Exploring Switzerland: 25+Cities, 11 days, in just Rs.90,000

Counselvise
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Exploring Switzerland: 25+Cities, 11 days, in just Rs.90,000

No travel agency will take you to this route but here’s how we travelled Switzerland with 25+ cities in 11 Days including 4 Boat Cruises for a total price of Rs. 90,000 for family of 2 Adults and 2 Kids using the Swiss Travel System.

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Swiss Travel Pass gives you access to unlimited travel by Trains, Trams, buses, and Boats and selected Cogwheel railway too, and entry to 500+ museums.

We bought 2 Adults 15 days Pass for 45k each and we got a Family Card for Free which gives free travel to children less than 16 years and includes free access to excursions like Titlis, and Glacier 3000 too with a paying adult.

Tip: Download the SBB app from the Playstore/ Apple store.

Travel agencies will not suggest this as they have to accommodate a bigger group so they cannot risk one person being late or missing the train.

But the beauty of Swiss Travel is that they are most punctual, are at regular intervals, and are designed meticulously so that interconnecting trains are almost waiting for you on opposite platforms.

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Switzerland Day 1-

We selected Lausanne as the Base city for 3 days.

We went to Zermatt which is a beautiful car-free city and you will find beautiful Chalets all around.

Additionally, you can either visit Matterhorn ( Toblerone mountain), or Gornergrat but I would recommend Gornergrat as here, the train will pass through the snow-clad mountains which will be an additional 29 CHF two-way with a 50% discount due to the Swiss Pass.

Day 2 –

We went to Gstaad which is a resort town for celebrities alongside cities of Zweisimmen and Saanen.

In 1995, Dilwale Dulhania Le Jayenge happened, and the economy boomed.

Many scenes from DDLJ were shot here and you can easily find the Café “Early Beck”

Zweisimmen is the station where Simran misses her train to Zurich. The kiosk where she buys the cowbell is still there right next to the station

Saanen railway station was the location for the scene in the movie where Raj and Simran wait to catch the next train to Zurich. The bridge next to the station was the location for the “palat” scene.

Tip: You can board a Panoramic Goldenpass train from Montreux which has a more scenic route. Reservation is optional and mostly you will get a seat easily without reservation. So the Swiss Pass covers more than 10+ Panoramic trains as well.

Day 3 –

We went to the Olympic museum in Lausanne wherein the entry ticket of 2k is included for Free on the Swiss Pass.

We also did a 2.5-hour cruise which is again Free with Swiss Pass and walked along the lake towns of Montreux and Vevey along Lake Geneva.

Imagine, all these towns are developed on mountains but so developed that you will find long Trams running at diagonally elevated heights across the mountains.

Day 4 –

It was a Day to change the Base to Mierengen which was a perfect base to explore places near Interlaken. It is 22 min from Interlaken but you can get properties at almost 1/3rd of rates from main tourist areas like Interlaken or Lucerne

On the same day, we also did another Boat cruise from Lake Brienz to Interlaken again Free with a Swiss Pass which according to me is the most beautiful lake with turquoise blue waters in Switzerland amongst Lake Lucerne, Lake Zurich, Lake Geneva, Lake Thun, etc.

Tip: SBB has a unique service to transfer luggage at 12 CHF per luggage from one town to another. Although costly, I would recommend using this if we analyze our per day cost which goes wasted while we checkout from one hotel, change cities, and check in at another hotel, here you will have hands-free while intercity travel so can visit many small towns in between by Hop on – Hop off any train.

Day 5 –

I always felt Jungfrau – the Top of Europe as a bit overrated for the cost of 9k per person so we decided to ascend to a less touristy but much more beautiful mountain Mannlichen.

Männlichen is a mountain in the heart of the Jungfrau Region with a 360° view. It’s one of the best viewpoints for the famous Eiger, Mönch and Jungfrau.

The journey till Interlaken- Lauterbrunnen – Wengen even though Cogwheel train is covered by Swiss Pass We took a Cable Car from Wengen to Mannlichen and then took a Gondola from Mannlichen to Grindelwald and the excursion was opened just today for Summer 2024. The total cost for a family of 4 was just Rs.7000 for two way ride.

