A are derived from above document with modifications.

75. What is job work? 

Job work means undertaking any treatment or process by a person on goods belonging to another registered taxable person. The person who is treating or processing the goods belonging to other person is called ‘job worker’ and the person to whom the goods belong is called ‘principal’.

76. Can a principal send inputs and capital goods directly to the premises of job worker without bringing it to his premises? 

Yes, the principal is allowed to do so. The input tax credit of tax paid on inputs or capital goods can also be availed by the principal in such a scenario. The inputs or capital goods must be received back within one year or three years respectively failing which the original transaction would be treated as supply and the principal would be liable to pay tax accordingly.

77. Can the principal supply the goods directly from the premises of the job worker without bringing it back to his own premises? 

Yes. But the principal should have declared the premises of an unregistered job worker as his additional place of business. If the job worker is a registered person then goods can be supplied directly from the premises of the job worker.

78. What is input tax? 

Input tax means the central tax (CGST), State tax (SGST), integrated tax (IGST) or Union territory tax (UTGST) charged on the supply of goods or services or both made to a registered person. It also includes tax paid on a reverse charge basis and integrated tax goods and services tax charged on the import of goods. It does not include tax paid under composition levy

79. Can GST paid on reverse charge basis be considered as input tax? 

Yes. The definition of input tax includes the tax payable under the reverse charge.

80. What are the conditions necessary for obtaining ITC? 

Following four conditions are to be satisfied by the registered taxable person for obtaining ITC:
(a) he is in possession of tax invoice or debit note or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both;
(c) the supplier has actually paid the tax charged in respect of the supply to the government, and
(d) he has furnished the return under section 39.

81. A person becomes liable to pay tax on 1st August 2017 and has obtained registration on 15th August 2017. Such person is eligible for input tax credit on inputs held in stock as on: 
1st August 2017 
31st July 2017 
15th August 2017 

He cannot take credit for the past period 31st July 2017

82. What is the purpose of returns? 

a) Mode for transfer of information to tax administration;
b) Compliance verification program of tax administration;
c) Finalisation of the tax liabilities of the taxpayer within stipulated period of limitation; to declare tax liability for a given period;
d) Providing necessary inputs for taking policy decision;
e) Management of audit and anti-evasion programs of tax administration.

84. Who needs to file Return in GST regime? 

Every person registered under GST will have to file returns in some form or other.  A registered person will have to file returns either monthly (normal supplier) or quarterly basis (Supplier opting for composition scheme).

An ISD will have to file monthly returns showing details of credit distributed during the particular month.  A person required to deduct tax (TDS) and persons required to collect tax (TCS) will also have to file monthly returns showing the amount deducted/collected and other details as may be prescribed.

A non-resident taxable person will also have to file returns for the period of activity undertaken.

85. Whether all invoices will have to be uploaded? 

No.It depends on whether B2B or B2C plus whether Intra-state or Inter-state supplies.

For B2B supplies, all invoices, whether Intra-state or Inter- state supplies, will have to be uploaded. Why So? Because ITC will be taken by the recipients, invoice matching is required to be done.

In B2C supplies, uploading, in general, may not be required as the buyer will not be taking ITC. However still in order to implement the destination based principle, invoices of value more than Rs.2.5 lakhs in inter-state B2C supplies will have to be uploaded. For inter-state invoices below 2.5 lakhs and all intra-state invoices, state wise summary will be sufficient.

86. Whether the description of each item in the invoice will have to be uploaded? 

No. In fact, description will not have to be uploaded. Only HSN code in respect of the supply of goods and Accounting code in respect of the supply of services will have to be fed. The minimum number of digits that the filer will have to upload would depend on his turnover in the last year.

87. Is the scanned copy of invoices to be uploaded along with GSTR-1? 

Only certain prescribed fields of information from invoices need to be uploaded.

88. Who is the person responsible for making an assessment of taxes payable under the Act? 

Every person registered under the Act shall himself assess the tax payable by him for a tax period and after such assessment, he shall file the return required under section 39.

Sajeev

Frequently Asked Questions on GST (Goods and Services Tax) - Part V

This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).
Below mentioned Q&A are derived from above document with modifications.

61. Whether supply of software would be treated as the supply of goods or supply of services under GST law? 

Development, design, programming, customization, adaptation, up-gradation, enhancement, implementation of IT software shall be treated as the supply of services.  [Sl. No. 5 (2)(d) of Schedule –II of the model GST law]

62. What is meant by zero-rated supply under GST? 

Zero rated supply means export of goods and/or services or supply of goods and/or services to a SEZ developer or a SEZ Unit. 

63. What is the time period within which invoice has to be issued for supply of Goods? 

[Section 31 of CGST/SGST Act] A registered taxable person shall issue a tax invoice showing description, quantity and value of goods, tax charged thereon and other prescribed particulars, before or at the time of removal of goods for supply to the recipient, where supply involves movement of goods or delivery of goods or making available thereof to the recipient in other cases. 

64. What is the time period within which invoice has to be issued for supply of Services? 

[Section 31 of CGST/SGST Act] A registered taxable person shall, before or after the provision of service, but within a period prescribed in this behalf, issue a tax invoice showing description, value of goods, tax payable thereon and other prescribed particulars. 

65. What is the time period within which invoice has to be issued in a case involving the continuous supply of goods? 

In the case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received. 

66. What is the time period within which invoice has to be issued in a case involving the continuous supply of services? 

In case of continuous supply of services,  

Where the due date of payment is ascertainable from the contract, the invoice shall be issued before or after the payment is liable to be made by the recipient but within a period prescribed in this behalf whether or not any payment has been received by the supplier of the service; 

where the due date of payment is not ascertainable from the contract, the invoice shall be issued before or after each such time when the supplier of service receives the payment but within a period prescribed in this behalf; 

where the payment is linked to the completion of an event, the invoice shall be issued before or after the time of completion of that event but within a period prescribed in this behalf. 

67. Is it mandatory for e-commerce operator to obtain registration? 

The benefit of threshold exemption is not available to e-commerce operators and they would be liable to be registered irrespective of the value of supply made by them. 

68. Whether a supplier of goods or services supplying through e-commerce operator would be entitled to threshold exemption? 

No. The threshold exemption is not available to such suppliers and they would be liable to be registered irrespective of the value of supply made by them. This requirement, however, is applicable only if the supply is made through such electronic commerce operator who is required to collect tax at source.   

69. Will an e-commerce operator be liable to pay tax in respect of the supply of goods or services made through it, instead of an actual supplier? 

Yes, but only in case of certain notified services. In such cases tax shall be paid by the electronic commerce operator if such services are supplied through it and all the provisions of the Act shall apply to such electronic commerce operator as if he is the person liable to pay tax in relation to supply of such services. 

