The highly-dramatized mid-night ceremony on 1 July, 2017 to mark the introduction of Goods and Services Tax claimed to be an overhauled taxation system has been eulogized by the country’s Prime Minister as a ‘festival of honesty’. He and his government have indicated that the scope of GST would be “expanded beyond taxation reform and transformed into an instrument for the campaign against corruption and poverty.” One would recall that a year back, the Union Finance Minister while commenting on fallout of GST stated that it would convert India into one common market, prevent tax-on-tax, make goods and services cheaper, facilitate businesses far more and boost the country’s GDP. If one is carried by these conventional cosmetic vocabularies now variegated with an array of sweet-coated words and prompted to view these homilies estranged from the prevailing capitalist system wreaking havoc in people’s life day in and day out, the real motive behind such steps on the part of the custodians of rotten reactionary capitalism would remain veiled. Need is to remove the veil and find out what is the sinister motive behind all these economic or fiscal savageries like economic liberalization, Value Added Tax (VAT), demonetization of currency notes, GST and so forth. Once that is unravelled, it would be clear why the bourgeois rulers and their bootlickers are so frantic in guarding that in every possible way. It is people’s ignorance or lack of consciousness which enables the ruling dispensation to bluff them and take them for a ride.

Economic policies cannot be viewed estranged from the prevailing capitalist system
While exposing the sinister design behind the much-trumpetted GST, we, a year back, (Proletarian Era, 1 August 2016) pointed out in no uncertain terms that any step, any measure towards economic reform initiated suo motto by any bourgeois government in any capitalist-imperialist country is bound to be in the aggregate interest of the ruling capitalist class and destined to militate against people’s interest. Assessing the import of any economic policy without this necessary political outlook would keep the truth elusive. Secondly, when the entire capitalist-imperialist world is frantically trying to stave off the growing intense insolvable economic crisis endemic of the system, the capitalist-imperialist rulers, their political managers and caretaker governments, would only formulate laws, impose regulations and revamp procedures simply to serve the vested interest of the monopolists and corporates, both domestic and foreign, and operationalize the agenda of more and more concentration, consolidation and centralization of economic power along with political powers in the hands of the capitalist-imperialist state. To shield this heinous objective, the ruling party leaders and ministers indulge in a slew of false promises and assurances as well as make all kinds of radical postures. Their highly fine-tuned propaganda machinery, pliant media and hired economists-scholars-commentators are also pressed into action to create illusion among the people about such measures, laws, regulations and reforms.

