Published On : Fri, Jun 30th, 2017

GST at the stroke of midnight ! Will it unite or divide as never before?

When the clock strikes midnight today, our Prime Minister Narendra Modi will roll out a new tax regime for the country which, as per its reason detre is supposed to unite the country under one umbrella, but has it bitterly divided, politically, socially and among business community also.

There is dispute right from the way it is being unrolled!

Opine many, it is the President of India who should have been doing it, not the PM. It is to be implemented nation wide at one stroke and only the President has the powers to do so. Why the PM has decided to do it instead is confusing… for the credit that it will accrue, or he thinks compliance will be better if he does it?


Because if GST, Goods and Service Tax, is to be described in one sentence it is Compliance driven through technology tax.

The penalty for not complying will not be a mere penalty, but it will drive you to close down your business!

Unless you can give a proper bill with GST to your customer, he will not be able to input it himself in his bill if it is a B2B transaction.

Even in a B 2 C ( Business to Customer) transaction, there will be inspections, audits and checks to see if you are billing as per new rules or not. In short whether you are compliant or not.

If you miss filing returns over 6 times, your Registration number stands to be cancelled.

As Mr. Bharatiya, a leading industrialist and businessman says ” the relationship between buyer and seller will change immediately. Earlier, it was more emotional, friends and relatives conducted business among themselves, now it will have to be 100% professional. You will be compelled to buy only from those who can furnish proper invoice which is GST compliant.”

“GST is not a tax reform, it is a business reform” he says.

“Right now it is difficult to understand, but once implemented properly it will reduce the cost of doing business.”

The Nay sayers, are singing a different tune though.

“It is a big mess. All businessmen are running around confused like a dog chasing its own tail. ” says a businessman in the Travel industry.

A businessman of this industry deals with many states at one time.

“We will have to file 40 returns a month, which is more than one a day!”

The nitty gritties and difficulties of GST many consultants will comment on we are sure, but the sense we are getting is that no understands.

What was the hurry?? It could have very well been done in September, two months later as many were demanding.

Another trader commented – It was awaited, we have been anticipating it from the time Manmohan Singh was PM, BUT NOT LIKE THIS!

But just one practical problem we would like to point out here;

70% traders and small businessmen of Nagpur – and we presume all over the country – do not have computers still.

The reason is very simple: just go to any lane in Itwari where you will find every kind of material under the sun being sold. Food grains, pots and pans, steel, iron, aggarbattis, clothes, textiles et al.

See the size of the shop, the way it is stuffed with material that customers can’t even step inside. In these cramped, congested, dusty environment, where is the place to keep computers?

And since, as we mentioned earlier, GST is technology driven, a computer is the first necessity. Let us not get into availability of internet etc. at all here!

Even if you have the computer, where are the GST proficient accountants to run it? This has not been taught in either B.Com or M.Com yet, neither has government run extensive training classes for it.

We wonder even if the Excise and VAT inspectors who will be auditing compliance understand it completely, said Dipen Agrawal.

“The five slabs of GST, the thrice a month returns, everything makes it very complicated, and confusing.”

Multiplicity of Tax Slabs

Instead of having a single or two slabs, we have 5 Slabs in GST – 0%, 5%, 12%, 18%, 28%

It does not end there. There are items which don’t fall under GST. And there is Cess.

This hardly looks simpler than what existed previously.

The joke is that even Ministers and the ruling class is equally confused!

Did you hear about the UP Minister, who after attending special classes on GST and was told to go and coach his constituency about it, could not even say what the full form of GST was!

Chief Minister Yogi Adityanath’s special classes on Goods and Service Tax seem to have had at least one student who was not quite paying attention. Uttar Pradesh minister Ramapati Shastri could not expand GST when asked to by reporters on Thursday.

The state’s Social Welfare, Scheduled Castes and Tribal Affairs minister appeared more than a little nonplussed as he fumbled, “The full form of GST is…” He then explained that while he knew the answer, he could just not recall it at that moment.

Which could happen to anyone, except Mr Shastri was at the time interacting with local businessman in UP’s Maharajganj to brief them on the benefits of the new tax regime that will be launched at midnight in Parliament.

Need we say more?

—Sunita Mudaliar (Executive Editor)