THE HINDU Editorial Vocabulary-June 5, 2017- Topic 1

GST countdown

The Goods and Services Tax Council has finalised the rates at which tax will be levied for almost all products and services under the tax regime, just four weeks before the July 1 deadline for rollout. The decisions amount to a balancing act between competing demands. The Council has set the tax rate on gold, silver, diamonds and other jewellery at 3%, while uncut diamonds will attract a ‘notional’ duty of 0.25%; a credit can be claimed for exports of such diamonds after they are polished and cut in India’s gem clusters. 

Footwear and readymade textiles will have differential tax slabs based on sale price (with a concessional 5% for footwear below Rs.500 and clothes below Rs. 1,000). But oddly, no such distinction has been made for mass consumption items such as glucose biscuits. Textiles, leather, diamonds and food processing already are, or have the potential to be, India’s biggest employment engines, and repercussions of tax structure anomalies can be felt hard and fast in a competitive global market. Though the low rates on gold and diamond can dampen smuggling opportunities, they introduce two more rates to an already complex GST structure of five rate slabs plus a variable cess on ‘sin’ goods. Taken together, with the exemptions for critical sectors such as real estate, electricity, petroleum and alcohol, GST in its current form is far from the ‘One Nation, One Tax’ it purports to be.

Not surprisingly, fresh demands for differential tax treatment have begun already, including for bidis. States and sections of industry want a review of rates finalised earlier for products ranging from biogas, fertilizers and tractors to agarbathis, human hair and cashew. Actor Kamal Haasan has threatened to quit cinema as it has been included in the 28% ‘sin’ category, and States have backed the demand that regional cinema be treated differently. The Council is slated to meet again on June 11 to discuss these demands while taking a call on a few pending items such as lotteries, and finalise rules pertaining to accounting and e-way bills (to be generated to transport goods). An assurance of input credit on existing stocks with dealers and simpler rules for filing returns should help industry gear up for the transition. But in the absence of final accounting rules or clarity on the anti-profiteering framework, there is concern whether all the loose ends can be tied up this month. The government is sticking to the July 1 deadline despite reservations about the readiness of the administration and the GST Network that would have to manage billions of invoices. The Council must take a realistic and honest stock of ground realities at its next meeting. A sub-optimal GST design can be corrected over time, but a hasty beginning could prove costly.

Vocabulary

Regime: a system or planned way of doing things, especially one imposed from above.

Example: Detention centers with a very tough physical regime

Synonyms: system, arrangement, order, pattern, method, procedure

Notional: existing only in theory or as a suggestion or idea.

Example: Notional budgets for hospital and community health services

Synonyms: hypothetical, theoretical, speculative, conjectural

Polished: shiny as a result of being rubbed.

Example: A polished mahogany table

Synonyms: shiny, glossy, gleaming, lustrous, glassy, waxed

Cluster: a group of similar things or people positioned or occurring closely together.

Example: Clusters of creamy-white flowers

Synonyms: bunch, clump, mass, knot, group, clutch, bundle, truss

Repercussion: an unintended consequence occurring some time after an event or action, especially an unwelcome one.

Example: The move would have grave repercussions for the entire region

Synonyms: consequences, results, effects, outcome, reverberations

Anomalies: something that deviates from what is standard, normal, or expected.

Example: There are a number of anomalies in the present system

Synonyms: oddity, peculiarity, abnormality, irregularity, inconsistency

Purport: the meaning or substance of something, typically a document or speech.

Example: I do not understand the purport of your remarks

Synonyms: gist, substance, drift, implication, intention, meaning

Absence: the state of being away from a place or person.

Example: The letter had arrived during his absence

Synonyms: nonattendance, nonappearance, absenteeism, truancy

Hasty: done or acting with excessive speed or urgency; hurried.

Example: A hasty attempt to defuse the situation

Synonyms: quick, hurried, fast, swift, rapid, speedy, brisk, fleet