Will GST be pro-consumer?
The BJP and the Congress have reached consensus on two clauses of the GST bill. This may signal a political detente as far as the constitutional amendment is concerned, but the core issue remains; will consumers, small traders, small and medium enterprises benefit as much as the government itself would. A major reform as this, needs to embrace both substance and spirit in equal measure. As for substance, central indirect tax is collected in the form of central excise and it is chargeable on manufacturing stage, but now either GST or central GST will apply at sale giving a boost to central revenue. Also the threshold for central excise at R1.5 crore will drastically be reduced, hitting the small producer. As for spirit, entry taxes account for 14% of states’ total tax collection, to be adjusted from central collection. The license raj culture of octroi will perhaps continue in other forms and users left no better. The parliamentary debate would focus more on the technicalities of fixing a limit on the GST. One wishes that Rajya Sabha members will be as concerned about making the goods and services tax work for the common man as for the government. We have a right to education but not adequate schools, a right to food but poor and inadequate storage and indifferent PDS. The nation may now have a GST and a central tax collection, left with many loose ends. The common man may have to bear the brunt of a tax system, for quite a while.