The Congress on Sunday attacked the Modi government on the first anniversary of the Goods and Services Tax (GST), saying it has become a bad word among business persons.
"The design, structure, infrastructure backbone, rate or rates and implementation of GST were so flawed that GST has become a bad word among business persons, traders, exporters and common citizens," former Finance Minister and Congress leader P. Chidambaram told the media.
He said the only section that appeared to be happy about the GST was the tax administration that had acquired extraordinary powers that frighten the average business person and the common citizen.
"Beginning with the GST Constitution Amendment Bill, every step taken by the BJP government with regard to the GST was deeply flawed.
"The net result is that what we have today is a very different animal and not a true GST," he said.
Chidambaram also stressed that the multiple rates, going up to 40 per cent, and arbitrary cess on top of the rates had completely "distorted the idea of GST".
"An intolerable compliance burden had been put on the average business firm, especially on the SMEs (small and medium sized enterprises), by requiring the assessee to file three returns a month in every state where the assessee carries on business. That means that an all-India business is required to file over 1,000 returns a year," he said.
Chidambaram said: "Gross delay in refunds has blocked crucial working capital of firms. It is widely perceived that GST has increased the tax burden of the common citizen; it has certainly not reduced the tax burden as was promised.
"The truth is that GST was thrust upon an unprepared nation," he said.
The Congress leader also said that the tax administrators were untrained.
"The GST Network (GSTN) was untested. Proof lies in the fact that GSTR Form-2 and GSTR Form-3 have not ben notified even after a year. The system is being run on GSTR Form-1 and the temporary (and perhaps illegal) GSTR Form-3B.
"It is an undeniable fact that GST has not yet had a positive impact on economic growth," the Congress leader said.
He said that because of the flawed design and hasty implementation, according to the statement of the Minister of Industry in the Tamil Nadu Legislative Assembly, 50,000 SME units in that state were closed in 2017-18 and 5 lakh jobs were lost.
Chidambaram advised the government to bring petroleum products and electricity under GST.
First Published: IST