This Cable Car has an upgrade option to the Royal Experience with a Balcony seat for only 5 CHF where you seat on the cable car roof in open for a thrilling experience!

Day 6–

We took a train to Capital city Bern which is like one hour from Interlaken.

Many do not consider Bern as travel city in Switzerland but I really liked the cobble-stoned Old town of Bern with boutique shops. We got a second hand shop wherein all good Board Games were at 5 CHF.

You cannot miss the Clock towers and the two main shopping streets of Kramgasse and Gerechtigkeitsgasse are in the center of the Old Town. The UNESCO World Cultural Heritage Site is lined with six kilometers of arcades that invite visitors to enjoy a special kind of shopping experience.

You will find Trams running along the city which is again Free with Swiss Pass.

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Day 7–

This is like a Hidden Gem I am going to share!

– Take a Train to Luzern – 1 hour
– Take a scenic Boat Cruise to Vitznau from Pier 1 – 1 hour
– Board Europe Oldest Cogwheel railway to Mt Rigi – 40 min and behold!

On May 21, 1871, Europe’s first mountain railway departed on its inaugural ascent from Vitznau to Rigi Staffelhöhe – a milestone in the history of Mount Rigi.

Today, Mount Rigi and its cogwheel railways presents itself as a unique mountain railway paradise and all this again included in Swiss Pass without a single penny extra.

Day 7 continued…

Descend from the other side to Zurich via Arth Goldau and visit the iconic Lindt Chocolate Factory!

The children will love the Chocolate Tour at Lindt. You will also love the Lindt Hot Chocolate at Cafe.

This way you save a day by taking two different routes to ascend and descend.

We also visited Zug and Zurich HB. In Zurich, we simply sit in any Tram , go 3 stops and come back or get down if we see anything interesting.

Tip : Book Lindt Chocolate Tour in advance as they have fixed slots. Cost – Rs. 1.5k pp

In Pics : Check out how a 2 Year Old teaching Life Lessions to her 5 month sibling! Thats what travelling gives which schools cannot!

Food options –

Well, we are still 2 Days to go with all your best wishes and many surprises on the way. For those asking for Lunch Options –
1. Lausanne – Shanti – Indian
2. Gstaad – Mango – Indian
3. Bern – Tibis – Pure Vegan – Pay as per weight
4. Zermatt – Golden India – Indian
5. Mereingen – Hotel Sherlock Homes – Run by Indians Made Pure Jain food for us

And as Gujaratis – Ghar ka Khana Thepla, Khichdi Locho, Home made Nachos. We bring vegetables from Coop or Migros and cook one time (also helps to save cost) or manage breakfast.

In Pics : Pure Jain Buffet ,My daughter enjoying first rains after dinner at Shanti restaurant, our Kitchen !

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Yes, I love to plan travel as a hobby and always use Public transport as it helps dwell deep into the culture of the city.

I also agree that sometimes overplanning kills the surprise element while you may enjoy going with the flow but I also love to write and share my experience on travel and the response is overwhelming!

Also Kudos to my 3 Siblings; we studied and grew up together and our respective wives; this is our first trip and that too with 6 Kids of Age 5 months to 8 years.

SaaS Startups in India: The Next Wave of Innovation 

Counselvise
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SaaS Startups in India: The Next Wave of Innovation 

Introduction: 

In recent years, India has witnessed a remarkable surge in the startup ecosystem, with Software as a Service (SaaS) companies emerging as frontrunners in driving innovation and growth.  

The SaaS sector in India has experienced exceptional growth, fueled by factors such as increasing internet penetration, a burgeoning digital economy, skilled talent, and supportive government policies. With the expansion of cloud computing and Software as a Service models, startups are leveraging technology to offer scalable solutions to businesses across various sectors. 

Key Drivers Growth 
Cost Efficiency SaaS models enable businesses to access software solutions on a subscription basis. Eliminating the need for upfront investments in infrastructure and licensing fees.  This approach makes SaaS products more accessible to startups and SMEs. 
Scalability Inherently scalable, allowing businesses to quickly adapt to changing demands.  Expand their operations without significant investments in IT infrastructure or resources.  
Focus on Innovation By leveraging technologies such as Artificial Intelligence, Machine Learning, and Data Analytics. These startups are revolutionizing industries ranging from e-commerce and fintech to healthcare and education. 

