GST - Nothing was right

• GST is and was a good idea implemented in many countries with some variations.
• It has the basic principle of one tax on all goods and services across the country unless exempted.
• Chief economic adviser recommended revenue neutral GST rate of 15% with merit based lower rate and demerit based higher tax making it a 3 slab GST, apart from exempted list.
• Modi & BJP mangled it beyond recognition with exempted list and 5 tax slabs (3% to 28%) with additional cesses and sin tax on cigarettes and with real estate, petroleum products & liquor retained outside the list. 
• While they campaigned it as revenue neutral, the truth is that it is designed to increase center's revenues while state's fear erosion in their revenues.
• It has also hidden intention of bringing in retail trade under tax net despite their lower margins made them vulnerable, compelling them to migrate completely into cash segment.
• GST was deeply flawed in concept, design, rate(s), exclusions, exemption limits, information dissemination, compliance procedure, infrastructure, preparedness, training and so on. 
• Worst is that service tax, which accounts for over 60% of revenues, was hiked from 15% to GST's 18% tax slab.
• Nothing about GST rolled out on July 1, 2017 was right.
• After 4 months of hasty implementation, the consequences are clear and situation is nothing short of disaster.
• SMEs worst effected; Micro enterprises thrown out of business; Many small manufacturing units closed their operation with no prospect of returning; family operated small enterprises struggling hard to survive; Medium enterprises cutting back on production & reducing work force; Medium enterprises borrowing additional capital for paying large amounts for professional help for GST compliance; GST dealers living in constant fear of tax officials.
• The diarchic rule 'pay first and claim refund later' affected (1) export businesses tax incentives blocked and (2) SMEs faced non refund of input tax credits in time, warranting mobilisation of  additional expensive working capital.
• Ignoring industry/businesses/tax practitioners suggestions and relying of bureaucrats for GST design and implementation process resulted in innumerable flaws causing hardship to small & medium enterprises, retailers and consumers.
• It is only when 'tax problem' worsened to become 'political problem' government woke up to fix the GST problems.
• The desperation is visible with many changes and deferments announced and many more to come soon. As on Oct 31, 2017, GST rules were amended 11 times with 27 reduction of rates, 7 prescription of rates, 22 exemptions, 1 waiver, and 15 extensions of time. Most were concerning SMEs.
• Commonsense returned into the heads of rulers only after 4 months of hardships faced by businesses and consumers. While tinkering of GST is going on, the truth is that there exist no quick fixes and, complete over haul of GST is beyond the comprehension of this government.
• With GST, Modi has resorted to constitutional impropriety of hijacking states autonomy, compromising constitutional principles for economic benefits based on majoritarianism and narratives. What is worse is that introduction of GST Bill as money bill in Lok Sabha depriving Rajya Sabha its right to reject.
• While GST is only transitioning into uniform single tax regime, Modi has resorted to high pitch campaign as a solution to resolve all the ills of nation and highlighted that commodity prices would come down. GST will only give benefits after 2+ years with initial economic disruptions, that too in the form reduction of reduced business to business expenses due to saving in logistics of their products. And Indian businesses are notorious to pass on increased expenses to consumers promptly and retain any savings with themselves. Therefore GST offers no benefits to consumers. On the contrary, GST resulted in increased prices to consumers and lessened revenues to government.
• The deteriorating economy is reflected by the fact that central government has exhausted over 90% of its fiscal deficit target [3.2% of GDP for full year] in the first four months and some states choosing cut capital expenditure as a consequence of farm loan waiver expenditure. Due to low oil prices of $40-45 per barrel since 2014 continuously, central government has managed to contain its fiscal deficit but the combined deficit of the center and states has still remained at near 7%. India’s trade deficit widened due to slow down of exports while imports spiked after demonetisation.
• Now it is clear that centre underestimated impact of GST transition in terms of hit to the growth and how long the dampening effect that could last. 
• The Economist observed --  the shambolic implementation of GST is likely to make matters worse than demonetization. The BJP is not interested in policy it offers. It offers voters mainly distraction.
• The GDP growth rate declined in six quarters from 9.1% to 5.7% is a fact. Every 1% GDP growth loss means loss of 1 million jobs. Since many businesses have closed down and millions lost their jobs, improving the economy and GDP growth would be painfully slow. Unfortunately oil prices now crossed $62 per barrel and OPEC restricting production could see its price moving further northwards which impacts our GDP growth as well as job creation.