Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 150
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Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 151
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 97
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

                trigger_error($message, E_USER_WARNING);

            } else {
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    <h1 class="cat-box-title">With Prices Rising Post-GST, Has the Government Taken the Public for a Ride? -Arun Kumar</h1>
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                            <div align="justify">-TheWire.in<br /><br /><em>The Goods and Services Tax (GST) is awfully complex and has confused not only businesses and the public, but also the government.<br /></em><br />Have prices of goods and services risen because the implementation of the Goods and Services Tax (GST) is faulty or because it was not designed properly? Eighteen percent GST is levied on the food in a restaurant. This has raised the cost of eating out. Is this what was intended in the original design of the GST? One of the benefits of the GST touted by the government was that prices would come down, but the opposite has happened. Prices of most services have also gone up as they are now taxed at 18% while they were charged 15% in the pre-GST regime. Hence, insurance, credit card charges, banking charges and so on have all risen.<br /><br />Unfortunately, the wholesale price index (WPI) does not capture much of this price rise since services are not a part of this index and constitute 60% of the production in the economy. Consequently, the rise in prices of services is not reflected in the inflation index based on WPI. Since it is the prices of services that have risen the most in the last several years, inflation is being grossly underestimated. Why have the prices of services risen? Because the government has increased the tax on services from 12% to 15% and now to 18%. It is well known that when an indirect tax is raised on any good or service, it is passed on to the consumer by the producer.<br /><br />Why were prices expected to come down under the GST?<br /><br />The GST is supposed to eliminate the cascading effect of taxes. Cascading effect signifies the levy of a tax on a tax so that the effective rate of tax becomes higher than the rate of tax levied. For example, in a restaurant, the inputs bought contain an element of tax paid on them so their price is higher by the amount of this tax. When food is prepared and the final bill is given to the customer, the price in the bill contains the tax paid on the inputs. So when a tax is levied on this price, a tax is levied on the tax already paid on the inputs. This is the cascading effect of tax on tax.<br /><br />Under the GST, there is an input credit for the tax paid on the inputs so that the price of the purchased goods and services declines and therefore, the price of the final product should be lower and the GST should be levied on that lower price. The restaurants are not doing that and therefore, they benefit twice over. They are getting the input credit which adds to their profit and are also charging the customers a higher price.<br /><br />The list price of food items in the menu of a restaurant should have been lowered to reflect input credit and on that lower price, 18% GST should have been levied. Alternatively, if the list price is not changed then the GST rate in the bill should have been lowered in proportion to the purchased inputs.<br /><br />If a restaurant buys Rs 500 worth of inputs to produce a dish selling at Rs 1,000, then the total GST collection ought to be Rs 180. But the restaurant is getting Rs 90 as input credit and collecting Rs 180 from the customers. However, they have to pay the government only Rs 180. Hence, their profit rises by Rs 90. Ideally, the restaurant should only collect Rs 90 from the customers (9%) and pay the government Rs 180 because they got the benefit of Rs 90 from the input credit.<br /><br />Alternatively, if the input credit is accounted for in the cost of producing the dish, the cost should be Rs 410 and not Rs 500. With the same mark up as earlier, the list price of the dish should be Rs 820. On that, the GST of 18% would amount to Rs 148. So the final price to the customer should be Rs 968 and not Rs 1180, as is now happening. In brief, if the input credit works properly, prices should drop but the public is being taken for a ride.<br /><br />However, the flaw in the design of the GST is that the input credit is available only if the invoices of the buyer and the seller match. How many suppliers can the restaurant owner chase? Switching to alternate suppliers would be costly. Supply chains are not easily built. So the restaurants are not reducing the list prices because they are not sure of getting the input credit.<br /><br />Please <a href="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/" title="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/">click here</a> to read more. <br /><br /></div>                                                           
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    <br><a href="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/" class="re" target="_blank">TheWire.in, 20 September, 2017, https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/</a><div class="clear"></div>
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    <h1 class="cat-box-title">With Prices Rising Post-GST, Has the Government Taken the Public for a Ride? -Arun Kumar</h1>
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                            <div align="justify">-TheWire.in<br /><br /><em>The Goods and Services Tax (GST) is awfully complex and has confused not only businesses and the public, but also the government.<br /></em><br />Have prices of goods and services risen because the implementation of the Goods and Services Tax (GST) is faulty or because it was not designed properly? Eighteen percent GST is levied on the food in a restaurant. This has raised the cost of eating out. Is this what was intended in the original design of the GST? One of the benefits of the GST touted by the government was that prices would come down, but the opposite has happened. Prices of most services have also gone up as they are now taxed at 18% while they were charged 15% in the pre-GST regime. Hence, insurance, credit card charges, banking charges and so on have all risen.<br /><br />Unfortunately, the wholesale price index (WPI) does not capture much of this price rise since services are not a part of this index and constitute 60% of the production in the economy. Consequently, the rise in prices of services is not reflected in the inflation index based on WPI. Since it is the prices of services that have risen the most in the last several years, inflation is being grossly underestimated. Why have the prices of services risen? Because the government has increased the tax on services from 12% to 15% and now to 18%. It is well known that when an indirect tax is raised on any good or service, it is passed on to the consumer by the producer.<br /><br />Why were prices expected to come down under the GST?<br /><br />The GST is supposed to eliminate the cascading effect of taxes. Cascading effect signifies the levy of a tax on a tax so that the effective rate of tax becomes higher than the rate of tax levied. For example, in a restaurant, the inputs bought contain an element of tax paid on them so their price is higher by the amount of this tax. When food is prepared and the final bill is given to the customer, the price in the bill contains the tax paid on the inputs. So when a tax is levied on this price, a tax is levied on the tax already paid on the inputs. This is the cascading effect of tax on tax.<br /><br />Under the GST, there is an input credit for the tax paid on the inputs so that the price of the purchased goods and services declines and therefore, the price of the final product should be lower and the GST should be levied on that lower price. The restaurants are not doing that and therefore, they benefit twice over. They are getting the input credit which adds to their profit and are also charging the customers a higher price.<br /><br />The list price of food items in the menu of a restaurant should have been lowered to reflect input credit and on that lower price, 18% GST should have been levied. Alternatively, if the list price is not changed then the GST rate in the bill should have been lowered in proportion to the purchased inputs.<br /><br />If a restaurant buys Rs 500 worth of inputs to produce a dish selling at Rs 1,000, then the total GST collection ought to be Rs 180. But the restaurant is getting Rs 90 as input credit and collecting Rs 180 from the customers. However, they have to pay the government only Rs 180. Hence, their profit rises by Rs 90. Ideally, the restaurant should only collect Rs 90 from the customers (9%) and pay the government Rs 180 because they got the benefit of Rs 90 from the input credit.<br /><br />Alternatively, if the input credit is accounted for in the cost of producing the dish, the cost should be Rs 410 and not Rs 500. With the same mark up as earlier, the list price of the dish should be Rs 820. On that, the GST of 18% would amount to Rs 148. So the final price to the customer should be Rs 968 and not Rs 1180, as is now happening. In brief, if the input credit works properly, prices should drop but the public is being taken for a ride.<br /><br />However, the flaw in the design of the GST is that the input credit is available only if the invoices of the buyer and the seller match. How many suppliers can the restaurant owner chase? Switching to alternate suppliers would be costly. Supply chains are not easily built. So the restaurants are not reducing the list prices because they are not sure of getting the input credit.<br /><br />Please <a href="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/" title="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/">click here</a> to read more. <br /><br /></div>                                                           
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    <br><a href="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/" class="re" target="_blank">TheWire.in, 20 September, 2017, https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/</a><div class="clear"></div>
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The Goods and Services Tax (GST) is awfully complex and has confused not only businesses and the public, but also the government.

