I never thought a tax-related article could have laugh-out-loud moments . Thought provoking and entertaining. Thank you for the engaging and informative read.
Thank you so much Pushpanjali. Please check out the latest newsletter--it includes an interview on the same subject and a share of fresh complication introduced by the GST authorities.
A very thought provoking article!! You have raised some very relevant issues which have a major impact on our economy and on a large section of our society!!
Yes Anil GST was introduced as Good and Simple Tax and even remains now as such !
I am sorry I cannot be in agreement with large part of your article on account of the following reasons:
A) Comparison with License Raj and pre 1991 era is unfair .
B) One size does not fit all. India is a huge country and 5 slabs are there to meet the demand and needs of as many as possible.
C) GST Council a first of its kind in the world demonstrates how economic federal democracy is at work. Mind you , meetings of the Council are results of hard toil during the interregnum.
D) Varying of rates through moving of goods and services from one slab to another ( and generally to lower slabs ) again demonstrates that how the Prime Minister and two successive Union Finance Ministers have made the Council responsive to public demands without awaiting annual budgets
E ) Present political leadership governs the bureaucracy and not vice versa ! Decisions taken in the Council are deliberated among the Finance Ministers of the Centre and the States ( as well as UTs ) . No decision ( except once ) is taken unless consensus is arrived- a miracle since different State/ UT FMs represent different political hues
F ) Please don’t be harsh as to label GST decisions arising out of corruption ! While corruption in the country may not have disappeared but to find it in the decisions on GST slabbing is not acceptable.
While I bow down to you being the leading economic journalist, believe me there is no fixing in GST Council decisions on GST !
Thank you for your thoughts and thje detailed note of disagreement. Much appreciated.
First of all, we seem to be more in agreement than in disagreement. All the salient features you flagged find mention in the newsletter--both present and past. It is undoubtedly a marquee reform.
Second, our disagreements are based on differing perspectives.
While acknowledging your domain expertise on indirect taxes, it is a view point from the policy planners perspective. What I shared in my newsletter is the alt-view from the ground up--it is not exhaustive and at best anecdotal.
Btw, some CEOs who have read the newsletter have pinged me bilaterally to convey thanks for airing what they dare not say publicly.
At the ground level, people (I have spoken to) are hurting. The many tweaks (harking back to the sales tax era) are adding to the burden--and laying the ground for fresh legal challenges.
My intent was to flag these concerns to the powers that may be. Stay forewarned so as to preempt opportunistic politicians fishing in troubled waters and undoing such a fantastic reform initiative.
That you have responded means that you have heard me out and thereafter disagreed. That is only fair.
On that note, thank you once again for your participation.
A pertinent point raised Anil, which has been overlooked by the majority due to lack of substantial corruption charges against the present government. However, some instances of profiteering are there. The first notable instance was when Piyush Goel, an ambitious young politician, became Railway Minister in 2017 and introduced the dynamic billing system in over 140 trains, like Rajdhani, Shatabdi and Duronto among others. It was an injustice on the middle class by a newly appointed minister, who was eager to impress with his business acumen. The other major over charging has been a stable Petroleum price, even when the international crude oil prices hit rock bottom during the Covid period. However, the oil prices have been digested by the people as the government met the emergency situation with rolling out a free vaccination and free food grains to about 800 million people in need of humanitarian support. Keep us posted Anil as it allows your readers to jog their memories and Grey cells.
Thank you Gautam for your thoughts and reminding me about the dynamic billing system. Good idea on paper, but unmindful of the ground realities. Like you said the petroleum price playbook helped fund the massive surge in social welfare spending. Without this India would have been a basket case by now--look at our neighbourhood.
More worrying for me is the growing trigger happiness of the service tax regime. They are constantly pushing the envelope--as clear from the examples I cited--which defeat the entire idea of GST being a Good and Simple Tax.
Extremely well written, well explained. Also quite worrying.
Its fair that any government of the world would like to mop up taxes for purposes of nation building. However, as rightly pointed out by you, with such advanced digital technologies and software available, there must be a better way for identifying the small minority who cause trouble.
If the more-or-less clean, honest, large middle class who form the backbone of any nation feel inconvenienced and harassed, progress can surely be measured in terms of gdp ratios etc, but that nation state would find it difficult to raise its happiness index over time.
One has reason to believe that its the overly enthusiastic bureaucracy which may require some soft skills training. They may have misunderstood the real intent of the Government.
Thank you so much for your kind words and thoughts.
Absolutely agree with you that the babus have taken the wrong cue. Because if you see the rest of the government--whether it is PLI, globalising UPI and so on--there is a sustained effort to adopt global standards.
Frankly, they seem to be reacting to the optics of the anti-corruption crusade. Here again they miss the point. This is only a section of the country's populace. Like you said there has to be a better means of screening the bad ones. Can't try to kill a fly with a sledge hammer.
Look forward to your continued participation Niranjan.
More than name and shame, it may be better if they circulate these amendments for public comments. TCS, or the GST tweaks are accidents that could have been avoided if thoughts of people outside the babu echo chamber were heard out.
In the past this worked simply because the stakes were very small and the tax payer base was miniscule. Now the stakes are much higher. There is an urgent need for a mindset reset with the accent on soft touch.
I never thought a tax-related article could have laugh-out-loud moments . Thought provoking and entertaining. Thank you for the engaging and informative read.
Thank you so much Pushpanjali. Please check out the latest newsletter--it includes an interview on the same subject and a share of fresh complication introduced by the GST authorities.
