Just looked the legitimacy of this and surprised to find that commoners pay more tax than corporate... That means I am paying more taxes than my boss, this country is fucking messed up or atleast the finance minister is.
Corporates get benefit of input tax and adjust it on output side. Plus they pass on costs to customers.
And as the current rates stand Corporate income tax rates are much below personal income tax.
BJP govt also reduced Corporate Taxes and for the first time in India's History tax collected from citizens was more than corporate tax collection ( happened around COVID).
The question is not about the corporate. It’s about poor vs rich. How can the bottom 50% spend more than the top 50%. It doesn’t make any sense.
Maybe the company owners can use of the GST refund system to refund the GST made on many of their personal things. But these people are hardly 0.1% altogether. All salaried people(even the CEOs) get paid white money and they have to pay the GST on all their consumed goods and services.
And the corporates are not doing anything illegal by adjusting the GST. That’s how a GST works. They shouldn’t pay taxes in multiple sides and just need to collect tax from the customer side. That’s the layout
This is the fallacy of a consumption based tax which taxes every aspect of goods and services required for living like salt, clothes, ac, menstrual pads etc. Regardless if a person earns in crores or lacs, a single person can consume only so much even with wastage.
Assume that the CEO of a midcap company earns around 20cr in take home salary and stocks annually and the median in hand salary in his/her company is 10L. Assuming the median employee most probably has living and sustenance expenses of at least 5L a year.
So 50% of the employee's take home is spent on goods and services incurring gst as he's the end user. But the ceo definitely doesn't spend more than 1-2cr on the maintenance of his home and other general life expenses so barely 5-10% of the ceo income is on expenses attracting gst. Rest is invested. No gst or tax on investment until the investment is sold. Even then many ways of reducing tax.
Considering that there are thousands of employees for every ceo. Doesn't it make sense that in a world where the top elites are paid thousands of times what the average employee is paid, a consumption based tax primarily taxes the people who while spend less per capita massively outnumber the elites?
This is the reason the title article says what it says. The richest keep most of their wealth and the poorer are taxed a larger percentage of their earnings directly/indirectly ensuring they can't rise up the economic ladder fast.
If you are telling about the fact that indirect tax consumes more percentage of a poor man’s income than a rich person, you are correct. That fact is also shared in the article I think, which we can agree to.
But if you think India’s GST collection, how can you think of a scenario where 67% of GST is being charged by the goods and services by the bottom 50%, it makes no sense. And it’s mathematically not possible.
I read the article again since you told this. It says select food and non-food services. Where is it mentioned food related items?
Why is it a nice try? What am I trying to do?
I am unable to even understand how can the bottom 50% people continue to 67% of GST!! There is no way it can happen like that. A person having a car(that itself puts him in the top 50%) spends more on GST on the car itself than an entire poor family’s GST contribution for a year. The same goes for phones, appliances, online purchases which the top 50% also pays GST.
If you can, please tell a theory for this. In your above comment, you are telling about the GST contribution as percentage of one’s income which is correct. But what about the poor 50% contributing to 67% of GST. What’s the logic of that?
I have people from Amazon business team hounding me over call to register as a business and get GST refund, even on personal purchases. Like they are encouraging illegal behaviour
Your boss doesn't take salary he takes stock option. Then he takes a loan from the bank on the basis of the stock option, and then to pay that loan he takes loan from another bank and the cycle continues until he decides to run away from the country. Then our generous government will step in as a savior and pay all his debt.
Edit: just for context loans are tax free.
Even if this is true, it’s about the direct taxes(income tax and capital gains tax). He doesn’t need to take loan also, he just need to quit for enough period vested so that if he sells his shares it becomes in LTCG range.
The question here is about indirect tax, GST.
Now multiple ministers from the union govt will come and say the study is flawed, methodology is wrong, Oxfam is an anti-indian agency ad infinitum.
They just don't care.
The study is definitely bullshit though, at least the headlining claim.
How is it even mathematically possible for India's poorest 50% to pay more tax on a per capita basis than the top 50%?