70. Will threshold exemption be available to electronic commerce operators liable to pay tax on notified services? 

No. Threshold exemption is not available to e-commerce operator who is required to pay tax on notified services provided through them.  

71. What is Tax Collection at Source(TCS)? 

The e-commerce operator is required to collect an amount calculated at the rate not exceeding 1% of the net value of taxable supplies made through it, where the consideration with respect to such supplies is to be collected by such operator. The amount so collected is called as Tax Collection at Source (TCS). 

72. It is very common that customers of e-commerce companies return goods. How these returns are going to be adjusted?   

An e-commerce company is required to collect tax only on the net value of taxable supplies. In other words, the value of the supplies which are returned is adjusted in the aggregate value of taxable supplies. 

73. Is every e-commerce operator required to collect tax on behalf of an actual supplier? 

Yes, every e-commerce operator is required to collect tax where consideration with respect to the supply is being collected by the e-commerce operator. 

74. At what time should the e-commerce operator make such collection? 

The e-commerce operator should make the collection during the month in which supply was made. 

Sajeev

Frequently Asked Questions on GST (Goods and Services Tax) - Part IV

This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).

Below mentioned Q&A are derived from above document with modifications.

46. Is possession of a Permanent Account Number (PAN) mandatory for obtaining a Registration? 

Yes. 

A person required to deduct tax under Section 51, may have, in lieu of a PAN, a Tax Deduction and Collection Account Number issued under the said Income Tax Act, in order to be eligible for grant of registration.

PAN is not mandatory for a non-resident taxable person who may be granted registration on the basis of any other document as may be prescribed. 

47. Whether the Department through the proper officer, can Suo-moto proceed to register of a Person under this Act? 

Yes. 

48. Whether the Registration granted to any person is permanent? 

Yes, the registration Certificate once granted is permanent unless surrendered, cancelled, suspended or revoked. 

49. Is it necessary for UN bodies to get registration under GST? 

Yes. All notified UN bodies, Consulate or Embassy of foreign countries and any other class of persons so notified would be required to obtain a unique identification number (UIN) from the GST portal. The structure of the said ID would be uniform across the States in conformity with GSTIN structure and the same will be common for the Centre and the States. This UIN will be needed for claiming the refund of taxes paid on notified supplies of goods and services received by them, and for any other purpose as may be notified.  

50. What is the responsibility of the taxable person supplying to UN bodies?

The taxable supplier supplying to these organisations is expected to mention the UIN on the invoices and treat such supplies as supplies to another registered person (B2B) and the invoices of the same will be uploaded by the supplier. 

51. Is it necessary for the Govt Organization to get registration? 

A unique identification number (ID) would be given by the respective state tax authorities through GST portal to Government authorities/PSUs not making outwards supplies of GST goods (and thus not liable to obtain GST registration) but are making inter-state purchases. 

52. Whether the job worker will have to be compulsorily registered? 

No, a Job worker is a supplier of services and will be obliged to take registration only when his turnover crosses the prescribed threshold of 20/10 Lakhs. 

53. Whether the goods will be permitted to be supplied from the place of business of a job worker? 

Yes.  But only in cases where the job worker is registered, or if not, the principal declares the place of business of the job worker as his additional place of business. 

54. At the time of registration will the assessee have to declare all his places of business? 

Yes. The taxpayer will have to declare the principal place of business as well as the details of additional places of business in the registration form. 

55. Is there any system to facilitate smaller dealers or dealers having no IT infrastructure? 

In order to cater to the needs of taxpayers who are not IT savvy, following facilities shall be made available,

Tax Return Preparer(TRP): A taxable person may prepare his registration application /returns himself or can approach the TRP for assistance. TRP will prepare the said registration document/ return in prescribed format on the basis of the information furnished to him by the taxable person. The legal responsibility of the correctness of information contained in the forms prepared by the TRP will rest with the taxable person only and the TRP shall not be liable for any errors or incorrect information. 

Facilitation Centre (FC): shall be responsible for the digitisation and/or uploading of the forms and documents including summary sheet duly signed by the Authorized Signatory and given to it by the taxable person. After uploading the data on common portal using the ID and Password of FC, a print-out of acknowledgement will be taken and signed by the FC and handed over to the taxable person for his records. The FC will scan and upload the summary sheet duly signed by the Authorized Signatory. 

56. Is there any facility for digital signature in the GSTN registration? 

Taxpayers would have the option to sign the submitted application using valid digital signatures. There will be two options for electronically signing the application or other submissions - 
by re-signing through Aadhar number, or through DSC i.e. by registering the tax payer’s digital signature certificate with GST portal. 

However, companies or limited liability partnership entities will have to sign mandatorily through DSC only. 

Only level 2 and level 3 DSC certificates will be acceptable for signature purpose.  

57.  What will be the time limit for the decision on the on line registration application? 

If the information and the uploaded documents are found in order, the State and the Central authorities shall have to respond to the application within 3 common working days. If they communicate any deficiency or discrepancy in the application within such time, then the applicant will have to remove the discrepancy / deficiency within 7 days of such communication. Thereafter, for either approving the application or rejecting it, the State and the Central authorities will have 7 days from the date when the taxable person communicates removal of deficiencies. In case no response is given by the departmental authorities within the said time line, the portal shall automatically generate the registration. 

58. What is the process of refusal of registration? 

In case registration is refused, the applicant will be informed about the reasons for such refusal through a speaking order. The applicant shall have the right to appeal against the decision of the Authority. Any rejection of application for registration by one authority (i.e. under the CGST Act / SGST Act) shall be deemed to be a rejection of application for registration by the other tax authority (i.e. under the SGST/UTGST/CGST Act)

59. What are the necessary elements that constitute supply under CGST/SGST Act? 

In order to constitute a ‘supply’, the following elements are required to be satisfied, i.e.- 
(i)  the activity involves supply of goods or services or both; 
(ii) the supply is for aconsideration unless otherwise specifically provided for; 
(iii) the supply is made in the course or furtherance of business; 
(iv) the supply is made in the taxable territory;  
(v) the supply is a taxable supply; and 
(vi)the supply is made by a taxable person. 

60. Whether Works contracts  and Catering services will be treated as supply of goods or supply of services? Why? 

Works contracts and catering services shall be treated as supply of services. 

Sajeev

Frequently Asked Questions on GST (Goods and Services Tax) - Part III

This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).

