AUGUST 15, 2018

By Vijay Kumar

Tribute to The Taxpayers on Independence Day

AS we celebrate the Independence Day, let us record our deep feelings of gratitude to the hundreds of patriotic citizens who have contributed to the great mission of achieving and sustaining the much-valued independence. It is said that eternal vigilance is the price of liberty and perhaps the greatest achievement after independence [not taking into consideration, GST which is being thrust on the highest pedestal, just lower than a celestial wonder (blunder?) and which no major country in the world had the courage to experiment with] is the fact that we were able to sustain the concept of democracy, without much demonism. Democratic ideals include (it has to be an inclusive definition) a triumph of the will of the people, manifested through a majority opinion, for the welfare of the citizens. So, any step taken by the government is, by definition, meant for the welfare of the people and has their tacit approval. A major, though often neglected and never recognized section of the society which has contributed to the sustenance of our democracy, is the unsung, unheard, unfortunate tax-payer, who bears it all with a grin to make the great enterprise of government possible. It is to this powerless taxpayer this tax column is dedicated today. God Save Taxpayers.

Now we know - Time (or lack of it) was the Culprit:

Goods and Services Tax Network (GSTN) CEO Prakash Kumar is reported to have said that the original date for rollout of e-Way Bill was April 1 and preponing it to February "on a whim" was a mistake.

Kumar is reported to have told IANS in an interview.

++ If the date was April 1, we should have adhered to April 1. Required time was not given and it is known. Everyone knows that

++ The Group of Ministers (GoM) on Information Technology examined it and said it should not have been done (preponed). They said go back to April 1. Not only that, (GOM Chairman) Sushil Modi said it should be implemented in a staggered manner - give time to both the system as well as the users.

++ No one can challenge that time was less. There were glitches and staggered delivery of modules and functionalities. That was because of the time constraint and the way the law was drafted and it was made available - the rules and the forms.
++ So we had the law in March. Rules were finalized in April and May. And we had majority of forms in June and July. It's because of that. No one can be held accountable.

++ Even the government was on a deadline as the constitutional amendment to bring in the new tax regime was only for one year. After September 8 or 9, there would have been anarchy. No government - state or Centre - would have been able to levy any tax. And if you don't levy tax, how will you run the government?

++ It's easy to lay blame and say there was no proper planning, but we have implemented it and it has stabilised. Now our focus should not be on what happened but how to improve it further and make it more user-friendly.

++ Better sense has prevailed and policymakers have understood that GST's IT-arm needed to be given enough time to make changes to the system if there was any change in GST laws and procedures.

++ This was the reason that while the GST Council in its July 21 meeting decided to overhaul the return filing process, it also gave six months time for the IT system to be ready.

++ This time, they have agreed to my point of view that IT will be given sufficient time to develop, test and integrate.

++ Since the goof-up with the e-Way bill - which was later successfully rolled out on April 1 as originally planned - the system has now stabilized and people are now filing on an average 20 lakh returns every day.

++ The rollout of the new return forms will be smooth. They have given us six months time which is sufficient. I am confident this time it will be smooth as we have learnt from our experience.

But if he was not ready, why couldn’t he simply tell the government that he was not ready?

Here is an excerpt from a lecture delivered by Field Marshall Sam Manekshaw:

There is a very thin line between being dismissed and becoming a Field Marshal.

In 1971, when Pakistan cracked down in East Pakistan, hundreds and thousands of refugees started pouring into India, into West Bengal, Assam and Tripura. The Prime Minister held a cabinet meeting in her office. The External Affairs Minister, Sardar Swaran Singh, the Agriculture Minister, Mr Fakhruddin Ali Ahmad, the Defence Minister, Babu Jagjivan Ram, and the Finance Minister, Yashwant Rao Chauhan were present. I was then summoned. A very angry, grim-faced Prime Minister read out the telegrams from the Chief Ministers of West Bengal, Assam and Tripura.

She (Indira Gandhi) then turned around to me and said, "What are you doing about it?" And I said, "Nothing, it’s got nothing to do with me. You didn’t consult me when you allowed the BSF, the CRP and RAW to encourage the Pakistanis to revolt. Now that you are in trouble, you come to me. I have a long nose. I know what’s happening." I then asked her what she wanted me to do.

She said, "I want you to enter East Pakistan." And I responded, "That means war!" She said, "I do not mind if it is war. "Have you read the Bible?" I queried. The Foreign Minister, Sardar Swaran Singh asked, "What has the Bible got to do with this?"

