Aspirants preparing for any major banking, government or insurance exams are often scared of the English section as they claim it to be their weakest section. However, to stay updated with English is important when it comes to clearing such exams thus, here we get you a set of difficult words and their meanings from a reputed newspaper editorial on a daily basis. Right next to the word is its meaning both in English and in Hindi for your easy understanding. We hope you are getting some help from the series of Editorial Analysis that we do. This aims to help you understand the editorials of prominent publications.
The GST Council should stop tinkering, focus on simplifying rate slabs
With total collection this year lower than the budgeted amount, the shortfall is a cause for worry
The upcoming GST Council meeting is perhaps the most eagerly awaited (to be waiting for something) one, as numerous industries, including automakers, have petitioned (make or present a formal request to an authority) with respect to a particular cause) for lowering GST (Goods and Service Tax is an indirect tax levied on the supply of goods and services) rates on their products to help them fight the slowdown (a decline in economic activity). A more exigent (needing urgent attention) issue before the Council is the declining GST collections and the consequent fiscal (relating to government finance and taxes) problems.
With total collection this year lower than the budgeted amount, the shortfall (deficit) is a cause for worry. Of greater concern is the lower compensation cess (form of tax charged over and above the base tax liability of a taxpayer) being collected this fiscal year; only half the required monthly amount has been collected so far. Since this money is used to compensate States, if the growth in GST revenue is under 14 per cent, the Centre could have a problem meeting the payouts to the States this fiscal year.
With growth in corporate and income tax collections also in lower single digits so far this fiscal, there is little room for the GST Council to move rates lower across the board (applying to all). Moreover, it is not clear whether a rate cut would be enough to spur (encourage an activity to make it happen faster) demand. In the auto sector, for instance, total indirect tax (tax charged on goods and services rather than on the income) incidence on automobiles was in fact higher in the pre-GST regime. While a rate cut, which will help reduce prices for the end buyer, may be tempting, it cannot be seen as a panacea (something that will solve all problems) for any sector facing a slowdown. In many sectors, the demand slowdown has already led to sharp discounts and price corrections, but that has not resulted in a significant delta (a change in amount) in sales. That said, there is a need for rationalisation and simplification of GST rate slabs.
India should move towards one rate — between 12 and 18 per cent — at which most goods and services can be taxed, with a lower rate for essential goods and a higher one for luxury products. A simplified rate regime can also aid in improving compliance (the act of obeying an order or request). The annual growth rate in GST revenue promised to States — of 14 per cent — also needs to be renegotiated (to discuss an agreement again in order to change it). It is obvious that the growth in tax base and the higher collections, originally envisaged (to imagine or expect something in the future), are not achievable immediately; as seen in the large shortfall in FY19. Also, with nominal GDP growth between 8 and 9 per cent, GST revenue projections need to be recalibrated (to make small changes to an instrument so that it measures accurately).
The GST Council also needs to pay serious attention to the problems in the GSTN, the IT backbone of the GST system. With invoice matching still not enforced (to cause a law or rule to be obeyed), bogus claims (not genuine) of input tax credit are leading to revenue leakage. The fact that most taxpayers are still struggling to file the annual GST returns for FY18 shows that the GSTN is still far from being user-friendly and needs a thorough overhaul (to repair or improve something so it works well). Rolling back anti-tax evasion (the act of avoiding something) levers such as reverse charge (a mechanism where the recipient of the goods and/or services is liable to pay GST instead of the supplier) mechanism in the GST system has also hurt tax collections. Unless this is brought back, the GST’s core objectives — of expansion of the tax base or formalisation of the unorganised sector — cannot be fully realised.
Hopefully these editorial articles will give you an insight as how to go about the vocabulary preparation for the english section.