In voicing its opposition to the otherwise warmly-welcomed Goods and Services Tax (GST) Bill that was passed in the Lok Sabha on Wednesday, the Trinamool Congress (TMC) may have exercised its democratic right to disagree. But the move smacks of trying to gain political capital out of a national issue with far-reaching importance. This opposition is also ironical because it was TMC leader Amit Mitra who was the chairman of the Empowered Committee of State Finance Ministers that worked out the details of the new tax regime to be ushered in by GST.
After the Bill was passed in the Lok Sabha, TMC leader Saugata Roy said, "Businesses aren’t prepared yet for GST, let’s not make haste." He added that he supported the Bill with a heavy heart and a lot of reservations. Even the largest Opposition party in the Lok Sabha, the Congress, supported the Bill in a rare show of Parliamentary camaraderie over a Bill as seminal as the GST.
"This is a historic tax reform, to have a long-term structural impact on the economy. GST will help the economy to become lot more progressive and transparent," the Congress said.
"Knowing that the BJP will gain political mileage from GST implementation, the TMC has made an exaggerated political statement. GST implementation is not a unilateral decision of the Centre; rather it is the result of a broad consensus. And, the TMC can’t claim that it was not a part of the consensus, especially when a prominent leader of the party (and the finance minister of West Bengal) Mitra is the chairman of the Empowered Committee of State Finance Ministers that worked out the details of the new tax regime. At one point of time, Mitra supported GST," Praveen Khandelwal, secretary-general, Confederation of All India Traders (CAIT) told Firstpost.
While the TMC may take a while to understand if this opposition delivers or deprives it of political capital in a country charged with a yearning for economic development, it will be worthwhile to see its concern for the country’s preparedness to move to the new tax regime. After all, it is the preparedness of the business community that will help fulfil the government’s wish towards the seamless implementation of GST from 1 July.
Even though the move has been widely welcomed, some traders are apprehensive about the transition.
"It is a welcome move, but frankly, the business community of this country is not prepared for GST right now, because one has to shift from a manual form of accounting to computerised accounting. More than 90 percent of traders still go for manual accounting. In Bhopal’s Sarafa Bazaar (Jewellery Market), out of 25 jewellers, only 20 are following computerised accounting. This is the scenario of a state capital, so one can imagine the accounting system at the tehsil or block-level. The government should set a three-year period for transition from the current system to GST, and shouldn’t impose a penalty or punishment on those who commit mistakes in this period. This duration should be treated as a learning period," said Navneet Agarwal, state general secretary, Akhil Bharatiya Udyog Vyapar Mandal, Madhya Pradesh.
Despite feeling that it is not yet prepared to embrace the new tax regime, the traders’ community has come forward as a partner with a unique plan to help government achieve its goal.
CAIT, an umbrella body of trade and business associations, has planned to launch ‘Mission GST’ — a national campaign in which the confederation plans to train 5,000 trade leaders from all across the country as 'master trainers'.
"The GST will be rolled out in the next 90 days. Keeping this target in mind, the master trainers will empower and educate the trading community on various aspects of GST across the country. CAIT has roped in tax practitioners, chartered accountants and consultants in this drive. The aim is to provide training to traders, right from state capitals to tehsils,” said Khandelwal.
Stating that implementation of GST would entirely change the business landscape of the country, he added, "While, GST is an e-compliance taxation system and altogether different from current tax regime, nearly 70 percent of traders don’t have computers and they go in for manual accounting. Now they have to adopt digital technology. We want the government to have greater interaction with the business community, as they are the carriers of GST and help traders in becoming technically empowered.”
Tax experts, however, feel that instead of making a hue and cry, and further politicising GST, traders too have to comply with the rules of GST and must switch over to computerised accounting system — the sooner the better.
"The fact remains that a seamless transition happened from physical share-brokering to online trading and consumers had made the online ticket booking system of the IRCTC the most successful e-commerce site of the country. This was long before e-tailing had become a fad. So, there’s no reason we should fear the arrival of GST. The only thing needed is training to traders, who have to comply with the new rules, without making a hue and cry. They should switch over to the digital interface and computerised accounting system without delay," remarked chartered accountant Abhishek Aneja.
Published Date: Mar 30, 2017 08:01 AM | Updated Date: Mar 30, 2017 08:01 AM