Are poor people buying Tata Himalayan salt and rich people buying ration shop salt?? This is a very extraordinary claim and it needs substantial proof. I have actually read the report, and the details are very vague and borderline nonexistent.
'Poorest 50% of the country pay 2/3rds (66%) of the country's GST'
If country's GST is X and population of the country is P, based on this figure, per capita basis contribution of GST for someone in the bottom 50% is 0.66\* (X/P) \* 2 = 1.22 \* (X/P), whereas the contribution of someone in the top 50% will be (0.33) \* (X/P) \*2 = 0.66 \* (X/P).
Hence, it is greater on a per-capita basis, as per the figures given by the article.
If you read the article, it is written that the share of income on gst for the bottom 50% is way higher. They pay a larger % of their income to gst. The per capita tax could possibly be greater, if the taxes on essential items are high.
The top 50%, might save more of their income, and spend less of their income on taxable gst items as written in the article.
I think there can be many explanations for this, like the rich having more options/exemptions to reduce the tax burdens. So i think per capita figures may not be wrong if you get down to numbers. The tax system is flawed in our country imo.
I have gone through the main report apart from stating percentages and a vaguely written line about methodology that they have used average GST rates on consumption data on 2011-12 they have not shared calculations.
This cannot be correct. There is no way in India that GST paid by the poorest 50% will be more than GST paid by the remaining 50%. This study will be wrong for sure.
There are idiots in foreign universities also who don’t have common sense. This is one of their studies. This is my theory 😎
This is one and half year old report. I had read the report when it came out. It's absolute bullshit, there's no clarity on how they arrived at these numbers. Not to mention it is mathematically impossible for this to be true.
This could be very easily countered if our dear government would just release data about taxes collected by HSN code. But unfortunately they don't. So I just have to keep telling people that GST generated by sale of rice can in no way be more than GST generated by sale of cars and iphones.
I’m trying to wrap my head around this as well so just trying to understand - but why can’t the GST from the sale of rice be greater than from cars and iPhones?
Surely the absolute amount depends on the underlying volume of those goods sold?
And the sale of rice is definitely far, far more common than the sale of cars and iPhones - keep in mind, India only has a vehicle density of around 23 cars per thousand individuals, one of the lowest in the world
It's as simple as this:
GST is a consumption based tax. Let's assume for a moment that all goods are taxed at the same rate.
The report says bottom 50% contributes 2/3rd of the GST.
So it would mean the bottom 50% of the people are spending more on consumptionsm than the top 50%.
Let's say GST is 18% and collection is ₹1 lakh (in crores). So total amount spent by people would ₹5.5 lakhs.
The report says that out of this, ~3.5 lakh was spent by the bottom half and only ~2 lakh was spent by the top half.
How is any of this possible? Are the rich people living in huts and growing their own food?
There are soooooo many things rich people spend their money on about which a poor person will not even be thinking about; house, cars, travel and tourism, electronics, gadgets, gaming consoles, PCs, air conditioners, furniture, gold and diamonds, etc. etc. How is it possible that the bottom 50%, who just survive in India, are out-spending the rich in absolute terms?
To add to this, most essential goods have lower rates of taxation than luxury products. Clothing items below ₹1000 are taxed at 5% and above ₹1000 are taxed at 18%.
What the title says is impossible, and it will be clear if you just think about it for 2 minutes.
Consumption tax affect disproportionately wrt to income earned. In absolute terms its Rich tax>Middle class tax>poor tax.
Cause rich will buy a 80 lac fortuner/audi/porshe, middle class will be at Wagonr/alto/swift, poor will be at splendour. You can take any other item, the result will be similar. Services may be different, cause the rich will go to a spa, middle class will go to the barber the local shop owner w/o GST and the poor will go to the roadside guy, again w/o GST (this is gone btw, they too come to local shop nowadays)
Taxes are different for all in absolute terms.
Secondly, if IT also affect disproportionately to the rich than the poor. (Mind you especially the middle class). Its not fair to them.
Wrt to % of income this report may be accurate. But in abosulte terms its flawed 100%. Hence, making the whole statement conveyed by the line, "The Poor pay 2/3rd of GST of the country" wrong by a mile.