Notable SaaS Examples: 

Zoho Corporation: Founded in 1996 by Sridhar Vembu, Zoho Corporation has grown into one of the world’s leading SaaS companies, offering a suite of cloud-based business applications, including CRM, Finance, HR, and collaboration tools. With over 50 million users worldwide, Zoho exemplifies Indian SaaS excellence on the global stage. 

Freshworks Inc.: Freshworks, founded by Girish Mathrubootham and Shan Krishnasamy in 2010, has emerged as a global leader in customer engagement software. The company’s suite of products, including Freshdesk, Freshsales, and Freshchat, helps businesses deliver exceptional customer experiences, driving growth and retention. 

Khatabook: Khatabook provides digital ledger solutions and other services to increase efficiency and reduce costs for businesses. Additionally, Khatabook has pivoted to new monetization models, including digital lending offerings, indicating its expansion into various financial services. 

Postman: Founded by Abhinav Asthana, Abhijit Kane, and Ankit Sobti in 2014, Postman is a collaboration platform for API development, used by over 17 million developers and 500,000 organizations worldwide. The company’s API testing, documentation, and monitoring tools have become indispensable for software development teams globally. 

Conclusion:  

The booming SaaS startup scene in India showcases the nation’s growing entrepreneurial landscape and tech capabilities. These companies prioritize innovation, scalability, and customer satisfaction, reshaping the global business software landscape. The Indian SaaS sector is poised to lead the next wave of innovation, shaping the future of industries worldwide. 

To read more- https://www.business-standard.com/industry/news/india-global-services-export-to-reach-800-billion-by-2030-goldman-sachs-124043000713_1.html

AMT Basics: A Guide for Taxpayers

Mehul Shah
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AMT Basics: A Guide for Taxpayers

Alternate Minimum Tax (AMT)

To encourage investment, the Indian government offers tax benefits to reduce individual tax burdens. However, consistent tax revenue is essential for funding development and public services. To ensure minimum tax collection from those claiming deductions, the Finance Act of 1996 introduced Minimum Alternate Tax (MAT) for corporations. Similarly, the Finance Act of 2011 introduced Alternative Minimum Tax (AMT) for non-corporate taxpayers.

What Is AMT, and Why Was It Implemented?

Alternative Minimum Tax is an alternative to the regular tax liability. It does work on the same principle as MAT, but it is unique in terms of applicability, exemptions, rules, deductions, and calculations. 

The government introduced AMT in order to find a balance between offering tax deductions/exemptions and collecting minimal taxes. 

Applicability of AMT

List of taxpayers covered under Section 115JC of the IT Act:

  • Non-corporate taxpayers
  • Individuals, HUFs, Body of Individuals, and Association of Persons  (only when their total adjusted income exceeds Rs. 20,00,000 annually) 

However, these taxpayers have to pay AMT only when they claim the following deductions:

  • Deductions claimed under Chapter VI A of IT Act: These include Sections 80H to 80RRB but taxpayers claiming deductions under Section 80P related to cooperative societies are not eligible for paying AMT. 
  • Deductions claimed under Section 35D of the IT Act: This Section allows 100% deductions on depreciation of capital assets when such assets have been in use for some specific businesses like cold storage facilities, fertilizer manufacturing, etc. 
  • Additionally, taxpayers claiming deductions under Section 10AA of the Income Tax Act need to pay AMT.

Tax Liability Applicable for AMT

The tax liability will be higher of the two whenever AMT is applicable under Section 115JC of the Income Tax Act:

  • Tax liability is computed as per normal slab rates after taking into consideration all deductions and relaxations available under different chapters of the IT Act. 
  • Tax liability computed as per AMT rate of 18.5% on adjusted total income.

 What is AMT Credit?

A non-corporate taxpayer to whom the provisions of AMT apply has to pay higher of normal tax liability or liability as per the provisions of AMT. If in any year the taxpayer pays liability as per AMT, then he is entitled to claim credit in the subsequent year(s) of AMT paid above the normal tax liability.

