Launching GST in a place where the Indian Economy was already healing from the repercussions of demonetization was a very bad idea. Not only this it has been three years to GST now and the ongoing Pandemic has not only challenged it at whole lot of different levels but we can see our GDP in negative too. So, was launching GST a success or a failure?
The truth is that GST was launched even when the naysers were against it. India’s economy is very gradually moving on a bullock cart whereas all the other countries are racing in super speed cars and vehicles. No single large state has managed to hit the 14 percent revenue growth target. Although there were states like Madhya Pradesh and Karnataka that have improved their GST collections by more than 10%. While Telangana, Maharashtra, and west Bengal saw revenue growth by 9.4 %; 9.2%; 9.1 % respectively other states were mostly rising by the percentage of 6-8.
Then there came the lockdown which imbalanced the GST collections on a whole level. Center’s CGST dropped 87 percent in April to just 5,934 crores. States although collected more than that but all of it was consumed by the coronavirus expenses. This is the reason why the states have been pressuring the center to clear their dues as soon as possible. Because of the GST regime tightening the government’s hand all of this pressure is being released by increasing the taxes on Alcohol and Fuel. Although WHO has conveyed to everyone about the loss of immunity alcohol can create in pandemic time still the government has ignored their concerns as they have to look forward towards the economy as well. Not only this the IMF has also recommended giving tax breaks to consumers and businesses but we can see the exact opposite in the hike of taxes in fuel.
It is not because of the virus that the GDP has declined and GST is to blame but in fact, the virus, in reality, has shown the architecture on which GST was standing without any backup of its falling down’s is not only panicking the states by not getting their dues timely but the much bigger problem is the destruction of jobs. All of the small shop owners near our home all the laborers (carpenter, plumber, electriansetc0 were operating without any taxes because they knew that even one tax consumption receipt can draw them out of the market. But with GST in role even sectors earning 20 lakhs have to pay revenue. (Earlier it was 1,5 crore)
All the small-scale, Unorganized sector have been also complaining about the expenses that are being driven out in Operation costs. They have to employ CA or Tax advocates to fill their revenue as less people are able to fill it on their own. The strict rules have made it impossible to fill the form independently. Due to strict punishments that lead to jail even without bail people who have even studies in this field are taking good time in filling out revenues and thus ultimately charging good amount. Thus, we can say that three years and a pandemic was enough to show us that GST although being one of the best taxing procedures needs to be revamped according to the Indian market and not cost them their hard-earned money.