PPLE

PREPARED B Y :
Shaik Mohd Ishaq
PROFFESSIONALETHICS

WHAT IS A PROFESSION?
⚫A profession as a vocation requiring advanced
education and training.
⚫A profession is a job that requires specific training
and is regulated by certain standards.
⚫ According to Roscoe Pound he defined profession
as a group pursuing a learned art as a common
calling in the spirit of public service.

PROFESSIONAL ETHICS
⚫ A profession is a vocation founded upon specialized high
educational training, the purpose of which is to supply
objective counsel and service to others, for a direct and
definite compensation.
⚫ Professional ethics encompass the
corporate standards of behavior
personal and
expected of
professionals.
⚫ Professional Ethics is concerned with one’s behavior and
conduct when carrying out professional work. It is
codified and varies across different cultures.
⚫ Professional ethics the ethical norms, values, and
principles that guide a profession and the ethics of
decisions made within the profession.

Professional
Ethics
Consequences
based Ethics-
outcomes
Ideal based
Ethics-
character
Principle
based Ethics-
rules, codes,
standards

DEFINITION OF PROFESSIONAL ETHICS
⚫ Banks (2003) explains that “a code of ethics is
usually a written document produced by a professional
association, occupational regulatory body, or other
professional body with the stated aim of guiding the
practitioners who are members, protecting service
users and safeguarding the reputation of the
profession”.
⚫ The Secondary Education Commission has stated
“They (teachers) will not look upon their work as an
unpalatable means of carrying a scanty living but as an
avenue through which they are rendering significant
social services as well as finding some measure of self-
fulfilment and self-expression.”

CONCEPT OF PROFESSIONAL ETHICS
⚫Professional ethics is a set of beliefs that a teacher
accepts concerning relationships with students,
colleagues, employers, and parents(or guardians
and caregivers of children), all of whom are
stakeholders in the life of the teacher. These
principles guide the teacher in their daily activities
in working with their stakeholders
⚫Professional ethics give a certain set of broad
principles derived in turn from a spectrum of
values which are arrived at after deep philosophical
reflection on the nature and role of the profession
in the life of mankind.

COMPONENTS OF PROFESSIONAL ETHICS
Some professional organizations may define their ethical
approach in terms of a number of discrete
components. Typically these include:
⚫ Honesty
⚫ Integrity
⚫ Transparency
⚫ Accountability
⚫ Confidentiality
⚫ Objectivity
⚫ Respectfulness
⚫ Obedience to the Law

HONESTY
⚫Honesty refers to a facet of moral character and
denotes positive, virtuous attributes such as
integrity, truthfulness, and straightforwardness
along with the absence of lying, cheating, or theft.
“Honesty is the best policy. If I lose mine honor, I lose
myself.”
-William Shakespeare

INTEGRITY
⚫Integrity is a concept of consistency of actions,
values, methods, measures, principles, expectations,
and outcomes. Integrity can be regarded as the
opposite of hypocrisy, that it regards internal
consistency as a virtue.
“Integrity without knowledge is weak and useless, and
knowledge without integrity is dangerous and
dreadful.”
- Samuel Johnson

TRANSPARENCY
⚫Transparency is a general quality. It is implemented
by a set of policies, practices and procedures. It allow
citizens to have accessibility, usability, utility,
understandability, in formativeness and auditability
of information and process held by centers of
authority (society or organizations).
“A lack of transparency results in distrust and a deep
sense of insecurity.”
-Dalai Lama

ACCOUNTABILITY
⚫ Accountability is often used synonymously with such
concepts as answerability, blameworthiness, liability. It
is the acknowledgment and assumption of responsibility
for actions, products, decisions, and policies and be
answerable for resulting consequences. It cannot exist
without proper accounting practices.
“When a man points a finger at someone else, he should
are pointing at
remember that four of his fingers
himself.”
— Louis Nizer

CONFIDENTIALITY
⚫ Confidentiality is an ethical principle of discretion
associated with the professions, such as medicine, law,
psychotherapy. In business, the confidentiality of
information, a mainstream adaptation of the “need to
know” .
⚫ Confidentiality regarding: 1. Whose interests
2. Which interests
⚫ Confidential information of: 1. Worker
2. Employer
3. Colleague
4. Competitor
“In intelligence work, there are limits to the amount of
information one can share. Confidentiality is essential.”
-Gijs de Vries

