Planning Career in Job changing Market

Remember good old days. The streets were safe. Goods were cheap. Jobs were aplenty. You got promoted every few years. You had an income for life. But the world has changed. Neither your city nor your job is safe anymore. Hiring intentions are at a 12-year low in India as a Manpower Group Report. Businesses are evolving rapidly. Whatever you do now will transform in three years or your employer will get it done cheaper and faster either through technology or by a younger placement.

Dying Assets

Skills – Sticking to your current skill set is a sure shot way to becoming redundant. Are you an accountant who knows how to keep books? This single skill earlier could get you a job and keep you there for a lifetime? Just a few years back, this skill became useless if you could not use accounting software. Similarly, a single change called GST meant that your contribution to your employer dropped dramatically unless you were willing to learn new skills.

Knowledge – The knowledge that you held today and spent years in acquiring and polishing is worth far lesser if you take a single year sabbatical from continuous learning. With Internet penetration, knowledge is incredibly cheap and even the youngest patient and legal client questions and double checks the service he is getting versus the price he is paying. Similarly, companies are learning that it is noncompetitive to pay senior professionals more than their knowledge alone. A youngster with less than half the experience can acquire that knowledge at a substantially lower salary.

Labor – Work hard and you will succeed is terrible standalone advice in the current job market. For every job that requires human hours, someone somewhere is working on technology to reduce time required to do a task to make you either more productive or redundant. From manufacturing to services to knowledge work, your labor hours are being replaced by technology solutions that help your company reduce costs and increase productivity.

Technology – Massive changes in the technology that you used 2-3 years back forced you to head back to the classroom to upgrade or become irrelevant. Relying on your comfort with current technology in your job is the fastest route to losing your job to the next savvy professional who comes along. Artificial Intelligence in language/data, robotics/3D printing, Internet of Things in goods/manufacturing/labor and Internet/computing in knowledge/education are rapidly evolving technology spaces where your comfort levels in using them needs to keep pace to stay professionally relevant.

Growth Assets

Sales – The Primary difference between being merely skilled being successful lies in how you work with others. To achieve this, you require the ability to communicate and sell your ideas to others. Work on your negotiation skills to master the art of reaching agreement on common goals and process.

Learning – Stay curious and stay hungry. If your current skills and knowledge are redundant, the only thing that you will ever require is the ability to learn. This is an acquired skill. The first step is to be intensely curious. Observe children who have the steepest learning curves simply because they are constantly curious about the world around them. No learning will ever go waste and no employer will ever let go of someone who can connect the dots across business and solve problems.

Creating – You will do well to set aside at least two hours every weekend to just pause and think. Ask yourself what happened in the previous week or month, what new knowledge you acquired and how you can improve your plan for the future.

How to Survive

Be Paranoid – What could go wrong in your job? How will you find your next source of income?

Double Up – Get a second career, work a second shift, sell to a second client or acquire a second skill.

Stay fit – Investing in achieving high fitness levels increases ability and time required for learning and growth.

Stay Sharp – To stay alive and kicking in your career, keep your mind ticking by constantly challenging and feeding it.

Grow People – The way to attract and lead people is to teach them, help them solve problems and unlock their potential.

Countries that tried GST before India

The Goods and Services Tax (GST), India’s biggest tax reform since Independence, will unify a $2 Trillion economy into a single market. This big tax overhaul will be a test for India. Not only does the country’s size and diversity make the challenge daunting – 1.3 Billion people, 29 states, 22 official languages – it’s also implementing multiple rates. Here are some countries who had implemented GST are –

Canada – When Canada implemented its goods and services tax in 1991, retailers offered customers “Don’t Blame Me for the GST” stickers amid cash-register snafus and vending machine meltdowns.

Australia – Three years after pledging in 1995 to “never” introduce a GST, Australia PM John Howard reversed his policy for the 1998 election, saying he was seeking a mandate to implement a 10 percent tax on most Goods and Services. He barely won amid a voter backlash, but that narrow victory was enough to legislate a GST that’s been used to fund health care and schools funding for the states. It excludes some politically contentious items such as fresh food, pre-owned real estate, medical and education services. Current PM Malcolm Turnbull toyed with the idea of increasing the tax to 15 percent, but ruled that out in February 2016.

South Korea – Following the introduction of a value added tax in 1977, a game of hide and seek broke out between tax officials implementing the new system and market vendors seeking to avoid taxation, prompting newspaper Dong-A llbo in 1978 to describe the year as a “365-day nightmare”. The day the indirect tax regime applied some taxi drivers thought the new system applied to taxi fares and argued with customers that they need to pay 10 percent more than the price on the meter.

Malaysia – Following the implementation of GST in April 2015, there were reports cash registers weren’t calibrated to deal with the new regime, government agencies weren’t ready and GST refunds were delayed.

