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GST: History, Implementation, Criticism

GST was launched in India on July 1, 2017 after years of debate and negotiations. While it was intended to simplify the country's tax system, its implementation faced significant criticism. The opposition argued it placed undue burdens on small businesses and hurt the poor. Technical problems marred the initial rollout, with the online system crashing due to heavy filing volumes. Studies also found India's GST rates were higher than most other countries. While reforms have attempted to address issues, critics argue the system remains too complex and harms vulnerable groups.

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51 views6 pages

GST: History, Implementation, Criticism

GST was launched in India on July 1, 2017 after years of debate and negotiations. While it was intended to simplify the country's tax system, its implementation faced significant criticism. The opposition argued it placed undue burdens on small businesses and hurt the poor. Technical problems marred the initial rollout, with the online system crashing due to heavy filing volumes. Studies also found India's GST rates were higher than most other countries. While reforms have attempted to address issues, critics argue the system remains too complex and harms vulnerable groups.

Uploaded by

Celina Alex
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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GST

- CELINA ALEX
HISTORY OF GST
• In the 2014 Lok Sabha election, the Bharatiya Janata Party (BJP)-led
NDA government was elected into power. With the consequential dissolution of the
15th Lok
Sabha, the GST Bill – approved by the standing committee for reintroduction – laps
ed. Seven months after the formation of the then
Modi government, the new Finance Minister
Arun Jaitley introduced the GST Bill in the Lok
Sabha, where the BJP had a majority. In February 2015, Jaitley set another deadline
of 1 April 2017 to implement GST. In May 2016, the
Lok
Sabha passed the Constitution Amendment Bill, paving way for GST. However, the
Opposition, led by the Congress, demanded that the GST Bill be again sent back for
review to the Select Committee of the
Rajya Sabha due to disagreements on several statements in the Bill relating to taxati
IMPLEMENTATION
• The GST was launched at midnight on 1 July 2017 by the President of
India, and the
Government of India. The launch was marked by a historic midnight (30 June – 1 J
uly) session of both the houses of parliament convened at the Central Hall of the Pa
rliament. Though the session was attended by high-profile guests from the business
and the entertainment industry including
Ratan Tata, it was boycotted by the opposition due to the predicted problems that it
was bound to lead for the middle and lower class Indians. The tax was strongly opp
osed by the opposing
Indian National Congress. It is one of the few midnight sessions that have been hel
d by the parliament - the others being the
declaration of India's independence on 15 August 1947, and the silver and
golden jubilees of that occasion. After its launch, the GST rates have been modified
multiple times, the latest being on 22 December 2018, where a panel of federal an
d state finance ministers decided to revise GST rates on 28 goods and 53 services.
CRITICISM
• Technicalities of GST implementation in India have been criticized by global financial
institutions/industries, sections of Indian media and opposition political parties in
India.
World Bank's 2018 version of India Development Update described India's version of
GST as too complex, noticing various flaws compared to GST systems prevalent in oth
er countries; most significantly, the second-highest tax rate among a sample of 115 cou
ntries at 28%.

• GST's implementation in India has been further criticized by Indian businessmen for
problems including tax refund delays and too much documentation and administrative
effort needed. According to a partner at
PwC India, when the first GST returns were filed in August 2017, the system crashed u
nder the weight of filings.
• The opposition
Congress party has consistently been among the most vocal opponents of GST impleme
ntation in India with party President, and leader of the opposition,
Rahul Gandhi, slamming
BJP for allegedly "destroying small businessmen and industries" in the country. He
went on to pejoratively dub GST as
"Gabbar Singh Tax" after an ill-famed, fictional dacoit in Bollywood.
Blaming the implementation of GST as a "way of removing money from the pockets of
the poor", Rahul has lamented it as a "big failure" while declaring that if Congress Party
is elected to power, it will implement a single slab GST instead of different slabs. In the
run-up to the
elections in various states of India, Rahul has intensified his "Gabbar Singh" jibes on M
odi government.
THANK YOU

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