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You need to look at it from an Indian point of view. Local bus tickets, metro rail tickets are Rs 5-60.
Fake money was printed in 500 and 1000 denominations, and a large amount of real unaccounted cash was in these denominations. With one step, the government erased 85% of the cash value and is now replacing it. There are people I know with millions in cash at their house, black money for which tax is not paid. Now the cash is useless unless they pay the tax and the penalty (about 70%).
Service tax rule in India is currently only for companies with revenue of 1 million INR yearly from Indian clients. That is about 15000 USD. So above that all companies will need to register with service tax department of India, collect and pay tax.
Seriously? You are comparing INR to USD? With $2000 you can hardly lead a good lifestyle in the US, but with $2000 converted to INR, you can get all the fancy stuffs in India. Just a currency conversion doesn't mean everything. It is the purchasing capacity that actually matters. Like what you get for $1 in the US can be got for 10 INR in India.
I was comparing to what could be readily understood by people. For a closer comparison, currently INR is about 1:1 to Russian Rouble. Average salary in Russia is about 35000 roubles per month (550 USD).
Local bus tickets are 22 roubles here.
...and yet it still seems absolutely unthinkable to me if the government removed all 500 and 1000 RUB notes (and 5000, which we also have, and 2000 which was to be introduced next year).
Imagine getting your salary as three 100-packs of banknotes. That's what it would amount to. Or sure, making everyone switch over to cashless payment means such as debit cards. That would certainly do it, but still that's not "an anti-corruption measure", that's just killing such concept as "cash" almost entirely.
Also it wouldn't even work against corruption, as then everyone would just start bribing in EUR and USD (as likely often was already the case).
No US states have VAT. Most US states have a sales tax, which is different and usually applies to physical goods only.
You may not know how much counterfeit notes Pakistan and Bangladesh pump into Indian system. so comparing Russian and Indian currency is not fair .Lots of black marketers do not pay tax in India and do cash transactions in those bigger denominations only.
And that's what is desired. People in the organised sector don't get salary in cash. Everything including subsidies are directly deposited to the user's bank accounts. And I think you do not know that recently, there was a scheme of opening zero balance accounts initiated by our PM. So, one can't just complain that he doesn't have a bank account.
You're absolutely right. You'd see schools telling to pay a part of the initial deposit in cash and the rest in maybe card or cheque. Now, the cash part is completely unaccounted. And that's what our PM is removing. And IDK about Bangladesh, but Pakistan pushes around 70cr INR every year into India. Even some banks KNOWINGLY accept the fake currencies and the manager even knows it. But he can't do anything because of those local mafias. This huge measure was taken to stop these.
For an enormous economy like India, though the intention is very good but the practical execution is horrendous particularly for the lower middle class and the ones below it. Daily wagers are paid daily vs weekly and alot of purchases for daily living are on cash. They don't even know the fact (in rural) there exists a machine that shells cash through a plastic card.
Already seen rumors of fake bills being pushed since there is hardly any bill for source reference, paving way for the "opportunists" to budge in. Moreover the sub-urban and non-metro cities still face a high crime rate so it will be situation of the "stronger" classes manipulating the changes leaving a class unrest situation.
so as said earlier... the economists and policy makers should have taken in account the atrocities a big chunk of people shall be facing.
vvv
That, Indian market is not really much business for most non Indian owned/operated/based datacenter/service providers.
Welcome to Poland - They charge(d?) anyone VAT except EU companies w/ VAT ID. Literally anyone.
No, that is not how the Indian laws work - DO sells services in India, who actually rents these from Webwerks or whoever (the DC owner) is not relevant, just like EU now. @leapswitch can probably confirm you that. Specific datacenter and IT exemptions however apply in a lot of places, possibly also Bangalore due to the nature of main business activity.
Further, yes, DO is most likely incorporated in India also - importing that amounts of hardware OR the money to pay it locally alone should need that.
Why do you pay VAT at all? If the company is in EU and you have a VAT ID you simply do not pay it; Apple is an exemption and we are currently fighting with them about a few k...
I do not pay my countries VAT for hardware i buy abroad inside the EU w/ VAT ID; this would be useless as i get it back after 3 months anyway then - If i buy in Austria i pay 20% and get it back in 3 months as well.
It is not in India. Way lower (between 150 and 400$) and the statistics are most likely "niced" as well.
