Malnad remembers VG Siddhartha: Coffee king who created jobs, inspired entrepreneurs

VG Siddhartha was one of the biggest entrepreneurs from Karnataka’s Malnad region, creating jobs for close to 50,000 people, including those from his home district.

The death of Coffee Day founder VG Siddhartha as confirmed by Mangaluru police on Wednesday morning has left many in shock. His body was found at 6.30 am around 9 km from the spot where he went missing near a bridge on the Netravati river, more than 24 hours after a multi-department rescue operation began.

The 58-year-old was one of the biggest entrepreneurs from Karnataka’s Malnad region, creating jobs for close to 50,000 people, including those from his home district.

Siddhartha hailed from Chikkamagaluru district, the central part of Karnataka also known as Malnad, which is famed for its scenic hills, waterfalls, coffee estates and other plantations. The son of a coffee estate owner, Siddhartha’s family has been in the coffee growing business for 130 years.

Known as the coffee king of India, Siddhartha launched the first Café Coffee Day outlet in 1996 in Bangalore. Since then, the Coffee Day group has expanded massively, with the hospitality chain including two seven-star hotels. Siddhartha also had other business interests ranging from the furniture sector to IT to wealth management.

Jairam G Kimmane, a successful businessman from the region, said, “We are distant relatives and know him from 1985. He had established himself in a very big way. We all know him as a man of dignity and accountability. He has given a lot of jobs to people, especially for our people in that region. He is a prudent businessman who has been successful in managing such big plantations and build such a big brand.”

Halappa Gowda, a resident of Siddhartha's village and a long-time acquaintance, said, “He has given jobs to thousands of people who are employed in Hassan, Chikkamagaluru, Shivamogga, Coorg (districts forming Maland). Many people have gathered today after hearing the news. We are all worried about the situation. Even before him, his father used to manage acres of coffee plantations. He took over and has managed the business in the last few decades. He was a gem of a person. Very friendly and acted very humble with us.”

Many people who knew him personally vouch for his prudence in business and said that he was looked up to by entrepreneurs in India.

BS Arun, former president of Shivamogga District Chamber of Commerce, said that Siddhartha had very “good vision and very few people have come up like this over the years”.

“Nobody ever dreamt like him. At that moment, coffee was selling at a very high price, but he thought of retailing and building a brand. While there would be many investing in real estate or tourism, nobody like this invested in coffee and software business. He was a good motivator and provided employment to a lot of people,” Arun told TNM.

While Siddhartha commanded admiration from legacy businessman and people remember him as a job creator, a bunch of new-age entrepreneurs also looked up to him as inspiration.

Yashwanth Nag Mocherla, founder of The ThickShake Factory, a budding quick service restaurant chain, said, “First of all, for me and as well as hundreds of entrepreneurs and would-be entrepreneurs he was an inspiration.”

He added, “He wanted to build the Starbucks of India and even now when they have entered India, they are no match to CCD. My business plan for shakes was what CCD was for coffee. Since then and even today, we look up to CCD for inspiration, just to understand the market potential in every new city we go to. The kind of business that he has built over the last 25 years is phenomenal and don’t forget he was among the top four coffee exporters in the world.”

If you or anyone you know is feeling depressed or suicidal, consider reaching out to one of the following helplines:

Tamil Nadu:
State health department suicide helpline number - 104
Sneha Suicide Prevention Centre - 044-24640050

Telangana:  
Telangana government suicide prevention toll free number - 104
Roshni - 040-66202000, 66202001
SEVA - 09441778290, 040-27504682 (between 9 AM and 7 PM)

Karnataka:
Sahai 24-hour helpline numbers: 080-65000111, 080-65000222

Kerala:
Maithri helpline - 0484-2540530
Chaithram helpline - 0484-2361161
Both are 24-hour helpline numbers.

Andhra Pradesh:
Life Suicide Prevention Helpline - 78930-78930
Roshni -
Helpline 1: 9166202000
Helpline 2: 9127848584

(SOurce: TNM)

15-20 'sorry' calls... This was VG Siddhartha's last day

Being a single child, though Siddhartha was very ambitious, he was "very sensitive, shy and a loner by nature," say his friends.

It was just another Monday morning for the family of VG Siddhartha. Yes, they were a bit surprised when he left home earlier than usual, but never would they have imagined that his body would be found floating in the Netravati river two days later.

