Lok Sabha Polls: Prof Arun Kumar offers his verdict on GST before that of the electorate

The upcoming polls through the next two months are going to be the first countrywide event to elicit people’s response to GST, or Goods and Services Tax, among other things. And, thus, the new taxation law can well have an impact of the people’s verdict this time. Amid such a possibility a new book that attacks GST quite a bit though with good reasons was brought out and released recently in Delhi by Prof Arun Kumar who has earlier written books on black money and demonetisation too.

Titled Ground Scorching Tax, the nearly 300-page book mainly argues that GST is a discriminatory indirect tax system that leaves out India’s vast informal sector in the cold and keeps the economy moving in two circles of organised and privileged sector on the one side of the economic spectrum and the unorganised, poorly acknowledged, mostly rural, poverty-ridden and poorly managed vast arena or sector on the other. Numerically the former caters to the needs and aspirations of a smaller but privileged section of the people than the latter that provides employment and livelihood to 94 per cent of the people of the country.

There are seldom any meeting points on just terms between the two circles. The law as also policy makers has failed to build a bridge between these diverse spheres of the economy. And GST too is meant to give the organised sector precedent and priority over the unorganised where the latter is bound to face further marginalisation, strain and hardship because the GST is bound to widen the gap between the two.

Inclusion of those who fall in the unorganised zone of the economy through banking system is only a partial and inadequate step towards formalisation that would never take the teeming millions of the people having workaday life too far, remarked the professor at the release of his latest work on Indian economy. According to him, the unorganized sector may benefit the organised but it cannot be the other way round after the GST.

Going beyond the usual criticism of GST because of its intricacies like multiple levels of levies and repeated filing of returns, Professor Kumar, indeed, tries to take a broader view of the effects of the new tax regime on consumers on the one hand and overall economy on the other.

As for the cures for the essentially discriminatory economy of which GST too has become a part in a year-and-half of its being enforced Professor Kumar showed a preference for better mobilisation of direct taxes over revamping indirect tax under which GST falls. He called taxation to be an art rather than being a mere science or statistics since Government has to distinguish between who makes or earns how much before deciding about the quantum and manner of tax to be levied.

He writes towards the end of the book: “…it is better to collect more direct taxes. India pays very little of those in spite of the high level of disparity. The well off sections can indeed pay a much larger per cent of GDP as direct taxes, if the black economy could be checked. So the first part of the alternative is to collect a lot more from the direct taxes by checking the black money.”

Somehow professor’s prescription also reminded of assurances given by Prime Minister Narendra Modi through the run up to the last Lok Sabha polls where tainted money had to be brought back under the legal framework and taxation net.

And since the huge net gains by often unscrupulous formal sector players continue to escape taxes through shifting them in far off tax havens, Congress leader and famed lawyer Abhishek Manu Singhvi who was part of the panel present at the launch of the book called GST as Gayee Sarkar Tumhari or the Government Scarpered…