India yesterday launched its biggest ever fiscal reform with the government promising that a new nationwide tax would make the economy stronger and less corrupt, but businesses are nervous about the revolution.
The new goods and services tax (GST) replaces more than a dozen levies imposed nationally and by the 29 states. It aims to transform the nation of 1.3 billion people and its US$2 trillion economy into a single market.
Indian Prime Minister Narendra Modi held a special midnight legislative session to launch GST which he called “a good and simple tax.”
Photo: AFP
“With GST, the dream of one India, great India, will come true,” he said.
“GST is a simple, transparent system which prevents generation of black money and curbs corruption,” said Modi, who jolted the nation last year by withdrawing more than 85 percent of India’s bank notes from circulation in a clampdown on under-the-table dealings.
However, Modi, who has put huge efforts into the economy as he targets re-election in 2019, said there would be teething troubles.
Jammu and Kashmir State has refused to sign onto the one tax regime and traders have begun protesting, while the main opposition Congress Party boycotted the launch ceremony.
Businesses are nervous about GST, which sets out four different rates of between 5 percent and 28 percent instead of the one rate originally envisioned.
The GST rule book is more than 200 pages and last-minute changes were still being made late on Friday. It allows local authorities to impose some taxes.
The first fallout was seen yesterday, when the southern state of Tamil Nadu announced a 30 percent levy on movie tickets, in addition to the 28 percent GST fee.
All 969 movie theaters in the state are to close from tomorrow in protest, said M. Subramanian, president of the regional theater owners’ association.
“Because of this we will lose customers and it will encourage illegal downloads of movies,” he said. “We will continue the strike until this 30 percent tax is removed.”
“That’s the risk you have when you don’t subsume all the taxes,” PwC India partner and leader of indirect tax Pratik Jain said. “It defeats the purpose of one tax.”
Textile traders and other sectors went on strike ahead of the launch and many businesses say they are unclear about what to charge.
Bhartiya Udyog Vyapar Mandal, a national traders association that claims 60 million members, called a one-day strike on Friday in protest.
Many are worried because while returns have to be filed by computer, they do not have or do not understand the technology.
“Since August last year, we have put forward our demands on GST, but the government has never responded,” the association’s national secretary-general Vijay Prakash Jain said. “We told the government, either fix this, or we will strike.”
Most economists agree that the reform — first proposed in 2006 — is long overdue, but warn of an initial shock to the economy as businesses adjust.
Credit Suisse Group AG managing director in India Neelkanth Mishra warned that “the next few months will be a period of uncertainty in which no company would want to invest, that slows down the investment cycle and acts as a drag on the economy.”
Rating agency ICRA said that while GST would increase in compliance in some sectors, smaller traders and businesses that are not compliant would lose business to large firms with big networks.
“Although it is still far from perfect, we realize how much better it is than the myriad taxes we’ve been subjected to over the last several decades,” Jain said.
“The old India was economically fragmented. The new India will create one tax, one market for one nation,” Indian Minister of Finance Arun Jaitley said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six