Friday, October 28, 2016

Taxed Out

I was recently on holiday in Australia. While we stayed with AirBnb for most of the trip, and cooked up our own food, occasionally, we did eat from out. There was a tonne of Asian cuisine restuarants sprinkled all over the country. But what surprised me more than the range of the food available, was the cost. It was not that expensive. Sure,it was all dollars,  and we Indians tend to convert everything to rupees…  but there were lot of options for low cost meals too. And I think the main reason the cost was low was because of low taxing.
I repeatedly kept noticing that whatever we bought, wherver we ate, the tax calculated on the service was never more than 10% ! That’s it. It was just under 10% for clothing, at restuarants, and even domestic plane tickets. Amazing !
If you eat out in India at any restuarant, the taxes will come to 20% ! The bill will nicely break up this into three different taxes. There is the 14.5 % VAT. Then 5.6 % service tax. Then the government’s swach barath and kissan cess, each of .2%.  Now the new amount is 20% more than the original bill !  For a dinner for four people, you will have to pay for an absent fifth !  Then the restuarant may charge you a service charge of 10%, and they can charge whatever they want.  And if there is any alcohol, there will be an additional 20% tax on only that.
What the hell is happening ? If a country like Australia can run itself with a 10% VAT/GST, why does India need to charge 20% tax ? This might go up to 30% too. And we have more people, and therefore more people eating out on any given day. The same goes for purchases and online services .
Surely the country has no shortage of income. What they need to fix is what they are doing with all that income.
Bon Apetit ! And Happy Diwali !

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