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To a large extent, this means there will be cost
reduction at the point of origin. This is because GST is to be levied on the
value added at each stage of sale and purchase or supply with an in-built credit
mechanism such that the tax is a pass-through for businesses, and the tax-burden
is borne by the ultimate customer.
Tax compliance is expected to go up as GST will rely on
computer-enabled systems. So a unique identification number could generate a
centrally captured trail all the way from the manufacturer to the end retailer.
Today, if it wishes, a major retailer can opt not to register select purchases
in its system and make cash purchases.
For companies, the benefit will be in the form of lower
tax rates owing to a larger tax base and better compliance.
2 Companies Bill 2009
Last year the Companies Bill 2008 was introduced in the
Lok Sabha but did not become law. It was re-introduced in Parliament as the
Companies Bill 2009 and is likely to become law in 2010.
If it does, it will likely bring about significant
changes in the way business is done in India, make it easier to start and close
businesses, and protect shareholders. The bill, introduced by Corporate Affairs
Minister Salman Khurshid, is centred on stakeholder protection, with provision
for class action suits that allow a group of people with a similar grievance to
file a joint petition.
It has met with stiff resistance from certain quarters
of the legal fraternity who believe the new bill will only create confusion and
overlap and conflict with numerous existing laws.
3 Fast Tracking Justice
Weighed down by the burden of legal reform, Law Minister
Veerappa Moily has taken on the biggest bet of his career, yet. In October this
year, he unveiled an audacious roadmap for judicial reforms to reduce the
average life of litigation from 15 to just three years, a task he wants
accomplished by December 2011. The multi-pronged initiative looks promising with
provisions for a National Arrears Grid to compile accurate data and appointments
for additional high court and lower court judges temporarily to bring down the
court congestion.
One of the proposals includes the setting up of a
special purpose vehicle involving the likes of TCS, Infosys and Wipro as well as
Innova (the satellite communication provider). The SPV will set up e-systems
that will enable the justice administration system to move faster. The SPV will
also recruit competent hardware and software personnel who will be attached to
the high courts. The techies will also take classes on e-systems for personnel
with district courts.
Source:
Moneycontrol.com, India, dated
22/12/2009
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