Monday, July 3, 2017

Day 383

I know I’m writing about the current tension between India and China. But what to do? These days only two things are current topic of discussion. First on is border tension and second thing is GST. GST is a new thing about which everyone is confused. Basically, the customer is more confused about GST because ultimately its customer who has to pay the final price. I think that the confusion is created due to the tax slabs. People are thinking that the price is hiked from 6% to 18%. This means 3 times increment. But what they are forgetting that what the difference is is the difference of amount which has to be paid. Let’s take example of automobile sector. It has been divided in to two groups based on the capacity of the engine. Till 30th June 2017, the tax rate was 30%. But now the automobiles up to 350cc will be charged as 28% and automobiles above 350cc will be charged as 31%. Increment of 1% will be marginal in monetary terms. Likewise reduction of 2% will be a medium marginal reduction.
Same thing is with every sector with every tax slab. Whether it’s 5%, 12%, 18% and 28%. Well, it’s a clear thing that whenever a new system is launched then initially there are difficulties and problem do happen. But when the system is being accepted then there is no problem. Same thing happened during demonetisation. During that time, everyone faced problem. But there were many incidences where unaccounted money were discovered. Same thing will happen with GST after couple of months. But interestingly four sectors have been untouched by the Modi government and they aren’t included in the GST. Petroleum, real estate, electricity and liquor has been put off the radar of GST. This was due to the differences of states and the central government. State governments weren’t ready to include these four things in GST because these four sectors have different tax slabs in the states. If GST would have been implemented forcefully on these sectors also then few states would have been in loss of revenue.  
But the thing is that why there is so much cry in the opposition regarding GST? Why are they scared? Congress party has released a video of Mr Narendra Modi in which he has given contradictory statements. As Chief Minister of Gujarat, Mr Modi has stated that GST will destroy the economy. As Prime Minister, Mr Modi has stated that GST is beneficiary for the economy. I think this is just the political stunt due to the differences between the ruling party and opposition party. But I have observed that whenever Congress has lead the opposition to counter the moves of Mr Modi then it has detoriated more. Congress is desperate to be in power again. During the demonetisation also it blamed Mr Modi with various allegations and even called him dictator. But what was the outcome. There was no protest by the general public. In fact, the demonetisation has helped in curbing the illegal assets of many corrupt people.
I think that after 6 months or so, the impact of GST will be clear. By that time, there will be more clarity in the transaction also. Till then, it will be clear that whether it’s good for the country or bad for the country. Well, I think that Congress is angry with Mr Modi over the implementation of GST bill. It was wish of Congress to launch GST bill so that new credit should be taken. Actually, MGNREGA was a corrupt project launched by the Congress. It started with the aim of providing employment to the unskilled and semi skilled labours for the 100 days by making ponds and roads and other things. But what was the final outcome? Except the corruption nothing was gained. So, I think it’s good that GST was launched by the Congress government. Otherwise there would have been other consequences.

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