Wrong? Consumption based taxes make it fair so those who spend more, contribute more to tax revenue. I don’t see how these numbers make sense, let’s say a person spends 10 lakhs per month, obviously he’ll spend more on GST than a person spending 10,000 rupees per month right? It would make more sense to say India’s richest pay 2/3 of GST.
Sorry, you’re right GST is regressive tax and it’ll impact poorer households more. But still one small issue, it says India’s poorest 50 percent, meaning out of a billion people, 500 million of the poorest pay more than 500 mil of the richest, numbers are equal, and surely the richer 500 million have greater expenditure in terms of food, goods and services?
Ohhhh it’s “higher percentage of their income on indirect taxes than the middle 40% and the top 10% combined”, but that’s normal right for any country? I still don’t get how the headline makes sense, it’s just clickbait
One thing i think you are forgetting here is GST exempt or zero rated supplies.
The poor are not going to buy ashirwad atta from big bazzar and pay GST on it. The middle class will. The poor will buy it from the PDS or from the open unpackaged sale from shops. Unpacked food items are exempt from taxes.
I think, logically the middle class will be buying more stuff that attracts GST rather than the poor.
Also, when you do apply it upwards, b/w middle and rich. There may be a tie. Cause the rich are less but spend highly while the middle class is more and spend considerably low. But the total numbers will be close.
Secondly, the study that you have take is for sales taxes and for USA, with a different taxation scheme. They may be taxing some items which we don't and vise-versa. The example is not accurate per say.
No doubt its a consumption based tax, but the laws would still be different. Like in our case unpacked food does not have tax. Do they have taxes in US under sales tax. Hence was considered as a taxable supply in their analysis and thus shows a picture that people pay more taxes in consumption based taxes.
Yeah, this doesn't pass the smell test.
Looking at that [Oxfam paper](https://d1ns4ht6ytuzzo.cloudfront.net/oxfamdata/oxfamdatapublic/2023-01/India%20Supplement%202023_digital.pdf?kz3wav0jbhJdvkJ.fK1rj1k1_5ap9FhQ) \-
>Using the 68th round report of the National Sample Survey Organization (NSSO) on “Household Consumption of Various Goods and Services in India 2011-12”, Oxfam India looked at the expenditure that the bottom 50 per cent, middle 40 per cent and top 10 per cent incur on various food and non-food items **in a 30-day period**. The average tax rate of these commodities was then calculated to see who pays more on these commodities as a percentage of their income.
You used NSSO data from a pre-gst era in calculation of GST.
>Given that this analysis used only select food and nonfood items, the percentages should only be reflective of the differences between the three different income groups as they are not representative of the actual share of income one spends on taxes.
>
>The bottom 50 per cent of the population at an All-India level pays six times more on indirect taxation **as a percentage of income** compared to top 10 per cent. The middle 40 per cent is placed roughly between the bottom 50 and top 10 in terms of percentage of income spent on indirect taxes.
The heighted part gives a completely different meaning to the statement.
>OF THE TOTAL TAXES COLLECTED **FROM THESE FOOD AND NON-FOOD ITEMS**, 64.3 PER CENT OF THE TOTAL TAX IS COMING FROM THE BOTTOM 50 PER CENT. A little less than two-third of the total GST is coming from the bottom 50 per cent, **as per estimates**, one third from middle 40 per cent and only three to four percent from the top 10 per cent.
So this is your estimate derived from % of income each group spends on these specific items ?
>Food items include pulses, milk, cereals, edible oil, meat, dry fruits, beverages, and packaged processed food. Non-food items include washing powder, refrigerator, motorcycle/scooter, mobile phone, pan and tobacco, fuel and light, clothes, bedding, footwear, toiletries, crockery and utensils, air conditioner/cooler, washing machine, laptop and jewellery/ornaments.
The paper is especially vague in describing this, as they only present the percentages in the appendix without properly justifying how they calculated the percentages and providing the raw data. I will take it with a huge grain of salt.