31. Is there any provision in GST for the tax treatment of goods returned by the recipient? 

Yes, Section 34 deals with such situations. Where the goods supplied are returned by the recipient, the registered person (supplier of goods) may issue to the recipient a credit note containing the prescribed particulars.  The details of the credit note shall be declared by the supplier in the returns for the month during which such credit note was issued but not later than September following the end of the year in which such supply was made or the date of filing of the relevant annual return, whichever is earlier. 
The details of the credit note shall be matched with the corresponding reduction in claim for input tax credit by the recipient in his valid return for the same tax period or any subsequent tax period and the claim for reduction in output tax liability by the supplier that matches with the corresponding reduction in claim for ITC by the recipient shall be finally accepted and communicated to both parties.   

32. What is Anti-Profiteering measure? 

As per section 171 of the CGST/SGST Act, any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit shall be passed on to the recipient by way of commensurate reduction in prices. An authority may be constituted by the government to examine whether input tax credits availed by any registered person or the reduction in the tax rate have actually resulted in a commensurate reduction in the price of the goods or services or both supplied by him.  

33. Will giving away essential commodities by a charitable institution be taxable activity? 

In order to be a supply which is taxable under GST, the transaction should be in the course or furtherance of business. As there is no quid pro quo involved in supply for charitable activities, it is not a supply under GST. 

34. Who can notify a transaction to be supply of goods or services? 

Central Government or State Government, on the recommendations of the GST Council

35. What are composite supply and mixed supply? How are these two different from each other? 

Composite supply is a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are bundled in natural course and are supplied in conjunction with each other in the ordinary course of business and where one of which is a principal supply. 

e.g when a consumer buys a television set and he also gets warranty and a maintenance contract with the TV, this supply is a composite supply. TV is the principal supply, warranty and maintenance service are ancillary.  

Mixed supply is combination of more than one individual supplies of goods or services or any combination thereof made in conjunction with each other for a single price, which can ordinarily be supplied separately. 

e.g. shopkeeper selling storage water bottles along with refrigerator. Bottles and the refrigerator can easily be priced and sold separately.  

36. What is the treatment of composite supply and mixed supply under GST?

Composite supply shall be treated as supply of the principal supply. 

Mixed supply would be treated as supply of that particular goods or services which attracts the highest rate of tax.  

37. Are all goods and services taxable under GST?

Supplies of all goods and services are taxable except alcoholic liquor for human consumption. Supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be taxable with effect from a future date. This date would be notified by the Government on the recommendations of the GST Council. 

38. What is meant by Reverse Charge? 

It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply. 

39. Is the reverse charge mechanism applicable only to services? 

No, reverse charge applies to supplies of both goods and services, as notified by the Government on the recommendations of the GST Council. 

40. What will be the implications in case of receipt of supply from unregistered persons? 

In case of receipt of supply from an unregistered person, the registered person who is receiving goods or services shall be liable to pay tax under reverse charge mechanism. 

41. Can any person other than the supplier or recipient be liable to pay tax under GST? 

Yes, the Central/State government can specify categories of services the tax on which shall be paid by the electronic commerce operator, if such services are supplied through it and all the provisions of the Act shall apply to such electronic commerce operator as if he is the person liable to pay tax in relation to supply of such services. 

42. What is the time limit for taking a Registration under GST? 

A person should take a Registration, within thirty days from the date on which he becomes liable to registration.

A Casual Taxable person and a non-resident taxable person should however apply for registration at least 5 days prior to commencement of business. 

43. If a person is operating in different states, with the same PAN number, whether he can operate with a single Registration? 

No. Every person who is liable to take a Registration will have to get registered separately for each of the States where he has a business operation and is liable to pay GST.

44. Whether a person having multiple business verticals in a state can obtain for different registrations? 

A person having multiple business verticals in a State may obtain a separate registration for each business vertical.

45. Is there a provision for a person to get himself voluntarily registered though he may not be liable to pay GST? 

A person, though not liable to be registered under Section 22 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person, shall apply to such person. 

Sajeev.

Frequently Asked Questions on GST (Goods and Services Tax) - Part II

This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).

Below mentioned Q&A are derived from above document with modifications.


16. What would be the role of GST Council? 

Constituted comprising the Union Finance Minister (Chairman of the Council), the Minister of State(Revenue) and the State Finance/Taxation Ministers to make  recommendations to the Union and the States on 

(i) Taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST; 
(ii) Goods and services that may be subjected to or exempted from the GST; 
(iii) Date on which the GST shall be levied on petroleum crude, high-speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel; 
(iv) Model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply; 
(v) Threshold limit of turnover below which the goods and services may be exempted from GST 
(vi) The rates including floor rates with bands of GST; 
(vii) Any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster; 
(viii) Special provision with respect to the North-East States, J&K, Himachal Pradesh and Uttarakhand;
(ix) Any other matter relating to GST, as the Council may decide. 

17. How will decisions be taken by GST Council? 

The Constitution (101th Amendment) Act, 2016 provides that every decision of the GST Council shall be taken at a meeting by a majority of not less than 3/4th of the weighted votes of the Members present and voting. The vote of the Central Government shall have a weightage of 1/3rd of the votes cast and the votes of all the State Governments taken together shall have a weightage of2/3rd of the total votes cast in that meeting. One-half of the total number of members of the GST Council shall constitute the quorum at its meetings. 

18. Who is liable to pay GST under the proposed GST regime? 

Tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the turnover threshold of 20 lakhs INR (10 lakhs for NE & Special Category States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. 

The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all inter-State supply of goods and/or services. The CGST/SGST and IGST are payable at the rates specified in the Schedules to the respective Acts. 

19. What are the benefits available to small taxpayers under GST? 

Taxpayers with an aggregate turnover in a financial year up to [20 lakhs and 10 Lakhs for NE and special category states] would be exempt from tax. Further, a person whose aggregate turnover in the preceding financial year is less than 50 Lakhs can opt for a simplified composition scheme where tax will payable at a concessional rate on the turnover in a state. 

[Aggregate turnover shall include the aggregate value of all taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.] Aggregate turnover shall be computed on all India basis. For the NE States and special category states, the exemption threshold shall be [10 lakhs].

All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Tax payers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption. 

20. How will the goods and services be classified under GST regime? 

HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Tax payers whose turnover is above Rs 1.5 crores but below 5 crores shall use 2-digitcode and the taxpayers whose turnover is 5 crores and above shall use 4-digitcode. Taxpayers whose turnover is below 1.5 crores are not required to mention HSN Code in their invoices. 

Services will be classified as per the Services Accounting Code(SAC) 

21. How will imports be taxed under GST? 

Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set off will be available on the GST paid on import on goods and services. 

22. How will Exports be treated under GST? 

Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters. The Exporter will have an option to either pay tax on the output and claim refund of IGST or export under Bond with out payment of IGST and claim refund of Input Tax Credit (ITC). 

