The World Bank has assessed and assailed the India’s Goods and Service Tax (GST) as most complicated format. The World Bank is its study report of 115 countries said India’s tax rate is second highest in the world.
The Modi Government launched the GST on 1st July 2017 in five stab 0-5-12-18-28 percent taxation on Goods and Services in India. The World Bank mentioned that 49 countries have only one slab in its GST while 28, have 2 slab GST but five countries India, Pakistan, Italy, Laxemburg, and Ghana have 5 slab GST system. The economies of these five countries are unstable.
Actually it was Congress led UPA Government that formulated GST scheme but at that time the BJP in Opposition opposed and it could not be implemented. But when BJP Government came to power at the Centre with Modi Ministry they were very keen to implement it and Congress in opposition cooperated and it become law.
The aim of the GST is to have one taxation for the whole country one price tag on all the items and one national market. But the way the Modi Government enforced it can never achieve these lofty objectives. In every industry, trade, commerce and all the items in the market the transportation cost almost just half of it. But under the GST the petrol and diesel are kept outside the orbit of GST.
All the states have different sale price of these items under such condition there can be one price of all the commodities, one tax rate in all over country and emergence of national market.
What the World Bank has said about GST now the Indian trade, industry and commerce from the day one said that the format and implementation of GST very faulty and cumbersome, impracticable and would ruin entire trading activities.
The monthly return online could not be carried out and all the traders became defaulters and liable for penalty. The GST Central Council had to beat a hasty retreat and monthly return form system withdrawn.
The GST must aim only one slab system and enforceable on all commodities for one tax, one sale and one market for the whole. The five slabs are too much and antithesis of GST.
The demonetization and GST have affected economy and trade very badly. It seems possible that it might have reflected in the results of bye-election and may show up in the General Election of 2019.