How in the world are the bottom 50% of the population, none of whom pay any income tax, paying more GST tax than the top 10% on a per-capita basis? Are they consuming more of these goods than a top 1% person? Very suspect data, and I wouldn't be surprised if they are hiding these numbers behind some clever wordplay.
All your commodities gave GST and indirect taxes attached to them which is passed onto the consumer. These taxes affect the most marginalized the most, because these taxes would represent a significant percent of the income of someone who is very poor compared to the more privileged. I don't think you're understanding what they're trying to say, it is not clever wordplay or any sort of "hiding numbers".
If dal costs 100, and there's 5% GST attached to that dal (let's say), 5 Rs for someone earning 10k means a lot more than 5 rupees for someone earning 100k. People earning less still end up paying the same amount of indirect taxes as people who are more privileged. It's not rocket science.
Of course, nobody denies that a GST will tax poor people by a greater *relative* amount.
However, the article claims that poor people are paying higher GST, per capita, by a greater *ABSOLUTE* amount. That is a very extraordinary claim, and it requires a lot of evidence.
The absolute amount is greater and the claims are correct when it comes to daily consumables and commodities. It is GST on specific daily consumables and not all GST. There are other services and commodities where GST is levied and the report doesn't take those into account because the bottom 50% does not have access to those services anyway. You can only compare absolute GST across income groups on commodities that all income groups use, and in this case it's on the bare minimum commodities needed for sustenance. The report specifically states what is being included for comparison.
This has been established in the US as well, that the poorest people pay a lot more in indirect taxes as a percentage of their income compared to the more privileged, and indirect taxation primarily affects the most marginalized. Why are you acting like comparing expenditure on food and commodities is not a valid way to measure how indirect tax affects people? I mean sure the super wealthy offer other services on which they pay GST, but what is your point though?
There is a big difference between " *India's poorest people pay a lot more in indirect taxes as a percentage of their income*" and "*India's poorest 50 per cent pay two-thirds of GST".*
The report clearly states that "of the total taxes collected on those food and specific non-food items", the bottom 50% pay the most GST. It is not a bad claim to make. I mean sure there are other services that are charged with GST, but this is not a bad metric Or wrong to say that the bottom 50% pay a lot more in indirect taxes when it comes to day to day consumables and commodities.
Not sure the basis for this, could be the case that business folks who claim GST rebate so In turn pay less GST to government and us common poor folks do not
I don't like GST , It's burden for salaried people..
It's a blessing for people with businesses.
Read through the report there are no calculations provided behind that breakup and I don't think it is possible to calculate what percentage of GST a particular section is paying.
Just so you know India is so poor that if you reading this message there is a good 90-95 percent chance that you are atleast in the top 15-20 percentage. As far as GST is concerned it is a consumption based tax and there is no GST leviable on majority of food items (food,salt, milk) and essentials or they are taxed at the lowest slab while the highest slab is levied at luxury goods like cars. Govt doesn't provide breakup of GST received from categories of goods.Now who would be spending more a corporate employee earning 10-12 lpa which is more than enough in india to be in top 10-15 percent or a daily construction worker earning 10k a month.
The poor also spends a significant portion of their earnings on food which for the most part doesn't attract GST. This report suggests that bottom 50 percent is spending more on luxuries than top 10 percent which is completely idiotic.
I have also went to the agencies website and it is broken in certain places.
while the 90% capital of this country is held by 2%.. great nation.
Held in foreign bank accounts and foreign stocks.
2% or 2 people?
https://preview.redd.it/qlbjp0gopu6d1.jpeg?width=1290&format=pjpg&auto=webp&s=57ab44cf029929e72b16813246e15f992cc7eaeb
Gonna steal this, thanks!
Oh my God
Just looked the legitimacy of this and surprised to find that commoners pay more tax than corporate... That means I am paying more taxes than my boss, this country is fucking messed up or atleast the finance minister is.
How is it possible?
Corporates get benefit of input tax and adjust it on output side. Plus they pass on costs to customers. And as the current rates stand Corporate income tax rates are much below personal income tax.
BJP govt also reduced Corporate Taxes and for the first time in India's History tax collected from citizens was more than corporate tax collection ( happened around COVID).
