Why Some People Hate GST – A Dummy’s Guide


By Amit Prasad on June 30, 2017

Are you confused with all this hungama around GST? I am with GST but I am against it, is that the message you’re receiving from some groups ? And this must be confusing you even further? Fret not, you aren’t alone and you aren’t at fault either! The Fact is that all this confusion is created intentionally, some people are assuming that they’ll suffer under GST so they’re spreading negativity about it. What surprises me is why some products that are going to become cheaper under GST are shamelessly announcing Sale season and trying to clear off stock.

But if it is such an amazing game changer, why would anyone hate it? How does it affect you as the Aam Aadmi of the country? To understand that, let me give you a Dummy’s guide on some background aspects of our country. A big hype is that small traders are going to hurt under GST, so consider your neighbourhood kirana store. He charges you by the MRP of the product which already includes taxes across all levels, but he pays no tax at all thereby pocketing all your money. Since GST will trace goods across all levels, he needs to get used to lesser profits. Rather than shedding crocodile tears over them, let us be happy that our hard earned money will no longer go to the black economy. And if the small trader cannot survive legally, then he might as well go and work for Walmart.

Over the years I have seen many businessmen buy smaller cars than they can afford but they go to a neighbourhood car accessories store and invest lakhs in upgrading various features which are normally available in high end cars. So why can’t they buy high end cars in the first place? Well, because they don’t have ‘entry’, but pray what is an entry? Dumb-Head that you are, obviously you don’t know that business in India is done mostly without ‘entry’ into the books of accounts. Businesses transact in crores but all of that goes into the parallel economy. I know a person who was paying close to a crore for an old flat purchase, but wanted to give most of it in cash because as a family he was showing only 1 lakh per earning member’s income!

Several moons ago in 1992 when I first started investing in the stock market I applied for the IPO of State Bank of India. I was lucky enough to get 200 shares allocated, thereby giving a bumper profit of over 50,000 Rs and obviously I was delighted! Having seen my family pay taxes before they get money home, I asked my financial adviser how much should I put aside for tax and he started laughing, he said only stupid people pay taxes. I remember telling myself even then, I hope days change soon and fortunately things are changing slowly since a few years, GST will hasten that change!

On the other hand, for the honest tax payer it has been a very uneasy journey, for those who pay taxes regularly or those who get salaries after Tax is deducted from their earnings. Even on that tax paid money, we pay tax when purchasing insurance, paying mobile bills, while eating at restaurants, when staying in a hotel and what not, making our effective tax rate not 30% but well into 40% or more! It is time India came up with a rewards scheme for those who are genuine payers.

For example, how about a Premium Club of tax payers who get Lounge access at all Airports, Special discounts in all Government Hotels , Restaurants, Guest Houses, Special membership to clubs the Government owns ? Make different tiers and institute a reward points scheme, more the points, more benefits you can avail at designated outlets. It would make payers feel recognized and rewarded and it has already been tried in some countries abroad. Besides, these discounts would only be similar to what Politicians and Bureaucrats enjoy off the record anyway, at the tax payer expense, just time to widen the net a bit further, to deserving people? Thus, encouraging more people to come forward and contribute towards building the nation.

So in summary my dear fellow Citizens of India, don’t get confused with all this hype, have confidence that worldwide, this kind of measure has given more benefits than ills. Think of the dozens of taxes we don’t need to bother about, just one single rate and one single country. Don’t get taken in by the hysteria or the initial setbacks that are likely to happen anyway. In the end we will have a cleaner India with less of Grey areas.

Thank your lucky stars that just like P V Narasimha Rao came in 1991 with a fresh policy that put the country on the path to restoration and glory, initiatives such as Demonetisation and GST are shaking up the country like never before, number of tax payers are increasing, number of people who accept credit cards and payment wallets are increasing. The phrase “cash is king” is slowly becoming less relevant, the old Order Changeth, we as well as our Children will reap the rewards of these !! Jai Hind !!

PS: Forward this article if you liked it and have experienced something similar, lets make India aware!!