India GST Rates in 2017

The Goods and Services Tax has been one of the key things that have caught the attention of the market given its implications on earnings of companies. The government has kept a large number of items under 18% tax slabs. The government categorized 1211 items under various tax slabs. Here is a low-down on the tax slab these items would attract. Gold and Rough diamonds do not fall under the current rate slab ambit and will be taxed at 3% and 0.25% respectively.

No Tax Goods & Services – No tax will be imposed on items like Jute, Fresh Meat, Fish chicken, Eggs, Milk, Butter Milk, Curd, Natural Honey, Fresh Fruits and Vegetables, Flour, Besan, Bread, Prasad, Salt, Bindi, Sindoor, Stamps, Newspapers etc. Hotels and Lodges with tariff below Rs 1,000, grandfathering service have been exempted under GST.

5% Goods & Services – Items such as Fish Fillet, Apparel below Rs 1000, packaged food items, footwear below Rs 500, cream, skimmed milk powder, branded paneer, frozen vegetables, Coffee, Tea etc. will attract tax of 5%. Transport Services, small restaurants will be under the 5% category because their main input is petroleum, which is outside GST ambit.

12% Goods & Services – Apparel above Rs 1000, Frozen meat products, butter, Cheese, Ghee, Dry Fruits in packaged form, Animal Fat, Sausage, Tooth Powder, Ayurvedic Medicines, Umbrella etc. will be under 12% tax slab. Non – AC hotels, business class air ticket, fertilizers, Work Contracts will fall under 12% GST tax slab.

18% Goods & Services – Most items under this tax slab which include Footwear costing more than Rs 500, Biscuits, Flavored refined sugar, Pasta, Cornflakes, Jams, Sauces, Tampons, Camera, Speaker and Monitors etc. AC Hotel that serve liquor, telecom services, IT services, branded garments and financial services will attract 18% tax under GST.

28% Goods & Services – Chewing Gum, Bidis, Pan Masala, Chocolate not containing Cocoa, Hair Shampoo, Ceramic Tiles, Water Heater, Washing Machine, ATM, Vacuum Cleaner, Shavers, Hair Clippers, Automobiles, Motorcycles, Aircraft for personal use etc. will attract 28% tax – the highest under GST system. 5-Star hotels, race club betting, cinema will attract tax 28% tax slab under GST.

Future of Electric Vehicles in India

Electric Vehicles are growing in popularity and certainly in mind space. They are cleaner and more efficient and even fun. Their growth, however, is still considered just a market problem. The end user should choose on the basis of what it costs to buy and run, or how it performs, etc. Markets matter but there is also a need for government and policy inputs. EVs, after all, operate within broader energy and transportation ecosystems with their own distortions. Unless we understand Indian-use cases, driver limitations and opportunities, we risk ambitious targets that remain aspirational.

Indians are famously value conscious. This is why consumers love diesel cars, despite their higher MRP and pollution relative to petrol counterparts. Even at today’s low oil prices, running a diesel sedan can cost about Rs3.8 per kilometre versus petrol’s Rs5.5. In contrast, CNG costs roughly Rs1.9/km, but it’s not widely available. The cost of EVs depends on electricity price, which varies significantly. At Rs7/kWh (kilowatt hour) of power, they cost only about Rs1.1/km. This saves consumers driving 5,000km per year over Rs 20,000 annually, and taxis much more as they drive 10-15 times as much.

The catch is the upfront cost. EVs are expensive, primarily because of the battery. A single kWh of electricity is enough to go about 6km, so a 200km “full tank” range requires about 35 kWh of battery. Today’s prices for lithium ion batteries are about $250/kWh globally, which comes to Rs 5.7 lakh in battery costs, excluding import duties. Even with an eight-year lifespan and a 12% interest rate, justifying the battery costs on per kilometre savings alone means one would have to drive over 25,000km per year. However, when battery prices fall to $100/kWh, as projected a few years out, EVs can become a game changer.

Range turns out to be key: 5,000km per year is only about 15km per day on average, while an urban taxi may do 300km daily. Higher range means not only more battery cost but weight as well. In an ideal world, we would have a smaller battery pack and simply recharge periodically. In practice, taxi and fleet vehicles can only charge overnight, and even private users may have limits on charging options. Without fast-charging infrastructure—fast-charging an EV requires much more power than household 15 amp sockets, which can only offer about 3 kW of power, so 35 kWh takes almost 12 hours to charge—one inevitably has “range anxiety”. Unlike the US, most Indians don’t have a personal garage. Hence, widespread and company-agnostic public charging infrastructure becomes a key policy choice.

Not only are EVs efficient – with regenerative braking capturing energy otherwise wasted and also due to the inherent efficiency of motors, especially at low speeds they pollute less. We should value such environmental co-benefits, not just carbon reductions. We could compensate cleaner vehicles through reduced registration charges, or even aim for mandating EVs for taxis and selected public transport vehicles. These are often diesel and thus far worse polluters.

