BJP rejoice 3rd anniversary of GST's unsuccessful Implementation

Welcome to another blog, in this blog I put forward a satirical but factual analysis of Goods & Services Tax (GST) launched by Government of India on 1st July 2017, so practically its 3 years and still GST benefits have not graduated to common public.

Before I put my data driven facts based thoughts, let me clarify GST is not a bad idea infact unification of multiple taxes was originally coined by Govt. in early 2000 and was aimed to bring following benefits:

• Simple Taxes 
• Increased Revenue for Government 
• Increased GDP of India
• Reduced Inflation. 

 Lets see in the blog if the above benefits are realized by our beloved nation India or GST was just another extravaganza empty promise of today's Indian Iron Man - Mr. Modi.

Indian PM announcing GST 

On July 1st, 2017 at the stroke of midnight Mr. Modi in pretty much Pt. Nehru style announced the new reformation of Indian Tax system with big promises to public, business, state govt and national financial institution. Apparently few months back on Nov 2016, PM Modi made a similar announcement of Demonetization in which he promised its a re-make of Indian economy, swiss bank black money will come back nevertheless we all know re-makes are often bad makes, well demonetization hit India as bad as a hit-wicket to a batsman in cricket.

Primary reason to introduce GST in India was to simplify the very complex Central and State Tax system in India, trust me the previous Tax system was more complex than the toughest questions of HC Verma's physics book.

So, on July 1st, 2007 Indian PM removed all Direct and Indirect Taxes by State/Central Govt and enabled GST as a single Tax on the supply of Goods and Services, right from the manufacturer to consumer.
(Some how I feel BJP is crazy about this number 'One' in almost everything BJP put this One for e.g. One Nation One Tax, One Nation One Ration Card, One Nation One Election, One Nation One Party😁.)

Report in Indian Business Newspaper

Report in Indian Business Newspaper

With the launch of GST, the govt  promised that India's GDP will rise by 2% due to GST.

 Revenue collection of all Indian states will increase by upto 14% and blah blah blah our flamboyant PM Modi even said that its not just a financial remake its a social reform.

#FactCheck_GST


A recently published report (click here) tells that GST collection has fallen by 41%👎👎.

Fact Check Here

Today due to stupid implementation of GST the central Govt of India is forced to pay INR. 36,400 crores to all states, you must be wondering Why so ? let me share typical Modi Govt.tactic which was played exactly three years back to bring all states in favor of GST.
Modi Govt on behalf of all citizens of India assured States that each state will have upto 14% increase in revenue if they fail to do so, Central Govt will pay them the difference. So Govt is giving warranty support on GST  to states that they promised earlier. 

Report from 2013

I still wonder why Modi Govt decided to give Pay Back warranty/guarantee to all states when he himself was against GST during his era as Gujarat CM.
My personal assumption: May be because that time Congress asked support from Gujarat and our dear SWAG PM Modi is anti congress so why to support Congress. Its so funny in 2013 CM Modi said GST will be a failure and in 2017 PM Modi implements it.

Engineering teaches everything has two aspects Theoretical and Practical, GST is not all about bad things there are many good ground level realities that happened due to GST.

• GST enabled swift and hassle free movements of goods across Indian States. 
• GST enabled unified taxes on majority of Goods enabling same price of products across India. 
• GST enable digital filing of Tax returns.
• GST ensured that unexpected high inflation did not happen in India.

The biggest problem discovered in implementation of GST was its inherent complexity, how paradoxical: it was supposed to simplify the Tax regime in India; came to be more complex.
GST was never properly researched and consulted with states before its implementation and looks like Modi Govt. was in style of Indian Cricketer Yuvraj Singh, they wanted to score 36 runs in 1 Over, good for cricket but bad for national bureaucracy.

Forget about public even the govt was so unclear on which commodity how much Tax will be imposed, instead of One Nation One Tax, India came across Tax slabs earlier we had variety of direct & indirect Taxes now we have variety of Tax slabs (0% to 28%) so its no difference right, Old wine in New Bottle Waah Modi Ji Waah !

Due to GST both State Government and Central Govt failed to gather required revenue growth and when Govt discovered the decline in revenue gathering then came the never stopping Taxes and Cess on Alcohol, petrol, diesels etc. the Govt kept on increasing the Taxes just like the number of debates on Arnab Goswami show.