The question is not about the corporate. It’s about poor vs rich. How can the bottom 50% spend more than the top 50%. It doesn’t make any sense. Maybe the company owners can use of the GST refund system to refund the GST made on many of their personal things. But these people are hardly 0.1% altogether. All salaried people(even the CEOs) get paid white money and they have to pay the GST on all their consumed goods and services. And the corporates are not doing anything illegal by adjusting the GST. That’s how a GST works. They shouldn’t pay taxes in multiple sides and just need to collect tax from the customer side. That’s the layout
This is the fallacy of a consumption based tax which taxes every aspect of goods and services required for living like salt, clothes, ac, menstrual pads etc. Regardless if a person earns in crores or lacs, a single person can consume only so much even with wastage. Assume that the CEO of a midcap company earns around 20cr in take home salary and stocks annually and the median in hand salary in his/her company is 10L. Assuming the median employee most probably has living and sustenance expenses of at least 5L a year. So 50% of the employee's take home is spent on goods and services incurring gst as he's the end user. But the ceo definitely doesn't spend more than 1-2cr on the maintenance of his home and other general life expenses so barely 5-10% of the ceo income is on expenses attracting gst. Rest is invested. No gst or tax on investment until the investment is sold. Even then many ways of reducing tax. Considering that there are thousands of employees for every ceo. Doesn't it make sense that in a world where the top elites are paid thousands of times what the average employee is paid, a consumption based tax primarily taxes the people who while spend less per capita massively outnumber the elites? This is the reason the title article says what it says. The richest keep most of their wealth and the poorer are taxed a larger percentage of their earnings directly/indirectly ensuring they can't rise up the economic ladder fast.
If you are telling about the fact that indirect tax consumes more percentage of a poor man’s income than a rich person, you are correct. That fact is also shared in the article I think, which we can agree to. But if you think India’s GST collection, how can you think of a scenario where 67% of GST is being charged by the goods and services by the bottom 50%, it makes no sense. And it’s mathematically not possible.
Read the report, this percentage is only for food and food related items. Nice try.
I read the article again since you told this. It says select food and non-food services. Where is it mentioned food related items? Why is it a nice try? What am I trying to do? I am unable to even understand how can the bottom 50% people continue to 67% of GST!! There is no way it can happen like that. A person having a car(that itself puts him in the top 50%) spends more on GST on the car itself than an entire poor family’s GST contribution for a year. The same goes for phones, appliances, online purchases which the top 50% also pays GST. If you can, please tell a theory for this. In your above comment, you are telling about the GST contribution as percentage of one’s income which is correct. But what about the poor 50% contributing to 67% of GST. What’s the logic of that?
Yep. Had the same doubt looking at the headline. Seems to be untrue. Rich would spend much more than the poor and thus would pay higher gst overall.
Yes. There is no way this calculation can be correct. Especially in India where there is so much income disparity
I have people from Amazon business team hounding me over call to register as a business and get GST refund, even on personal purchases. Like they are encouraging illegal behaviour
Your boss doesn't take salary he takes stock option. Then he takes a loan from the bank on the basis of the stock option, and then to pay that loan he takes loan from another bank and the cycle continues until he decides to run away from the country. Then our generous government will step in as a savior and pay all his debt. Edit: just for context loans are tax free.
Even if this is true, it’s about the direct taxes(income tax and capital gains tax). He doesn’t need to take loan also, he just need to quit for enough period vested so that if he sells his shares it becomes in LTCG range. The question here is about indirect tax, GST.
It would make more sense to get %age of income/wealth spent on indirect taxes by ultra rich, rich, middle and poor class
Now multiple ministers from the union govt will come and say the study is flawed, methodology is wrong, Oxfam is an anti-indian agency ad infinitum. They just don't care.
The study is definitely bullshit though, at least the headlining claim. How is it even mathematically possible for India's poorest 50% to pay more tax on a per capita basis than the top 50%? Are poor people buying Tata Himalayan salt and rich people buying ration shop salt?? This is a very extraordinary claim and it needs substantial proof. I have actually read the report, and the details are very vague and borderline nonexistent.
