GST Yes, But What about Loss Thus Far

article

Though the government came up with many steps to plug in the loopholes, sooner or later they turned out to be sheer naff. The losses kept on piling up, in turn creating deficit in budget after budget

ABID SHAH

ABID SHAH

Abid Shah is a joint editor of parliamentarian. He is a journalist with over 30 years of experience in working with various publications.

Old habits die hard. And if it comes to taking goods like bread and butter or services like electricity and water for granted, all such stuff may well have to be put on discount even if they don’t become as good as dole. But far from this being the case, the poor consumer has always been paying for every little thing, including the tax appended to it. So much so that the taxes on both, goods or services, have merged so deeply with the actual cost of the product that to sift it out from the overall cost coughed up by the end user, and take it to public fund or exchequer impeccably to run the country as a fair, genuine and just socio-political collective has been becoming quite a task.

There have been myriad taxes on almost every single conceivable product since the days of Salt Satyagraha in the wake of Gandhiji’s opposition to the British move to tax salt. And so is the case with services. Together, they fall in strict boundaries called Centre and States. Yet, seldom had the tax collected from teeming millions reached the State coffers in desired quantum. The taxes levied by the State have always been realised through mostly not so scrupulous tradesmen under the selective gaze of even less scrupulous taxmen with the result that a good part of the taxes became a virtual booty to be shared and pocketed between the two.

It is mainly in this backdrop that GST, or Goods and Services Tax, is hopefully going to replace both Central and State taxes like excise duty, VAT or Value Added Tax, Sales Tax, entertainment tax and similar other levies and/or various types of cess. The fact that for ages the retailers were seldom providing cash memos to consumers points to regular pilferages of taxed amount. What the grocers have in fact been doing is paying taxes through filing statements for years, nay decades, leaving the elaborate taxation system in the red. The complicity of authorities by turning a blind eye to such evasions in lieu of a consideration from them had thrown the entire system out of gears on the one hand and given birth to what is known as crony capitalism on the other.

Though the powers that be came up with many steps to plug in the loopholes, yet sooner or later most of them turned out to be sheer naff. The losses kept on piling up and in turn fuelling deficit in budget after budget till this brought pressure from international donors who have often been funding the country’s development and other urgent needs and therefore could easily be worried at the shabby state of public finances. Old habits still came in the way when the top leadership of the country woke up to stem the rot. It took 17 long years since the then Prime Minister Atal Behari Vajapayee had set up an empowered committee way back in the year 2000 under West Bengal Finance Minister Asim Dasgupta, who was from ideologically diverse Left wing vis-à-vis Vajpayee’s party, to look into and weigh the option of introducing GST to throw a wider and uniform tax net to plug loopholes and do away with other anomalies.

Despite the euphoria generated with the move, successive governments since Vajpayee’s time have been shrugging off the responsibility of cobbling up and enforcing this new tax regime for one reason or the other. So much so that when senior Congress member of the Lok Sabha and former Union Minister Veerappa Moily pointed out on March 30, 2017, to the Lower House that no less than Rs 12 lakh crore have been lost in past eight years because of the extraordinary delay in bringing in GST, no serious challenge came in the wake of the claim or contention that the delay has been costing Rs 1.5 lakh crore a year or 12.5 thousand crores a month.

Whopping as this may sound what Moily wanted to convey was that it was none other than Narendra Modi as Chief Minster of Gujarat besides a few others who had fiercely opposed the GST and continued to do so till he became Prime Minister and was faced with the staggeringly huge issue of poor tax realisation in

the absence of a mechanism like the GST.

Now, as the countdown for GST to become a reality has virtually begun, the challenge is far from just applauding amid expectations that it would turn the country into a single market by removing trade barriers, among other things, but also to ensure that the rupee or money stops from landing inadvertently from honest hands to dishonest ones. This has starkly been the case in the decades gone by, despite so many tall claims. What would determine the success of GST is whether a uniform and fair tax regime also brings new fiscal mores, where the old wont to squander away tax payers’ hard earned money goes away or continues to linger with impunity

as, sadly, has often been the case in

the past.

the-gorkha-ploy

The Gorkha Ploy

Darjeeling has been set ablaze – presumably to salvage political clout by the BJP-sponsored anti-Mamata Banerjee dispensation outfit, Gorkha Janmukt...

Jadhav-Hanging-in-Balance

Jadhav Hanging in Balance

With the interim order by the International Court of Justice (ICJ) that stayed the death sentence of the Indian prisoner in Pakistan jail Kulbhushan J...

A-new-beacon-less-polity

A new beaconless polity

The Narendra Modi cabinet has taken a historic decision to end the VIP culture in the country. On Wednesday, April 19, 2017, the Union Cabinet decided...

GST-Yes-But-What-about-Loss-Thus-Far

GST Yes, But What about Loss Thus Far

Old habits die hard. And if it comes to taking goods like bread and butter or services like electricity and water for granted, all such stuff may well...

 
BACK-STOPS-AT-ELECTION-COMMISION

BACK-STOPS-AT-ELECTION-COMMISION

COULD impressive performance of the BJP in Maharashtra and Odisha municipal elections have influenced Assembly elections in Uttar Pradesh, where the p...

incentives-not-artificial-scarity

Incentives not artificial scarity

Reserve BANK OF INDIA might not have o cially acknowledged, yet over 95 per cent of the demonetised currency notes of Rs 500 and Rs 1,000 notes have r...

FIRE-BEFORE-PEACE

FIRE BEFORE PEACE

WHEN our Editor at Parliamentarian magazine told me that we are doing a special issue on astrology in the January Edition of 2017, I was a bit surpris...

DILEEP-PAdGAONKAR:-A-triBUTE

DILEEP PAdGAONKAR A TRIBUTE

THE Times of India is credited to have started many journalistic trends in the country. Managing Editor being one of them. An editor who was more of a...

magzine-cover
ads