I explained, that the first book, the first chapter, the first words, the first sentence God said was, "Let there be light" and there was light. Now you say, "Let there be war" and there will be war, but are you prepared? I am certainly not. This is the end of April. The Himalayan passes are opening and there can be an attack from China if China gives us an ultimatum. The Foreign Minister asked, "Will China give an ultimatum?" And I said, "You are the Foreign Minister, you tell me".

I told them that my armoured division and two of my infantry divisions were away. One in the Jhansi/Babina area, the other in Samba and the third one in Andhra Pradesh and Tamil Nadu. I mentioned that I would require all the road space, all the railway wagons, the entire railway system to move these formations to the operational areas and that harvesting was in progress in the Punjab and UP and they would not be able to move the harvest which would rot; and I pointed out to the Agriculture Minister that it wouldn’t be my responsibility if there were a famine. Then I said, "My armoured division, which is my big striking force is supposed to have one hundred eighty nine tanks operational. I have got only eleven tanks that are fit to fight. The Finance Minister, who is a friend of mine asked, "Sam why only eleven?" So, I told him, "Because you are the Finance Minister. I have been asking you for money for over a year and you say you haven’t got it!"

And finally, I turned around to the Prime Minister and said that the rains were about to start in East Pakistan and when it rains there, it pours and when it pours, the whole countryside is flooded. The snows are melting, the rivers would become like oceans. If you stand on one bank, you cannot see the other. All my movement would be confined to roads. The Air Force, because of climatic conditions would not be able to support me. Now Prime Minister, give me your orders.

The grim Prime Minister with her teeth clenched said, "The Cabinet will meet again at four o-clock". The members of the Cabinet started walking out. I being the junior most was the last to go and as I was leaving, she said, "Chief, will you stay back?" I turned around and said, "Prime Minister, before you open your mouth, may I send you my resignation on grounds of health, mental or physical?"

She said, "Everything you told me is true?". "Yes! It is my job to tell you the truth" I responded, "and it is my job to fight, it is my job to fight to win and I have told you the truth,"

She smiled at me and said, "All right Sam, you know what I want?"

I said, "Yes, I know what you want!"

The war took place seven months later, when Manekshaw was prepared and the rest is history. What would have happened had Manekshaw gone to war when Indira Gandhi wanted him to and when he was not ready - God Save The Nation (GSTN)! But then, everybody is not Manekshaw and GST is not war - you can take a risk here. Only the taxpayers will suffer.

No Country had the Courage: Finance Minister Mr. Piyush Goyal says, "No big country has ever had the courage to implement something like GST. It's not there in the US or China. Big nations don't have the courage to bring such huge change." True; let us pray.

God, grant me the
Serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference.

Rakshabandhan is coming. Rakhis exempted: The Finance Minister also said, "Rakshabandhan is coming. We have exempted Rakhis from GST. Also, for Ganesh Chaturthi, we have exempted GST on statues made from wood, clay and stones. Handicraft and handloom sectors are also there. All these things are our heritage and we have to hold on to them with respect." Fine!, what will you exempt for Bakrid, Diwali, Teachers Day, Dussehra, Children’s Day, Christmas, New Year, Sankranti, Holi, Ugadi and a host of holy days ahead, not forgetting Sri Ram Navami.

Simplifying the GST is possible without imposing a significantly higher burden on the poor - IMF: The international Monetary Fund in its recent Report on India’s GST has concluded that simplifying the GST is possible without imposing a significantly higher burden on the poor. The Report states,

++ India belongs in a small group of (five) countries having four or more GST rates (four non- zero rates of 5 percent, 12 percent, 18 percent, and 28 percent; special low rates of 3 percent on gems and jewelry and 0.25 percent on rough diamonds; and a GST "cess" levied on demerit goods). In comparison, among 115 countries with VATs, 49 have a single rate, and 28 have two rates.

++ The multiple rate structure and other features of India’s GST environment could give rise to high compliance and administrative costs.

++ The indirect incidence of the current GST disproportionately burdens poorer households, undoing the objective behind having exemptions.

The Indian National Flag is exempted: On this Independence Day, we should be happy to note that the Indian National Flag is exempted from CGST, IGST, UTGST and SGST by the following Notifications:

++ Notification No.2/2017-Central Tax (Rate) dated 28th June, 2017 for CGST

++ Notification No.2/2017-Integrated Tax (Rate) dated 28th June, 2017 for IGST

++ Notification No. 2/2017-Union Territory Tax (Rate) dated 28th June, 2017 for UTGST

++ Notification No.2/2017-State Tax (Rate) dated 29th June, 2017 by the Maharashtra Government and similar notifications by all State Governments/Union Territories.

In all the above notifications, Serial Number 133 - Chapter 63 - Indian National Flag is exempted from the whole of the central tax/integrated tax/union territory tax/state tax.