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                            <div align="justify">-TheWire.in<br /><br /><em>The Goods and Services Tax (GST) is awfully complex and has confused not only businesses and the public, but also the government.<br /></em><br />Have prices of goods and services risen because the implementation of the Goods and Services Tax (GST) is faulty or because it was not designed properly? Eighteen percent GST is levied on the food in a restaurant. This has raised the cost of eating out. Is this what was intended in the original design of the GST? One of the benefits of the GST touted by the government was that prices would come down, but the opposite has happened. Prices of most services have also gone up as they are now taxed at 18% while they were charged 15% in the pre-GST regime. Hence, insurance, credit card charges, banking charges and so on have all risen.<br /><br />Unfortunately, the wholesale price index (WPI) does not capture much of this price rise since services are not a part of this index and constitute 60% of the production in the economy. Consequently, the rise in prices of services is not reflected in the inflation index based on WPI. Since it is the prices of services that have risen the most in the last several years, inflation is being grossly underestimated. Why have the prices of services risen? Because the government has increased the tax on services from 12% to 15% and now to 18%. It is well known that when an indirect tax is raised on any good or service, it is passed on to the consumer by the producer.<br /><br />Why were prices expected to come down under the GST?<br /><br />The GST is supposed to eliminate the cascading effect of taxes. Cascading effect signifies the levy of a tax on a tax so that the effective rate of tax becomes higher than the rate of tax levied. For example, in a restaurant, the inputs bought contain an element of tax paid on them so their price is higher by the amount of this tax. When food is prepared and the final bill is given to the customer, the price in the bill contains the tax paid on the inputs. So when a tax is levied on this price, a tax is levied on the tax already paid on the inputs. This is the cascading effect of tax on tax.<br /><br />Under the GST, there is an input credit for the tax paid on the inputs so that the price of the purchased goods and services declines and therefore, the price of the final product should be lower and the GST should be levied on that lower price. The restaurants are not doing that and therefore, they benefit twice over. They are getting the input credit which adds to their profit and are also charging the customers a higher price.<br /><br />The list price of food items in the menu of a restaurant should have been lowered to reflect input credit and on that lower price, 18% GST should have been levied. Alternatively, if the list price is not changed then the GST rate in the bill should have been lowered in proportion to the purchased inputs.<br /><br />If a restaurant buys Rs 500 worth of inputs to produce a dish selling at Rs 1,000, then the total GST collection ought to be Rs 180. But the restaurant is getting Rs 90 as input credit and collecting Rs 180 from the customers. However, they have to pay the government only Rs 180. Hence, their profit rises by Rs 90. Ideally, the restaurant should only collect Rs 90 from the customers (9%) and pay the government Rs 180 because they got the benefit of Rs 90 from the input credit.<br /><br />Alternatively, if the input credit is accounted for in the cost of producing the dish, the cost should be Rs 410 and not Rs 500. With the same mark up as earlier, the list price of the dish should be Rs 820. On that, the GST of 18% would amount to Rs 148. So the final price to the customer should be Rs 968 and not Rs 1180, as is now happening. In brief, if the input credit works properly, prices should drop but the public is being taken for a ride.<br /><br />However, the flaw in the design of the GST is that the input credit is available only if the invoices of the buyer and the seller match. How many suppliers can the restaurant owner chase? Switching to alternate suppliers would be costly. Supply chains are not easily built. So the restaurants are not reducing the list prices because they are not sure of getting the input credit.<br /><br />Please <a href="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/" title="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/">click here</a> to read more. <br /><br /></div>                                                           
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    <br><a href="https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/" class="re" target="_blank">TheWire.in, 20 September, 2017, https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/</a><div class="clear"></div>
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With Prices Rising Post-GST, Has the Government Taken the Public for a Ride? -Arun Kumar