23. What is the scope of composition scheme under GST? 

Small taxpayers with an aggregate turnover in a preceding financial year up to [50 lakhs] shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover in a state during the year without the benefit of Input Tax Credit(ITC). The rate of tax for CGST and SGST/UTGST shall not be less than [1% for manufacturer & 0.5% in other cases; 2.5% for specific services as mentioned in para 6(b) of Schedule II viz Serving of food or any other article for human consumption]. 

A taxpayer opting for composition levy shall not collect any tax from his customers. The government may increase the above said limit of 50 lakhs rupees to up to one crore rupees, on the recommendation of GST Council.  Tax payers making inter-state supplies or making supplies through ecommerce operators who are required to collect tax at source shall not be eligible for composition scheme. 

Composition scheme is optional

24. What is GSTN and its role in GST regime? 

Goods and Service Tax Network (GSTN) is a Special Purpose Vehicle called the GSTN has been setup to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central and State Governments, taxpayers and other stakeholders for implementation of GST. 

The functions of the GSTN would, include: 
(i) Facilitating registration; 
(ii) Forwarding the returns to Central and State authorities; 
(iii) Computation and settlement of IGST;
(iv) Matching of tax payment details with banking network; 
(v) Providing various MIS reports to Central and State Governments based on the taxpayer return information; 
(vi) Providing analysis of tax payers profile;
(vii) Running the matching engine for matching, reversal and reclaimof input tax credit. 

The GSTN is developing a common GST portal and applications for registration, payment, return and MIS/ reports. The GSTN would also be integrating the common GST portal with the existing tax administration IT systems and would be building interfaces for tax payers. GSTN is also developing back-end modules like assessment, audit, refund, appeal etc. for 19 States and UTs(Model II States). The CBEC and Model I States (15 States) are themselves developing their GST back-end systems. Integration of GST frontend system with back-end systems will have to be completed and tested well in advance for making the transition smooth. 

25. How are the disputes going to be resolved under GST regime? 

Constitution (101th Amendment) Act, 2016 provides that Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute,
(a) Between Centre and one or more States 
(b) Between Centre and State or States on one side and one or more other Sates on the other side; 
(c) Between two or more States, 

arising out of there commendations of the Councilor implementation there of. 

26. What is the purpose of Compliance rating mechanism?  

As per Section 149 of the CGST/SGST Act, every registered person shall be assigned a compliance rating based on the record of compliance in respect of specified parameters. This rating will be in public domain. A prospective client will be able to see the compliance ratings of suppliers and take a decision as to whether to deal with a particular supplier or not.

27. Whether actionable claims liable to GST? 

As per section 2(52) of the CGST/SGST Act actionable claims are to be considered as goods. Schedule III read with Section 7 of the CGST/SGST Act lists the activities or transactions which shall be treated neither as supply of goods nor supply of services. The Schedule lists actionable claims other than lottery, betting and gambling as one of such transactions. Thus only lottery, betting and gambling shall be treated as supplies under the GST regime.  All the other actionable claims shall not be supplies. 

28. Whether transaction in securities be taxable in GST? 

Securities have been specifically excluded from the definition of goods as well as services. 

29. What is the concept of Information Return? 

Information return is based on the idea of verifying the compliance levels of registered persons through information procured from independent third party sources. 

As per section 150 of the CGST/SGST Act, many authorities who are responsible for,
maintaining records of registration or statement of accounts or 
any periodic return or document containing details of payment of tax and other details of transaction of goods or services or both or 
transactions related to a bank account or 
consumption of electricity or 
transaction of purchase, sale or exchange of goods or property or right or interest in a property 
under any law for the time being in force, are mandated to furnish an information return of the same in respect of such periods, within such time, in such form and manner and to such authority or agency as may be prescribed. 

Failure to do so may result in penalty being imposed as per Section 123.  

30. Different companies have different types of accounting software packages and no specific format are mandated for keeping records. How will department be able to read into these complex software?  

As per Section 153 of the CGST/SGST Act, department may take assistance from an expert at any state of scrutiny, inquiry, investigation or any other proceedings.  

Sajeev

Frequently Asked Questions on GST (Goods and Services Tax) - Part I

This Question and Answers are prepared by Apex Training Institute Under Central Board of Excise and Customs(CBEC) with some inputs from National Academy of Customs, Excise and Narcotics (NACEN).

Below mentioned Q&A are derived from above document with modifications.

1. What is Goods and Services Tax (GST)? 

A destination-based tax on consumption of goods and services. It is proposed to be levied at all stages, right from manufacture up to final consumption with credit of taxes paid at previous stages available as the setoff. Only value addition will be taxed and burden of tax is to be borne by the final consumer.

2. What exactly is the concept of a destination-based tax on consumption? 

The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.

3. Which of the existing taxes are proposed to be subsumed under GST? 

The GST would replace the following taxes:

(i)Taxes currently levied and collected by the Centre:
a. Central Excise duty.
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise(Goods of Special Importance)
d. Additional Duties of Excise(Textiles and Textile Products)
e. Additional Duties of Customs(CVD)
f. Special Additional Duty of Customs(SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate to supply of goods and services

(ii) State taxes that would be subsumed under GST are:
a. State VAT
b. Central Sales Tax.
c. Luxury Tax.
d. Entry Tax (all forms).
e. Entertainment and Amusement Tax(except when levied by the local bodies).
f. Taxes on advertisements.
g. Purchase Tax.
h. Taxes on lotteries, betting and gambling.
i. State Surcharges and Cesses so far as they relate to supply of goods and services

The GST Council shall make recommendations to Union and States on taxes, cesses and surcharges levied by Centre, States and local bodies which may be subsumed in the GST.

4. What principles were adopted for subsuming the above taxes under GST? 

(i) Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services.
(ii) Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services at one end and the consumption of goods and services at the other.
(iii) The subsumption should result in the free flow of tax credit in intra and inter-State levels. The taxes, levies and fees that are not specifically related to supply of goods & services should not be subsumed under GST.
(v)  Revenue fairness for both the Union and the States individually would need to be attempted.

5. Which are the commodities proposed to be kept outside the purview of GST? 

Alcoholic liquor for human consumption. Five petroleum products - petroleum crude, motor spirit (petrol), high-speed diesel, natural gas and aviation turbine fuel have temporarily been kept out and GST Council shall decide the date from which they shall be included in GST. Furthermore, electricity has been kept out of GST.

6. What will be the status in respect of taxation of above commodities after the introduction of GST?

The existing taxation system (VAT & CentralExcise) will continue in respect of the above commodities.

7. What will be the status of Tobacco and Tobacco products under GST regime? 

Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products.