There are other distortions to consider. Over half of petrol’s pump prices are for taxes. Petrol taxes are 1% of GDP and diesel 2% and fully switching to EVs means affecting 2% of GDP. Of course, oil is predominantly imported, so moving to EVs should be a worthwhile trade-off. Plus, over-time more and more electricity will come from renewable sources.

Goods and Services Tax (GST) Bill Explanation

The Goods and Services Tax (GST), the biggest reform in India’s indirect Tax structure since the economy began to be opened up 25 years ago is now a reality. Here’s how GST differs from the current regimes, how it will work, and what will happen if Parliament clears the Bill.

Stage 1 - Imagine a manufacturer of say, shirts. He buys raw material or inputs – cloth, thread, buttons, tailoring equipment worth Rs 100, a sum that includes a tax of Rs 10. With these raw materials, he manufactures a shirt. In the process of creating the shirt, the manufacturer adds value to the materials he started out with. Let us take the value added by him to be Rs 30. The gross value of his good would then be Rs 100 + 30, or Rs 130. A tax rate of 10%, the tax on output will then be Rs 13. But under GST he can set off this Tax (Rs 13) against the Tax he has already paid on raw materials (Rs 10). Therefore, the effective GST incidence on the manufacturer is only Rs 3 (13-10).

Stage 2 - The Next stage is that of the good passing from the manufacturer to the wholesaler. The wholesaler purchases it for Rs 130, and adds on value (margin) of Say Rs 20. The gross value of the good he sells would then be Rs 130 + 20 or a total of Rs 150. A 10% tax on this amount will be Rs 15. But again, under GST, he can set off the tax on this output (Rs 15) against the tax on his purchased good from the manufacturer (Rs 13). Thus, the effective GST incidence on the wholesaler is only Rs 2 (15-13).

Stage 3 - In the Final stage, a retailer buys the shirt from the wholesaler. To his purchase price of Rs 150, he adds value of say Rs 10. The gross value of what he sells therefore goes up to Rs 150 + 10 or Rs 160. The tax on this, at 10% will be Rs 16. But by setting off this tax (Rs 16) against the tax on this purchase from the wholesaler (Rs 15), the retailer brings down the effective GST incidence on himself to Rs 1 (16-15). Thus, the total GST on the entire value chain from the raw material suppliers through the manufacturer, wholesaler and retailer is Rs 10 + 3 + 2 + 1 or Rs 16.

Scenario in Non-GST Regime – In a full non-GST system, there is a cascading burden of “Tax on Tax” as there are no set-offs for taxes paid on inputs or on previous purchases. If we consider the same example as above, the manufacturer buys raw materials at Rs 100 after paying tax of Rs 10. The gross value of the shirt he manufacturers would be Rs 130, on which he pays a tax of Rs 13. But since there is no set-off against the Rs 10 he has already paid as tax on raw materials the good is sold to the wholesaler at Rs 143 (130 +13).

With the wholesaler adding value of Rs 20, the gross value of the good sold by him is then Rs 163. On this, the tax of Rs 16.30 (at 10%) takes the sale value of the good to Rs 179.30. the wholesaler, again can’t set off the tax on the sale of its good against the tax paid on his purchase from the manufacturer. The retailer buys the good at Rs 179.30 and sells it at a gross value of Rs 208.23 which includes his value addition of Rs 10 and a tax of Rs 18.93 (at 10% of Rs 179.30). Again, there is no mechanism for setting off the tax on the retailer sale against the tax paid on this previous purchase.

The total tax on the chain from the raw materials suppliers to the final retailer in this full no-GST regime will work out to Rs 10 + 13 + 16.30 + 18.93 = Rs 58.23. For the Final consumer, the price of the good would then be Rs 150 + 58.23 = Rs 208.23. Compare this 208.23 with a tax of Rs 58.23 to the final price of Rs 166, which includes a total tax of Rs 16, Under GST.

Present Scenario – Currently, we have Value Added Tax (VAT) systems both at the Central and State levels. But the central VAT or CENVAT    mechanism extends sets offs only against central excise duty and service tax paid up to the level of production. CENVAT does not extend to value addition by the distributive trade below the stage of manufacturing, even manufacturers can’t claim set off against other central taxes such as additional excise duty and surcharge.

VATs cover only sales. Sellers can claim credit only against VAT paid on previous purchases. The VAT also does not subsume a host of other taxes imposed within the states such as luxury and entertainment tax, octroi, etc. Once GST comes into effect, all central and state level taxes and levies on all goods and services will be subsumed within an integrated tax having two components, a central GST and a state GST.

This will ensure a complete, comprehensive and continuous mechanism of tax credits. Under it, there will be tax only on value addition at each stage, with the producer/seller at every stage able to set off his taxes against the central/stage GST paid on his purchases. The end-consumer will bear only the GST charged by the last dealer in the supply chain, with set off benefits at all the previous stages.