There are many taxation systems in India's tax system. Even after the coming of GST, some things are still kept under VAT and excise duty for their revenue benefits, in which petrol and diesel are in the discussion nowadays and many Economists are also talking about bringing it under the purview of GST. Many times the finance minister and government finance officials keep saying that a large population of the country is still not paying tax, whereas in reality it is not that tax is being taken on every product through consumption. Many people were saying that after ending income tax, the banking deal should be taxed, but there is a risk here that in such a situation, cash transactions will be encouraged and banking transactions will be discouraged. There is also an opinion about the income tax that it is a progressive tax system and indirect tax is a non-progressive tax system, many people think that income tax is a right system according to the social justice system, more tax burden on rich people and on low-income low-income tax burden. However, after the GST and the HSN code in it, then this issue is resolved completely. While applying GST, where nil or lower GST is already applicable to daily and basic things, and as the indulgence moves towards the objects of luxury, then there is already a higher GST rate then the principles of the social justice tax system is available with GST, then in the name of social justice tax continuing income tax is not justifiable, the government should rethink on Income Tax.
Though this will be a very bold decision at the government level when this government can take big decisions like demonetization and GST, then why can't it decide to change the entire format of income tax? I have some ideas that may seem revolutionary today, may seem contrary to today's thinking but there is innovation in the idea, and that is that the government should also connect and tax the income tax on the supply concept, and the government should not collect income tax from the salaried people. Why should he file his detail or return twice, once to the employer for TDS deduction and the employer is already submitting his detail to the employer through his TDS returns, then why again ITR required from the salaried people, unless their income is different from that stated to the employer. At the same time, income tax should not be taken from the people at the end of the production chain, such as a retailer, and the people engaged in these chains should be taxed on the basis of turnover only with a reasonable progressive percentage of GST.
For this, the government should make a system of income tax recovery through consumption from two of the five heads of income tax i.e. salary and income from business and profession completely. The government should keep the heads of capital gains, income from house property and income from other sources remain with Income Tax. Income tax should be taken on the salary head only on the income which is not going to be spent in India and which is going to be remitted out of India and part of that income from the salary earned for it can be brought under income tax and the filing additionally which is being sent abroad and for this, the government can regulate the foreign remittances system and get it reported in Form 15CB.
A person engaged in the production chain, such as Producer, Distributor, Wholesaler, Retail trader should also be exempted from the present income tax system and collect a certain progressive percentage based on supply based GST as well as sales-based progressive system. As it is currently on some extent of income under section 44AD, although it is still not linked with GST, this will result in simplification of income tax, and GST and income tax will be able to come in a uniform system, that is supply based tax system. Government and taxpayer can get its scrutiny done with one filed data with one filed return with one department, he need not get the scrutinized his one data with two return filed with two separate departments which are now in vogue.
To compensate for this shortfall of income tax, the government should rationalize the social justice tax system on this GST and sales-based tax system. This new idea will be a unique exemption in the world itself and global companies will start investing here under Make in India, although in such a situation we will have to impose GST exports even if it is discounted and calculating the current exemptions on containing special rate so that it can maintain its competitive rate in the world market and effect of current exemption can be extended in export case. In the case of foreign companies, if they want to take the income out of India and this expenditure is not going to happen in India, then income tax should be imposed on that income.
Overall, it looks a little surprised today, but if the tax procedures are simplified, the uniform tax system is the supply-based tax system, then we will achieve the black money problem solved on a large scale and seamless GDP growth. This is the time, the government has the seamless majority, which is unprecedented since last 1979, this is the opportunity for this government to think about this opportunity for innovation in the economy. The new economic policy of India should be a new start-up step and example for the economic policies of the whole world. The government should not only invoke the countrymen for innovation, but it should also include new thinking in the economy. One should ask himself why only two types of tax? And why only 5 heads of income in income tax? Should question themselves and the government should go and then the country will be able to escape from these scams of tax processors. It was said to say that "one country becomes one tax" but how? Why do you keep income tax out of this slogan? Merge this Income Tax with GST, you will see a hike in tax compliances and collection with seamless growth in GDP.
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