Goods, Sales tax, and Service Tax, - Sharing of Tax Amount between buyer, Seller, State Governments and the Republican Government.

Goods, Sales tax and Service Tax, - Sharing of Tax Amount between buyer, Seller, State Governments and the Republican Government. - Hope Similar strategy is adopted for all taxes including Income Tax, Gift Tax, GST, Service Tax, Wealth Tax, Transaction Tax, property tax, and so on for all types of Tax...

A definition as in Wikipedia

A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. ... A value-added tax (VAT) collected on goods and services is similar to a sales tax.

The GST has three components namely, CGST, SGST & IGST (what is IGST, who gets this amount the State Government or the Republican Government, in case the company is operating from State A, the buyer is in State B, then how would the IGST would be split up as per GST law, does the current approach of IGST violates the fundamental principle of GST Law, foundation, it's principle and it's basis of sharing revenues between the State(s) and the republican Government.?)

The tax paid by purchaser is split by the State Government and the Republic Government in equal proportion.

Similarly, the GST has to be paid by the Purchaser and the seller, it's the seller who makes profit and not the buyer. Therefore, ideally they should pay the sales tax that is the seller. 

However, to make things easier and to make both the buyer and the seller accountable they both have to pay the tax of type sales equally between them.

In this case the amount concerned in equal proportion should come from both of their accounts respectively, the individual or account in the name of the buyer and the account in the name of the seller. Where in both the seller and buyer share the tax in equal proportion.

Additionally, the sales tax Or any transaction that is taxable and is carried out from different state boundaries or demographic border, where in the buyer, seller are in different region... Then the taxes have to be paid to the Respective state governments and the republic government..

That is for example a service provider or seller is in the state of Tamilnadu and the buyer is in the state of Karnataka then the taxation could be tripartite. In this case the taxes paid by the seller who is in Tamizhnadu pays 50% sgst to treasury account of Tamilnadu 50% cgst to treasury account of the Republican Government. Similarly, the buyer who is in the state of Karnataka pays 50% sgst to treasury account of Karnataka 50% cgst to treasury account of the Republican Government.

This ensures taxes are paid appropriately and equally between the parties involved with out any ambiguity.

The taxes are split in equal proportion between buyer and seller. The taxes are split in equal proportion between the states involved and the republican government. The demographics would be based on the physical presence of the buyer and the seller.

When the above changes gets established then the tax break ups for income tax or slabs could be for RIT, SIT (republic income tax and state income tax).

Communism in Taxation

0 to 2,00,000 SIT, RIT NIL

Capitalism in Taxation

2,00,001 to 5,00,000 RIT, SIT = 5%, tax amount 14,999.95 / 2

5,00,001 to 50,00,000 = 10%, tax amount 4,49,999.9 / 2

50,00,001 to 5,00,00,000 = 15%, tax amount 67,49,999.85 / 2

5,00,00,001 to 50,00,00,000 = 20% tax amount 8,99,99,999.8 / 2

50,00,00,001 to 5,00,00,00,000 = 25% tax amount 1,12,49,99,999.75‬ / 2

5,00,00,00,001 to 50,00,00,00,000 = 30%, tax amount 13,49,99,99,999.7‬ / 2

50,00,00,00,001 to 5,00,00,00,00,000 = 35%, tax amount 1,57,49,99,99,999.65‬ / 2

5,00,00,00,00,001 to 50,00,00,00,00,000 = 40%, tax amount 17,99,99,99,99,999.6‬ / 2

50,00,00,00,00,001 to 5,00,00,00,00,00,000 = 45%, tax amount 2,02,49,99,99,99,999.55‬ / 2

5,00,00,00,00,00,001 to 50,00,00,00,00,00,000 = 49%, tax amount 22,04,99,99,99,99,999.5 / 2

The total income tax can never cross 49% of any body's total taxable income....

The farm (ஓம்) Produce tax (DIT or Produce Tax or PT or FPT) (FPT) and transaction tax (TT) could be as follows and split by 2, between the State Government and the Republic Government. The DIT refers to Farm Produce tax (FPT) Or direct income tax taxed at harvest or when a produce is first sold to a buyer or distributor. 

Communism in Taxation

Less than 1,000 or 10,000 no tax – base value for which no Transaction Tax is deducted... (either 1,000 or 10,000 per trasaction)

Capitalism in Taxation

1001 or 10001 to 1,00,000 tax amount rs. 1, 1/ 2 between transactor and transactee- for every transaction whose value is between this range

1,00,001 to 1, 00,00,000 tax amount rs. 10, 1/ 2 between transactor and transactee- -  for every transaction whose value is between this range

1,00,00,001 to 1, 00,00,00,000 tax amount rs. 100, 1/ 2 between transactor and transactee- -  every transaction whose value is between this range

1,00,00,00,001 to 1, 00,00,00,,00,000 tax amount rs. 1000,   1/ 2 between transactor and transactee--for every transaction whose value is between this range

And so on......

In case the buyer is from different State or Geographical region and the Seller from different state or Geographical region (DIT would be Value / 4, where in the State A, State B gets 1/4, 1/4 and the Republic Government gets 1/2 value of the tax amount, 1/4 from State A and 1/ 4 from State B totaling to 1/2 value of the tax amount )...

This should be the approach to collect tax in a federal or republic... Even for IGST the money collected should be shared in equal proportion as stated above between state government's and the republic Government. For that matter all taxes or tax types in a country that has adopted Federalism and republic model have to share the taxes collected in equal proportion between the states involved and the republican government.

The only case of exception should be when the Service is availed by the buyer himself. For (e.g) when the buyers registers for an online training, consulting, coaching etc where in the buyer himself is the direct beneficiary in that case the GST or rather the Service tax would be paid by the buyer. In all other cases where in the buyer buys a ready made product that he or his family is going to use then in such cases the GST have to spit in equal proportion between the buyer and the seller.

The split up of tax between the republican government and the state governments involved should be share equally based on the purchase location and the seller location. In case multiple state Governments are involved because of the fact the buyer is from residing or placing the order from different state of geographical region and the seller is from a different state or geographical region that the value would be split between the Governments involved, where in the states get 1/4, 1/4 and the republican government gets 1/2 (1/4+1/4) of the tax amount.

In case of Multiple States(n) involved then the GST split up accordingly between buyer and seller. The payment of GST then would be GST Tax value / n *2 , GST Tax value  / n*2 would be the split up between the buyer and seller to each states involved and the CGST value paid from each states to the republican government.

The above tax strategy can be or rather should be adopted for all PAN card holder, for all PAN type and should cover 100% population in a given region. 

The tax percentage numbers should be derived from a formula that considers cost of inflation index, cost of living, input costs, real estate costs, depreciation index, cost to the company or CTC index, and various other relevant parameters to arrive at tax percentage values from a or set of formula.  For example GST ranges between 5 to 18%, why not 1% to 18% or 1 to 20%?. 

Similarly, the tax slab ranges could also  be derived as a value from the same or similar formula.  The tax slabs range values are rounded or cieled to the nearest decimal value Whereas the tax rates or percentages are rounded to two decimal places. 

What do we think or say about this idea?