GST was to lead to the unification of the country and improve ease of doing business. These were all significant political slogans. But they have receded to the background in favour of a more muscular nationalism. 

GST is not being flaunted by the BJP as its major achievement in the ongoing election campaign. It was launched with a special session of Parliament similar to the one at the dawn of Independence. It was billed as the biggest tax reform. It was to lead to the unification of the country and improve ease of doing business. These were all significant political slogans. But they have receded to the background in favour of a more muscular nationalism.

GST collections have risen to a high of Rs 1.13 lakh crore in April. But on the whole, has it delivered what was expected? Not quite, because the unorganised sectors including the BJP’s base, the small traders and producers, are hurting. And adverse impacts on small producers are being reported from the shoe industry in Agra, brassware industry in Moradabad, pressure cooker industry, etc.

The large and medium-scale producers who are expected to benefit the most from GST are confused since hundreds of changes have been announced from the time it was launched. Even chartered accountants and lawyers who are to help businesses cope with GST are often left befuddled. More and more cases are being filed in courts due to lack of clarity and varying interpretations.

The government has been arguing that the problems are transitional. The government suspended the more difficult parts of the GST provisions — like e-way bill, GSTR2 form — for a while. It has raised the limit for registration under GST from Rs 20 lakh to Rs 40 lakh and for the composition scheme from Rs75 lakh to Rs 1.5 crore to exempt most small businesses.

Many tax rates have been brought down. But the problems persist because they are structural and not just a result of poor implementation. Of course, implementation has been poor because difficulties were not anticipated and GST was rushed through. GST needs a structural change but the government is reluctant to admit its mistake.

The opposition parties have raised the issue of the adverse impact of GST on the economy, especially on the unorganised sector. They have promised to bring about a simpler GST.

Published On : 04-05-2019

Source : The Indian Express