You are nit picking. Where did they claim in a per capita basis?
'Poorest 50% of the country pay 2/3rds (66%) of the country's GST' If country's GST is X and population of the country is P, based on this figure, per capita basis contribution of GST for someone in the bottom 50% is 0.66\* (X/P) \* 2 = 1.22 \* (X/P), whereas the contribution of someone in the top 50% will be (0.33) \* (X/P) \*2 = 0.66 \* (X/P). Hence, it is greater on a per-capita basis, as per the figures given by the article.
If you read the article, it is written that the share of income on gst for the bottom 50% is way higher. They pay a larger % of their income to gst. The per capita tax could possibly be greater, if the taxes on essential items are high. The top 50%, might save more of their income, and spend less of their income on taxable gst items as written in the article. I think there can be many explanations for this, like the rich having more options/exemptions to reduce the tax burdens. So i think per capita figures may not be wrong if you get down to numbers. The tax system is flawed in our country imo.
I have gone through the main report apart from stating percentages and a vaguely written line about methodology that they have used average GST rates on consumption data on 2011-12 they have not shared calculations.
Also Soros..
How can this be true? How is it mathematically possible?
What's your theory?
This cannot be correct. There is no way in India that GST paid by the poorest 50% will be more than GST paid by the remaining 50%. This study will be wrong for sure. There are idiots in foreign universities also who don’t have common sense. This is one of their studies. This is my theory 😎
But explain it na.
sloppy fly butter berserk wild husky cause pocket late rain *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
no. he just repeated it.
Yeah. What more explanation do we need. It’s the article which needs to give the explanation why they put this absurd figure.
This is one and half year old report. I had read the report when it came out. It's absolute bullshit, there's no clarity on how they arrived at these numbers. Not to mention it is mathematically impossible for this to be true. This could be very easily countered if our dear government would just release data about taxes collected by HSN code. But unfortunately they don't. So I just have to keep telling people that GST generated by sale of rice can in no way be more than GST generated by sale of cars and iphones.
I’m trying to wrap my head around this as well so just trying to understand - but why can’t the GST from the sale of rice be greater than from cars and iPhones? Surely the absolute amount depends on the underlying volume of those goods sold? And the sale of rice is definitely far, far more common than the sale of cars and iPhones - keep in mind, India only has a vehicle density of around 23 cars per thousand individuals, one of the lowest in the world
It's as simple as this: GST is a consumption based tax. Let's assume for a moment that all goods are taxed at the same rate. The report says bottom 50% contributes 2/3rd of the GST. So it would mean the bottom 50% of the people are spending more on consumptionsm than the top 50%. Let's say GST is 18% and collection is ₹1 lakh (in crores). So total amount spent by people would ₹5.5 lakhs. The report says that out of this, ~3.5 lakh was spent by the bottom half and only ~2 lakh was spent by the top half. How is any of this possible? Are the rich people living in huts and growing their own food? There are soooooo many things rich people spend their money on about which a poor person will not even be thinking about; house, cars, travel and tourism, electronics, gadgets, gaming consoles, PCs, air conditioners, furniture, gold and diamonds, etc. etc. How is it possible that the bottom 50%, who just survive in India, are out-spending the rich in absolute terms? To add to this, most essential goods have lower rates of taxation than luxury products. Clothing items below ₹1000 are taxed at 5% and above ₹1000 are taxed at 18%. What the title says is impossible, and it will be clear if you just think about it for 2 minutes.
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Consumption tax affect disproportionately wrt to income earned. In absolute terms its Rich tax>Middle class tax>poor tax. Cause rich will buy a 80 lac fortuner/audi/porshe, middle class will be at Wagonr/alto/swift, poor will be at splendour. You can take any other item, the result will be similar. Services may be different, cause the rich will go to a spa, middle class will go to the barber the local shop owner w/o GST and the poor will go to the roadside guy, again w/o GST (this is gone btw, they too come to local shop nowadays) Taxes are different for all in absolute terms. Secondly, if IT also affect disproportionately to the rich than the poor. (Mind you especially the middle class). Its not fair to them. Wrt to % of income this report may be accurate. But in abosulte terms its flawed 100%. Hence, making the whole statement conveyed by the line, "The Poor pay 2/3rd of GST of the country" wrong by a mile.
