Ab tak chappan, Gabbar Singh tax gone, but…

The Modi government does not believe in admitting its mistakes, but indulges in beating the chest and blaming the Congress. Modi himself blames the Congress for the Congress regime tax on toffees and conveniently forgets that his government has been collecting 12 per cent GST on pencils, sharpeners and 5 pe

The 56th meeting of the GST Council has unanimously approved the massive reduction or even scrapping of the taxes being imposed on a host of items from pencils to bicycles to milk and bread. Mark the word unanimously. And the BJP is celebrating the “next generation GST reforms” as though the taxes were imposed by the Congress regime. In fact, Congress vice president and Leader of Opposition in the Lok Sabha Rahul Gandhi has been consistently referring to the GST as Gabbar Singh Tax and calling for a simplified two-slab structure of 5 per cent and 18 per cent instead of the complicated 5 per cent-12 per cent-18 per cent-28 per cent system.

The Modi government which has been adamantly justifying the GST for the past eight years has to end the Gabbar Singh Tax in the 50th year of Sholay! Standup comedian Vipul Goyal even described the GST as Give Sitharam Tax! Jokes apart, the reforms of the reformative GST obviously mean that the government has been wrong on the taxes on account of which it has collected over Rs 100 lakh crores. Wasn’t that a burden on the taxpayer?

The Modi government does not believe in admitting its mistakes, but indulges in beating the chest and blaming the Congress. Modi himself blames the Congress for the Congress regime tax on toffees and conveniently forgets that his government has been collecting 12 per cent GST on pencils and 5 per cent on milk.

The humble cycle, required by crores in the country carried a 17 per cent tax. "Sewing machine -- for lakhs and lakhs of mothers and sisters, it is a means of self-respect and self-employment. 16 per cent tax was imposed on this," he said, according to an NDTV report.

But, dear Prime Minister Sir, the same symbol of self-respect was taxed 12 per cent to18 per cent by your own government. You had a tax of 12 per cent on Namkeens, Bhujia, mixture, Chabena and similar edible preparations. Sir, you imposed a 12 per cent GST on pencil sharpeners.

The bicycle suddenly becomes a symbol of fitness with a reduced 5 per cent GST with Union Sports Minister Dr Mansukh Mandaviya posing himself with a bike. Well, what was it when your government has been collecting 12 per cent since 2017? Union Agriculture and Rural Development Minister Shivraj Singh Chouhan says Now there will be no GST on milk and cheese in the dairy sector, this will not only benefit the common man, but its demand will also increase and those who buy milk and prepare dairy products will also be benefited and farmers who are milk producers, cattle rearers will also directly benefit.

GST has been reduced on butter, ghee, so definitely these indigenous products will start selling more, GST has also been reduced on milk cans, the dairy sector will also get its benefit and if the dairy sector progresses, then farmers and cattle rearers will directly progress. Do we, thus, admit that the sales have not been high due to the high taxation?

There are 12 biological pesticides and micronutrients, GST has been reduced on them as well. This will benefit natural farming and organic farming as the price of organic inputs will be less and the tendency of farmers to move from chemical fertilizers to organic fertilizers will definitely increase.

GST on fertilisers like ammonia, sulphuric acid, nitric acid has also been reduced from 18 per cent to 5 per cent. These are the raw materials used to prepare fertilisers, so their prices will definitely come down and farmers will also benefit from that.

Not just these, Chauhan analyses the benefits to the farmer: For example, 35 HP tractor - earlier Rs6,50,000, now Rs6,09,000 (approximate), saving Rs41,000

45 HP tractor - earlier Rs7,20,000, now Rs6,75,000, saving Rs45,000. 75 HP Tractor - earlier Rs10,00,000, Now Rs9,37,000, saving Rs63,000 50 HP Tractor - earlier Rs8,50,000, Now Rs7,97,000, saving Rs53,000 Power Tiller 13 HP - earlier Rs. 20,357, Now Rs. 8,482, saving Rs11,875 Multi Crop Thresher – 4 Tonne - earlier Rs. 24,000, Now Rs. 10,000, Saving Rs14,000 Paddy Planting Machine - (4 Row – Walk Behind) - Earlier Rs26,400, Now Rs11,000, Saving Rs15,400 power weeder – 7.5 HP - earlier Rs9,420 Now Rs3,925, saving Rs5,495 seed cum fertilizer.

“I am telling you the estimated price of the power tiller. Roughly, a 13 HP power tiller costs around Rs 1 lakh 69 thousand 643. There will be a saving of around Rs 11 thousand 875 in that,” he says.

The machine for planting paddy costs Rs2 lakh 20 thousand. There will be a saving of Rs15 thousand 400 in that.

Your tariff card, dear Mr Chauhan, clearly shows that it was your government that has been imposing these high taxes. It was not the Congress regime. And this is the example of the way you have been taxing the poor in whose name you have won the consecutive elections. The list of taxed items and the so-called reliefs is endless.

We have been crying hoarse against the 18 per cent GST on life and health insurance policies and now the government scraps it. as the Wire reported, the cliche goes that a family is just one episode of serious illness away from poverty. A Niti Aayog report confirms this. It says 7 per cent of India’s population — about 10 crore people — are pushed into poverty every year due to the amount of money they spend on healthcare.

Now there is a debate whether the reliefs will be passed on to the end consumer. Strange. The business houses have not been just passing on the taxes and claiming input benefits. So, they will not be losing anything from their pockets if their produce comes with reduced taxes. Where is the question of them doing any favour to the consumer?

So, the government statement that it hopes that the benefits will be duly passed on, sounds meaningless.

The government has all along been dilly-dallying on reduced GST slabs on the pretext that the States will have to agree. Take the case of bringing fuel under the GST regime instead of the ongoing multiple taxation and the cess on it.

That was perhaps the only way the government showed some semblance of respect for the nation’s federal structure. In our previous columns we had extensively dealt with the way the Centre ignored the non-BJP-run States’ demand for timely transfer of their GST share.

The PM has conveniently forgotten the States when he in his Independence Day address, unilaterally announced the Diwali gift by way of GST reforms. The GST Council meeting was a mere formality after which Nirmala Sitharaman rolled out the reforms.

Going by this, the Modi government can implement what it wants since it runs most of the States and the minority of non-BJP States are literally voiceless.

So, why can’t the Centre take the next steps towards the GST reforms by bringing petrol, diesel, and lubricants under the 18 per cent slab?

(The columnist is a Mumbai-based author and independent media veteran, running websites and a YouTube channel known for his thought-provoking messaging.)