Even Gods Can't Salvage GST

By Vijay Kumar

CONGRESS leader Anand Sharma says, "The April 01 deadline for rolling out GST will not be met even if the trinity of Gods - Brahma, Vishnu and Mahesh - descend on earth".

So it's final; no GST from April 1 2016. Both Mr Jaitley and Mr. Chidambaram agree that a delayed GST is better than a flawed GST. Maybe a no GST is a better option. I have no idea about high-sounding concepts like Macro Economics, GDP, IGST, GST Council, the value of a vote in the GST Council, Revenue Neutral Rate..., but I know our babus and I am fully confident about their ability to make a thorough mess of GST in the very first year of its possible existence. More people are going to experience the might of Government, more people are going to be the victims of the haughty arrogance of the government servants. And most of the people are going to pay more taxes – in the most complicated ways possible. And our courts will simply crash under the weight of litigation that is going to be generated faster than revenue.

They introduced Service Tax in 1994 and in the last 20 years, made the laws totally complicated and incomprehensible to the best minds, issued hundreds of notifications, clarifications, circulars, orders, rules, mathematical formulae….. and at every point when some clarity was visible, upset the laws to make them further confusing and complicated. Nearly 30,000 Service Tax cases are pending in the Tribunal. They did not know how to tax construction Sector and Supreme Court had to tell them they cannot collect Service Tax on works contracts prior to 01.06.2007. They amended laws retrospectively in case of Commercial Coaching and Renting of immovable property having failed to draft the law properly. You may have to add a couple of zeroes to the pending cases when GST comes. The taxpayers' woes are going to at least double as they have to satisfy two sovereign authorities, the Central GST and the State GST. The CENVAT Credit scheme, which is already in a mess will simply turn chaotic. What can you expect from people who want to deny you the credit you have already earned, because of some change in Government policy?

GST is anyway badly delayed; let us delay it for a few more years and try to have a simple GST, easy to administer and easy to comply with. We must create a new breed of tax collectors who should be taught that they are servants of the taxpayers and not masters. This tax should not be left in the hands of people who have anything to do with in the present tax administration – a whole new department should be created and let there be only one authority/officer for the Central and State GST.

Until then, let the present confusion continue.

Last week, a minister in a State Assembly said, passing a Bill cannot be done as quickly as making a dosa.

Let GST wait, and anyway, what's in it for the common man? More taxes!