These days we hear and read a lot about the latest thing which gave birth to yet another “New India”.
- It is ‘transformative’,
- ‘it is Good and Simple’,
- ‘it creates a single economic block larger than Eurpopean Union’
so on and so forth.
It is GST – Goods and Services Tax.
We meet this thingy face to face in the form of
- higher restaurant bills,
- increased mobile phone charges,
- additional bank charges and
- paying more for dozens of other goods and services.
Certain things got cheaper, no doubt, for example
- Mercedes-Benz, Audi, BMW Audi became cheaper
- Honda, Renault, Maruti and Tata cars cost less.
We hear about
- traders in Surat’s textile market going on strike “There are over 70,000 textile trading shops in 165 textile markets in Surat, with a daily turnover of Rs 135 crore.” )
- protests by delhi shop keepers
- woes of Dharavi leather makers
- Tamil Nadu textile businesses going on strike
- match box makers complaining and so on.
We listen to
- shop keepers worrying about fall in business
- and shoppers talking about price rise.
There are pundits and experts to soothe the fears and pain.
- ‘It is better than what we had before (many taxes, many rates)’,
- ‘there will be initial hiccups, we will see the improvement in a couple of years time’,
- ‘checkposts at states’ borders will vanish’,
- ‘GST will eliminate cascading effect of multiple taxes’
- ‘this will add 2 percentage points to GDP growth (and hence lead to job creation)’,
- ‘there are about 160 countries which have implemented GST’ and so on and so forth.
There are issues such as
- loss of taxation powers to state governments
- higher taxes on goods and services of common use and lower tax on luxury items
Let us try to make sense in simple economic terms of a common man making a living by working and struggling to make ends meet every day, every week, every month.
There will be a series of small posts, enabling readers to provide more inputs, questions and engage in discussion.
- What is GST or Goods and Services Tax (Why 2 terms?)
- How much it simplifies and for whom? (the short answer : for Indian and multinational corporates)
- From whom it collects? (the short answer : from salaried employees and wage workers)
- Who supports it, who opposes it? (the short answer : none of the mainstream political parties including CPM oppose it, in principle. They differ only on details)