The credit can be adjusted in the year in which the liability of the taxpayer as per the normal provisions is more than the AMT liability. The set off in respect brought forward AMT credit shall be allowed in the 15 subsequent year(s) to the extent of the difference between the tax on his total income as per the normal provisions and the liability as per the AMT provisions.

For Example:

F.Y. 2023-24:

Normal Rates = Rs. 12,00,000/-

As per AMT= Rs. 14,00,000/-

Liable to pay AMT as tax liability as per normal rate is lower.

F.Y. 2024-25:

Normal Rates = Rs. 16,00,000/-

As per AMT= Rs. 15,00,000/-

Liable to pay tax as per the normal rates.

As there was AMT paid in the preceding year, they have total AMT credit of Rs. 14,00,000 – Rs. 12,00,00 = Rs. 2,00,000 with them.

They can use this credit for an amount not exceeding the difference between the normal rate and AMT in FY 2024-25 i.e. Rs. 1,00,000 (Rs. 16,00,000 – Rs. 15,00,000).  The remaining credit can be forwarded to the coming years.

Tax Benefits and Exemptions for Startups and MSMEs

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Tax Benefits and Exemptions for Startups and MSMEs

In India, both startup and MSMEs are eligible for certain tax benefits and exemptions to promote entrepreneurship and economic groups.

Startups  (incorporated as a private limited company or registered as a partnership firm or a limited liability partnership, having turnover less than 100cr in any of the previous financial years shall be considered as a startup up to 10 years from the date of incorporation) are newly established businesses, often founded by entrepreneurs aiming to address specific problems or capitalize on market opportunities. Startups are known for their agility, creativity and willingness to take risks.

TAX INCENTIVES FOR STARTUPs

  • Startups can avail three-year tax holiday under Sec. 80IAC of the Income Tax Act 1961, provided they are recognized by DPIIT and are incorporated between 1st April 2016 to 31st March 2025.
  • Startups recognized by DPIIT are exempted from angel tax(tax paid by startups on the excess amount received by way of investment when investments exceed its FMV)  provided they meet certain criteria.

MSMEs stand for Micro, Small and Medium enterprises. These are the businesses that fall within certain criteria regarding their size, investment in plant and machinery or equipment and annual turnover. MSMEs play a vital role in economic development and job creation.

TAX INCENTIVES FOR MSMEs

  • MSMEs are eligible for concessional tax rates under section 115BA of the Income Tax Act 1961. Certain domestic companies, including MSMEs, are eligible for a reduced tax of 25% instead of the standard rate of 30% by fulfilling certain conditions.
  • MSMEs can also opt for a tax rate of 22% under section 115BAA of the Income Tax Act 1961 by fulfilling certain conditions. This section allows domestic companies including MSMEs to calculate the total income without considering certain deductions. This section applies to those companies other than those covered under sec 115BA.
  • MSMEs may be granted tax holidays during which they are exempt from paying taxes for a specified period, to encourage new business or to promote growth.
  • MSMEs who are engaged in secondary steel production are now eligible to get an extension of customs duty exemption on steel scrap.

CONCLUSION

Tax exemptions and benefits are instrumental in supporting the growth, innovation and competitiveness of both MSMEs and startups. Leveraging tax benefits and exemptions is vital for the growth and success of startups and MSMEs in India. By utilising these incentives effectively, entrepreneurs can strengthen their financial positions.

DTAA – Double Tax Avoidance Agreement: Insights

Mehul Shah
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DTAA – Double Tax Avoidance Agreement: Insights

In today’s interconnected global economy, entrepreneurs are increasingly expanding their businesses across international borders. However, along with the opportunities come challenges, one of which is navigating the complex realm of taxation. Double taxation, wherein income is taxed in more than one jurisdiction, poses a significant hurdle for businesses operating internationally. This is where Double Taxation Avoidance Agreements (DTAA) come into play, offering a roadmap to mitigate the impact of double taxation and ensure a fair distribution of tax liabilities between countries. 