Best
Anil
Dear Anil,
A very thought provoking article!! You have raised some very relevant issues which have a major impact on our economy and on a large section of our society!!
Thank you so much Vandana. Glad it resonated with you.
Best
Anil
Yes Anil GST was introduced as Good and Simple Tax and even remains now as such !
I am sorry I cannot be in agreement with large part of your article on account of the following reasons:
A) Comparison with License Raj and pre 1991 era is unfair .
B) One size does not fit all. India is a huge country and 5 slabs are there to meet the demand and needs of as many as possible.
C) GST Council a first of its kind in the world demonstrates how economic federal democracy is at work. Mind you , meetings of the Council are results of hard toil during the interregnum.
D) Varying of rates through moving of goods and services from one slab to another ( and generally to lower slabs ) again demonstrates that how the Prime Minister and two successive Union Finance Ministers have made the Council responsive to public demands without awaiting annual budgets
E ) Present political leadership governs the bureaucracy and not vice versa ! Decisions taken in the Council are deliberated among the Finance Ministers of the Centre and the States ( as well as UTs ) . No decision ( except once ) is taken unless consensus is arrived- a miracle since different State/ UT FMs represent different political hues
F ) Please don’t be harsh as to label GST decisions arising out of corruption ! While corruption in the country may not have disappeared but to find it in the decisions on GST slabbing is not acceptable.
While I bow down to you being the leading economic journalist, believe me there is no fixing in GST Council decisions on GST !
Highest regards as always for you !!
Dear Balesh,
Thank you for your thoughts and thje detailed note of disagreement. Much appreciated.
First of all, we seem to be more in agreement than in disagreement. All the salient features you flagged find mention in the newsletter--both present and past. It is undoubtedly a marquee reform.
Second, our disagreements are based on differing perspectives.
While acknowledging your domain expertise on indirect taxes, it is a view point from the policy planners perspective. What I shared in my newsletter is the alt-view from the ground up--it is not exhaustive and at best anecdotal.
Btw, some CEOs who have read the newsletter have pinged me bilaterally to convey thanks for airing what they dare not say publicly.
At the ground level, people (I have spoken to) are hurting. The many tweaks (harking back to the sales tax era) are adding to the burden--and laying the ground for fresh legal challenges.
My intent was to flag these concerns to the powers that may be. Stay forewarned so as to preempt opportunistic politicians fishing in troubled waters and undoing such a fantastic reform initiative.
That you have responded means that you have heard me out and thereafter disagreed. That is only fair.
On that note, thank you once again for your participation.
Best
Anil
A pertinent point raised Anil, which has been overlooked by the majority due to lack of substantial corruption charges against the present government. However, some instances of profiteering are there. The first notable instance was when Piyush Goel, an ambitious young politician, became Railway Minister in 2017 and introduced the dynamic billing system in over 140 trains, like Rajdhani, Shatabdi and Duronto among others. It was an injustice on the middle class by a newly appointed minister, who was eager to impress with his business acumen. The other major over charging has been a stable Petroleum price, even when the international crude oil prices hit rock bottom during the Covid period. However, the oil prices have been digested by the people as the government met the emergency situation with rolling out a free vaccination and free food grains to about 800 million people in need of humanitarian support. Keep us posted Anil as it allows your readers to jog their memories and Grey cells.
Thank you Gautam for your thoughts and reminding me about the dynamic billing system. Good idea on paper, but unmindful of the ground realities. Like you said the petroleum price playbook helped fund the massive surge in social welfare spending. Without this India would have been a basket case by now--look at our neighbourhood.
More worrying for me is the growing trigger happiness of the service tax regime. They are constantly pushing the envelope--as clear from the examples I cited--which defeat the entire idea of GST being a Good and Simple Tax.
Look forward to your continued participation.
Best
Anil
Extremely well written, well explained. Also quite worrying.
Its fair that any government of the world would like to mop up taxes for purposes of nation building. However, as rightly pointed out by you, with such advanced digital technologies and software available, there must be a better way for identifying the small minority who cause trouble.
If the more-or-less clean, honest, large middle class who form the backbone of any nation feel inconvenienced and harassed, progress can surely be measured in terms of gdp ratios etc, but that nation state would find it difficult to raise its happiness index over time.
One has reason to believe that its the overly enthusiastic bureaucracy which may require some soft skills training. They may have misunderstood the real intent of the Government.
Dear Niranjan,
Thank you so much for your kind words and thoughts.
Absolutely agree with you that the babus have taken the wrong cue. Because if you see the rest of the government--whether it is PLI, globalising UPI and so on--there is a sustained effort to adopt global standards.
Frankly, they seem to be reacting to the optics of the anti-corruption crusade. Here again they miss the point. This is only a section of the country's populace. Like you said there has to be a better means of screening the bad ones. Can't try to kill a fly with a sledge hammer.
Look forward to your continued participation Niranjan.
Best
Anil
Great piece Anil.
There should be a way of publishing the names of the authors of each tax recommendation and enabling the public to give a rating.
Some of these deserve to be labeled as ‘crimes against economy’.
Thank you so much Debu.
More than name and shame, it may be better if they circulate these amendments for public comments. TCS, or the GST tweaks are accidents that could have been avoided if thoughts of people outside the babu echo chamber were heard out.
In the past this worked simply because the stakes were very small and the tax payer base was miniscule. Now the stakes are much higher. There is an urgent need for a mindset reset with the accent on soft touch.
Best
Anil