Prof. Arun Kumar, explains the reality behind GST

Feb 26, 2019, 12:19 AM

Many Questions on GST

GST Book: Blurb

Title: Ground Scorching Tax

On 1st July 2017, Goods and Services Tax (GST) became a reality. The government hailed it as the biggest tax reform of independent India which would herald a new freedom for the nation and unify it with ‘One Nation One Tax’.

Some of the claims made by the government were that GST would bring about ease of doing business; increase tax collection; lower inflation; increase GDP growth by 1-2%; and check the black economy.

So, today, one can ask?

1. Why did the economy slow down?

2. Why is the government collecting less tax then targeted?

3. Why have prices continued to rise?

4. Why the black economy continues?

5. Why has Malaysia withdrawn from GST?

The book points out that the problems are not just transitional as made out by the proponents of GST but and structural. To correct for the transitional problems, there have been a few hundred notifications and orders which have only added to the confusion.

In this book, Arun Kumar, explains the reality behind GST. The author explains that GST

1. Is a double whammy for the common man;

2. Will lead to increased inequality across sectors and regions;

3. Will hurt small businesses; and

4. Why it will do more harm than good

The author presents what the government does not spell out by discussing the `what and why’ of GST. He shows that it is a Convoluted Tax and not a Good and Simple Tax. Finally, he presents an alternative which would convert GST from a `Ground Scorching Tax’ into a `Ground Nourishing Tax’.

Some other questions addressed in the book:

1. GST is based on fallacious arguments about simplifying indirect taxation in India

2. With eight rates of tax, does GST fulfil the promise of `one nation one tax’?

3. Is it true that 17 taxes have been replaced by 1 tax?

4. Has the cascading effect been eliminated as promised?

5. Why calculation of GST tax rates is `not a science but an art’?

6. Why is GST a half-way house in India and not a full GST?

7. Why benefits of computerization should not be confused with achievements of GST?

8. Why more of formalization will not mean less black income generation?

9. What are the Social and Political consequences of GST?

10. How is the autonomy of the states being dented?