Why is everyone against GST?

Pity the small traders! Steadfast supporters of the Bharatiya Janata Party, small traders have been bitten twice by its government in quick succession. Bleeding economically and apprehensive about the future, it would seem logical for them to desert the party of their choice.

In November, demonetisation sent small traders scurrying around to exchange their invalidated currency notes for new ones at a hefty discount. This loss was aggravated as the market, starved of liquidity, has remained sluggish since then.

Eight months later, small traders are agitated about the Goods and Services Tax, which came into effect on July 1. Apart from its complex mechanism to file returns, and several slabs of taxes, they are frothing with rage because GST has now criminalised economic offences.

Know More About GST Tax Filing Software.

Unlike in the past, anyone who is deemed to have evaded taxes between Rs 2 crore and Rs 5 crore will be held guilty of having committed a non-cognisable offence. Tax evasion above Rs 5 crore will be considered a cognisable offence — traders accused of this can be arrested without a warrant. Similarly, a person convicted once for either a cognisable or non-cognisable offence can be arrested for evading tax of any amount. Such stringent provisions could ensure tax compliance and swell the state’s revenue.

But then, as so many traders point out, they depend on chartered accountants to file their returns, either because they lack the requisite skills or are pressed for time, more so now as GST requires filing of tax returns three times a month.

This means that a trader is liable to be punished for their chartered accountant’s mistakes, and a genuine difference in the interpretation of a GST provision between the trader and the tax authority can also be criminalised — and punished.

Arun Singhania, president, Delhi Hindustani Mercantile Association, which was formed in 1893, said, “Traders feel that GST presupposes that they are thieves. We have been stigmatised.”

Stigmatisation often justifies excesses based on suspicion. The GST Act indeed puts a legal imprimatur on suspicion — its provision allows officers of the rank of joint commissioner and above to order an arrest if they “believe” taxes are being evaded. The word “believes” could well become a cover for the officer’s whims or vindictiveness.

Demonising traders

Small traders are hurt that Prime Minister Narender Modi has used GST to portray them as tax evaders, because of whom the nation wallows in poverty. Such an argument could have the poor blame their woes on traders, turning them into an object of hate.

“Modi has triggered a spurious class war exactly in the manner Indira Gandhi did through her 1971 slogan of Garibi Hatao and a slew of anti-rich measures,” said a trade organisation head. “As it was in 1971 so it will be now, the poor will languish in their squalid jhuggi-jhopris.”

This galls small traders as they have been inveterate supporters of the Rashtriya Swayamsevak Sangh and its political wings — the Bharatiya Jana Sangh, and its later avatar the BJP — assisting these groups with money if not with votes in the decades before the BJP rose to power. They loved the Sangh because of its pro-business, anti-Left outlook and Hindutva ideology. Now traders feel that instead of the Sangh redeeming its debt to small traders, Modi has chosen to criminalise them. They would indeed readily endorse what German philosopher Friedrich Nietzsche wrote, “Great obligations don’t make people grateful, but revengeful.”

But Modi’s BJP can turn against small traders because they may have wealth in comparison to others around them, but do not have the numbers to constitute a substantial voting group. For instance, the Vaishyas, who dominate the trading group, were just 2.7% of the country’s population in the 1931 census, the last census in which caste data was collected and made public.

With the BJP expanding rapidly, traders now constitute a fraction of those who vote for the party. So will they continue to stick with the BJP, which has not reciprocated their ardour? To get an answer, let us turn to Surat, which has become the hotbed of the agitation against GST.

Like what you read? Give GST India a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.