8. What type of GST is proposed to be implemented? 

It would be a dual GST with the Centre and States simultaneously levying it on a common tax base. The GST to be levied by the Centre on the intra-State supply of goods and/or services would be called the Central GST (CGST) and that to be levied by the States/Union territory would be called the State GST (SGST)/ UTGST. Similarly, Integrated GST (IGST) will be levied and administered by Centre on every interstate supply of goods and services.

9. Why is Dual GST required? 

India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources.

10. Which authority will levy and administer GST? 

Centre will levy and administer CGST & IGST while respective states/UTs will levy and administer SGST/UTGST.

11. Why was the Constitution of India amended recently in the context of GST? 

Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while States have powers to levy the tax on the sale of goods. In the case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the States. As for services, it is the Central one that is empowered to levy service tax.

The introduction of the GST required amendments in the Constitution so as to simultaneously empower the Centre and the States to levy and collect this tax. The Constitution of India has been amended by the Constitution(101th amendment) Act, 2016 for this purpose. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST.

12. How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)? 

The Central GST and State GST would be levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State.

e.g.2: Assume that the rate of CGST is 10% and that of SGST is 10%. When an advertising company located in Mumbai supplies advertising services to a company manufacturing soap (located within the State) for, let us say Rs 100, the ad company would charge CGST of Rs 10 as well as SGST of Rs 10 to the basic value of the service. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government.

He need not again actually pay Rs 20 (10 + 10) in cash as it would be entitled to set-off this liability against the CGST or SGST paid on his purchase (say, of inputs such as stationery, office equipment, services of an artist etc.). But for paying CGST he would be allowed to use only the credit of CGST paid on its purchase while for SGST he can utilise the credit of SGST alone.CGST.

13 What are the benefits which the Country will accrue from GST? 

This is a significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate ill effects of cascading and pave the way for a common national market.

For consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. The introduction of GST would also make our products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to the widening of the tax base, increase in trade volumes and improved tax compliance. Transparent character of GST would make it easier to administer.

14. What is IGST? 

Under GST regime, an Integrated GST(IGST) would be levied and collected by the Centre on the inter-State supply of goods and services (Constitution Article 269A). Such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the GST Council.

15. Who will decide rates for levy of GST? 

Jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council.

Sajeev

Tuesday, April 25, 2017

Forest policies needs to be Inclusive (of tribals)

Reports states that forest department evicted tribals living in hamlets inside the forest. These tribals – belonging to ‘Gotti Koya’ community – fled to these woods (Govindraopet mandal of Jayashankar Bhupalpally district) to escape violence in naxal hit areas of neighboring Chhattisgarh. According to tribals, their hamlets were burned down; as per DFO and District Collector they were simply evicted.
In DFO's own words, "They have been felling very large trees for cultivation, which is not good for forest. We, along with the District Collector, visited the hamlet and tried to convince them to shift to an alternative location outside the forest. But they lack gratitude and are hell bent on having this land for cultivation".

In these times when hardly any pristine forest left in many parts of India, it is very important to protect whatever is remaining. But the question is, where the tribals fit in? Aren't they part of the same forest? Isn't it our responsibility to consider tribals living in forest for generations while creating forest laws? If they are clearing the jungles and destroying the ecosystem, I can understand the need for eviction. Even then, I strongly believe Forest and Revenue department have more resources and power to control the unhealthy practices like shifting cultivation etc.

What I believe is, if tribals want to live in forest without destroying it, then let them live there. While creating and implementing policies we should consider tribals as part of ecosystem; not some groups who bent on destroying it. What you think?

Sajeev

References

1. Foresters burn down tribal village - The Hindu

Monday, April 24, 2017

Carl Wilson Heading to..... yes Australia!!!

In response to the provocation from North Korea, US deployed ACG (Aircraft Carrier Group) Carl Wilson to Korean Peninsula. South Koreans cheered, finally their best friend - the US - is ready to flex muscles on their behalf. No idea about North Koreans, who knows, what their government told them. Well, the smile on South Korean's face didn't last long. As a matter of fact, at the time Trump was speaking Aircraft Carrier Carl Wilson was sailing in opposite direction to Australia and at least 3,500 miles away from Korean borders. What more, adding to the injury, in an interview with WSJ Trump told that "Korea actually used to be a part of China."

References
1. "Trump’s claim that Korea ‘actually used to be a part of China’" - Washington Post
2. Aircraft Carrier Wasn’t Sailing to Deter North Korea, as U.S. Suggested  - New York Times

Taliban - Marching towards Kabul

Taliban religious Police beating woman
The word 'Deadly' is not enough to describe Taliban's 10 members strong squad's strike on North Afghanistan's largest military base. More than 140 soldiers (and counting) died in the attack. It is to be remembered that Taliban soldiers came in an army vehicle and went past 7 check points before firing on soldiers returning after Friday prayers.

Last year 6,700 Afghan soldiers lost their lives to the insurgency. The tragedy continues in this year as well. Taliban, on the other hand, is gaining heavily in country side; many cities are now on the verge of falling into their hands.

What makes this attack more important is, this happened on the north of the country; that also at one of the biggest bases of Afghan Army - 209 corps. This army group is responsible for providing security to 9 provinces of Afghanistan.

If things are going in this way, this war of attrition going in Taliban's favor. They are winning and have enough fighters. At the same time, Afghan Army which has more manpower and firepower slowly but steadily losing the control. Outside force cant props up Afghan Army forever. If security forces are not getting their act together, then it won't take much time for the world to see Taliban flag flying high over Kabul.

Sajeev

One Coal free day in UK

Nelson's Column during the great fog of 1952 [dec 5-9]. This smog killed more than 4000 people and eventually resulted in Clean Air Act
Britain achieved something phenomenal this time - a day without coal powered electricity. First time since commercial electricity production started. This is really a milestone in the journey towards the coal-free world. After all, it was in Britain where the first coal powered generator opened way back in 1882 (London). It was also in UK where James Watt came up with a steam engine, which powered the industrial revolution and thus enabled the UK to fly Union jack across the oceans.

This is good news for other coal powered economies - especially the US, India, and China. We can also leave polluting dirty coal behind and can start a new life with clean energy. If we are not able to shutdown current plants, at least we can stop constructing new ones.

As of now for Norway, Switzerland, and Belgium every day is a coal-free day. Germany is trying hard to switch to clean energy. Just think about the day when heavy coal users like the US, China etc. also joins the club. Definitely, that day will be as important as the day when steam engine came into existence. The human race will never be the same again.


Sajeev

Image Courtesy: The copyright for the image is owned by N T Stobbs [from Wikipedia under CC-ShareAlike 2.0 license]

Sunday, April 23, 2017

Attapadi – An open wound

During my visit to other states, when people come to know that I am from Kerala they always say a couple of good things about my state. I really liked it. After all who don’t want to hear good words about the native state.