Published on Sep 21, 2017   Modified on Sep 21, 2017

-TheWire.in The Goods and Services Tax (GST) is awfully complex and has confused not only businesses and the public, but also the government. Have prices of goods and services risen because the implementation of the Goods and Services Tax (GST) is faulty or because it was not designed properly? Eighteen percent GST is levied on the food in a restaurant. This has raised the cost of eating out. Is this what was intended in the original design of the GST? One of the benefits of the GST touted by the government was that prices would come down, but the opposite has happened. Prices of most services have also gone up as they are now taxed at 18% while they were charged 15% in the pre-GST regime. Hence, insurance, credit card charges, banking charges and so on have all risen. Unfortunately, the wholesale price index (WPI) does not capture much of this price rise since services are not a part of this index and constitute 60% of the production in the economy. Consequently, the rise in prices of services is not reflected in the inflation index based on WPI. Since it is the prices of services that have risen the most in the last several years, inflation is being grossly underestimated. Why have the prices of services risen? Because the government has increased the tax on services from 12% to 15% and now to 18%. It is well known that when an indirect tax is raised on any good or service, it is passed on to the consumer by the producer. Why were prices expected to come down under the GST? The GST is supposed to eliminate the cascading effect of taxes. Cascading effect signifies the levy of a tax on a tax so that the effective rate of tax becomes higher than the rate of tax levied. For example, in a restaurant, the inputs bought contain an element of tax paid on them so their price is higher by the amount of this tax. When food is prepared and the final bill is given to the customer, the price in the bill contains the tax paid on the inputs. So when a tax is levied on this price, a tax is levied on the tax already paid on the inputs. This is the cascading effect of tax on tax. Under the GST, there is an input credit for the tax paid on the inputs so that the price of the purchased goods and services declines and therefore, the price of the final product should be lower and the GST should be levied on that lower price. The restaurants are not doing that and therefore, they benefit twice over. They are getting the input credit which adds to their profit and are also charging the customers a higher price. The list price of food items in the menu of a restaurant should have been lowered to reflect input credit and on that lower price, 18% GST should have been levied. Alternatively, if the list price is not changed then the GST rate in the bill should have been lowered in proportion to the purchased inputs. If a restaurant buys Rs 500 worth of inputs to produce a dish selling at Rs 1,000, then the total GST collection ought to be Rs 180. But the restaurant is getting Rs 90 as input credit and collecting Rs 180 from the customers. However, they have to pay the government only Rs 180. Hence, their profit rises by Rs 90. Ideally, the restaurant should only collect Rs 90 from the customers (9%) and pay the government Rs 180 because they got the benefit of Rs 90 from the input credit. Alternatively, if the input credit is accounted for in the cost of producing the dish, the cost should be Rs 410 and not Rs 500. With the same mark up as earlier, the list price of the dish should be Rs 820. On that, the GST of 18% would amount to Rs 148. So the final price to the customer should be Rs 968 and not Rs 1180, as is now happening. In brief, if the input credit works properly, prices should drop but the public is being taken for a ride. However, the flaw in the design of the GST is that the input credit is available only if the invoices of the buyer and the seller match. How many suppliers can the restaurant owner chase? Switching to alternate suppliers would be costly. Supply chains are not easily built. So the restaurants are not reducing the list prices because they are not sure of getting the input credit. Please click here to read more.

TheWire.in, 20 September, 2017, https://thewire.in/179281/gst-and-price-rise-public-taken-for-a-ride/

Tagged with: Goods and Services Tax Goods and Services Tax (GST)

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