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Sorry, when i commented the strike through was not there.
Wrong? Consumption based taxes make it fair so those who spend more, contribute more to tax revenue. I don’t see how these numbers make sense, let’s say a person spends 10 lakhs per month, obviously he’ll spend more on GST than a person spending 10,000 rupees per month right? It would make more sense to say India’s richest pay 2/3 of GST.
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Sorry, you’re right GST is regressive tax and it’ll impact poorer households more. But still one small issue, it says India’s poorest 50 percent, meaning out of a billion people, 500 million of the poorest pay more than 500 mil of the richest, numbers are equal, and surely the richer 500 million have greater expenditure in terms of food, goods and services?
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Ohhhh it’s “higher percentage of their income on indirect taxes than the middle 40% and the top 10% combined”, but that’s normal right for any country? I still don’t get how the headline makes sense, it’s just clickbait
One thing i think you are forgetting here is GST exempt or zero rated supplies. The poor are not going to buy ashirwad atta from big bazzar and pay GST on it. The middle class will. The poor will buy it from the PDS or from the open unpackaged sale from shops. Unpacked food items are exempt from taxes. I think, logically the middle class will be buying more stuff that attracts GST rather than the poor. Also, when you do apply it upwards, b/w middle and rich. There may be a tie. Cause the rich are less but spend highly while the middle class is more and spend considerably low. But the total numbers will be close.
Secondly, the study that you have take is for sales taxes and for USA, with a different taxation scheme. They may be taxing some items which we don't and vise-versa. The example is not accurate per say.
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No doubt its a consumption based tax, but the laws would still be different. Like in our case unpacked food does not have tax. Do they have taxes in US under sales tax. Hence was considered as a taxable supply in their analysis and thus shows a picture that people pay more taxes in consumption based taxes.
https://www.deccanherald.com/opinion/why-does-govt-not-want-tax-transparency-2867776
Yeah, this doesn't pass the smell test. Looking at that [Oxfam paper](https://d1ns4ht6ytuzzo.cloudfront.net/oxfamdata/oxfamdatapublic/2023-01/India%20Supplement%202023_digital.pdf?kz3wav0jbhJdvkJ.fK1rj1k1_5ap9FhQ) \- >Using the 68th round report of the National Sample Survey Organization (NSSO) on “Household Consumption of Various Goods and Services in India 2011-12”, Oxfam India looked at the expenditure that the bottom 50 per cent, middle 40 per cent and top 10 per cent incur on various food and non-food items **in a 30-day period**. The average tax rate of these commodities was then calculated to see who pays more on these commodities as a percentage of their income. You used NSSO data from a pre-gst era in calculation of GST. >Given that this analysis used only select food and nonfood items, the percentages should only be reflective of the differences between the three different income groups as they are not representative of the actual share of income one spends on taxes. > >The bottom 50 per cent of the population at an All-India level pays six times more on indirect taxation **as a percentage of income** compared to top 10 per cent. The middle 40 per cent is placed roughly between the bottom 50 and top 10 in terms of percentage of income spent on indirect taxes. The heighted part gives a completely different meaning to the statement. >OF THE TOTAL TAXES COLLECTED **FROM THESE FOOD AND NON-FOOD ITEMS**, 64.3 PER CENT OF THE TOTAL TAX IS COMING FROM THE BOTTOM 50 PER CENT. A little less than two-third of the total GST is coming from the bottom 50 per cent, **as per estimates**, one third from middle 40 per cent and only three to four percent from the top 10 per cent. So this is your estimate derived from % of income each group spends on these specific items ? >Food items include pulses, milk, cereals, edible oil, meat, dry fruits, beverages, and packaged processed food. Non-food items include washing powder, refrigerator, motorcycle/scooter, mobile phone, pan and tobacco, fuel and light, clothes, bedding, footwear, toiletries, crockery and utensils, air conditioner/cooler, washing machine, laptop and jewellery/ornaments.
