August 28, 2018

Is GST really helpful for common man or just corporates?

Is this GST really helpful for common man or just corporates?

From an economic perspective – GST as a tax policy is an extremely diligent tool for driving tax governance in any country, as most tax loopholes can be fixed & even if not – it can still give authorities enough directions to plug them. Well, i am not writing anything to discuss that.. My objective in writing this is – to get some clarity in people’s mind – if GST is helpful to common man in the long run.

    Well, common man in India has accepted one thing for sure – its common for common man to be taken for a ride, when it comes to policy making in India. As per tax laws – you pay taxes for all that you either buy or sell – when you don’t pay taxes, that money becomes eligible to be called “Black Money”. To tap “Black Money”, government should tap “Black Market”. And for government to tap “Black Market”, they should should have a fair assessment of what is the market? You must understand the fact that – CORRUPTION cannot be STOPPED, it can only be CONTAINED only when it is assessed the right way. 

GST is one of those tools that helps government to have an first hand assessment of market general market condition –
WHAT Products are getting manufactured – WHICH products are getting distributed – WHAT products are really sold – WHICH products is really reaching end customers. Everybody pays some tax – whether you are Manufacturer, Distributor, Retailer or an end customer & accordingly you can claim tax credits. By analysing this government will get to know – what is the real market mix  & what needs to be addressed & various ways it can be addressed.

You must understand the fact that – CORRUPTION cannot be STOPPED, it can only be CONTAINED only when it is assessed the right way. GST is one such assessment tool, through which government – if it gets wilful – it can bring in regulations to benefit the customers/common man by reducing taxes on products on which really matters. Government can understand what you are buying – how much is its real cost – how much tax it can reduce to benefit you in which way.

Yes, this can help corporates & indeed this will benefit end consumers as well. A clear tax structure can pave way for newer players to enter market – so when newer quality players enter the market – competition gives way for better products, better quality & certainly better discounts which can benefit end customer – which thereby kills monopolistic practices of fewer players in the market.

Will current government do it ? Well, i am an economist & i can only tell things only from a economic stand point .. i cannot quantify willingness of any government to do it – be it MODI ji or anybody else – i can only say the probability of doing it given the economies of scale which are in government’s favour – like Fiscal Deficit, GDP growth, Populist Political Agenda & Political Stability – taking people along with you by taking Youth into confidence – Yes, all of these are something that is in MODI’s favour to drive change & mind you – we have never had all this factors in place since independence . (And for people who say that these factors were in place earlier as well – i can give you some respite to your mind to say – “INDIA has never been even assessed on these factors, so just forget about factors being in place earlier” )

Well, i know politics only as much as you do  – but i have an edge over you – in terms of analysing if economic market conditions are favourable that can compliment governments measures to drive changes if it wills to do. So going by this i can say – At the moment, government now can do it – if it wills to do.

 

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