"Though Malavika (Siddhartha's wife) or SM Krishna (his father-in-law) didn't find anything odd with Siddhartha's behaviour on Monday, they were a bit surprised that he left home as early as 8 am to office. Siddhartha normally left around 9.30 or 10 am and it was slightly early for him to leave but there was nothing unusual about his mood that day," said a family friend who had spoken to Siddhartha's wife after the news of him going missing arrived.

According to sources, Siddhartha was at home on Sunday and had made several phone calls. He even had lunch at home with his wife and father-in-law on Sunday afternoon. He stepped out for sometime on Sunday evening and came back to have dinner before going to bed. Something must have happened in the night which led to this decision, suggest friends close to his family.

Family members and relatives pay their last respects to the mortal remains of Cafe Coffee Day founder VG Siddhartha in Chikmagalur Wednesday July 31 2019. | PTI

However, Malavika and S M Krishna are tightlipped about the sequence of events and have just hinted that he had been upset with the recent pressure from the I-T department.

Siddhartha has two sons, Amartya and Ishan. Amartya, the first son, is in the US and Ishan is in school.

He left on Monday morning around 8 am, saying there was work at the office and asked the driver to take him to the head office. After this, around 11 am he asked the driver to proceed towards Sakleshpura.

"He had even informed his family members that he was going to Sakleshpura. They were not surprised as the coffee king loved to visit his hometown and also his father's estate in Chetanahalli," said a close friend.

Siddhartha was the son of Gangaiah Hegde, a 95-year-old coffee planter, who is now unwell and in the ICU in a private hospital in Mysuru.

Siddhartha wanted to fight for the country as a soldier in the Indian Army. At the age of 18, he wrote the entrance examination for the National Defence Academy in Pune to enrol as a cadet but couldn't clear the exam.

Speaking at a conference in Kanpur, Siddhartha had reportedly said that the dejection of failing in the exam led him to join St Aloysius College in Mangaluru to do economics.

After this, against his father's will, Siddhartha decided to do business.

According to a write-up by a very close associate of Siddhartha's family, which was shared on social media, he told his father, "Look, dad, if I lose money in business, think that your son is wayward and ruined 100 acres of coffee estate on his vices. I will still be left with hundreds of more acres to inherit. I will come back and continue our plantation profession. If I succeed in business, then I will give jobs to at least 500 boys of our Chickmangluru district, who just loiter around their college," wrote Vinay Madhav, a close associate of the family.

Being a single child, though Siddhartha was very ambitious, he was "very sensitive, shy and a loner by nature," say his friends. He then worked with Mahendra Kampani of J M Financial Ltd for one year and even opened a stock brokering office in Bengaluru.

According to Vinay Madhav, impressed with Siddhartha, the then Union Minister SM Krishna helped him take over Sivan & Co, an almost defunct stock brokering office in Bengaluru, which had its offices on Church Street. Siddhartha soon became a "hero" amongst people in Chickmagalur. Everyone admired him for his sensitivity and were happy to know that he was marrying Krishna's daughter Malavika. 

"We grew up admiring Siddhartha as a rising star in Chickmagalur district. He used to attend most of the weddings in Chickmagalur and everyone was awed by his simplicity. He spoke to everyone with the same respect and ensured that his roots remained firmly in the local community. We spoke at length about how he had adopted a middle-class lifestyle, despite being a rich kid. It was said that he lived in a single room in Mumbai in a middle-class locality while interning with JM Financial Ltd. and stayed in a single room at Hotel Highlands for a long time after taking over Sivan & Co in Bengaluru. We all respected him a lot," writes Vinay Madhav.

It's unfortunate that the same man who on the outside looked so confident and full of ambition lost his will to live at the age of 60 and declared himself a "failure" in his letter to board members.

His close associate MLA TD Rajendra says, "He was a very simple man with a great family background. He had said that he was a "little upset' with the recent I-T probe which had hit his business. But we never thought he would contemplate suicide," he said.

Meanwhile, Siddhartha, according to his driver Basavaraj Patil, made a minimum of 15 to 20 calls along the way and kept apologizing to people.

In his statement to the police, he said Siddhartha "was making calls to people and saying sorry. I noticed he sounded upset but I had not even in my dreams thought that he would kill himself," the driver reportedly told the police.

