The Goods, Service, and Tax (GST) completed one year yesterday. The idea of GST was first proposed by the UPA government in 2006 which became a reality on July 1, 2017, leading to celebrations all around the country and the Parliament of India. Unfortunately, the story didn't end happily.
Monumental Mismanagement:
Good, Services and Tax were thrust on the unprepared nation for which the design, structure, infrastructure backbone, rate or rates and implementation of GST have been so flawed, making it a bad word among businesspersons, traders, exporters and the common citizen. GST Bill ignored the advice of Chief Economic Advisor. The net result of which is not a true GST, Multiple Rates going up to 40 percent, arbitrary cesses on the top of the rates, making it the intolerable compliance burden on the average business firms in the country, especially on the SMEs.
P. Chidambaram, Foreign Finance Minister of India quoted:
The government did a bad thing in a big way, The Demonetisation or big things in a bad way, The GST.
Gains:
Goods, Service, and Tax(GST) in a jeweled uniform of valuable tax(VAT) which as firstly announced in 1991 Reform Budget by Dr. Manmohan Singh. The government claims there might be some early hiccups but soon the people of the country would witness the big boost in the economy. The Government of India has been successful in generating multiple audit trails and creating a common database for direct and indirect taxes.
Furthermore, it would help in removing the "Cascading Effect", which is a situation when the taxes are imposed on the previously charged tax, simply defining it as "TAX ON TAX". It has removed the entry tax paid by the truck drivers, transporting goods, on entering every state, which before can be seen as the long line of trucks roadside. Thus, leading to the ease of doing business for the transporters and the large-scale industries.
Pains:
For the small-scale businesses, it proved to be 'The Animal' not true GST, by requiring SSEs to file the three returns a month in every state wherever they carry out their businesses. That means all India Businesses require to file over one thousand returns a year amounting to Gross Delay in refunds leading to the blockage in crucially working capital of the funds. Thus, increasing the tax burden of the common citizen of India. The Government had earlier promised to reduce the tax burdens, which they eventually failed.
Furthermore, the GST doesn't have the positive impact on the economic growth eventually due to the flawed design and the hasty implementation of the Government of India, mainly including Finance Minister of the country, Shri Arun Jaitley and untrained Tax Administrators.
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