Bara Bazar in Kolkata is reeling under the pressure of increased tax rates due to GST implementation.
India’s most revolutionary and important tax reform became a reality earlier this year. Goods and Services tax (GST) which has been put to use in order to replace all other indirect taxes. There has been a lot of discourse on how GST will benefit the country by making things systematic and simplified, but if the ground reality does not match, all the dialogue is in vain.
Bara Bazar, a street in Kolkata, which is one of the busiest streets in the country, has witnessed the impact of GST like no other. Small and middle-class businessmen who swarm the road dealing in huge amounts of money have kept the city by the Ganges economically relevant for so long. But the air of discontent, rising in the air ever since the introduction of GST is palpable.
GST- A simple process?
India’s tax system before GST consisted of various direct and indirect taxes. Indirect taxes included various central and state levies like value added tax, sales tax and excise duty among others. GST has subsumed all these indirect taxes under one umbrella bringing in uniformity of taxes. This will be levied by both levels of government and take the form of dual GST. This system promised to be economically efficient, neutral in its implication and simple. However, four months into practice, it has not been able to stand by it and it has left the country divided.
Not many have understood the process despite reading articles and attending seminars. People who have understood are suffering due to the varying rates, complicated processes of filing GST and lack of other people complying with it. Reports are many on how it has affected various markets across the country. In Bara Bazar people are of the general opinion that the process is complicated and business has gone down, thus deeming the system not so simple.
“The main aim of GST is to simplify the taxation process, reduce the burden of taxes and ensure compliance of tax payment. This will curb black money and lead to an increase in national income and reduce the tax burden on people as the number of taxpayers will go up,” said the former Union Minister M Venkaiah Naidu (now Vice President).
Bara Bazar feels the pinch
One tax, a year of understanding the system and four months into practice, the overall verdict of shopkeepers at Bara Bazar gives thumbs down for GST. This comes from a majority who stands in support of Narendra Modi.
“India is not ready for a reform like GST, the system is here in paper but people are clueless about how to implement it,” said Himanshu Mundra, the owner of a Kirana store in Kalakar Street. He continued, “I am all for following the law and paying taxes to the government to ensure that my country benefits from the work I do. Sadly, it does not matter if I am honest or not, people on the pipeline are the ones that form the flow of doing business.”
While Himanshuis used to doing business with GST and his business was not affected much, there are others whose payable tax has increased and even tripled. Sighting his transition from Sales tax and VAT to GST, Rahul Gupta, owner of a sweet and snack shop said, “There is no balancing, although I use the same products to make different items in my shop, my input is the same while my tax payable is different for different products.”
“While we were promised that if we put all our taxes in a basket and compare we will see there
are no changes. This is false, as before uniform tax I used to pay 15,000 and now last month
I had paid a sum of 54,000,” Rahul Gupta, Shop owner”
He points a three times rise in his tax and a loss in market. “While we were promised that if we put all our taxes in a basket and compare we will see there are no changes. This is false, as before uniform tax I used to pay 15,000 and now last month I had paid a sum of 54,000. The places I used to send my products like Ranchi and Orissa have stopped taking my products as they have not yet complied to the GST format.”
Looking ahead with hope
Other store owners had similar lamenting stories. All of them believe things have become “complicated rather than simple”, contradicting the whole premise of the central government. Despite this, people have the general opinion that even though initially it is hard to adjust they hope it will be beneficial for the country and all the increased taxes and hardships are worth the pain.
It is hoped that the revolutionary tax reform is beneficial to not only the multinationals looking to set up businesses in India but also to the nation as a whole especially the common man. Care must be taken to not curb the interest of youngsters in starting their own business in the country and make the implementation of GST a comprehensive move by the Modi government.
There should be more cuts like the one announced on 10th of November to make the rate slabs more reasonable for people across all sectors. The end goal is to let businesses continue to prosper in the country so that in the coming years India is ranked even higher on World Bank’s list of Ease of Doing Business.