The CCB police team from Mangaluru is yet to interrogate the CCD board members and family members to understand if Siddhartha was depressed and if the letter was sent on 27th July or if he emailed it on the day of his disappearance.

(Source: TNIE)

CCD owner VG Siddhartha’s body found near Mangaluru river 2 days after he went missing

A fisherman had claimed to have seen a man likely to be Siddhartha jumping into the Netravathi river from the bridge on Monday evening, police had said on Tuesday.

The body of Cafe Coffee Day (CCD) founder VG Siddhartha was found from the banks of the Netravathi River in Karnataka’s Mangaluru on Wednesday, two days after he went missing, police said.

The 60-year-old Siddhartha had gone missing on Monday evening from the road bridge between Ullal and Mangaluru over the river around 7pm, his driver Basavaraj Patil had told the police.

The 60-year-old Siddhartha had gone missing since Monday evening from the road bridge between Ullal and Mangaluru over the river around 7pm, his driver Basavaraj Patil told the police.(AFP photo)

“Around 6am today we found a body in the Hoige Bazaar area and we are trying to confirm if it is Siddhartha. We have informed his family and we have also sent the body to Wenlock Hospital to complete formalities. Our investigation will continue,” Mangaluru’s commissioner of police Sandeep Patil said.

A fisherman had claimed to have seen a man likely to be Siddhartha jumping into the Netravathi river from the bridge on Monday evening, police had said on Tuesday.

Siddhartha left Bengaluru on Monday afternoon to Sakleshpur near Hassan, where he has a house and one of his coffee estates. He told Patil to drive towards Mangaluru after a short break at Sakleshpur to freshen-up.

Siddhartha is the elder son-in-law of senior BJP leader, SM Krishna, who was the external affairs minister in the UPA-2 government (2009-12) and state chief minister (1999-2004) when in the Congress.

(Source: HT)

VG Siddhartha: Cafe Coffee Day tycoon's body found

The body of the founder and owner of India's largest coffee chain, Cafe Coffee Day, has been found near a river on the outskirts of the southern city of Mangalore, police say.

VG Siddhartha went missing on Monday after apparently walking away from his car and driver.

On Tuesday, police said a body had been found by fishermen on the river.

The identity was confirmed by members of Mr Siddhartha's family after the body was taken to hospital.

Mr Siddhartha's company, Coffee Day Enterprises Limited, held an emergency board meeting on Monday to discuss his absence. In a statement, it appealed for "the support and strength of all our stakeholders".

In a note to the stock exchange it said the company was "professionally managed and led by a competent business team" which would ensure the "continuity" of business.

Who was VG Siddhartha?
The 59-year-old coffee tycoon, who has been described in local media as "soft spoken" and "self-effacing", was not fond of the limelight.

He was born to a family of coffee plantation owners, but his first company was an investment firm. He used the profits from it to enter the coffee business, according to PTI news agency.

His decision to open a chain of cafes was inspired by a chat with the owners of Tchibo, a German coffee chain. Cafe Coffee Day opened its first outlet in the southern city of Bangalore in 1996. It wooed customers by offering them free internet with a cappuccino.

Mr Siddhartha saw the chain become one of the biggest brands in the country. It remained competitive even against global rivals such as Starbucks.

"He is singularly responsible for increasing domestic coffee consumption in India. There can be no doubt about it. In those days, we were completely dependent upon the export market and the heavy regulations on its sale," Dr SM Kaverappa, former vice chairman of the Indian Coffee Board, told BBC Hindi.

Mr Siddhartha is the son-in-law of former Karnataka chief minister SM Krishna and his wife is on the board of Cafe Coffee Day. The couple have two children.

What do we know about his disappearance?
Mr Siddhartha was travelling to Mangalore on Sunday evening when he asked his driver to stop the car on a bridge over the Netravati river on the outskirts of the city.

His driver told police that Mr Siddhartha then got out of the car and told him he wanted to take a walk. He also instructed him to park the car further ahead.

When Mr Siddhartha did not return after half an hour, the driver called his mobile phone - only to find the number switched off.

Alarmed, he informed the police who assembled two teams and searched the river on Sunday and Monday.

A fisherman found his body on Tuesday morning.