Understanding DTAA: 

DTAA, as the name suggests, is an agreement between two countries aimed at avoiding the burden of double taxation on the same income. These agreements lay down the rules regarding the taxation of various types of income, including dividends, interest, royalties, and capital gains, earned by residents of one country in another country. By establishing clear guidelines for taxation, DTAA provides certainty and prevents situations where taxpayers are taxed twice on the same income. 

Indian Legalities: 

India, acknowledging DTAA’s significance, has inked agreements with many nations to ease cross-border trade and investment. As of 2024, India has signed DTAA agreements with more than 90 countries, including major economies like the United States, United Kingdom, Singapore, and Germany. These agreements vary in their terms and conditions, reflecting the unique bilateral relationships between India and each partner country. 

Specific Agreements: 

While all DTAA agreements follow a similar framework, some may contain provisions that warrant special attention from users.  

For instance, the DTAA between India and Mauritius has historically been of particular significance to investors due to its favorable provisions regarding capital gains taxation. Under this agreement, capital gains derived from the sale of shares by residents of one country in another country are taxed only in the country of residence, providing a significant tax advantage for investors. 

Similarly, the DTAA between India and Singapore also offers favorable terms for capital gains taxation, making Singapore an attractive destination for investment by Indian entrepreneurs. 

Methods in DTAA: 

Under DTAA, there are generally two methods used to relieve taxpayers from the burden of double taxation: Tax Credit and Tax Exemption. 

1. Tax Credit: 

Tax credit, also known as the credit method, allows taxpayers to offset taxes paid in one country against the tax liability in another country. 

Example: Suppose an Indian entrepreneur, Raj, conducts business in the United States and earns income subject to taxation in both India and the U.S. According to the DTAA between India and the U.S., Raj can claim a tax credit in India for the taxes he paid in the U.S. on the same income. 

Let’s say Raj’s business in the U.S. generated a profit of $50,000, on which he paid $10,000 in taxes to the U.S. government. Now, when Raj reports this income in India, he can claim a tax credit for the $10,000 already paid to the U.S. This means that Raj’s tax liability in India will be reduced by the amount of tax already paid in the U.S., resulting in a lower overall tax burden. 

2. Tax Exemption: 

Tax exemption, also known as the exemption method, allows certain types of income to be exempt from taxation in one of the countries involved in the DTAA. Example: Consider an Indian company, XYZ Ltd., which receives dividends from its subsidiary in Germany. Under the DTAA between India and Germany, dividends received by XYZ Ltd. from its German subsidiary may be exempt from taxation in India. 

Let’s say XYZ Ltd. receives dividends amounting to €20,000 from its German subsidiary. If this income qualifies for exemption under the DTAA, XYZ Ltd. does not have to pay tax on these dividends in India. Instead, the dividends may only be taxed in Germany, according to German tax laws. 

Conclusion: 

In conclusion, DTAA plays a pivotal role in facilitating international business activities by providing clarity and certainty in taxation matters. For Indian entrepreneurs venturing into the global market, understanding the implications of DTAA agreements is essential to optimize tax efficiency and avoid the pitfalls of double taxation. By effectively leveraging DTAA agreements, businesses can confidently expand their global presence, assured of fair and transparent tax management.

E-commerce After GST: Adapting to New Tax Dynamics   

Muskan Tulsiyan
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E-commerce After GST: Adapting to New Tax Dynamics   

The Goods and Services Tax (GST) is a comprehensive indirect tax that was implemented in India on 1st July, 2017. 

The government of India has undertaken a big taxation reform by introducing GST, which is expected to enhance the growth of E-commerce. GST is a single destination-based indirect tax that is applicable across all states on the supply of goods or services. The CGST Act, under Section 9(5), defines electronic commerce as “the supply of goods or services or both, including digital products, over a digital or electronic network” and defines Electronic Commerce Operator (ECO) as “any person who owns, operates, or manages a digital or electronic facility or platform for electronic commerce.” E-commerce operators like Amazon act as an intermediary and bring buyers and sellers together, and facilitate transactions. ECOs have to mandatorily register for GST regardless of turnover.  

“Persons who sell goods or services, or both through an ECO are E-commerce Sellers.”  