Kerala rightly deserved the position. It is true that we have a habit of endorsing and celebrating bandhs hartals, industrial and political strikes, creating an industrial environment which might frighten even the most adventurous investor who wants to set up something in Kerala. We also send huge workforce abroad to the gulf and other countries. But Kerala also stands first in Human Development Index, highest in literacy, highest in life expectancy, lowest in infant mortality etc. On average a person in Kerala lives 8 years longer compared to India average. Kerala is also the only state in India where females outnumber males.

Defying all these statistics stands a tribal block in Palakkad district of Kerala called Attapadi.
Unlike socio-economic statistics of rest of Kerala; which can be compared to developed European countries, statistics of Attapadi is comparable to Sudan and other African countries and India’s most backward tribal districts. At least Sudan and other African countries can blame civil wars and insurgency for their backwardness. Tribal belts of Jharkhand, Orissa, and Chhattisgarh can blame everything on Maoism. But political parties and administration of Kerala don’t even have anyone else to blame. There is no civil war in Attapadi; no one is firing at government personals using their AK 47s. As a matter of fact, those poor tribal don’t even have three good meals a day.

See the statistics, Attapadi’s infant mortality rate is 66; Sudan is slightly ahead with 66.7 (for Kerala the number is just 6). Infant Mortality rate means how many kids dies for every 1000 newborns. As per India Spend report, the life expectancy of average Malayali has increased from 62 years in 1970-75 to 74.9 years in 2011. However, in Attapadi the life expectancy of an Adivasi came down from 70 years in 1975 to 59 in 2010. Remember that average life span of Adivasis in India is 64 years. The main characteristics of this place are low birth-weight, severe malnutrition, high infant mortality rates, severe vitamin and iron deficiency in pregnant ladies.

In the juicy political climate of Kerala, where governments were always run by centre-left and leftist parties, Attapady’s tragedy hardly reaches legislative assemblies. How much more has to die before these issues become the headlines? I wish the administration opened their eyes and see.

Now when someone says something nice about Kerala to me; more than happiness it is the guilt about state’s attitude towards Attapadi and other tribal belts in Wayanad and Idukki which comes to my mind. My head is not going to rise in pride but fell in shame.

Sajeev

Monday, April 10, 2017

Bangalore: Dry lakes and Fat Sewage Channels

Bangalore is a rare Indian city which doesn't have a river to call its own. Other cities, at least have a drainage channel (which was a river a couple decades back) to claim. Instead of rivers, Bangalore has (I should rather say ‘had’) a good number of freshwater lakes. Many of them are man-made. However, the rapid development of real estate effectively converted the land occupied by those numerous water sources to high rise apartments and office complexes. Most of remaining lakes went dry or slowly encroached upon.

Interestingly there is a drainage channel flowing behind my office. It has a good amount of water even in this dry season. The only problem is, this water is green in colour!!! It is coming from a near-by lake which is fed by industrial and residential sewage. For time being, we Bangalorians are fed by water from Kaveri; who knows how long she will be able to feed us? Did I tell you that, bore-wells in Bangalore already gone dry?  Essentially what we are looking forward is a time, in which we may have to adopt the life style of those living in the deserts.

Being a Keralite, who lavishly spent freshwater, future looks too dry.

Sajeev

Sunday, March 19, 2017

Tear it apart – Wasting public funds and other crimes

Height of Stupidity
It is hard to understand why humans - considered to be ‘the’ foremost thinking animal in the world - still do such stupid things.

Only a couple of months back the workers came and completely re-tarred a nearby road here in Bangalore. Now some other people came and dig one side of it to replace a network of old underground pipes. Couldn’t these two groups talk to each other and do it in such a way that they replace the pipes first and then tar the road?

This is not the first-time absence of communication between two government departments waste public money and create more difficulties for public. Most often right after tarring a road someone will come to tear it apart (Water authority, Sewage treatment boards etc are some of the culprits). This not only waste public money but make half of the road not usable atleast for next 6 months.

When the ancient monument of Palmyra was destroyed by IS and when the monuments of Bahamian was destroyed by Taliban; world was stunned and wept. Everyone wondered how someone can do such barbaric acts. Newly tarred roads are neither Palmyra nor statues of Bahmiyan; but for those who walk and drive through those roads it is very much important. Destroying it is nothing less than destroying the beauty exists in the world.

Hope that whoever reading this will at least think twice before giving order to dig newly tarred roads.

Sajeev

Tuesday, March 14, 2017

Presidential News OVERDOSE – Please Stop

The problem with lengthy US presidential election is, both print and electronic media across the world would be filled with what each candidate did in every second. Is this required? I don’t think people around the world are so much worried (for one full year) about who is going to rule US for four years. The problem is media think it is THE most important thing in the world for that one year.

As if this is not enough, news outlets are in an overdrive this time. They see everything related to US internal and foreign policies through a prism called Trump. For most of them issues across the world where people live and die hardly matters when comparing with what Trump say or tweets.

I had great respect for US news media outlets; their high-quality journalism and good reporting backed with good evidence collected painstakingly. However, if they are continuing in this way, I don’t think I will have the same respect to them for long. You can criticize Trump, his policies but don’t make that the only news. Journalism is not copy pasting tweets or commenting on other people’s comments – even if it is US president.

Sajeev

Anti-Climax in Goa and Manipur

GOA

This is not something which even the veterans of Goan politics expected after elections. Most of them might have rightly guessed that, no single party would get the majority. A hung assembly was on the cards. 

However, an anti-climax like this were Congress despite have 17 seats pushed towards the opposition benches was a total surprise. Who would have imagined that, failing to nominate a CM candidate immediately is going to cost them five years? By the way, BJP’s current CM and many of his cabinet colleagues lost their seats in this election. 

To get the majority BJP pulled parties (who campaigned against BJP in elections) and crossed the half way mark. What more; they even formed a government!!! All those small party representatives got ministerial positions (I don’t know what else they got). Given enough incentives they may even join Congress.

Goa before election, ruled by BJP

Election Results
Total Seats - 40
Congress - 17
BJP – 13
GFP – 3
MGP- 3
Independent – 3
NCP – 1

In the election BJP lost 8 seats, while Congress gained 8 seats. It is true that, BJP got 32.5% of votes while Congress got 28.4% of votes. But it is not the percentage of votes, but the number of seats in the assembly which matters. 

MANIPUR

Total Seats – 60
Congress – 28
BJP – 21
NPP – 4
NPF – 4
AITMC - 1
LJP – 1
IND – 1

Here too Congress is the largest party. However, BJP with 21 seats suddenly formed the government. 

