‘Twist of Knife in Deep Wounds of Small Businesses’: Chidambaram on 5 Yrs of GST

Several Congress leaders, including Rahul Gandhi, criticised the poor implementation of the tax system.

On the fifth anniversary of the Goods and Services Tax (GST), Congress leader and former Finance Minister P Chidambaram slammed the central government for poor implementation of the system.

(Photo: Samarth Grover/The Quint)

On the occasion of the fifth anniversary of the implementation of the Goods and Services Tax (GST) on Friday, 1 July, Congress leader and former Finance Minister P Chidambaram slammed the central government for poor implementation of the tax system.

"Today GST celebrates its fifth birthday, there is nothing really to celebrate," Chidambaram said in his opening remarks at the party's briefing on five years of the GST.

"Every tweak of the tax rate is another twist of the knife in the deep wounds of small businesses," the former FM said.

The senior Congress leader said that the GST laws had serious birth defects which have only worsened in the past five years.

'Not the GST Envisaged by UPA Government'

The Goods and Services Tax system, initially proposed by the Congress party to build cooperation and trust between the competing Centre and states, was implemented by the National Democratic Alliance (NDA) government in 2017.

Chidambaram, who had announced in 2006 the implementation of the system from 1 April 2010, stated during the briefing that the GST currently in force was not the one envisaged by the United Progressive Alliance (UPA) government.

"The GST that we have today is a complex web of many rates, conditions, exceptions, and exemptions that will leave even an informed taxpayer completely bewildered. Not all registered dealers are informed taxpayers; as a result, they are at the mercy of the tax collector," he said.

"As far as the Congress Party is concerned, we reject the current GST and, as promised in the Election Manifesto of 2019, we will work toward the replacement of the current GST by GST 2.0 that will be single, low-rate," the former finance minister said.

Chidambaram said that even after five years, there has been no rationalisation in the number of tax returns to be filed.

"Various provisions of the GST laws have still not been implemented and instead, the government has resorted to stopgap or temporary arrangements, some of which have lasted 5 years," the Congress leader added.

He also pointed out the problems faced in claiming refunds, stating that thousands of cases are being litigated in the courts, and also referred to the technical glitches.

"The law is so defective that the government is forced to issue hundreds of executive directions," he said.

‘We Are Ready To Give Suggestions'

P Chidambaram said that the central government should call an all party meeting to discuss the law.

"The government must call an all-party meeting, listen to all parties, especially non-BJP parties' finance ministers, and amend the GST laws and substantially modify the manner in which GST is implemented," he said.

"We are ready to give suggestions at such a meeting but will such a meeting will be called? I have doubts about it," Chidambaram added.

"They believe that what they did was right, what they’re doing is right and what they will do is right," Chidambaram said, referring to the NDA government.

'Gabbar Singh Tax': Rahul Gandhi

The Congress said on Friday that the GST laws and the manner of their implementation have "wrecked the economy."

Party leader Rahul Gandhi also took to Twitter to criticise the laws, claiming that the Congress party would bring a single and low-rate GST 2.0, which would be shared fairly with the states.

"Congress' Genuine Simple Tax was turned into Gabbar Singh Tax by the BJP. Six rates, 1000 plus changes in 1,826 days! Ease? It's a nightmare to do business, especially for MSMEs," Gandhi wrote in his tweet.

Former Union Minister Jairam Ramesh said that small and medium industries have been ruined by the GST regime which has further escalated unemployment.