The Goods and Services Tax (GST) was introduced in India with the aim of unifying the country’s complex tax system, simplifying procedures, and promoting economic growth. However, several years after its implementation, GST has become a source of frustration and confusion for many, with rising costs, complicated procedures, and an ever-expanding tax burden undermining the original goals.
GST was designed to replace a multitude of indirect taxes with a single, unified tax structure. The objective was to ease business operations, ensure transparency, and streamline the tax system across India. Unfortunately, it has evolved into a labyrinth, with multiple tax slabs, frequent revisions, and confusing exemptions that leave both businesses and citizens struggling to make sense of the system.
One notable example of the confusion caused by GST is the controversy over its application to popcorn. While popcorn sold in cinemas is taxed at a higher rate of 18%, the same product sold in retail stores is subject to only 5%. This arbitrary distinction between two identical products, taxed differently based on the point of sale, has left consumers and businesses alike frustrated. Critics argue that this is just one example of the illogical and inconsistent application of GST, which has only deepened the confusion surrounding the system.
The growing complexity of GST has affected everyone, from small traders to large corporations. Even those who thought they were exempt from GST are now grappling with its reach. The promise of a simpler, more transparent system has, instead, led to a widespread sense of bewilderment. Ordinary citizens, especially the middle class, have felt the brunt of GST’s implementation, with stagnant wages and rising costs making it harder to make ends meet. Essential goods, including food and fuel, have become increasingly unaffordable, exacerbating the financial strain on households.
The economic pressure on the middle class is a significant concern. The cost of living has surged while wages have remained stagnant, leading many to question the benefits that GST was supposed to bring. The gap between the government’s promise of economic prosperity through GST and the harsh reality faced by ordinary citizens has only widened.
While some defend GST, citing the revenue it generates for infrastructure and welfare programmes, the benefits are not visible to the average person. The tax revenue may be flowing into government coffers, but it has not translated into tangible improvements in the lives of the common people. This has led to growing disillusionment with the system, as the promised economic liberation seems increasingly distant.
The situation is further complicated by corruption and the misuse of power by government officials. The case of Saurabh Sharma, an official who was found with large amounts of cash and gold, is an example of how the system is being exploited. Such instances only fuel public anger, as they reveal that the system, in addition to being overly complex, is prone to abuse.
GST has become a symbol of the widening gulf between the ruling elite and the common man, highlighting the failure of a policy that was meant to simplify the tax regime but has instead complicated life for many.
Looking to other countries, Malaysia provides a cautionary tale. After introducing GST in 2015, Malaysia saw similar discontent, with rising living costs and struggling businesses. In 2018, the government, led by Mahathir Mohamad, scrapped GST and replaced it with a simpler sales tax. This move was widely welcomed, serving as a reminder that overly complicated tax systems, regardless of their intentions, can backfire and negatively impact the economy.
In India, the growing consensus is that GST must be simplified. The promise of a unified tax structure has not been realised. Instead, the system has become difficult to navigate, even for the educated, and has placed an undue burden on citizens. The situation has sparked widespread calls for reform, with many questioning whether the government will respond to the mounting discontent or continue with a policy that is clearly failing.
As the frustrations continue to mount, the question remains: will the government take heed of the widespread discontent and reform GST, or will it continue to ignore the voices of the people who are paying the price for this ill-conceived policy?
The time has come for a rethink on GST. It’s clear that the current system, far from simplifying India’s tax structure, has instead added layers of complexity and hardship. For the common man, the dream of a better tax regime is slipping further away, and the need for change has never been more urgent.