Why is his letter to the board of directors causing controversy?
In the letter, Mr Siddhartha says he was in debt and had "failed to create the right profitable business model despite my best efforts". It was signed by him and was also shared by his company with the stock exchange. It has since been widely circulated.

Mr Siddhartha's family verified he wrote the letter, police told BBC Hindi's Imran Qureshi.

"I am solely responsible for all mistakes. Every financial transaction is my responsibility," it said. "My intention was never to cheat or mislead anybody. I have failed as an entrepreneur."

However, Mr Siddhartha also accuses a former director general of the income tax department of harassing him, which he says, led to a "serious liquidity crunch".

This has caused a political outcry, with opposition MPs calling it targeted harassment. They are expected to raise the issue in parliament on Wednesday.

The income tax department has denied the allegation and questioned the letter's authenticity, saying that the signature did not appear to match Mr Siddhartha's signature on his company's annual financial reports.

The company board, too, has questioned the letter's authenticity in a statement, adding that it would "thoroughly investigate the matter".

How big is Cafe Coffee Day in India?
Cafe Coffee Day is India's largest coffee franchise chain. It has about 1,750 cafes across the country and some international outlets including in Malaysia, Nepal and Egypt.

However, local media reports have said its rate of expansion had slowed significantly over the last two years in the face of increased competition.

Mr Siddhartha owned a 33% stake in the company, but through his family and holding companies controlled closer to 50%.

The local Economic Times newspaper reported that he had been in talks with Coca-Cola to sell the company for $1.45bn (£1.19bn) although this was not officially confirmed by either side.

Mr Siddhartha's letter said the chain was struggling with financial problems due to debt, taxes and share buy backs.

Shares of the company have fallen by around 20% since his disappearance was reported.

(Source: BBC)

Indian coffee tycoon V.G. Siddhartha's body found floating in river

Authorities in Karnataka recovered the body of coffee baron V.G. Siddhartha floating in a river on Wednesday, two days after his disappearance sparked speculation that he was under intense financial strain.

The recovery of Siddhartha’s body unnerved investors in his flagship listed Coffee Day Enterprises Ltd and sent its shares plunging to an all-time low on Wednesday.

Coffee Day Enterprises held an emergency board meeting on Wednesday and named independent board member S.V. Ranganath as interim chairman. The company has also set up a committee that will be vested with the powers of the chief executive and they will explore opportunities to deleverage the Coffee Day Group.

A letter, purportedly written by Siddhartha and addressed to his board and employees, said he “gave up,” blaming an unnamed private equity partner for pressuring him into a share buyback and tax authorities for “harassment” and decisions that caused a liquidity crunch.

Siddhartha’s letter also mentioned hidden transactions that even auditors and senior managers were unaware of. Reuters was not able to confirm the authenticity of the letter, which was available on social media and published by local media.

While the authenticity of the letter has still not been verified, the board has taken serious note of its contents and will thoroughly investigate the matter, the company said.

Shares in Coffee Day hit their lower limit for the trading day and plunged 20% to a fresh all-time low of 122.75 rupees on Wednesday, fresh off the back of another 20% slide on Tuesday.

“I think the company, its brand, its franchise has value, if it gets sold to an external buyer,” said Deepak Jasani, a senior vice-president at HDFC Securities. “A lot will depend on whether and when the board or top management takes a call on selling the business or not.”

POLITICAL OUTCRY
Siddhartha was travelling to Mangaluru, a port city about 350 km (218 miles) from India’s tech hub Bengaluru, on Monday when he asked his driver to wait for him on a bridge while he went for a walk, according to police.

The driver alerted the police when Siddhartha did not return.

“We found the body about half a kilometre from the sea,” said Ritesh D’Souza, 34, a local fisherman who helped retrieve Siddhartha’s body.

Authorities declined to say whether they were treating his death as suicide or foul play.

Siddhartha, 59, was widely recognised for having brought the coffee shop culture to a largely tea-loving India and he was also hailed as one of the country’s early venture capital investors.

India’s opposition parties seized on the letter, accusing Prime Minister Narendra Modi’s administration of spooking businesses with heavy-handed tactics.

“His is the ugliest example of how agency persecution is wrecking India’s growth story,” tweeted Congress politician Milind Deora. “Hope govt reflects on its anti-business policies!”