OBJECTIVITY
⚫Objectivity is a principle of journalistic
professionalism. Objectivity in journalism enables
highly accelerated news reporting and delivery,
which sometimes is at tension with standards of
objectivity.
“The belief in objectivity is a faith in 'facts,' a distrust
in 'values,' and a commitment to their segregation.“
-Michael Schudson

RESPECTFULNESS
⚫ Respect gives a positive feeling of esteem for a person and
conduct representative of that esteem. Respect can be a
specific feeling of regard for the actual qualities of the one
respected. Rude conduct is usually considered to indicate a
lack of respect, disrespect, whereas actions that honor
somebody or something indicate respect. The opposite of
respect is contempt.
“I speak to everyone in the same way, whether he is the
garbage man or the president of the university.”
-Albert Einstein

OBEDIENCE TO LAW
Law is the set of enforced rules under which a society is
governed. Law is one of the most basic social institutions-
and one of the most necessary. The law thus establishes the
rules that define a person's rights and obligations. The law
also sets penalties for people who violate these rules. In
fact, laws frequently are changed to reflect changes in a
society's needs and attitudes. Law is a system of rules and
guidelines which are enforced through social institutions to
govern behavior.
“An unjust law is itself a species of violence. Arrest for its
breach is more so.”
-Mahatma Gandhi

Engineering ethics
Engineering ethics is the field of system of moral
principles that apply to the practice of engineering.
The field examines and sets the obligations by engineers to
society, to their clients, and to the profession.
The purpose of engineering ethics is to identify specific
ethical issues that may arise in order to avoid a
potential problem. Past ethical or technical issues can help
engineers to learn from both previous failures and successes.

Standards or codes of behavior
expected of an individual by a group
( nation , organization, profession) to
which the individual belongs.
A set of beliefs about right
and wrong behavior
within a society.
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2

Code of ethics is one that I feel is important in
life, both personally and professionally.

PERSONAL CODE OF ETHICS
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7

TRUTH
• Comply with fact or reality.

FAIRNESS
Being just and unbiased.
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RESPONSIBILITY
• Fact of being responsible.
Coincides with the terms Reliability or Dependability.
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INTEGRITY
•Integrity is a concept of consistency of actions,
values, methods, measures, principles, expectations,
and outcomes.
•Integration of honesty and truthfulness or accuracy
of one's actions.
• Opposite of Hypocrisy.
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RESPECT
• Respect thyself.
• Respect others.
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HARMONY
• To fit together, to join.
• Opposite to Monotony.
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COURAGE
• The quality of mind or spirit that enables a person
to face difficulty, danger, pain, etc.
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COMPASSION
• Compassion is the virtue of empathy for the
suffering of others.
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WHY PERSONAL CODE OF ETHICS
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• To define accepted/acceptable behaviors;
• To promote high standards of practice;
• To provide a benchmark for individuals to use
as self evaluation;
• To establish a framework for professional
behavior and responsibilities;
• As a vehicle for occupational identity &
maturity.

CONCLUSION
• A man of dignity.
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CONCLUSION
• A man to be followed and admired.
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CONCLUSION
• Pave the way to success.

White Collar Job
A job with attractive perks?

PROFESSION AND
PROFESSIONALISM

• 360 perspective
• Maturity in Judgment
• Serving the welfare to public
• Supporting the profession at all mean

BRANDED
UNPROFESSIONA
LISM
• Dropping your Commitment
• Blaming others for your mistake
• Assaulting other people senses
• Throwing your workers to wolves

PROFESSIONAL
IDEALS AND
VIRTUES

PROFESSIONALISM IDEALS AND VIRTUES
IDEALS Being Perfect
VIRTUE  High Moral Standard

IDEALS
AND
VIRTUES
Motives Attitude Emotions

THEORIES
ABOUT
VIRTUE
T R A D I T I O N A L
To attain harmony
Truthfulness
Confidentiality
Courageous
M O D E R N
Public Good
Internal Good

PROFESSIONAL
RESPONSIBILITY AS A
PROFESSIONAL VIRTUE
Comm
itment
Self
Directed
Virtue
Perceptio
n
Justice
Public
Spirite
d
Virtue
Generosity
Loyalty
Respec
t for
Authorit
y
Team
Work
Virtue
Co-
operative
ness
Self
Respect
Proficiency Virtue
Integrity

What is Professional
Responsibility?
⦿ Legal and moral duty of
a professional to apply
his or her knowledge in
ways that benefit his or
her client, and the wider
society, without causing
any injury to either.

