The super-imposition of GST by the Modi regime with effect from July 1, 2017 is the biggest post-war indirect tax reform aimed at reducing the tax on the corporate super-rich and for shifting maximum tax burden to the shoulders of common people. It demolishes country’s federal structure by depriving the state governments of their Constitutional power to levy taxes within the states. The new tax authority is the GST Council and the GSTN which are not answerable to the parliament but firmly under the grip of corporate financiers and new generation banks. The very process of state governments’ budget-making itself has become irrelevant. Modi government could easily impose such a draconian anti-Constitutional regime as all parties represented in parliament and state governments led by them also enthusiastically joined the chorus hailing this move which has long term disastrous effects.
Under neoliberal corporatization intensified by successive governments, the power to fix prices of goods and services has already been handed over to monopoly market controlled by MNCs and corporate giants. In this context, even if the GST rates become less than the average of the previous indirect tax rates, tax burden on the people will be heavier as GST is imposed on the prices decided by monopoly market forces. As the experience of more than 150 countries which have already moved to GST shows, India is bound to go through unprecedented inflation even as corporate profits are galloping.
In India, the Small and medium enterprises (SMEs) and innumerable self-employment avenues that provide sustenance and employment to vast majority of the people and produce more than half of India’s manufactured output are surviving due to several tax exemptions. Henceforth they will find it difficult to survive as they will be forced to compete with the corporate entities at the same unified GST rate. Crores of people depending on retail trade and employed in SMEs are going to face devastation and unemployment is going to sky-rocket.
While US corporate CEOs along with comprador Indian ideologues have all praise for Modi for streamlining GST in India, it is ironical that till now the US does not even have a pan-American indirect tax and in accordance with the requirements of federalism, all the indirect taxes on goods and services there are totally vested with the states. It is no secret that GST is not designed in India. It has been part of the neoliberal corporate offensive from US and EU led imperialist centres. The intellectual inputs and policy prescriptions pertaining to GST intended to achieve “ease of doing business” in India by transforming it into a unified market violating the federal structure are provided by OECD, IMF, World Bank, WTO, UNDP and such other international consulting agencies like Price Waterhouse Coopers, KPMG, Deloitte, Crimson & Company, along with NGOs like Tax Inspectors Without Borders (TIWB), Forum on Tax Administration (FTA), etc.
In continuation of the horrors inflicted by demonetization, following the launching of GST, as feared, prices of essential items, necessaries, medicines and that of all essential services are galloping. As the government has already withdrawn from price controls and market intervention, GST Council is arbitrarily superimposing the tax rates which are the highest in the world on the prices marked up by corporate market forces that control everything from production to final retail trade. Prices of all goods and services essential for the people are rising even as corporate hoarders and black marketers hold the reins of the economy.
People in different parts of India have started resisting this biggest-ever neoliberal offensive. The central Committee of the Party which met on 22-23 July has called on all Party committees at all levels to actively join with the agitating people, take appropriate campaigns to expose the real anti-people character of GST, and to take initiative to strengthen people’s simmering discontent against the anti-people regime