One more failure
After one year of GST, the numbers suggest that the new tax is not just disappointing but fiscally damaging and its implementation is riddled with anomalies.
JULY 2018 marks the first month of the second year in which the much-heralded Goods and Service Tax (GST) regime has been in place. When launched 13 months earlier, in a propaganda blitz that (wrongly) claimed that this “one nation, one tax” system was a gamechanger, the government had promised that the new regime would help the Centre and the States to efficiently mobilise the resources needed to put on a high-growth trajectory. In fact, demonetisation and the GST regime were presented as the two initiatives of the Modi government that would transform India.
Demonetisation, as the government’s own numbers provided in the Reserve Bank of India’s latest Annual Report establish, has been a failure from the point of view of stated objectives such as freezing and rendering worthless black wealth held as cash, preventing counterfeiting and encouraging a shift away from cash to digital transactions. And now it is becoming clear that GST is proving a failure too. In fact, from the beginning of its implementation, it was clear that the new tax regime was not what it was claimed to be.
To start with, it had to be accepted that a regressive flat or single tax on all commodities, whether conindia
FINANCE MINISTER Arun Jaitley chairs the 27th GST Council meeting through videoconferencing in New Delhi on May 4.