Why we need to practise it?
⦿With knowledge and skills ,
professionals have the power to do
great things. With this power, he has a
tremendous responsibilities to
individuals, organisation and society.
⦿This helps us in decision making which
ensures us to act responsibly.

MasterYourWork
Learn to be expert and effective in your work, no
matter whether you like the job or not, it's the
right attitude that matters. There is no work
which is too high or low; what matters is how
you effectively and joyfully take it up. List out
the things you have to learn in your work and
find your own method. You need not be in a
hurry to learn everything in a short period; stick
to a reasonable time frame and consistently.

Enhance Your
Communication Skills
To be successful as a professional, you
must be able to express yourself well
both in speaking and in writing. These
skills help to demonstrate your
competencies in many areas.

ActAs a Leader
Leaders inspire others around them to
collaborate, work together and strive to be
the best they can.
Leadership traits are often innate, but can
be learned and enhanced by various
workshops and seminars.
The important things to remember about
being a leader is that you are a role model,
your presence effects the mood of the
entire workplace, and leaders aren't always
right.
Being a leader means that you stand up
for what you believe in and work hard to
achieve your goals.

Be Honest &
Confidential
This is the key to become professional at
work. Never lie or be dishonest;
dishonesty will eventually out. If you are
honest, you gain respect. Being honest at
work creates a kind of positive energy and
boldness.

Embrace a Positive
Attitude
When approaching life and your career with a
good attitude and enthusiasm, goals and
objectives are achieved much easier. You must
be passionate about your career in order for it to
be successful. A positive attitude goes a long
way to assist you if your career hits a rough spot
and you need to adjust your path.

Collaborate And Cooperate With Others
It's common that in the workplace, teamwork is
stressed as the most efficient and effective way to
complete important projects or assignments. By being
willing to work with others, you increase your odds of
being effective and successful.
Accept all at work

Possess Ambition
It would be difficult to find a
successful professional who lacks
ambition or the goal to succeed.
However, ambition without goals or a
focus doesn't achieve success. Someone
who hopes to become successful must
identify goals, benchmarks and other
important objectives as he works along in
his career

Whistleblower
A person who informs on a person or
organization regarded as engaging in
an unlawful or immoral activity.

MEANING OF CONFLICT OF INTEREST
In 2005 THERE was an interesting case
The issue was that the finance minister wife had joined
the income tax department which was under her husband
charge . The implication was that she was misusing her
husband position of political and government power
When a person’s personal concerns stand to benefit
from the professional ones , a case is made for conflict
of interest ( A manager sanctioning loan to his relative)

Kinds of conflict of interest
 Public –Private conflict
 Outside employment
 Receiving gifts from vendors to the company
 When an organization is asked to investigate its own
affairs it will make exceptions to suit itself ( Audit)
 The purchase manager buys only from those suppliers
who are friends or relatives
 Revolving door: It is where officials quitting public offices
get into some corporation and pass insider information

METHODS TO AVOID CONFLICT OF INTEREST
➢Prevention
➢Disclosure
➢Recusal
➢Third party evaluation
➢Code of ethics

1 Prevention : Before occupyin.gany position in the department one should
carefully examine all the policies of that department so in order to prevent COI
2. Disclosure : In INDIA the rule is that every body has to
disclose his assets which he posses Ex. POLITICIAN,
Financial statements(true profit)
3.Recusal : In order to make a free and fair transaction , there
may be withdrawal of ones position EX. There are 5 BOD
(Board of Directors) who have to give an order to 1 supplier
among the list and 1 BOD (Board of Directors) knew some
of the parties so in order to avoid COI he should not
participate

4. Third party evaluation: T.
hird party
evaluators are called when any transaction
involves people from within the company
eg To fix a price of product
5.Code of ethics : Well established COE help in
avoiding the conflict of interest

