GST@1: GOODNESS OF A SIMPLE TAX

If a tax was good and simple it would not be a tax. From the
Indian experience of past 70 years, calling a tax good and simple is mythical
and superfluous. If I had to paint a common taxpayer of pre GST regime in a
vivid visual description, I would choose to make him look like a duck stuck in
an oil spill. The first-year journey of GST left many people feeling like that
duck too. The difference between the two eras is that the oil spill is receding
fast and the promise of fresh waters is more conceivable. That I think is the
goodness of GST as I think of it on its first anniversary. 

Much water has flowed since the midnight of 30^th
June 2017 – from rate changes, to law changes, to GSTN changes, to procedural
changes, to return changes, to timeline changes, to body clock changes (of GST
service providers). Amongst such changes, there is one change that cannot be
ignored: the change of opinion of taxpayers about GST. BCAS carried out a dip
stick survey of taxpayers. While many changes are necessary and expected, most
taxpayers remained positive, optimistic and pragmatic about GST.

India is known for its ‘unity in diversity’ and we have
evolved it in a way which grants something for everyone. The interpretation of
this axiom is such that everyone’s demand must be met! Call it states and
centre, rich and poor, forward and backward, farmer and trader and every other
binary. Law making also succumbed to that format. Nevertheless, we paid a price
of multiplicity, clutter, inefficiency, red tape, ambiguity, and all the
interplay between them. GST changed that in a big way. I would like to call it
Uniformity in Diversity in spite of all its shortcomings – a single umbrella to
fit everyone. 

Yesterday, I was returning through the Vashi bridge. On my
left, I saw the lonely and desolate board of Octroi check naka (remember the
‘good’ old days?). The entire complex was sealed with tall metal boards. Lines
of trucks waiting at ‘naka’ after ‘naka’ to be ‘checked’ flashed in my mind. As
I was driving – beyond the octroi post and through that thought, I realised
that in effect, the trucks were not halting, but our progress was. What seemed
like checking was actually choking our growth.

GSTN is painful when it so frequently does not work. The same
GSTN also remains the backbone and blood stream of GST law and especially its
future. GSTN brought together humongous spread of geographies and disjointed
tax regimes. With it, the promise of what is possible in the times to come.

My meeting in Vashi was with a French subsidiary. The group
CFO showed me an App that had Optical Character Recognition (OCR). France had
legally barred paper invoices/documents for companies last year. For expenses,
all he had to do was take a photo of the tax invoice through that app and up it
went into the company ERP. The app’s OCR read the vendor name, VAT number,
amount and even the description and it did all the rest from taking credit to
preserving the image for the company. Imagine, a paperless VAT in a country
that sold VAT stationery not too long ago. 

A week earlier, I met a trader in Pune. He told me a story
from those ‘good old days’ that were not too long ago. Their trade association,
he said once requested the state finance minister for a VAT / Sales Tax rate
reduction in return for some ‘greasing’.

Reading both these examples
together, the goodness of GST is simple – it holds colossal potential for
future – of making a tax that is both good and simple.

Raman Jokhakar

Editor

FORTHCOMING
EVENTS

BCAS – E-Learning Platform
(https://bcasonline.courseplay.co/)

 For more details, please contact Javed Siddique at 022
– 61377607 or email to events@bcasonline.org