REGISTRATION REQUIREMENTS FOR E-COMMERCE SELLERS 

Type of Activity  Registration Requirement  
Selling Goods  Compulsory Registration  
Providing Services other than those listed u/s 9(5)  Register only if turnover is more than 10/20 lakhs  
Providing Services listed u/s 9(5)  Not required to register  

Earlier in the service tax, a centralized system for registration was available,but under the GST a centralized system for registration is not available as the place of supply will decide the scope of registration.  

GST is likely to increase costs for the E-commerce industry due to high expenses in storing and warehousing goods. The company have to pay taxes on unsold goods and can only reclaim them upon sale.

FOLLOWING ARE A FEW EXAMPLES OF REGISTRATION REQUIREMENTS OF DIFFERENT INDUSTRIES  

Industry  Examples of E-commerce operator  Registration requirement  
E-Commerce Sellers (goods)Amazon, Flipkart  The seller is required to register.  
Hotel (turnover less than 10/20 lakh)  OYO, Make My Trip   The hotel is not required to register.  
Hotel (turnover of the hotel more than 10/20 lakh)  OYO, Make My Trip   The hotel is required to register.  

Previous indirect tax policies created considerable confusion and led to extensive litigation, impeding the growth of the e-commerce sector in India. The lack of clarity resulted in tax evasion, causing substantial revenue losses for the government. The introduction of GST aims to streamline the tax system, close loopholes, and potentially lessen the overall tax burden.

GST has a significant impact on the E-commerce marketplace. The influence of GST on the landscape of Indian e-commerce is unmistakable. With streamlined tax processes, including mechanisms like Tax Collected at Source (TCS) and Input Tax Credit (ITC), GST has forged the path towards uniformity, transparency, and compliance with the e-commerce sector. From mandatory registration to addressing common challenges, navigating GST requirements is critical for e-commerce entities to operate legally and contribute to a fairer tax ecosystem.  

The Pillars of Startup Success: Key Lessons to Learn 

Editor
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The Pillars of Startup Success: Key Lessons to Learn 

Starting a startup is akin to embarking on an adventurous journey into the unknown. While the road may be fraught with challenges, the success stories of renowned startups offer invaluable insights and lessons for aspiring entrepreneurs. Let’s dig into some of the foundational pillars of startup success: 

1. Focus on Problem-Solving 

Successful startups, such as Airbnb and Uber, identified existing problems and devised innovative solutions to address them. Airbnb’s journey began when its founders, rented out air mattresses in their living room to attendees of a design conference in San Francisco, thus realizing the potential for a peer-to-peer lodging marketplace. Flipkart recognized the lack of accessible e-commerce platforms in India and built a robust online marketplace, transforming the retail landscape. Similarly, Ola leveraged the ubiquity of smartphones to provide convenient and affordable ride-hailing services across the country, addressing the challenges of urban transportation. By keenly observing pain points in the Indian market, these companies created products or services that catered directly to consumers’ needs. 

2. Team Building 

Google‘s founders, Larry Page and Sergey Brin, prioritized hiring exceptionally talented individuals and creating a culture of innovation. Google’s renowned “20% time” policy, allowing employees to dedicate a portion of their workweek to passion projects, has led to the development of groundbreaking products such as Gmail and Google News. A strong team with shared values and goals forms the bedrock of a successful startup. Investing in team-building activities, fostering open communication, and nurturing a positive work environment are essential for long-term success. 

3. Adaptability 

The evolution of Netflix from a DVD rental service to a global streaming powerhouse underscores the importance of adaptability in the fast-paced business landscape. Likely, CureFit demonstrated adaptability by offering online fitness classes and personalized workout plans during the COVID-19 pandemic when traditional gym facilities were closed. This pivot allowed CureFit to continue serving its customers and adapt to the changing circumstances Startups must remain agile and responsive to changing market dynamics, consumer preferences, and technological advancements. 

In conclusion, the journey of startup success is paved with various challenges and uncertainties. However, by prioritizing problem-solving, fostering strong team dynamics, and embracing adaptability, entrepreneurs can navigate the tumultuous waters of entrepreneurship with confidence and resilience. 