.
Ways to solve conflict of interest
1. Admit possible conflict of interest
If you are upright person and you know that you have done
nothing wrong and yet are being accused of conflict of
interest , then be open to investigation
It is natural to resist in order to defend your image
2. Determine conflict of interest
You must begin the process of identifying the nature of
conflict as most of the conflicts may be determined easily
and rectified by disclosures and recusals

.
3. Take immediate action
Action should be taken immediately once COI is identified
Ex If a politician holding a minister post is charged against
COI than it is morally advisable to resign from public post
until cleared all charges
4 Create a code of conduct
COI will always teach you regarding creation of a personal
code of conduct
Make effort to re create and re work on it
5.Apply
After a bad experience of COI one should always try to apply
a new code of conduct

Introduction
⚫The Constitution of India clearly states that it is the
dutyof the state to ‘protectand improve the
environmentand tosafeguard the forestsand wildlife
of thecountry’.
⚫The Departmentof Environmentwas established in
India in 1980.This later became the Ministry of
Environmentand Forests in 1985.

Contd..:
⚫The EPA (Environment Protection Act), 1986 came
into force soon after the Bhopal Gas Tragedy and is
considered an umbrella legislation as it fills manygaps
in theexisting laws.
⚫Thereafter a large number of laws came into existence
as the problems began arising, for example, Handling
and Management of Hazardous Waste Rules in 1989.

The Environment
Protection Act (1986)
⚫Enacted underarticle 253 of the Indian constitution.
⚫Toprotectand improveenvironmental quality, control
and reduce pollution from all sources.

General
⚫1986 - The Environment (Protection) Rules
⚫Standards of emission ordischargeof environmental
pollutants.
⚫1989 - Theobjectiveof Hazardous Waste
(Managementand Handling) Rules
⚫To control the
generation, collection, treatment, import, storage, and
handling of hazardous waste.

⚫ 1989 - The Manufacture, Storage, and Importof Hazardous Rules
⚫ Defines the terms used in this context, and sets up an authority to
inspect, onceayear, the industrial activityconnected with hazardous
chemicalsand isolated storage facilities.
⚫ 1989 - The Manufacture, Use, Import, Export, and Storage of
hazardous Micro-organisms/ Genetically Engineered Organismsor
Cells Rules
⚫ Introduced to protect theenvironment, nature, and health, in
connection with the application of gene technology and
microorganisms.
⚫ 1991 - The Public Liability Insurance Actand Rules and
Amendment, 1992 S
⚫ Drawn up for the purpose of providing immediate relief to the persons
affected by accidentwhile handling any hazardous substance.

⚫1995 - The National Environmental Tribunal Act
⚫Created to award compensation for damages to persons,
property, and the environment arising from any activity
involving hazardous substances.
⚫1998 - The Biomedical waste (Management and
Handling) Rules
⚫Legal binding on the health care institutions to
streamline the process of proper handling of hospital
waste.

⚫1999 - The Environment ( Siting for Industrial
Projects) Rules, 1999
⚫Lays down detailed provisions relating to areas to be
avoided for siting of industries & precautionary
measures to be taken forsite selection.
⚫2000 - The Municipal Solid Wastes (Management and
Handling) Rules, 2000
⚫Apply to every municipal authority responsible for the
collection, transportation, processing, and disposal of
municipal solid wastes.

⚫2000 - The Ozone Depleting Substances (Regulationand
Control)
⚫ Rules have been laid down forthe regulation of production
and consumption of ozonedepleting substances.
⚫2001 - The Batteries (Management and Handling)
Rules, 2001
⚫ Rules shall apply toevery person involved in the
manufacture, processing, sale, purchase, and use of batteries
or components to regulate and ensure the environmentally
safedisposal of used batteries.

⚫2002 - The Noise Pollution (Regulationand Control)
(Amendment)
⚫Laydown such terms and conditions as are necessary to
reduce noise pollution.
⚫Such as use of loud speakers or public address systems
during night hours (from 10.00 p.m. to 6.00 a.m.) on or
during any cultural or religious festiveoccasion
⚫2002 - The Biological Diversity Act
⚫Isan act to provide forthe sustainable use &
conservation of biological diversity.

