A Taxing Tale: Assessing the Impact of Six Years of GST https://janataweekly.org/a-taxing-tale-assessing-the-impact-of-six-years-of-gst Arun Kumar The ease of doing business has not come about and investment rates have not increased. An alternatively simpler GST exists but the government is not willing to admit its failure. Further, while the benefits have not accrued to the country, fiscal federalism has been dented.
For the huge unorganised sector in India, keeping track of input and output is difficult and they are unlikely to computerise it. So, the unorganised sector with a turnover of up to ₹50 lakh is exempted above that, and if they make a turnover of up to ₹1.5 crore, they are under the composition scheme with a flat 1 percent tax.
But they neither get ITC,(input tax credit) nor can they offer ITC to their buyers. Thus, they face a disadvantage vis-à-vis the organised sector, which benefits from ITC. The result of GST is a shift in demand from the unorganised sector to the organised sector.
The ease of doing business has not come about and investment rates have not increased. An alternatively simpler GST exists but the government is not willing to admit its failure. Further, while the benefits have not accrued to the country, fiscal federalism has been dented, which will have long-term consequences.