Fact Check Here

More addition to the miseries was the people of India, GST filing had loop holes and Tax Evasion rose to all time high as a result Govt. further lost revenues.

The filing of GST was based on reconciliation of  Invoices, as a result of  many Indian cottage industries and local shops/showrooms came with the idea of fake invoices. How could the govt let such a loop hole to happen.

Shockingly when experts raised questions about the efficiency of GST the very capable finance minister Ms. Niramala said, It might probably give you difficulties but I'm sorry, it's the law of the land now," Sitharaman said. Link to Indian FM Statement

As mentioned earlier Central Govt promised State Govt to pay back any gap in achieving GST targets as a result all states missed their GST tax collection target and look towards central govt. which by the way also lacking funds to pay back to states hence a valley like revenue deficit occurred and Indian economy went in ICU, I hope many of you would visualize how economy is falling after Demonetization and GST because India has huge debts to its own states.
As a result of GST the newly introduced tax slabs brought no noticeable change to MRPs as a result demand and consumption falls and hence growth and supply fallen.

Falling Indian Economy

Forget about achieving the Target revenue collection, post GST the revenue collection was even lower than earlier non GST years. Soon after its launch all economist were able to witness the ill side effects of GST but however we all were saying Namo, Namo, Namo and today after 3 years of its implementation GST has become a Pandemic to Indian Economy.


Even BJP established institution Comptroller and Auditor General of India (CAG) has said that GST has failed to live up to its full potential (Fact Check click here).

The adjacent figure clearly shows that GST collection was way below than expected.

In fact as said earlier GST collection were even lesser than the Pre GST era by 10%.
Further more the states started frowning towards central govt on return of the difference in revenue.

The figure on the left shows the collection mark of GST in state revenue clearly misses the 14% mark. 

My Final Verdict:

Well there is no doubt India is in a catastrophic economic crisis, unfortunately Indian Govt and Indian Media is not at all covering this point. 

Due to Covid19 the revenue collection has fallen by 87% the adjacent figure shows the comparison of GST collection in 2020 against 2019, be mindful even 2019 it was below its target and in 2020 its exponentially below its target. 

Further the GST council is under immense pressure by state Govts to pay them the debt of GST collections for which the GST council has no money, the central govt gave them another stupid idea i.e. to take loan from IMF or World Bank, wow to pay off debt take another loan what an economic masterstroke by Finance Ministry. 

Anyhow even states understand that central govt is not able to pay them money, so states are forced to continuously increase taxes on alcohol and fuel the condition of economy is so bad that Indian govt is fighting to Tax 'Roti and Parathas' (basic Indian bread).   

This is truly the beginning of an economic cyclone that will hit India very soon and we can clearly see the symptoms now below are some low-lights of it: 

• BJP Govt is under pressure for disinvestment of profitable public units like Coal India, Bharat Petroleum, Railways etc. 
• BJP Govt. is bringing multiple crowd sourcing bonds to gather cash.
• BJP Govt. is reducing the Interest rate on PPF and other Money Market instruments. 
• BJP Govt. is doing consolidation of banks which is clearly a sign of poor economic health.
• BJP Govt. is mishandling charity funds like PM Care Funds, govt declined to give an insight on expenditure of PM Care fund.

We all can see India is running out of Cash. 

On the other hand Indians are happy deleting TikTok and talking about digital surgical strike to crash Chinese economy, no media is asking Govt. to give an insight on the funds in treasure of India the situation of India can also result in cases of hyper inflation and devaluation of Indian currency if any corrective measure is not taken immediately.
This also bring us to the end of blog but definitely not to the end of problem, hope everything is fixed in time and we once again see the string growth that we had in mid 2000 era.  

Hope you find this blog meaningful, if you like it please share it with others. 

न चोरहार्यं न च राजहार्यंन   भ्रातृभाज्यं न च भारकारी ।  व्यये कृते वर्धते एव नित्यं विद्याधनं सर्वधन प्रधानम् 

Neither it can be stolen not it can be divided knowledge  gets multiplied when shared

 Cheers !
Nishant