Penalties:
⚫Section -15 –EPA dealswith these.
⚫ If a person fails to comply any provision or any
direction issued under this act then he shall be
punished foreach failureas :-
⚫Imprisonment , which mayextend to 5 years, or fine
which mayextend to Rs one lakh or both.
⚫ If failurecontinues afterconviction for 1 st failurean
additional finewhich may be Rs 5000 foreverydaycan
be imposed.
⚫If failurecontinues for 1 year theoffendershall be
imprisoned which mayextend upto 7 years

Forest and wildlife
⚫1927 - The Indian Forest Actand Amendment, 1984,
⚫ It was enacted to ‘consolidate the law related to forest, the
transitof forest produce, and theduty leviableon timberand
otherforest produce’.
⚫1972 - The Wildlife Protection Act, Rules 1973 and
Amendment 1991
⚫ Provides forthe protection of birds, animalsand plantsand
forall matterconnected therewith.
⚫1980 - The Forest (Conservation) Actand
Rules, 1981, provides forthe protection of and the
conservation of the forests.

Penalties
⚫Wildlifeprotection act (9 sept . 1972).
⚫Chapter 6 dealswith prevention & detectionof
offences.
⚫Section 51 dealswith penalties.
⚫Any person whocontravenes any provision or ruleof this
act shall be punished with imprisonment forextent of 3
years , or fineextending upto Rs 25000 or both.

⚫The Indian Forest Act.
⚫Undersection 33 of thisact imprisonment fora term of
6 months or more or fine of Rs 5,000 or both is the
penalty forany person whoviolatesany of the rule
underthisact.

Water
⚫1882 - The Easement Act
⚫ Allows private rights to usea resource that is, groundwater, by
viewing it as an attachment to the land. It also states that all
surfacewater belongs to the stateand is a state property.
⚫1897 - The Indian Fisheries Act
⚫ Establishes two sets of penal offences whereby the
governmentcan sueany person who uses dynamiteorother
explosive substance in any way (whether coastal or inland)
with intent to catch or destroy any fish or poisonous fish in
orderto kill.

⚫1956 - The River Boards Act
⚫Enables the states to enroll the central government in
setting up an Advisory River Board to resolve issues in
inter-statecooperation.
⚫1970 - The Merchant Shipping Act
⚫ Aims todeal with wastearising from shipsalong the
coastal areas within a specified radius.

⚫1974 - The Water (Prevention and Control of Pollution) Act
⚫ establishesan institutional structure forpreventing and
abating waterpollution.
⚫ Itestablishesstandards forwaterquality and effluent.
⚫ The CPCB (Central Pollution Control Board) was constituted
underthis act.
⚫1977 - The Water (Prevention and Control of Pollution)
Cess Act
⚫ Provides forthe levy and collection of feeson water
consuming industriesand local authorities

⚫1991 - The Coastal Regulation Zone Notification
⚫Puts regulations on variousactivities, including
construction.
⚫Itgives some protection to the backwaters and estuaries.

Normal composition
Nitrogen – 78.09 %
Oxygen – 20.94 %
Argon – 0.93 %
Carbon dioxide – 0.32 %

Air
⚫1948 – The Factories Actand Amendment in 1987
⚫First toexpress concern fortheworking environment of
theworkers
⚫1981 - The Air (Prevention and Control of Pollution)
Act
⚫Enacted underarticle 253 of the Indian constitution.
⚫Provides forthecontrol and abatementof air pollution.

Rules
⚫Defines the procedures of the meetingsof the Boards
and the powers entrusted to them.
⚫1982 - The Atomic Energy Act
⚫Deals with the radioactivewaste.

Amendment Act
⚫Empowers thecentral and state pollutioncontrol boards
to meetwith grave emergencies of air pollution.
⚫1988 - The MotorVehicles Act
⚫States thatall hazardous waste is to be properly
packaged, labelled , and transported.

Penalties
⚫Section 37 dealswith these.
⚫Punishment forviolating anyof the rule underthisact
shall be :-
⚫Imprisonment forterm which shall not be less than one
yearor 6 months & mayextend to 6 years orwith fine.
⚫In case failurecontinues an additional fine of Rs 500 per
day.
⚫If failure continues beyond one year the punishment
shall be imprisonment for term which shall not be less
then 2 years & mayextend to 7 years & with fine.