The government did not immediately respond to a request for a comment on the allegations made by the opposition.

The Income Tax department issued a statement on Tuesday saying Siddhartha had failed to disclose some income, and it stressed that authorities’ actions were normal.

DEBT WOES
Siddhartha, who hailed from a coffee-growing family, opened his first coffee shop in 1996, more than a decade before global coffee shop giant Starbucks began its foray into the country. His Cafe Coffee Day chain boasts more than 1,600 outlets servicing a burgeoning middle class.

Siddhartha, who owns a direct stake of 32.75% in Coffee Day Enterprises, was also widely seen as a savvy investor who made some prescient early investments in Indian IT service firms such as Infosys and Mindtree in the 1990s, years before global firms began to bet on Indian start-ups.

His flagship entity, however, faced queries recently over outstanding debt, competition from trendier rivals, and scrutiny from tax authorities over unpaid dues.

Siddhartha, his family and their holding companies pledged or encumbered about 75.7% of their stake in Coffee Day toward various borrowings. Coffee Day’s 2018 annual report showed Siddhartha had personally guaranteed most of the borrowings.

Siddhartha’s letter, which included a list of many assets, stated that the value of the company’s assets outweighed its debts, and these could be use to repay everybody.

(SOurce: Reuters)

Hotel JW Marriott fined Rs 25,000 for ‘illegal tax’ on two bananas Rahul Bose ordered

Fresh fruits are not taxable under the GST law. According to HSN/ Chapter 803, bananas, including plantains, fresh or dried come under zero tax rate and are exempted.

The Chandigarh Excise and Taxation department on Saturday penalised hotel JW Marriott for charging “illegal tax” on two bananas that cost a whopping Rs. 442.50 to actor Rahul Bose. The five-star hotel was slapped with a penalty of Rs 25,000.

After confiscating relevant records, the hotel was served a showcause notice to which they were supposed to reply on Saturday and also attend a personal hearing.

Fresh fruits are not taxable under the GST law. According to HSN/ Chapter 803, bananas, including plantains, fresh or dried come under zero tax rate and are exempted.

Confirming the development, UT Assistant Excise and Taxation Commissioner (AETC), Rajeev Chaudhary said, ” Yes, the hotel has been indicted for illegal collection of tax – because they charged tax on bananas which come under the category of fresh fruits that are a tax free item. Fresh fuits are not taxable as per law. We have imposed a penalty on them.”

You have to see this to believe it. Who said fruit wasn’t harmful to your existence? Ask the wonderful folks at @JWMarriottChd #goingbananas #howtogetfitandgobroke #potassiumforkings pic.twitter.com/SNJvecHvZB

— Rahul Bose (@RahulBose1) 22 July 2019

The AETC said that a penalty of Rs 25,000 has been imposed on the hotel— Rs 12,500 under CGST and Rs 12,500 under UTGST—for charging the actor Rs 67.5 tax for two bananas. The penalty has been imposed under section 125 of CGST act and section 21 of UTGST act.

The hotel authorities were asked to submit a reply by 11 am today. “The hotel authorities could not give a satisfactory reply to our notice. They did come for a personal hearing and sought more time which we did not allow. Citizens should be alert and can complain to us wherever they find that they are being charged illegally,” Chaudhary said.

Excise and Taxation Commissioner Mandip Singh Brar had ordered a high level investigation to probe GST on two fresh bananas in hotel JW Marriott following a tweet by the actor.

Later, a three member team was constituted by the Excise and taxation department on Thursday that visited the hotel in sector 35 and seized all relevant records. Excise officials had stated that prima facie, the case is also a violation of Consumer protection act, 1986.

While talking to The Indian Express, Excise and Taxation Commissioner Mandip Singh Brar said, “Everyone should be careful as charging tax to citizens on tax free items is not allowed at all.”

The committee constituted comprised Assistant Excise and Taxation Commissioner Rajeev Chaudhary, Excise and taxation officers RL Chugh and Arun Dheer. The committee will continue to probe records of the hotel to see if they are actually depositing tax on other items with the government or not.

No official statement has been released by the hotel authorities till now.

(Source: Indian Express)

Reimbursement part of salary to come under GST? A rule change may make you pay more taxes

A large chunk of the reimbursement part of employees working in private sector may come under taxation net as the government is said to be mulling over bring "indirect earning" under the Goods and Services Tax (GST). The relevant amendment in the GST rules may be discussed and approved in the next meeting of the GST Council.

