#Fincabulary18 – Chandelier Bid

MeaningA bid that is announced by an auctioneer during an auction that has not been signaled by a participant, but has rather been fabricated by the auctioneer in order to create the appearance of greater demand for the item.

Chandelier bids are so named because the auctioneer announcing the bids may point to the ceiling or other areas of the room rather than at actual bidders. This gives the illusion that bids are being made. Chandelier bids are not illegal, but can be frowned upon by bidders who don’t like the idea of competing against imaginary competitors. They are most likely to be used when the seller has placed a reserve price on the item, with the auctioneer having leeway at increasing the “bid” until the reserve price is reached.

One Nation One Tax – GST Decoded

– By Varun Krishna Gupta and Chandra Sekhar Routray

At the midnight-joint session of Indian parliament when the gong sounded, the iconic goods and services tax was rolled out. This was only the fourth such occasion in the history when such a session was conducted. GST replaced 17 state and federal levies on everything. Earlier sellers went through a nightmare of central and state sales tax, entry tax, turnover tax, service tax, excise, and octroi. This cascading effect of taxes made India one of the highest indirectly taxed nations in the world. GST effectively terminates this cascading effect and embodies the essence of “One Nation, One Tax”.

GST Models across the Globe

France, became the first nation, to implement GST in order to curb tax- evasion. Since then, more than 140 countries have implemented GST.  Some countries like Brazil and Canada have implemented a dual model of GST. India has also implemented the dual model of GST. According to a report from Nomura Holdings Inc. GST rollout fueled inflation in countries like Australia, Japan, Malaysia, and Singapore. The reason being the tax rate was lower than pre-existing rates. U.S.A does not have GST, as it ensures high autonomy for the states.

Indian version of GST

India customized the dual GST model to synchronize with the needs of its economic transaction.


India (Proposed) Canada UK
Standard Rate 0% (for food staples), 5%, 12%, 18% and 28% (+ Cess for luxury items) GST 5% and HST varies from 0% to 15% 20% Reduced rates- 5 %, exempt, zero rated
Threshold Exemption Limit 20 lakhs (10 lakhs for NE states) Canadian $ 30,000 (Appx ₹15.6 lakhs) £ 73,000 (Appx ₹61.32 lakhs)
Returns and Payments Monthly and one annual return Monthly, quarterly or annually based on turnover Usually quarterly. Small business option- annual
Reverse Charge
Applicable on goods (new) as well as services (currently under Service tax) Reverse charge applies to importation of services and intangible properties. Applicable
Exempt Services A number of food items have been exempted from any of the tax slabs.
Fresh meat, fish, chicken, eggs, milk, butter milk, curd, natural honey, fresh fruits and vegetables, flour, besan, bread, all kinds of salt, jaggery and hulled cereal grains have been kept out.
Real estate, Financial Services, Rent (Residence), Charities, Health, Education Medical, Education, Finance, Insurance, Postal services

Chinks in the GST Bill Armor

Different Tax Slabs – AC and non-AC, outdoor and indoor will be having different tax rates. So, a restaurant having both has to make different arrangements.

Anti-Profiteering Rule – The law doesn’t clarify how the costs incurred on account of the transition from GST to non-GST era are to be factored in. It also doesn’t specify how loss-making units pass on the benefits. Many companies are producing two sets of price tags for the same product to avoid confusion. But a comparison of profit or loss for pre- and the post-GST period would be difficult for companies.

Unorganized Sector– India being mostly an unorganized economy with smaller companies comprising nearly 45 percent of manufacturing, an establishment of this supply chain is difficult.

Tax Credit – There is little clarity on input tax credit on the old goods produced before July 1. GST isn’t a retrospective tax and since traders have already paid taxes for the existing stock, there are concerns about their old stocks.

GST Return Forms – According to GST rules, businesses will have to file 37 forms in a year—three each month for CGST, IGST and SGST, and one at the year’s end. For a company with operations in 20 states, it means 740 annual returns.


GST aims to create a uniform tax structure pan-India, removing several layers of taxation. As the time progresses, clarity will follow on many fronts. According to analysts, GST can increase India’s GDP by 2%, by transforming India into a common market larger than Europe, the US, Brazil, Mexico, and Japan combined.

#Fincabulary17- Affordability Index

Meaning – It is a measure of a population’s ability to afford to purchase a particular item, such as a house, indexed to the population’s income.

An affordability index uses the value of 100 to represent the position of someone earning a population’s median income, with values above 100 indicating that an item is less likely to be affordable and values below 100 indicating that an item is more affordable. An affordability index is most often associated with housing costs. Housing affordability indexes often compare the cost of purchasing a home in different locations. Points above 100 indicate that a typical family will be less likely to qualify for a mortgage on a home in the area, while a value of 100 indicates that the typical family can just barely afford to live there.