Media says BJP outfoxed Congress. However, I would rather say, all these political parties continue their habit of outfoxing people who elected them in the first place. What you think?

Sajeev

Sunday, February 19, 2017

This doesn't make sense - GSTN vs CBEC

When government is struggling to clarify, and simplify existing tax regimes and trying to shed more lights to complex, hard to read (sometimes unwanted) taxation rules it is amusing (at the same time irritating) to see two of its arms fight each other.

In latest series of events Goods and Services Tax Network (GSTN) is under investigation by Service tax department of Central Bureau of Excise and Customs (CBEC). Assessing officer issued a summon against GSTN CEO Prakash Kumar and asked him to appear (in person/through representative) on February 22, with balance sheets, bank statements and income tax return forms. Summon also asked the company to produce details of funds from GoI and payments details towards Infosys (Infosys was commissioned for implementing the GST project).

By the way GSTN was set up as a non-profit, non-government company in March 2013. Ownership of GSTN is as follows,

Central Government: 24.5%
State Governments: 24.5%
HDFC: 10%
NSE Strategic Investment Corporation: 10%
HDFC Bank: 10%
ICICI Bank: 10%
LIC Finance: 11%

Total Assets: 143 Crores, Revenues 16.3 Crore (as on Mar 31, 2016)

GSTN receives grants in aid from government for its capital requirements.

Now what make this problem ugly is, if two government’s arms are not able to settle taxation issues then how we can expect things will go smooth when private, public limited companies are involved. Already retrospective taxation and other ad-hoc items created more mess than clarify things. Central government needs to step in and make rules clear, simple and create an environment where companies know what to pay and government know what it will get. Anything short of it will only make things worse. If taxation issue is creating problems for an entity which was created to make things simple in the first place, then forget about higher expectations from ease of doing business rankings.

Sajeev

References

1. GSTN's  infra firm under scrutiny for tax evasion - Business Standard

Elimination of Measles and Control Rubella: A Big Challenge to take Head on

Latest recommendations of an Expert Advisory Group to MoHFW (Ministry of Health and Family Welfare) is to target 2020 for eliminations of Measles and control Rubella. In order to achieve this goal, government is planning to cover 41 crore children in coming two years.

What makes it critical for India to become Measles and Rubella free is the fact that, Measles is a major cause of children’s death and CRS (Congenital Rubella Syndrome) results in severe irreversible birth defects which affects eyes, ears, brain and hearts. Rubella - which generally comes in the first three months of pregnancy – often results in Glaucoma, Cataract, loss of hearing capability, Microcephaly, Mental retardation.

India already made good progress in this field. Measles death have been down by 51% between 2000 and 2015 (in terms of number it is from 100,000 to 49000).

In our immunization program, first dose of measles vaccine is given at an age of 9 months. In 2010 we introduced a second dose of vaccination for measles.

Any improvement in measles situation in India will also raise the hope of its global elimination. Hope that we will be able to stay on track and make India measles free by 2020.

Sajeev.

Abuses at God’s Place – Vatican has to Take Tough Measures

Sexual abuse scandals are nothing new to Church. Oscar winning movie ‘Spotlight’ shows how these things happened in US and how key people either ignored or covered up the problems.
New reports from Australia are shocking. Tragically, this might not be a problem limited to US or Australia. A proper investigation may reveal numerous rotten apples from other countries as well.
Australian government investigators found that (from 1980 to 2015) there were 4444 victims of abuse.

What more,

"through this period... abused children were ignored or punished while priests who raped children were protected by supervisors"

Some of the key findings are,

1. 40.4% of religious brothers from the order of ‘St. John of God’ were accused of sexually assaulting their wards.
2. It took an average of 33 years for victims to overcome decades of personal despair and file complaints.
3. 7% of catholic priests in Australia between 1950 and 2010 allegedly sexually abused children.
4. 4444 people were reported child sexual abuse, which allegedly occurred at more than 1000 different institutions between 1980 and 2015.
5. Average age of victims was 10.5 for girls and 11.6 for boys.
6. Claims identified 1880 different alleged perpetrators.
7. 90% of alleged perpetrators were male, 10% were female.
8. Commission referred 309 cases to Police (this resulted in 27 prosecutions; additional 75 cases are under investigation)

In US, as per bishop-accountability.org,

1. 26 bishops, 3733 priests, 93 nuns, 287 brothers, 58 deacons, 23 seminarians (a total of 4,220) personals name have been made public for accusations of sexual abuse.
2. U.S. bishops have reported receiving allegations of abuse by 6,528 priests in 1950-2015 (or 5.9% of the 109,694 U.S. priests active in between 1950 and 2002) according to John Jay report.

Are we supposed to hear these kinds of things from the place of God; perpetuated by people who are considered as an intermediary between God and believers? It’s time to take tough measures against rotten apples who abuse the position and prey on poor helpless, homeless kids. Is there a crime bigger than that? Forcing all those small butterflies to live a miserable traumatized life is an action which will never be forgiven or forgotten by God. Handling sexual abuse scandals are going to be one of the biggest challenge to Vatican and Pope. If Vatican is not taking tough measures and notifying the authorities about abuses at right time, then people may loss their belief in the structure. Even Jesus will not forgive them.

Sajeev

References

1. Australian catholic church alleges 7 of priests sexually abused kids over decade
2. Australias grim toll in the churchs sex abuse scandal - NYT
3. bishop-accountability.org

They need care and medicines NOT GUNS

What I don’t understand about America is, her citizens’ crazy demand for guns. After all, US have one of the world's biggest army, mammoth Homeland Security and other internal security infrastructures. All these institutions are very much functional and ready to face any challenges. In such a situation, what is the need for the state to let her citizen's carrying guns? I know that, this has a lot to do with the way US got independence and evolved over a period of time. Now-a-days many started considering the right to own a gun more important than the right to live.

Letting everyone carry a gun is an easy way to invite tragedies. I don’t think any other country will do this to their people, that also so willingly. Mass shootouts in public spaces, schools and deaths of thousands, armed robberies are living example of how the easy supply of guns rupturing the basics of families and societies. A man/woman carrying a gun is a walking death machine. There is high possibility that those carrying gun, may also use it in undesirable circumstances.

Now-a-days what we are seeing is, instead of outright ban or more controls on gun purchases Congress is more willing to relax the rules and allow more widely use; to the extent that even a mentally unstable person can also carry a gun.

I don’t think here in India, government is providing all required security for her citizens. But people carrying gun and roaming around the streets will be the last thing I want. Hope that, those gun hungry people will also realize this and do something about it. At least don't give it to mentally unstable people. They need care and medicines not guns.

