Skip to main content

Posts

GST – Impact on Small Industry and the Informal Sector

The Goods and Services Tax (GST), that came into effect on 1st July, 2017, has been lauded as the most comprehensive contemporary reform of Indian indirect taxation. Aimed at creating a common, unified and integrated domestic market, allowing the free flow of goods and services across state lines, GST is supposed to deliver Indian industry and thereby the economy the competitive edge apparently lacking till now.
Reality is however a far cry from the picture painted by government. GST by creating platform a conducive to economies of scale and nullifying regional tariffs, is both conceptually and practically advantageous to big business and detrimental to the informal sector and small businesses.
These groupings, informal and small, though quite different have some degree of overlap. Informal business is overwhelmingly small but not all small businesses are informal. GST’s impact on these groups is quite different both with regard to extent of impact or in terms of results sought.
Small Bu…
Recent posts

GST Round-Table Organized by Business Standard on the 6th of September 2017, New Delhi

On the 6th of September, 2017, the Business Standard organized a round table to explore the 2 month old Goods and Services Tax (GST) post the initial euphoria . It’s aim was to determine the efficacy of GST’s roll-out and gain a glimmer as how industry has reacted to the most substantial reform in contemporary Indian indirect taxation. The panel selected to facilitate the discussion was collected from diverse fields including the upper echelons of bureaucracy, industry and professional sector experts while the audience was predominantly middle management, entrepreneurs and entrenched professionals; doctors, lawyers and the like.
The event commenced with a key note address from Hansmukh Adhia, a revenue secretary. Adhia, declared GST to be a success while issuing a warning to industry that any delay in registration would be strictly penalized. He went on to state that there existed 86 lakh registrations under the old system spread over excise, service tax and state VATs. As manufact…

Why Should Modinomics Be Bestowed With An Ignoble Prize In Economics? Demonetization’s Spectacular Failure.

This lesson from history is quite well known: Muhammad bin Tughlaq thought that may be if he could find an alternative currency, he could save some money. So he replaced the Gold and Silver coins with copper currency. Local goldsmiths started manufacturing these coins and which led to a loss of a huge sum of money to the court. He had to take his orders back and reissue Gold/Silver coins against those copper coins. This counter decision was far more devastating as people exchanged all their fake currency and emptied royal treasure. And nothing seems to have changed ideatically even after close to 800 years since, when another bold and bald move or rather a balderdash move by the Prime Minister of India Narendra Modi launched his version of the lunacy. Throw in Demonetization and flush out black money. Well, that was the reason promulgated along with a host of other nationalistic-sounding derivatives like curbing terror funding, expanding the tax net, open to embracing digital economy an…