Protection of action under
good faith.
⚫No legal proceedings shall lieagainst thegovt. orany
officer of govt ; member or employer or board in
respectof anything or intended to bedone in good
faith.

BreakingTheSilence
“Whistle Blowing is the
instance of reporting improper
activities to an appropriate
person.’’ – Richard T.De
George

Features
• Individual Act : Whistle Blowing is an act of an individual i.e.
a person or a group of person.
• Moral Motive : The Whistle Blowing is done for a public good
rather than for some selfish motive.
• Reasonable Belief : The Whistle Blower beliefs that the
conduct for an activity reported is inappropriate.

• Calling Attention : Whistle Blowing means calling
attention of proper authority to something which is
wrong.
• Expectation Of Positive Response : The Whistle
Blower expects the organization or the external agency
to respond positively.
• Voluntary Act : Whistle Blowing is voluntary and
deliberate as there is no legal obligation to do so.
• Several Types : The Person Blowing The Whistle
maybe an insider or an outsider. It maybe against a
person, an organization or a group and a government.

Types Of
Whistle
Blowing
• Internal Whistle Blowing : It refers to disclose
about the improper conduct of a person within the
organization. Its purpose is to get the matter
investigated in accordance with the organization’s
rules and procedures.
• External Whistle Blowing : It refers to disclosure
to outside agencies such as the media,
enforcement authorities and public interest
groups.

• Personal Whistle Blowing : When a person or class
of persons is subjected to immoral behavior or
exploitation, the disclosure is called personal whistle
blowing.
• Corporate Whistle Blowing : It refers to disclosure
about misconduct on the part of a company.
• Government Whistle Blowing : It refers to
disclosure about wrong or immoral conduct on the
part of government officials or department.

MotivesOf Whistle Blowing
• To Enforce Ethical Conduct : Whistle Blowing is done to make
the person or organization realize and adopt ethical behavior.
• To Highlight the Dangers : One of the reasons behind whistle
blowing is to point out the possible dangers from the use of a
product or technology.
• To Highlight Threat to Public : Disclosure is also made to
point out the danger to life and property due to a defective
product or technique.
• To Motivate Towards Morality : One of the motives of whistle
blowing is to inspire the mangers or government officials to
adopt morals value and ethical practices.

IsWhistleBlowingMorallyJustified?
• When whistle blowing is based on an appropriate
motive or utmost good faith.
• When the whistle blower has exhausted all internal
channels.
• When the whistle blower’s belief regarding the
inappropriate conduct is based on reasonable evidence.
• When the whistle blower’s action has some chance of
exposing and/or avoiding the moral violation.
• When the whistle blower’s action is commensurate with
responsibility for avoiding and/or exposing moral
violation.

Whenwhistleblowingismorallyunjustified?
• Breach of trust : When the disclosure amounts to breach of
trust on the part of the person making the disclosure.
• Internal Channels not used : When the person making the
disclosure has not tried internal channels to prevent or stop the
wrongdoing or misconduct.
• Insufficient Evidence : When there is lack of clear and
substantiated evidence that the organization is doing something
wrong which cause serious harm to the other parties.
• Little Chance Of success : Whistle blowing is not justified
incase it is uncertain that it will prevent the wrong.

Protected
disclosure
A protected disclosure is a qualifying disclosure under the
Employment Rights Act 1996 that is made by a worker that
they reasonably believe shows serious wrongdoing within the
workplace. This will typically relate to some form of dangerous or
illegal activity that the person has witnessed at work.

What is a protected
disclosure?
To qualify for protection, you must have a “reasonable
belief ” that a wrongdoing has occurred, or is likely to incure,
and that it is not in the public interest. It is not necessary for
the wrongdoing to have actually occurred, but that you
believe it to be true.

In order for such a disclosure to be protected a
worker must:
•Reasonably believe that the information disclosed and any
allegation is substantially true;
•The disclosure is not made for personal gain;
•The making of the disclosure in public is in all the
circumstances, reasonable

Tax
• A fee charged ("levied") by a government on
a product, income, or activity.
• If tax is levied directly on personal or corporate income,
then it is a direct tax.
• If tax is levied on the price of a good or service, then it is
called an indirect tax.
• The purpose of taxation is to finance government
expenditure.
• One of the most important uses of taxes is to finance public
goods and services, such as street lighting and street
cleaning.

