Of late, Congress Vice-President Rahul Gandhi has made the Goods and Services Tax the butt of jokes. He’s been calling it ‘Gabbar Singh Tax’ after the eponymous, iconic villain in the 1970s blockbuster film, Sholay — the barb in this case seemingly directed at the impact of GST on small industry. Alluding to the surgical strikes analogy, he said in his recent talk at the PHD Chamber of Commerce and Industry that GST and demonetisation were akin to a commando opening ‘double tap’ fire on the economy, flattening it altogether. While it appears that the Congress leader is finally enjoying the political stage, it seems rather late in the day to question the raison d’etre of GST. Unlike, say, demonetisation, it can hardly be said that GST was suddenly thrust upon the country.
GST, Gandhi should know, is the product of a detailed process of consultation between the Centre and States over close to two decades. State governments of varied political persuasions have participated in the process. Former West Bengal finance minister Ashim Dasgupta (of the CPI-M) was appointed chairman of the empowered committee of State finance ministers during the Vajpayee government and continued to enjoy the support of Manmohan Singh’s government. The Congress played a proactive role in steering GST discussions during the UPA years (and ironically enough was opposed by the BJP then). Finally, all States and Parliament have ratified the 122nd Constitutional Amendment which allows, among other things, both the Centre and the States to tax virtually all goods and services. The earlier cornucopia of rates and government domains has been set aside, and in full public view. The GST Council is a statutory body meant to oversee the new system, with States represented in it. The Prime Minister is justified in saying that the Congress party cannot wash its hands of GST at this stage to pursue populist goals.
This is not to suggest that the GST is beyond criticism. However, constructive, informed debate in the same consensual, cooperative spirit that created the new tax framework would go a long way in removing the inconveniences faced by the informal sector in particular. On June 30, Gandhi had said that GST “is a reform (with great potential) that the Congress has championed and backed from the beginning, but... is being executed by an incompetent and insensitive government without planning foresight and institutional readiness”. This goes against his present stance of opposing GST, lock, stock and barrel. Suggestions that address the pain points of business, as well as apprehensions over the erosion of States’ fiscal autonomy, would leave all stakeholders better off.