Be it demonetization or and now GST, the Modi government has put common man in pain and agony. Financial rollout is necessary for the development of the country but not at the cost of common man. Many businesses got closed, many became jobless, youth came on the road, and a sole breadwinner can’t run a family. Small-scale industries are already trailing in India, our businesses are bracing for the worst as the country storms ahead with its most ambitious reform in decades – altering the world’s fastest growing major economy into a single market. The long-awaited Goods and Services Tax (GST) will replace about 20 federal and state taxes and unify the country’s $2 trillion economy. Modi government assures the new system will not just simplify trade by replacing more than a dozen levies with one tax, but combat corruption and enrich state coffers by bringing the informal economy into the digital era.
Initially, the BJP-ruled Rajasthan, Haryana, Maharashtra, Assam, Madhya Pradesh, Jharkhand and Chhattisgarh, and manufacturing States such as Tamil Nadu and Karnataka were against the GST over revenue implications. Their fear is that, they need to be dependent on the Central sharing formula for their own welfare schemes. After the Centre’s promise that the most-affected States would be compensated, almost all States fell in line.
The GST is meant to be a unified indirect tax across the country on products and services. In the current system, tax is levied at each stage separately by the Union government and the States at varying rates, on the full value of the goods. But under the GST system, tax will be levied only on the value added at each stage. It is a single tax with a full set-off for taxes paid earlier in the value chain.
Thus, the final consumer will bear only the GST charged by the last dealer in the supply chain with set-off benefits at all the previous stages.
According to the Supreme Court, if you do not have an Aadhaar or do not wish to get an Aadhaar as of now, you don’t need to worry, at least for now. Your PAN will not be cancelled in such a case. “Only a partial relief by the court has been given to those who do not have Aadhaar and who do not wish to obtain it for the time being, that their PAN will not be cancelled so that other consequences under the I-T Act for filing to quote PAN may not arise.
But many businesses and retailers complain that they are ill prepared for the massive changes and about what to charge. Thousands of textile mills and retailers across the country went on strike this week to protest against the tax. Small businesses in particular are unhappy at the extra demands made of them to be tax compliant during the changeover. A slew of basic staples like fresh vegetables and milk are exempted, along with less obvious items like temple offerings, the national flag and human hair.
Tobacco like products will be slapped with extra levies, while states will still be allowed to separately tax on some products including alcohol, petrol and aviation fuel. India has one of the lowest tax-to-GDP ratios in the world and these changes, though initially painful, will have a “significant impact” on compliance.
To avoid a similarly rough landing, the government has trained 60,000 tax bureaucrats and run sessions with private accountants to ensure everyone is up to speed on the finer points of the GST. A GST Council has spent months thrashing out the final legislation, which was blocked in parliament for a year until an amended version was approved. About 70,000 tax officers and employees in the country had worn black bands at work, to protest some recent decisions taken by the GST Council headed by Finance Minister Arun Jaitley.
The associations representing them said the decisions are heavily tilted towards the states, which is not good for the sovereign function of the Centre to levy and collect taxes. While extending their support for successful and smooth implementation of Goods and Services Tax (GST), the associations demanded that the same has to be done in a rational and transparent manner.
However, in the present set of things and decisions, which has been taken in the recent meeting of the GST Council, it is felt that the basic structure of the scheme is being compromised and the same may lead to utmost chaos which may be detrimental not only to the revenue but also to the industry, trade and commerce in general.
Referring to the contentious issue of dual control over the assessees, the associations said the duality of control would in turn lead to spurt in litigation amongst the states thereby increasing the burden on the courts that are already burdened.
Anyway, some people have criticized the move while others have praised the PM. Ever since the Modi Government has come to power it has made essential services like Banking more expensive by raising the service tax. Modi’s GST raises the cost of banking services and insurance services again. Both of these are essential to the common man. Thus, it is clear that Modi’s GST may prove to be anti-common man.
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