STORY: India’s main opposition Congress party leader Rahul Gandhi on Wednesday (October 04) hit out at Prime Minister Narendra Modi-led government for hastily and poorly implementing Goods and Services Tax (GST).
Gandhi, who is on a three-day visit to northern Uttar Pradesh state, said the federal government without completely understanding the new sales tax implemented the biggest tax reform, which was complex and had put shopkeepers, small and medium-sized enterprises at unease.
GST, launched on July 01, is India’s biggest tax reform in the 70 years since independence from British colonial rule. It has replaced over a dozen federal and state levies and unified a $2 trillion economy and 1.3 billion people into one of the world’s biggest common markets.
Ambiguous rules, an onerous return filing system and glitches with GST’s IT back-end have made doing business far more complicated for many companies. Frequent changes in tax rates after its launch have heightened business uncertainty, resulting in many firms failing to register for the new tax.
India’s GDP growth itself has slowed to 5.7 percent in the April-June quarter from 7.9 percent a year earlier, a slowdown also partly blamed on the introduction of the GST, adding to the pressure on the state coffers.