The idea of bringing reimbursements under the GST net flows from a recent ruling of the Authority of Advance Rulings (AAR) on canteen charges. The AAR ruled that the canteen charges recovered from an employee were to GST rates.

This ruling may prompt employers to stop charging for canteen services in a bid to save taxes, which, in turn, is likely to impact the salary packages. The employers would not prefer to increase the cost to company for their employees.

In a case involving a Kerala-based footwear company Caltech Polymers, the AAR ruled, "recovery of food expenses from the employees for the canteen services provided by company would come under the definition of 'outward supply' as defined in Section 2(83) of the Act, 2017, and therefore, taxable as a supply of services under GST."

Is the ruling going to impact other parts of reimbursement component of salary? "The decisions by the Authority of Advance Rulings are not binding on the GST Council. Both are independent of each other. The AAR works under finance ministry and has a lot to do with the Income Tax department while the GST is dealt with by a separate GST Council," chartered accountant Manindra Tiwari told Indiatoday.com.

"However, the GST Council may consider the rulings given by the AAR while considering revision in GST rules. The logic is simple: the reimbursements are not taxed because they are claimed after expenses have been made and relevant taxes already paid. But, the counter logic is that reimbursements involve earnings made indirectly and hence should be taxed," Tiwari further explained.

There has been an argument that the companies may be making recoveries avoiding taxes through salaries of their employees without issuing due invoices. "There is strong likelihood that some part of reimbursement may be brought under indirect taxation through GST," Tiwari said.

If the GST Council agrees to expand the ambit of the GST to bring reimbursements under the indirect tax net, it is certainly going to burn bigger holes in the pockets of employees working in private sectors.

So, reimbursements on home rentals, telephone bills, premiums for additional health insurance coverage, health check-ups, conveyance, gym, professional attires, entertainment or similar expenditure may attract GST. The corporates may soon be found restructuring salaries of their employees, to pass on the additional GST cost on to employees.

(Source: India Today)

Petrol prices may come down from Rs 70 to Rs 38 under GST. Will government do it?

While most of the taxable articles moved under the GST regime, petroleum products are still governed by VAT system.

Questions are being asked if Finance Minister Arun Jaitlely-headed GST Council will pay heed to Petroleum Minister Dharmendra Pradhan's suggestion on petroleum prices.

"The Petroleum products' inclusion in GST only way for rational fuel prices," tweeted Dharmendra Pradhan as the petroleum prices reached three-year high. Bringing petroleum products under the GST regime will make the fuels cheaper.

In Mumbai, petrol prices touched Rs 80 a litre while in Delhi, it is over Rs 70 per litre. If petrol is brought under GST, it may cost as little as Rs 38.10 in Delhi at 12 per cent GST rate.

It was August 2014, when petrol prices breached Rs 70 mark the last time. Back then the crude oil prices was around USD 98 per barrel. But, now the crude oil prices are hovering around USD 50 per barrel.

WHY ARE PETROL, DIESEL SO COSTLY
According to data released by the Indian Oil Corporation for the petrol price build up in Delhi, the fuel costs only Rs 26.65 at the refineries. Dealers get a litre of petrol at Rs 30.70. But, petrol is sold at Rs 70.39 a litre in Delhi. This means Rs 39.41 is charged as tax component and dealer's commission on every litre of petrol sold in the national capital.

While most of the taxable articles moved under the GST regime, petroleum products are still governed by VAT system. Different states have different rates of VAT applicable on petroleum products.

As per the data available with the Petroleum Planning and Analysis Cell (PPAC), Delhi charges a VAT of 27 per cent on petrol while it is 47.64 per cent in Mumbai, Thane and Navi Mumbai. This explains the difference of about Rs 9 in the petrol prices in the two cities.

CENTRE'S SHARE IN HIGH PETROL PRICES
Centre imposes excise duty on petrol and diesel. As per the PPAC data, excise duty on petrol has increased by 54 per cent since November 2014. An average increase of 46 per cent has been seen with regard to VAT on petrol while dealer's commission has been increased by as much as by 73 per cent.