Understanding the legalities of GST on Petroleum Products

Counselvise
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Understanding the legalities of GST on Petroleum Products

In the complicated web of India’s taxation system, the treatment of petroleum products under the Goods and Services Tax (GST) regime remains a complex and highly debated subject. As critical drivers of the economy, petroleum products such as Crude Oil, Petrol, Diesel, and Natural Gas play a significant role in revenue generation and government policy.

  • Exclusion from GST

Under the current Indian tax regime, petroleum products are kept outside the purview of GST. Instead, they are subject to specific excise duties levied by the central government and state-level Value Added Tax (VAT). This exclusion stems from concerns about revenue loss for both the central and state governments, as petroleum products contribute substantially to tax revenues.

The exclusion of petroleum products from GST has direct implications for consumers and businesses alike. While consumers may not benefit from the input tax credit mechanism offered by GST, businesses in petroleum industry face administrative challenges in managing multiple taxation systems, leading to increased compliance costs and pricing complexities.

  • Challenges and Criticisms:

In the absence of GST, state governments levy VAT on petroleum products, which varies from state to state and contributes significantly to state revenues. Additionally, the central government imposes excise duties on petroleum products, which serve as a crucial source of revenue for funding various developmental projects and government initiatives.

The exclusion of petroleum products from GST has drawn criticism from various quarters. Critics argue that the fragmented tax structure leads to cascading taxes, increases administrative burden, and hampers the efficiency of the economy. Moreover, the volatility of crude oil prices in the global market can exacerbate the impact on consumers and businesses.

  • Calls for Reform and Inclusion:

In recent years, there have been calls for reforming India’s taxation system to bring petroleum products under the ambit of GST. Proponents argue that integrating petroleum products into the GST framework would streamline taxation, enhance transparency, and mitigate price fluctuations for consumers. However, concerns about revenue implications and the autonomy of state governments remain significant hurdles to such reforms.

  • Potential Path Forward:

While the debate on the inclusion of petroleum products in GST continues, policymakers are exploring alternative mechanisms to address the challenges posed by the current tax regime. This includes discussions on revisiting excise duties and VAT rates, implementing measures to stabilize prices, and enhancing coordination between the central and state governments.

The Patanjali Saga: Triumph to Troubles

Counselvise
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The Patanjali Saga: Triumph to Troubles

INTRODUCTION 

Patanjali, once hailed as a giant in the ayurvedic industry, surged into prominence with its wide range of FMCG products. Patanjali’s entry into the FMCG market was nothing short of revolutionary. Founded by Baba Ramdev and Acharya Balkrishna, the company leveraged its strong focus on Ayurvedic Principles to create a diverse range of products spanning from personal care to food items. Its competitive pricing and claims of natural ingredients shook the market, challenging established players like Hindustan Unilever Limited (HUL), Nestle and others. However, recent events have cast a shadow over Patanjali’s success story. 

SCRUTINY ON PATANJALI AND BABA RAMDEV

As Patanjali’s advertisements became more widespread, they also attracted scrutiny from regulatory bodies and consumer organizations. In 2016, the Advertising Standards Council of India (ASCI) pulled up Patanjali for running misleading advertisements. 

Ramdev is currently facing action from the Supreme Court. This is due to the publication of objectionable and misleading advertisements about their Ayurvedic products. Despite giving an undertaking to the Supreme Court in November last year to halt these advertisements, they continued to do so, leading to the court’s dissatisfaction with their actions.  

President of the Indian Medical Association (IMA), Dr. R V Asokan, has voiced strong criticism against Baba Ramdev, condemning his claims of being able to cure COVID-19 while disparaging modern medicine as “stupid and bankrupt.” Asokan expressed deep concern that Ramdev’s influential status could mislead people, which he found unfortunate. 

In May 2022, Patanjali received a Rs.1000 crore defamation notice from the Indian Medical Association (IMA), which termed Ramdev’s remark as a “criminal act” under IPC 499 and demanded an apology from Baba Ramdev. Following this, in August 2022, the IMA filed a petition in the Supreme Court regarding the disparaging advertisement. The Supreme Court held the first hearing on the matter in November 2023, during which it warned Patanjali against using terms like “permanent relief”. 

