24 hours to GST: Govt seeks only glory, Oppn beats it with feeble stick
It is supposed to be the 'reform' of the decade; the cure that doctors of economics have been prescribing for Indian trade; the showstopper of the jamboree that is the Narendra Modi government. And it is just 24 hours away. So are we all ready to go GST?
The Goods and Services Tax, which Modi has billed would 'unify' India, is to kick in at midnight on 1 July. But far from uniting the nation in one fell swoop, it has only highlighted political cleavages and underscored the creases on the brows of traders from Kohima to Kathiawar.
On Thursday, news channels couldn't have done more to demonstrate that the business community is still confused about the new sets of dos and don'ts. Forget the media, even a chat with your neighbourhood grocer would be enough to tell you about the impending chaos. Even chartered accountants sound flummoxed, after marathon sessions that were supposed to be 'explainers'.
Govt in la-la land
The Central government, though, seems to be in another world, already set to pat its own back. Not long ago, it drafted megastar Amitabh Bachchan to sing paeans of the new tax regime. Ministers and leaders of the ruling party can't stop talking about how great it is going to be.
“The system is fully geared up,” said Finance Minister Arun Jaitley. Other leaders were seen urging Opposition leaders to join the party. Only if they had spent more times in ensuring a smoother roll-out the system, it would have served to soothe frayed nerves.
Instead, Jaitley was busy downplaying the fears: “I don't see much of a problem. Small issues will always arise whenever you make a change of any kind.”
This indicates he does anticipates problems. But, of course, he did not think it important to share what those problems could be.
Nor does he seems to have planned to solve them. “I'm sure the system is fully geared up and the system will eventually smoothen itself out,” is all he had to say.
Really, Mr Jaitley? You mean the system will smoothen out as it did when your government created that huge road-hump called demonetisation? Will it be too out of place to recall how the masses had to undergo extra hardship to face that brainwave of your government?
The FM went on to talk about how the government has spent “so much time” in building consensus. That sounded hollow, especially as he put the ball squarely in the court of the Opposition, saying they “must display broad shoulders and own up this decision”.
Opposition's headless chicken act
The other end of the political spectrum wasn't much inspired either, except West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee. The Congress, the chief Opposition, hardly managed anything other than to look grumpy.
With party vice-president Rahul Gandhi away on an indefinite holiday, the onus has fallen back on old war horses.
According to the party's senior leaders, midnight sessions in the Central Hall have only been held three times before – 1947, 1972 and 1997 – to celebrate India's independence, its silver and golden jubilees respectively.
“It is not just a question of not participating; the Indian National Congress cannot be party to such a tamasha, a publicity gimmick merely for taxation purpose,” said Congress leader Anand Sharma.
He went on to add that by convening this 'tamasha', the government has insulted the very memory of India's freedom struggle and the associated sacrifices.
Having given its nod to the GST Bill in Parliament, Congress faces a dilemma on how to oppose the Prime Minister who has taken the onus of presenting GST launch as India's second tryst with destiny moment. It must be deeply discomforting for Congress that the present government will take all the credit for GST, despite it largely being Congress' brain child.
This must be discomforting for the Congress. However, instead of targeting the government over the timing of the launch and its preparedness to roll out such a ambitious scheme, the grand old party hasn't found any other stick to beat the government with.
The Mamata blueprint
Considering the confusion amongst the trading community over GST, the grand old party could have raised their issues, and highlighted how they are seeking more time before the roll out. Several trade organisations across the country have been planning protests against the GST roll-out, prompting other Opposition parties to skip the midnight jamboree.
Banerjee, who has been leading the Opposition's charge against GST, showed the way to do it, raising serious concerns about its implementation. Her party, too, will boycott the grand celebrations in Parliament.
To voice her concerns, Banerjee wrote a lengthy post on Facebook: “After #demonetisation, this unnecessary disastrous hurry is another epic blunder of the Centre. We have been for GST from the beginning but are very worried now with the way the Central Government is going ahead with the implementation. Our repeated suggestions to take some more time to properly implement GST have fallen in deaf ears.”
She also raised concerns about essential commodities such as medicines not being available in many places, while prices of various commodities are “rising for lack of clarity and mismanagement”. Banerjee also highlighted how the leaders of the present government had initially strongly opposed GST for over seven years, and had a change of heart after assuming power.
The DMK and Left parties also questioned the celebrations in the face of protests by traders and small businesses, and have decided not to attend.
CPI's D Raja told PTI: “The Left will not be participating in the midnight GST meeting. People are agitating across the county. There are serious apprehensions in the minds of people over GST's implementation. We cannot be celebrating when people are agitating.”
Bihar Chief Minister Nitish Kumar, on the other hand, will send emissaries to the event, which has yet again put doubts over him being part of the united Opposition in the run-up to the 2019 General Elections.
It is hard to deny that traders are facing a torrid time trying to decipher how GST would be implemented and how it would impact them. They have raised multiple issues that could plague the ease of doing business:
First, the cost of technology is expected to rise exponentially, since a majority of traders are not well versed with digital tax payments. But GST forces them to go digital and deal with the uncertainties of the new system on the move. A silly mistake under the GST could lead to huge penalty, and even a jail term, and that is what is making traders jittery.
Second, under the new system, for availing input credit, all the suppliers within the supply chain must file authentic invoices in the GST network. For example, if a product has passed through the hands of 10 suppliers, and if the supplier number four and seven have not uploaded correct invoices in their systems, then none of the other suppliers will be able to claim input tax credit. If that was not enough, the supplier in the down chain gets only five days to ask the supplier in the chain above him to upload the correct invoice.
Third, once GST comes into force with an anti-profiteering clause, it could be used to debar a company from doing business, in case it is found not passing on the benefits accrued due to GST to the customer. An anti-profiteering authority will be set up with the powers of assessing whether a company passed on lower prices on account of the GST to customers.
Moreover, a complaint will be first verified by a standing committee of officers. Based on the merit of the case, it will be investigated by the director general of safeguards. The authority will then take a call on the quantum of punishment, which, at its extreme, will de-register the licence of a company. The entire process will be complete within eight months.
While industry stakeholders have called the clause draconian, the government wants to use this provision to ensure that the benefits of lower tax rates on essential items are passed onto the customers.
In these circumstances, the Opposition, particularly the Congress, should have raised these issues and reached out to the trading community, instead of raising irrelevant issues like the government insulting freedom movement. It must realise the show will go on, regardless of whether Opposition parties participate in the festivities or not.
(With inputs from Sulagna Sengupta)