Sajeev

References

1. Congress says let the mentally ill buy Guns - NYT

Saturday, February 11, 2017

Digital India - After effects of Demonitization

Demonetization's Aftereffects 

Another mile stone for India’s solar power program

4 MW horizontal single axis tracker in Vellakoil, Tamil Nadu
Shortfalls in rain, availability of water in rivers and growing atmosphere pollution is not only threatening the water supply to agriculture and cities but also raising questions about the viability of future electricity production by means of water intensive methods like thermal and hydro. Electricity became a crucial element in modern life to such an extent that, it acquired a position next to air, water, food and shelter. Raising concerns about safety and high initial investment already made nuclear power production unattractive.

It is at this juncture we are getting some good news from Rewa Ultra Mega Solar Project’s bidding. Bid for three units in Rewa – each will have an installed capacity of 250 MW – was won by won by Mahindra renewables, ACME Solar Holdings and Sweden’s Solengeri Power. Total installed capacity of this project is 750MW.

Mahindra renewables, ACME Solar Holdings and Solengeri Power quoted 2.979/KWh, 2.97/KWh and 2.974/KWh for first year. Under Rewa’s power purchase agreement there is an escalation price of 5paisa/ unit in tariff for next 15 years. As per Mint reports levelled tariff over 15 years will be 3.30 INR/Unit.

What make this number path breaking is, it is the first time we are witnessing a below 3 INR price for solar power. Till now the record was 4.34INR/Unit. Even the average price for electricity from highly polluting but cheap coal plants of NTPC stands at 3.2 INR/ Unit.

If these private companies which are going to operate Rewa are able to produce power sustainably (only time can tell) then lot of new projects will definitely come up. Even now many foreign funds are keen on investing in India’s renewable sector. However, to mature, the industry has to demonstrate that even without government subsidies it has a sustainable future.

In any case renewables share in Indian electricity production is going to increase. As per a BP estimate it will it 8% (from current 2%) by 2035. As of December 2015, we have an installed capacity of 9012.69MW.

Sajeev

References
1. Livemint

Photo Courtesy: Wikipedia

Sunday, January 29, 2017

Future of Manufacturing and factory jobs


India Government already made manufacturing as national priority again. As we can’t do much more with agriculture; and services may already be approaching its peak this may be an area left for bold steps. In addition to that, when we are buying most of important items from overseas these type of policy changes make sense.

The question is how far we can go; more than that how far we are willing to go?

By the way we are not alone here. Even in US where new president is trying to make his mark on everything, is also doing the same job - to bring all manufacturing jobs back to US. Again, the question is how many manufacturing jobs can be brought back? More than that, what type of manufacturing jobs will that be? A closer look at this problem reveals some interesting patterns.

Manufacturing is looking for two main things - cheap labour and facilities for mass production. As the world now have some very good supply chains, it is not difficult to manufacture anything anywhere and supply the same in any nook and corner of planet earth. Even now, engineering goods are moving from EU, US and China to all parts of the world.

Well, cheap labour leads the way. Over a period of time due to the availability of cheap labour some jobs easily shifted from western Europe to eastern Europe; from Europe and US to east Asia and finally to China. This phenomenon raised wages in China and some of those jobs started looking for new green pastures where wages are still low; towards Vietnam, Cambodia, Bangladesh etc.

But this time there will be a difference. Chinese are doing something unexpected. They are importing industrial robots and slowly moving towards the mass production of the same. Chinese factory floors are seeing less and less human foot-prints. Many are in the process of shifting jobs from human’s hands to electronic hands. ABB’s and other multinational companies’ robots are working 24/7 on factory floors.

At the same time, China will not let US, EU or Japanese robotic companies have the last laugh. They are making their own robots which like many other Chinese products may not be as precise as imported ones but nevertheless do the job. After a while quality will also come.

As far as numbers are concerned, China became world’s largest market for industrial robots as early as 2013. This is not only going to give solution for ageing Chinese population and fix imperfections in manufacturing high-end equipment’s bit will also make sure that the country will remain global factory hub for years to come.

Will Trump be able to bring manufacturing jobs back?

So, what is going to happen to Trump’s proclamation of bringing back factory jobs to US? Well, he may be able to do so. The difference may be the fact that, those factories may no longer employee humans but may run with robots imported from China! Even without imported Chinese robots, this is going to happen. Contrary to popular perceptions, US manufacture a lot. For e.g. in 2016 US manufactured more than any other year in their history but with leaner workforce ratio. The US manufactured 85% more goods in 2016 but with 75% of the workforce compared to 1987.

Is US doing something to get back the crown of manufacturing industrial robots? I don’t think they are doing much. In Beijing, everything is different. There is a well-planned policy to make China a global robotic hub. At the time of speaking, there might be more than 100 companies engaged in building robots. Central and regional government are giving a lot of subsidies. True, this type of centralized approaches will generate a lot of waste. But think about a worst-case scenario where only 50% of those companies survive; then also there will be more than 50 companies with the sophisticated technology to build industrial robots.

What India is doing

There are some flickers here and there. I believe that the government is yet to think seriously about the future of manufacturing from a factory floor perspective. It is not enough to build factories, but those factories should also be able to compete with Foxconn, ABB, Flextronics etc of the world. Simply building more factories will certainly enhance the capacity and productivity but may not be sustainable in the long run.

Brabo

Last week TAL Manufacturing Solutions (an arm of Tata Motors) unveiled new robot- Brabo. This is coming with a payload of 2,5, 10 kgs. Brabo developed with a small budget of 20 crores is fully indigenous except its motor (company states that they will manufacture motors in India soon). As per TAL Brabo have 360-degree vision with flip back capabilities and can be used for CNC machine handling, Vision and Inspection in assembly lines, materials handling, pick and place materials etc. As per company claims users can recover the cost (4.75L to 6.5Lakkh) within 15 to 18 months of operation. In addition to that, Bramo is claimed to have the capacity to finish work in 2-3 days which an operator may take 7 days.

Required Big Shifts in Policy

Adoption of industrial robots in all manufacturing is not yet fully graduated, which leave as some more time to tweak the policy. As robotic manufacturing is accompanied by Big data, Analytics, Autonomous systems, IoT, Augmented reality and Cyber-security where India already have considerable potential there is still time to make our mark in the future.

Going forward we need comprehensive policy to address new shifts in manufacturing. Government needs to do come up with well-crafted plans, proper incentives to make manufacturing of industrial robots in India a national priority.

The question is, are we willing to do it? The decisions we are going to take in next few years will make or break India’s future in manufacturing. Right decisions will make us a global hub on manufacturing, the wrong ones will make sure that we are going to miss this manufacturing revolution as well; just like we missed the earlier two.

Sajeev.

References

http://www.tal.co.in/robotics/