IS THE APOLOGY BIG ENOUGH? 

Ramdev has said his company has taken out newspaper ads apologizing to the public. But, On April 23, the Supreme Court questioned Patanjali Ayurved, about the scale of its published apology in newspapers compared to its typical expensive “front page” advertisements promoting herbal drugs.  

Supreme Court said the apology was published in 67 newspapers. “Tens of lakhs” were spent to convey their regret for misleading the public. “But is your apology the same size as the advertisements you normally issue in newspapers? Did it not cost you ‘tens of lakhs’ to put front-page advertisements?” 

On April 15, the Uttarakhand State Licensing Authority suspended the 14 manufacturing permits of Ramdev’s companies, including traditional medicines for asthma, bronchitis, and diabetes, among others. The suspension was immediate. However, on April 30, the court was dissatisfied with the inaction of the said authority in the misleading advertisement case, questioning whether they acted lawfully and urging honesty for sympathy and compassion. 

GST- ANOTHER BLOW FOR PATANJALI

Also, Patanjali Foods has received a show cause notice from the Directorate General of GST Intelligence, Chandigarh, for allegedly claiming Rs. 27.5 crore in undue input tax credit. 

This notice, issued under the CGST Act, highlights a potential discrepancy in the company’s tax filings that could result in penalties. 

Patanjali’s journey reflects both triumphs and tribulations in the competitive FMCG landscape. While its initial success disrupted the market with Ayurvedic principles and competitive pricing, recent controversies and regulatory scrutiny have challenged its standing.

Inheritance Tax: A solution to ensure equality or risk to hard earned savings?

Madhav Chasmawala
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Inheritance Tax: A solution to ensure equality or risk to hard earned savings?

Inheritance Tax, often dubbed as the “Death Tax,” is a levy imposed on the transfer of assets from a deceased individual to their heirs or beneficiaries. The Inheritance Tax serves two main purposes. First, it helps the government generate revenue to support public finances and expenditures. Second, by taxing the transfer of large estates, it seeks to address the distribution of wealth and may reduce wealth disparity in society. 

The concept of an Inheritance Tax is, however, not new to India. Such a tax, known as estate duty or “death tax” in some countries, was very much prevalent in India around four decades ago before it was abolished in 1985. Before its abolishment, a high “estate duty” of up to 85% for properties over Rs. 20 Lakhs was required to be paid by the executors of the deceased’s estate under the Estate Duty Act of 1953. It was abolished due to concerns about its effectiveness in generating revenue and double taxation. In the following sections, we’ll explore the arguments for and against Inheritance Tax implementation, as well as its potential implications for individuals and families in India. 

Arguments For: 

  1. Promoting Wealth Redistribution: Inheritance Tax promotes economic equity by taxing large estates and redistributing proceeds to fund social welfare programs, thereby addressing wealth inequality. 
  1. Revenue Generation for Public Services: It serves as a crucial revenue source for the government, financing public services like healthcare and education, contributing to economic stability and growth. 

Arguments Against: 

  1. Double Taxation and Burden on Families: Inheritance Tax faces criticism for potentially imposing double taxation, burdening families with financial strain amidst emotional challenges. 
  1. Potential Negative Impact on Economic Growth: Opponents argue that Inheritance Tax may hinder economic growth by discouraging savings and investment, particularly impacting small businesses reliant on intergenerational capital. 
  1. Administrative Complexity and Compliance Costs: The administrative complexity and compliance costs associated with Inheritance Tax implementation could disproportionately affect middle-income families and small estates, potentially outweighing any revenue gains. 

Currently there is no Inheritance Tax system in India. Countries such as the United States, the United Kingdom, Japan, France, and Finland have already imposed Inheritance Tax policies, reflecting varying ideologies. In U.S.A., the Inheritance Tax rate is as high as 55%. In contrast, India finds itself amidst a political debate. With the ruling party expressing its disagreement and the opposing party advocating for its implementation, the topic has gained prominence, especially during the time of general elections.  

Ultimately, the path forward in India will require thoughtful consideration of its potential impact on revenue generation, wealth distribution, economic growth, and administrative feasibility 

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