Similarly, in the case of diesel, the excise duty has gone up by 154 per cent, VAT by 48 per cent and dealer's commission by 73 per cent. The excise duty on petrol and diesel has been increased on 12 occasions since 2014.

The combined effect of taxation on petroleum product by the Centre and the state governments is that the prices of petrol and diesel have gone back to 2014-level while the crude oil have become cheaper by little less than half.

It is not a surprise that during the same period revenue from petroleum products has increased from Rs 3.32 lakh crore in 2014-15 to Rs 5.24 lakh crore in 2016-17.

WHAT IF PETROLEUM COMES UNDER GST
Under GST, the petrol and diesel prices under the present circumstances will become substantially cheaper. The GST regime provides for taxation rates of 0, 5, 12, 18 and 28 per cent. Petrol and diesel can't be expected to be taxed below 12 per cent.

At 12 per cent GST, the petrol will be sold at Rs 38.1 in Delhi - almost Rs 32 cheaper than the current rate for one litre of the fuel. At 18 per cent, petrol will be 40.05 a litre in Delhi while at 28 per cent, it will cost Rs 43.44 per litre.

If the SUV compensation cess is imposed over and above 28 per cent GST on petrol, it will cost Rs 50.91 in Delhi - still about Rs 20 cheaper than the existing rate.

As for diesel, its current price in Delhi is Rs 58.72 per litre. At 12 per cent GST, diesel will sell at Rs 36.65 in the national capital. At 18 per cent GST, diesel will cost Rs 38.61.

At 28 per cent GST, diesel will cost Rs 48.88 in Delhi and if SUV cess is imposed, the customers will have to pay Rs 49.08 for a litre of the fuel - still Rs 9.64 cheaper than the existing rate.

But, bringing petroleum products under the GST involves politics. Under the GST Act, the decision to bring petroleum products under the new taxation regime can only be taken by the GST Council which has heavy representation from states, which are not ready to let go the hen laying golden eggs.

(Source: India Today)

Here is how traders are avoiding tax post GST in India

Businesses are already coming up with innovative ways to ensure that their products remain exempt or at lower rates under the goods and services tax (GST). How are they making it possible? Here's a look:

At the midnight of June 30, GST was rolled out in India at a grand event in the historic Central Hall of the Parliament. At the event, Prime Minister Narendra Modi had said that only will GST help us create One Nation, One Tax but will also help in bringing more transparency and end corruption. A week into the implementation of the Goods and Services Tax, traders in India have already found a way to avoid tax and save money. According to a report by ET, businesses are already coming up with innovative ways to ensure that their products remain exempt or at lower rates under the goods and services tax (GST). How are they making it possible? Here’s a look:

Under the GST regime, footwear below the price of Rs 500 are being taxed at 5% while above that at 18%. So to save the tax, shopkeepers have started to make a separate bill for each shoe of the pair, as per the report. Similarly, in clothing, apparel under the price of Rs 1000 is taxed at 5% while above it will be charged at 12%. So, the sellers have decided to sell different parts of a garment on different bills. So, if a shopkeeper gives you separate bills for your kurta and pyjama, don’t be surprised.

Another loophole is that branded rice is taxed at 5% while unbranded rice is exempted from it. India Gate, which is the largest selling rice brand in the country is already trying its best to exempt from paying goods and services tax (GST) as it didn’t get its brand name registered under the Trade Marks Act 1999. “This is to further clarify, declare and certify that ‘India Gate, Indian Farm, Lotus and Unity’ brands are owned by KRBL Ltd but since they are not registered in Class 30 under ‘Trade Marks Act, 1999’ hence ‘NIL’ GST rate is applicable on it,” KRBL Ltd, which sells India Gate packaged rice, said in an internal communication dated 3 July, as per a report by Livemint.

This scope of avoiding tax or paying fewer rates became possible because the government decided multiple rates under GST. While few products are exempt from tax, others are charged at 5%, 12%, 18%, 28% and 28% plus cess. Also, the tax will be divided between the state and the Central governments.

(Source: Financial Express)

Rs 100 ATM withdrawal to cost Rs 3 more due to 18 per cent GST

From July 1, the government has implemented the much publicised Goods and Services Tax that charges all the financial services in country under 18 per cent tax slab. Earlier, the service tax rate for these services was 15 per cent. It means there is a 3 per cent rise in tax incidence on country's financial services.

