The Rush for GST

“Taxation is theft!” said Murray Rothbard a twentieth-century libertarian, but the twenty-first century India is celebrating the launch of a new national tax regime, Goods and Services Tax, abbreviated as GST. The launch is organized in an extravagant manner with a midnight launch resembling the announcement of Independence for India. The resemblances are very striking, we have the confused citizens across the nation and a clueless administration.

                “ I do not own a computer and at this age, it is not possible for me to even learn it. Even if I buy one I will not be able to afford a staff to operate it.” Says Ramdev, a cloth merchant from his hundred square feet shop in Maruthi Seva Nagar.” They are saying that it is mandatory to have a computer with internet to do the billing, what will I do? ” Retailers like Ramdev are the worst hit and they say that the implementation was in such a short notice that it is difficult for them to accommodate it. Inclusivity is one of the biggest criticisms that GST implementation is facing. The government had set up a portal for GST migration but efforts for training the merchants were not effectively reached. The fate of merchants like Ramdev is still a question mark.

Problems are not confined to traditional merchants, retail outlets selling electronic goods and appliances are also witnessing the chaos. “There are clouds of confusion about the existing stock and items on credit, the government has not given a clear instruction about it still,” says Aljo, the owner of a computer peripherals shop.” We were already reeling under the slowdown caused by demonetization and now this, we are also burdened with the task of migrating our systems into the new scheme” he added. Authorities have directed merchants to maintain up to date books and clear the older stock at the earliest or face added taxes after July third the date of GST launch. Bigger retail chains are tackling this with massive discounts and offers, but smaller retailers are a troubled lot.

There are, however, brighter spots and smiling faces too, sectors like budget hotels are in an upbeat mood as there are slab revisions and tax reductions. Hoteliers are welcoming this move and have already passed the reductions to the customers. Tax consultants are also optimistic about the reforms, “This will bring a majority of merchants into the net of taxation and make them more accountable and a uniform tax system will bring in economic activity equally across the country.

GST or Goods and Services Tax is definitely one of the biggest tax reforms the country has ever seen, however shortcomings in its implementation need to be addressed at the earliest. Without proper implementation, the taxation is still going to be a challenge in a country like India.