CA seems to charge me 9% (7.5 + the 1.5% mandatory) on iTunes purchases on an address in LA, though i'm not sure why apps are still 99c - might be just some specifics or Apple eats it. On hardware i pay 9% unless i have a reseller certificate which generally also requires a company (not sure for other US states; "export" works like in EU i heard but needs forms also...)
What if these people are illiterate or have no ID documents? This is quite a large problem in eastern Europe already; cannot even imagine India... (chance is these are in very poor regions then though, Jharkhand? Bihar? Cash might work there.)
Gold is very popular to own in India.
Riiight:
Actually from what my accountant told me, when doing business, Portugal to anywhere else than EU"anywhere else THAN EU" -> outside of EU.
I suppose it's a "stupid foreigners, charge them more" thingy
Lots of people here as well believe that they're superior beings to any foreigner 
For someone who is paid daily, he hardly gets paid 500 daily, so that'll not be an issue for him since all notes have not been cancelled. Only the ones of 500 and 1000 denomination have been termed invalid.
according to the VIES system, it is mandatory to charge VAT tax rate that is applicable for the clients country. i mean, if the company selling hosting services in UK and the client is from Estonia, then company should charge 20% EE VAT tax. If the customer is from Denmark, company should charge 25% DK VAT tax.and no matter what, uk based company selling service to other eu member state, it is not allowed to charge UK VAT rate. All these records should be declared in the end of every quarter as MOSS declaration. If i remember correctly, then US companys should also collect EU VAT?
I haven't got time for that, so I'll just stop selling to Indians, I mostly get chargebacks/scams/fraud from there anyways
Indian salary varies by sectors. On average
I just laughed at this. Unorganised, it's minimum 1500 per month. And government ranges from 6000 to 1.5 lakh per month
He quotes dollar, not INR.
Ah okay then.
@BlazingServers ranges are just indicative ... people can make more or less than that.I am just quoting what I see here in my surrounding . I am not economist to exact figures lol
Business man and black market traders make millions and even billions without paying taxes or paying tiny taxes .. So I would say this is a good initiative.
It's not your problem. It's theirs.
Who tells you that? Many rich people in India pay tax - you can see that simply by the fact your gov still has money and is able to control the country. Black money/money laundry (which both require illegal income, not just not paying tax) are a thing in most countries, tax avoidance and not paying is anywhere from the 4th to 1st world (Somalia as example has an income tax...)
Yes agree that condition is better than many countries , still large number of traders and businessmen do not pay taxes. I see this in many times. i live here and traveled many states and cities ,I have first hand knowledge of the rotten system here . even if 20%-40% paying taxes in genuine ,India will run because of the size of the country and economy.But this does affect in running the government with fiscal deficit to some extent. Within 3 days ,more than 30 billions USD deposited in banks .
In Asia this would be outside of eg. China (which has a different system) already fairly high. The informal sector, which usually does not pay tax, is pretty large.
This law is likely to be enforced. The Govt wont penalize individuals which are major hosting buyers.
This law is likely to be enforced. The Govt wont penalize individuals which are major hosting buyers.
Yes, BUT your country also has a VERY LARGE informal work base which are paid from this money, so this could end worse than it started - your gov gets money, yes, but the illegally employed people which have no other choice do not get it anymore...
your gov gets money, yes, but the illegally employed people which have no other choice do not get it anymore...
Yes, collection of taxes through enforcement is one thing but "spending" that collection in real development and infrastructure to benefit citizens is an altogether different "intention" policy makers should have.
We are missing one important point. When ever we talk about informal sector in India.
The percentage of people concerned vs the payment they get and also there income (% of GDP).
They form the lower part of the pyramid structure.
90-95% people here in Indian has an Unique Identity number (aka Aadhar no)
And even if some one is not having one can get it within fortnight and it takes less than an hour in reality to get a bank a/c with just that single document (though it wont really happen during the remains of this month).
The note crisis is going to be negligible from the beginning of next month (December) atleast when it comes to essential commodities.
Almost all the govt schemes are linked/ likable to bank A/C and Aadhar.
If someone is in Informal sector but with regular earning, many such people pays for there essentials at a fixed interval (say payment settlement ones every week or bi-weekly).
For those with no bank a/c it will take 0.5-3 hr to get there currency exchanged with a single govt issued document (including Aadhar) [Cannot say about Metros] and this will be very low from 25th Nov. or early next month.
Thats not new; Ask someone with a foreign passport/dual citizenship... takes forever to exchange since years. Easiest to use a CC to get INR as foreigner.
At your size that means there are more unregistered citizens than in my entire country x5-x10...