Former finance minister P Chidambaram today attacked the government on the first anniversary of the GST (Goods and Services) regime, claiming it had raised the tax burden on the common man and become a "bad word" among the people.
Former finance minister P Chidambaram today attacked the government on the first anniversary of the GST (Goods and Services) regime, claiming it had raised the tax burden on the common man and become a "bad word" among the people.
Addressing a press conference today, P Chidambaram said, "The Congress party is happy that the idea that was first proposed by the UPA government in 2006 has become a reality."
He added, "We are also relieved that the BJP, which stridently opposed the idea for five years and obstructed the passage of the bills, changed its patently wrong view and adopted the idea of GST."
"Unfortunately, the story did not end happily."
Chidambaram recalled that earlier as well he had said that the "government did bad things in a big way (demonetisation) or big things in a bad way (GST)."
He slammed the Centre for poor implementation of and flaws in the indirect tax regime. He said that the tax administration is the only section happy with the GST in its current form as it has acquired enormous power that frighten the average businessman.
"The design, structure, infrastructure backbone, rate or rates and implementation of GST were so flawed that GST has become a bad word among business persons, traders, exporters and common citizens. The only section that appears to be happy about the GST is the tax administration that has acquired extraordinary powers that frighten the average business person and the common citizen."
In his statement, Chidambaram said, "Beginning with the GST Constitution Amendment Bill, every step taken by the BJP government with regard to GST was deeply flawed."
"The GST bills ignored the advice of the chief economic adviser on many aspects of GST, notably on the rates. The net result is that what we have today is not a true GST."
"Multiple rates going up to 40 per cent, and arbitrary cesses on top of the rates, have completely distorted the idea of GST. An intolerable compliance burden has been put on the average business firm, especially on the SMEs [Small and Medium Enterprises], by requiring the assessee to file three returns a month in every state where the assessee carries on business. That means that an all-India business is required to file over 1000 returns a year! Gross delay in refunds has blocked crucial working capital of firms. It is widely perceived that GST has increased the tax burden of the common citizen; it has certainly not reduced the tax burden as was promised."
"The truth is that GST was thrust upon an unprepared nation. The tax administrators were untrained. The GST Network (GSTN) was untested. Proof lies in the fact that GSTR Form-2 and GSTR Form-3 have not been notified even after a year. The system is being run on GSTR Form-1 and the temporary (and perhaps illegal) GSTR Form-3B."
"It is an undeniable fact that GST has not yet had a positive impact on economic growth. On the contrary, because of the flawed design and hasty implementation, according to the statement of the Minister of Industry in the Tamil Nadu Legislative Assembly, 50,000 SME units in Tamil Nadu were closed in 2017-18 and 5,00,000 jobs were lost. Multiply that several times for the other industrial hubs in the country."
The former finance minister also suggested corrective measures "required to be taken to bring the current tax closer to a true GST".
Addressing a press conference today, P Chidambaram said, "The Congress party is happy that the idea that was first proposed by the UPA government in 2006 has become a reality."
He added, "We are also relieved that the BJP, which stridently opposed the idea for five years and obstructed the passage of the bills, changed its patently wrong view and adopted the idea of GST."
"Unfortunately, the story did not end happily."
Chidambaram recalled that earlier as well he had said that the "government did bad things in a big way (demonetisation) or big things in a bad way (GST)."
He slammed the Centre for poor implementation of and flaws in the indirect tax regime. He said that the tax administration is the only section happy with the GST in its current form as it has acquired enormous power that frighten the average businessman.
"The design, structure, infrastructure backbone, rate or rates and implementation of GST were so flawed that GST has become a bad word among business persons, traders, exporters and common citizens. The only section that appears to be happy about the GST is the tax administration that has acquired extraordinary powers that frighten the average business person and the common citizen."
In his statement, Chidambaram said, "Beginning with the GST Constitution Amendment Bill, every step taken by the BJP government with regard to GST was deeply flawed."
"The GST bills ignored the advice of the chief economic adviser on many aspects of GST, notably on the rates. The net result is that what we have today is not a true GST."
"Multiple rates going up to 40 per cent, and arbitrary cesses on top of the rates, have completely distorted the idea of GST. An intolerable compliance burden has been put on the average business firm, especially on the SMEs [Small and Medium Enterprises], by requiring the assessee to file three returns a month in every state where the assessee carries on business. That means that an all-India business is required to file over 1000 returns a year! Gross delay in refunds has blocked crucial working capital of firms. It is widely perceived that GST has increased the tax burden of the common citizen; it has certainly not reduced the tax burden as was promised."
"The truth is that GST was thrust upon an unprepared nation. The tax administrators were untrained. The GST Network (GSTN) was untested. Proof lies in the fact that GSTR Form-2 and GSTR Form-3 have not been notified even after a year. The system is being run on GSTR Form-1 and the temporary (and perhaps illegal) GSTR Form-3B."
"It is an undeniable fact that GST has not yet had a positive impact on economic growth. On the contrary, because of the flawed design and hasty implementation, according to the statement of the Minister of Industry in the Tamil Nadu Legislative Assembly, 50,000 SME units in Tamil Nadu were closed in 2017-18 and 5,00,000 jobs were lost. Multiply that several times for the other industrial hubs in the country."
The former finance minister also suggested corrective measures "required to be taken to bring the current tax closer to a true GST".