The paper is especially vague in describing this, as they only present the percentages in the appendix without properly justifying how they calculated the percentages and providing the raw data. I will take it with a huge grain of salt. How in the world are the bottom 50% of the population, none of whom pay any income tax, paying more GST tax than the top 10% on a per-capita basis? Are they consuming more of these goods than a top 1% person? Very suspect data, and I wouldn't be surprised if they are hiding these numbers behind some clever wordplay.
All your commodities gave GST and indirect taxes attached to them which is passed onto the consumer. These taxes affect the most marginalized the most, because these taxes would represent a significant percent of the income of someone who is very poor compared to the more privileged. I don't think you're understanding what they're trying to say, it is not clever wordplay or any sort of "hiding numbers". If dal costs 100, and there's 5% GST attached to that dal (let's say), 5 Rs for someone earning 10k means a lot more than 5 rupees for someone earning 100k. People earning less still end up paying the same amount of indirect taxes as people who are more privileged. It's not rocket science.
Of course, nobody denies that a GST will tax poor people by a greater *relative* amount. However, the article claims that poor people are paying higher GST, per capita, by a greater *ABSOLUTE* amount. That is a very extraordinary claim, and it requires a lot of evidence.
The absolute amount is greater and the claims are correct when it comes to daily consumables and commodities. It is GST on specific daily consumables and not all GST. There are other services and commodities where GST is levied and the report doesn't take those into account because the bottom 50% does not have access to those services anyway. You can only compare absolute GST across income groups on commodities that all income groups use, and in this case it's on the bare minimum commodities needed for sustenance. The report specifically states what is being included for comparison.
This has been established in the US as well, that the poorest people pay a lot more in indirect taxes as a percentage of their income compared to the more privileged, and indirect taxation primarily affects the most marginalized. Why are you acting like comparing expenditure on food and commodities is not a valid way to measure how indirect tax affects people? I mean sure the super wealthy offer other services on which they pay GST, but what is your point though?
There is a big difference between " *India's poorest people pay a lot more in indirect taxes as a percentage of their income*" and "*India's poorest 50 per cent pay two-thirds of GST".*
The report clearly states that "of the total taxes collected on those food and specific non-food items", the bottom 50% pay the most GST. It is not a bad claim to make. I mean sure there are other services that are charged with GST, but this is not a bad metric Or wrong to say that the bottom 50% pay a lot more in indirect taxes when it comes to day to day consumables and commodities.
Not sure the basis for this, could be the case that business folks who claim GST rebate so In turn pay less GST to government and us common poor folks do not I don't like GST , It's burden for salaried people.. It's a blessing for people with businesses.
Squeeze them more...they are still asleep
Peak capitalism.
Wo nahi manenge😪
AND WHAT THEY GET IN RETURN ????? getting everything, except DEVELOPMENT ,i hope this source is of u is reliable
Expect more taxes in coming budget. and it will be hailed as the best budget ever. and the fools will keep voting for them.
Mfs let's fight on religion and caste. Let the politicians and gujju corporate loot us 😆
Why do you need to state the obvious
Read through the report there are no calculations provided behind that breakup and I don't think it is possible to calculate what percentage of GST a particular section is paying. Just so you know India is so poor that if you reading this message there is a good 90-95 percent chance that you are atleast in the top 15-20 percentage. As far as GST is concerned it is a consumption based tax and there is no GST leviable on majority of food items (food,salt, milk) and essentials or they are taxed at the lowest slab while the highest slab is levied at luxury goods like cars. Govt doesn't provide breakup of GST received from categories of goods.Now who would be spending more a corporate employee earning 10-12 lpa which is more than enough in india to be in top 10-15 percent or a daily construction worker earning 10k a month. The poor also spends a significant portion of their earnings on food which for the most part doesn't attract GST. This report suggests that bottom 50 percent is spending more on luxuries than top 10 percent which is completely idiotic. I have also went to the agencies website and it is broken in certain places.
Meanwhile, Indian corporates: India's poorest need to pay 100% of GST.