Sales Tax
• Under sales tax, tax is levied on every sale made.
• For example if a dealer (say A) sold goods to another dealer
(say B) he collects local sales tax from such dealer which is
normally included in his sale price.If dealer B again sells
goods to another dealer (say C) he again collects tax on
sales made by him.The tax levied by dealer B shall be on his
sale price i.e (his purchase price + profit ). As his purchase
price already includes tax paid by him,sales tax includes tax
on tax already paid i.e it is repetetive in nature.
Under VAT (value added tax) the tax is on sales made by
any dealer levied only on value added at each selling
point.so it is not repetetive in nature.

Value Added Tax(VAT)
• Sales tax is retail only.
• Value-Added tax is a tax at every step of the
inventory process
• Taxed at every step from manufacturer to
distributor to warehouser to retailer to
customer.
• VAT is uniform; whereas sales tax differs from
state to state.

Goods and Service Tax (GST)
• The Goods and Service Tax (GST) is a Value Added
Tax (VAT) to be implemented in India, from April 2016.
• GST is comprehensive tax mechanism where in all
major indirect taxes are clubbed into one, whether
they are levied on services(service tax) or goods(excise
and vat).
• Government had promised that GST will reduce the
compliance burdens at present.
• One of the aims of introducing GST is to reduce the
cascading effects of taxes which is the primary focus of
VAT but vat system is not comprehensive enough to do
so.

VATVs GST
• VAT is value added tax (on products). GST
(Goods and Services Tax) is like VAT but
applies to Services also (apart from products).
• In India, we have VAT and Service Tax.
Whereas in many countries you have only GST
that applies to both products and services.

History
• In 2000, the Vajpayee Government started discussion on
GST by setting up an empowered committee.
• An announcement was made by Palaniappan
Chidambaram, the Union Finance Minister, during the
central budget of 2007–2008 that it would be introduced
from April 1, 2010.
• After this announcement, the Empowered Committee of
State Finance Ministers decided to set up a Joint Working
Group on May 10, 2007, with the Adviser to the Union
Finance Minister and the Member-Secretary of Empowered
Committee as co-convenors and the concerned Joint
Secretaries of the Department of Revenue of Union Finance
Ministry and all Finance Secretaries of the states as its
members.

• The Joint Working Group, after intensive internal discussions as well
as interaction with experts and representatives of Chambers of
Commerce and Industry, submitted its report to the Empowered
Committee on November 19, 2007.
• This report was then discussed in detail in the meeting of
Empowered Committee on November 28, 2007.
• On the basis of this discussion and the written observations of the
states, certain modifications were made, and a final version of the
views of Empowered Committee at that stage was prepared and
was sent to the Government of India (April 30, 2008).
• The comments of the Government of India were received on
December 12, 2008 and were duly considered by the Empowered
Committee (December 16, 2008).

Centre Includes Compensation in GST
Amendment Bill
• The Centre has included in the Goods and Services Tax
(GST) Constitutional Amendment Bill the compensation
which will be paid to states for revenue loss on account
of rolling out the new indirect tax regime.
• The Bill was introduced in the Lok Sabha on December
19.
• While liquor has been completely kept out of the GST,
petroleum products like petrol and diesel will be part
of the new regime from a date to be decided at a
future date by the GST Council, which will have two-
third of its members from states.

India's GST structure is complex, says IMF
• Report says the proposed GST structure will require the
Centre to coordinate with 30 states, which is an
administrative challenge.
• Even as the International Monetary Fund (IMF) says the
proposed goods and services tax (GST) will improve tax
compliance and enhance economic growth by 1-1.5 per
cent over time, it finds the structure of the indirect tax
regime in India complex.
• “The GST design being contemplated is... fairly complex,
with a dual administration arrangement that involves the
tax authorities of both the Centre and states separately
taxing a single transaction,” says the Fund in a report on
India.

Analysis on Budget 2015 - 2016
• Excise Duty & Service Tax
1.Rise in Excise Duty & Service tax(ST
increased to 14% from 12.36%) was seen
making it getting sync with the GST rates of
27%.
2.This is because the GST rate would not be
felt as a burden when it is adopted
3.Also, this would fund the CG as it requires
compensation payment to the states

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