GST proven to be very appalling incident, Narendra Modi’s own party leaders have not understood the GST. BJP Minister from Madhya Pradesh said that he has not been able to understand the Goods and Services Tax (GST) yet. Do millions in the countryside understand Income tax filing? GST doesn’t have to be understood by common man. Traders will take time but it will eventually become a smooth and transparent process. He said eventually, but ultimately when are we all going to get it? GST has been implemented in a horrible manner, totally mishandled and hopelessly directed. So, admit it and get on with life, is what BJP has to do. Instead they defend the vulnerable. Since this party has come to power they have sucked the economy, common public is suffering without funds. Their future has become hollow. Look at the irony, BJP’s leader while addressing a gathering at his party event on the first anniversary of demonetisation said, he is yet to understand GST. His statement comes days after Prime Minister Narendra Modi exuded confidence over the GST that was rolled out on July 1. He added saying, even CAs and businessmen are facing problem in understanding it. This is the biggest tax trauma since Independence, which began in India. The launch of the centralised GST is aimed to cut through the red tape and corruption generated by the swathe of state taxes currently in force.
There is opposition to GST from various traders of, textiles, retail, road construction, furniture and diamond sectors have expressed their concern. GST has increased the cost of living. It would be equivalent to an income cut of 5-10 per cent. The imposition of GST eradicated the principle of a tax system based on capacity to pay. The “compensation” offered by the Coalition would not fully compensate for the impact of a GST. In countries with a GST, it was increased by an average of 42.41per cent within 10-15 years of its introduction. Workers who have been retrenched or injured have to use up their retrenchment pay or workers’ compensation money before they are eligible for government benefits. This means that they won’t get any compensation for a GST. The main tax avoidance culprits are big companies. The GST would do absolutely nothing to stop tax avoidance because businesses would be fully reimbursed for any GST paid on business inputs. The GST won’t fix the problem of workers on medium incomes being pushed into the top income tax brackets. This would result in a massive transfer of wealth from the rich to the poor. While a GST may increase private profits, there is no guarantee that these profits would be spent on increasing production and jobs.
Modi has sold the dreams but after three years people are actually realising what is going wrong. He won managing public perception through propaganda. Look at Modi’s own constituency, Varanasi, a year after Modi’s surprise move to scrap large value notes. The priest on ghat and voter since 1996 says, demonetisation damaged him economically; people were out of cash for months and he was unable to get dakshina or offerings for his religious rituals – his source of livelihood. Many like him have to starve, and there are many yet to come out of demonetisation shock. The banks of river Ganga went silent, vendors to priests everyone was under the challenge of livelihood. Across Varanasi, this is the view shared by many. Even beyond Varanasi, small traders, common men and businessmen are fed up. They have lost their businesses and they have become unemployed. Inspite of demonetisation shock BJP won in UP because people of the state were fooled, they were told that the rich are getting caught which made UP’s underprivileged voters quite happy. Demonetisation was a political masterstroke and an economic disaster. The sentiment among voters that helped the party win a big majority in the all-important UP assembly elections, where criticism of notes ban was all around by a section of economists and social activists, and the anger of common people who stood for hours in bank queues did not translate into a vote against the BJP.
Economists are still fighting over its merits and demerits. Even master degree holders and PhDs in Economics or Public Finance, are not having any unanimous opinion on the subject. Demonetisation was supposed to be a series of systematic steps to curb black money and corruption making India a more transparent and honest economy through digitalisation. But BJP’s own leader came under scanner but the party and its Supremo conveniently ignored them.
Majorly manufacturing states had incurred revenue loss after GST was implemented. GST is a Consumption based tax so states, which are manufacturing oriented, have lost money. All the manufacturing states were against this law like Maharashtra, Tamil Nadu and Gujarat. Since Maharashtra and Gujarat is ruled by BJP, they couldn’t oppose much and Tamil Nadu opposed a lot which helped them in a way and Centre Govt will compensate for their losses for five years.
People earning low incomes would pay a GST on 100 per cent of their income because they tend to spend 100 per cent of their income on basic expenses. In contrast, rich people pay a GST only on a proportion of their income because they spend a much smaller proportion on living expenses, and save or invest the rest. Already, the top 20 per cent of income earners pay only 17.3 per cent of their incomes in indirect tax, while the bottom 20 per cent pay 30.8 per cent.
Forget about one BJP leader who came openly and accepted the fact that he has not understood GST, but there are many like him within BJP who is against it but can’t speak. Common public is clueless, where and how they are fooled.
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