According to media reports, revised tax rates wuld increase cost of a banking transaction which means customers will have to pay Rs 3 more for every Rs 100 withdrawn from ATM.

It may be noted that banking customers are at present giving 15 per cent service tax for depositing cash, withdrawal from ATM, credit and debit cards, insurance premiums and EMIs.

Due to increased service tax under GST regime for financial services, banking services like withdrawals from ATMs, requests for cheque books, cash deposits and issuance of demand drafts would cost more than it did earlier.

Revised tax rate under GST would also apply on servicing charges and yearly maintenance contracts that cost of which would be borne by the banks, according to a report in The Financial Express.

The Bharatiya Janata Party-led government headed by Prime Minister Narendra Modi broke from customary way of launching a public policy scheme. On midnight of June 30, it held a grand ceremony in Central Hall of Parliament to kickstart India's largest tax reform effective July 1.

State Bank of India (SBI) chairperson Arundhati Bhattacharya had shed further light on the tax rate for India's banking sector. She had told DNA newspaper that for all services provided by banks, cost of the service will be added to the service tax.

"Under the GST regime, this will get converted into the cost of the service plus the GST, which will go up from the existing service tax rate of 15 per cent to 18 per cent," she added.

(Source: DC)

India's GST rates highest in the world

India's GST structure changed on July 1, 2017. GST will revolutionize the way Indians pay taxes and yet it a tax reform that most Indians have failed to completely understand.

What is GST and how will it change the tax structure?

GST or Goods and Services Tax is a detailed, multi-layered, destination-based tax that will be levied on every purchase.  It is an indirect tax applicable throughout India, replacing multiple cascading taxes charged by the central and the state government.
GST is governed by the GST Council and its chairman is the Finance Minister of India (presently Arun Jaitley).

Under GST, goods and services will be taxed under tax slabs of 0 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent. There is a special rate of 0.25 per cent on rough precious and semi-precious stones and 3 per cent on gold.

Almost 60 per cent of all goods under GST fall under the 18 per cent or the 28 per cent tax bracket, to ensure that the revenues earned by both centre and the state governments remain the same. While unpackaged grains and milk remain tax-free, items like hair oil, shampoos, deodorants and even chocolates are taxed at 28 per cent.

GST's role in transforming the economy:

GST will play a significant role in transforming the current tax structure, and therefore, the economy.Originally, the tax structure was divided into direct tax and indirect tax. The liability of the indirect tax could be transferred to the buyer when a seller sells his product. But GST addresses this problem.GST has a system of Input Tax credit which will allow sellers to claim the tax they already paid while purchasing from the retailer, so the final liability on the end consumer is decreased.
How does GST work?

There are three kinds of applicable Goods and Services Taxes. They are:
CGST: where the revenue will be collected by the central government

SGST: where the revenue will be collected by the state governments for intra-state sales

IGST: where the revenue will be collected by the central government for inter-state sales

The tax structure under GST would be:

Sale within the state: CGST + SGST

Sale to another state: IGST

GST around the world

Under the dual-GST structure both the central and the state governments have the power to collect taxes.
India has the highest tax rate out of all the countries that have implemented GST.

Let's take a look at the GST structures around the world:

1. France
There are 4 rates of VAT in France: 2.1 per cent, 5.5 per cent, 10 per cent and 20 per cent since its first implementation in 1954

2. United Kingdom
Since 2011, UK's VAT is set at 20 per cent

3. Ukraine
There are two VAT slabs in Ukraine, which are 20 per cent for most goods and services and 7 per cent mostly for medicines

4. New Zealand
GST was introduced in New Zealand in 1986 at a rate of 10 per cent which was later increased to 15 per cent in 2010

5. Australia
Introduced in 2000, the rate has been set at 10 per cent

6. Vietnam
Three VAT rates of 0 per cent, 5 per cent and 10 per cent are applied to most goods and services in Vietnam unless stated otherwise

7. Singapore
Implemented at 3 per cent in 1994, GST was increased to 7 per cent in 2007

8. Malaysia
Introduced in 2015, Malaysia's GST is set at 6 per cent

9. Canada
GST is set at 5 per cent on supplies of goods or services and includes most products. In some provinces of Canada, a Harmonised Sales Tax of 15 per cent is also charged

(Source: India Today)