How people have been repeatedly duped in the name of reform
Let us rewind to 1969 when Indira Gandhi, the then Congress Prime Minister, had announced nationalization of banks and abolished privy purse. It was also hailed as a progressive move, if not a step towards socialism, by many including the so-called Marxists. Indira Gandhi was extolled as the ‘harbinger of liberation of Asia’. Equally deceptive were her slogan of garibi hotao (remove poverty) and the 20-point programme of poverty alleviation. What had been the outcome of both? Rich became richer and the poor poorer. Fortunes showered on the handful of industrial barons and business tycoons while escalating plight and poverty made the toiling people wretched beyond tolerance. Based on Marxist methodology of analysis, our Party had then warned the countrymen that, “…in a capitalist state, when the bourgeoisie takes recourse to nationalization, it does so in the aggregate interest of capitalism precisely to bring about a coalescence of monopolies with the state and thereby virtually subjugating the state to the interest of the monopolists. In this way, the rock-bottom foundation stone of fascism is laid.” (Extracts from the Resolution of the Central Committee of our Party on bank nationalization dated 30 August, 1969.)
Next we recall the day of 24 July, 1991 when the then Congress Government had rolled out economic liberalization with much fanfare based on the prescripts of the new-fangled doctrine of globalization. It was claimed that this liberalization of economy “would create wealth, remove the stigma of abject poverty, social misery and inequality.” “Reform…is not to give fillip to mindless and heartless consumerism we have borrowed from the affluent societies of the West. In a society where we lack drinking water, education, health, shelter and other basic necessities, it would be tragic if our productive resources were devoted largely to the satisfaction of the needs of a small minority.” (Budget speech of Manmohan Singh, the then Finance Minister on 24-07-1991) Wearing the cloak of an erudite economist, he said that hitherto existing large scale tax evasion, both in terms of income and in terms of wealth, would go away and there would be substantial improvement in tax compliance in the few months to follow. Calling Manmohan Singh a ‘hedgehog’, his cabinet colleagues bragged that “his budget has deservedly earned its place in our history.” At that time also, our Party had provided detailed analysis of this mega-deception showing that cry for liberalization is a bourgeois conspiracy to well-entrench its tooth and claw. We categorically stated that “The Congress (I) government has launched its savage-most-ever attack on the toiling and exploited people of our country in order to serve the Indian monopolists and save Indian capitalism from crisis.” (Proletarian Era dated 14-10-1991) Has not history proved our analysis and stand to be absolutely correct? Has not this so called globalization-liberalization proved yet more devastating for the toiling millions in every respect—be it harrowing price rise, growing unemployment, massive job loss, plummeting income, marginalization of rural poor, spurt in black-marketing and hoarding, large scale tax evasion by the rich and privileged or surging corruption in every sphere of economic activity and controlling bodies? Have our productive resources been devoted to meet the basic necessities of the millions of suffering countrymen like drinking water, education, health, shelter and such others? Or it has been a saga of carrying coal to New Castle? What do the drumbeaters of globalization-liberalization now say about this fallout other than trying to beat about the bush with hollow pedagogy?
The chapter of ‘Economic Revamp’ to follow was much-trumpetted tax reform in the form of introducing Value Added Tax (VAT) in April, 2005. In the preface to the White Paper issued on January 17, 2005 by the Empowered Committee of State Finance Ministers constituted by the Ministry of Finance, Government of India, Asim Dasgupta, the Convenor of the said committee and the then CPI (M) Finance Minister of West Bengal, claimed that “VAT will not only provide full set-off for input tax as well as tax on previous purchases, but will also abolish the burden of several of the existing taxes, such as turnover tax, surcharge on sales tax, additional surcharge, special additional tax, etc. …VAT will improve tax-compliance…augment revenue growth … and therefore help common people, traders, industrialists and also the government.” It was further stated there that “correctness of self-assessment will be checked through a system of department audit… comprehensive cross-checking system will help reduce tax evasion and also lead to significant growth of tax revenue… protecting transparently the interests of tax-complying dealers against the unfair practices of tax-evaders.” We had immediately pointed out that talking of price reduction in decadent moribund capitalist system is a hoax. The proposed multi-point tax system of VAT would be cumbersome, harassing and would ultimately trigger price rise as starting from the manufacturers to the traders and retail merchants, all would pass their tax burden squarely on the consumers by way of loading it on the end price or retail price. Moreover, being unable to comply with the new procedures, many small businessmen, traders and retail outlets would not only be in severe crisis but would gradually disappear and cause loss of the means of livelihood to many. The big monopoly houses and retail giants would eventually take over the entire commerce. Further, when a noxious axis of corrupt tax-administration, ruling capitalists and the government rules the roost in our country, if the procedural hazards are increased in tax assessment without taking any genuine initiative to tone up the administration and put in place stringent punitive measures for the unscrupulous tax officials, claim of preventing tax-evasion or begetting any improvement in tax collection would prove a fiasco. Instead of so called claim of freeing the system from all these aberrations, it would increase corruption, manipulation and evasion further. (See Proletarian Era dated 01-03-2005) Have the consequences of VAT been anything else other than this? How much has the price line spiralled in the last 12 years? What has been the extent of growth of organized retail under big brand names? Has not the quantum of tax evasion by the big industrial houses, corporate behemoths and business magnates been massive?
Then in November last had appeared on the centre-stage the prescription of demonetization once more advancing surfeit of counterfeit arguments that it would unearth black money, remove corruption, cleanse the system of fake currencies, stall funding of terrorism and ultimately paving the way towards a cashless society. Again, based on Marxism-Leninism-Shibdas Ghosh Thought, we exposed the hideous underbelly of this stunt and categorically stated that so long capitalism stays, not a single aberration bred by it can be eradicated through so called reforms initiated by its pliant government. The government and those playing second fiddle to it claimed that once the system was made cashless, all crimes and misconduct related to cash would come to an end. We rebutted that as well. We showed that whatever they may say to hoodwink people at present stage of dying capitalism, cash in the sense of money which is the medium of exchange cannot disappear not only in capitalism but even in socialism. Such an argument is, therefore, a blatant lie and preposterous. Money as medium of exchange would stay in different forms like plastic money (debit or credit cards), electronic banking (on line banking) or digital wallet (Paytm, Jio money, etc.). In cashless mode people would end pay extra money each time they transact digitally and hence promote the digital business of the monopoly houses. Hence, such monopoly houses are celebrating demonetization which their pliant government had implemented clearly at their behest. On the other hand, those who depend on cash transactions like small and mid-size businesses, cash-based small retailers, vendors and hawkers would be in serious trouble so much as to be on the course of eventual phasing out. Similarly, the unorganized sector employing 93% of the total workforce would be badly affected and the rural poor including small and marginal peasants, daily wagers and casual labourers would be pushed to the precipice of utter ruination.

Myths created around GST
In the series of these capitalist deceptions, GST is the latest endowment. As we had shown a year back, GST is based on the same principle of input tax credit as was the case with VAT. Only VAT had been state-based while GST is at all-India level. If VAT has proved to be a damp squib, how can GST be a runaway success? The Prime Minister, the Finance Minister and their cabinet colleagues are talking of one tax, one country and one market. Is it so? There are four GSTs — CGST (central), SGST (state), UTGST (Union territory) and IGST (Inter-state). All are GSTs, nonetheless! Secondly, cess would continue to be levied over and all above GST. Thirdly, petrol-diesel is not brought under GST, the reason being the maximum rate under GST is fixed at 28%, whereas existing tax on petrol-diesel is 57% (23% excise and 34% VAT) plus cess. GST is not applicable on electricity also. Can anyone disagree that both petrol-diesel and electricity are among the most vital and immediate factors that affect price levels? So will not those be playing on as usual to bring about further dreaded spurt in tariffs? Also, alcoholic beverages for human consumption are kept out of the purview of GST. It may be because the excise duties imposed by the states on alcohol bring substantial revenue to the state governments and the central government that a compromise has kept it out of the constitutional mandate for levying GST. Such being the scenario, the current multi-layered taxation is not abolished altogether. As a result, excise duties, sales tax, service tax, VAT and cess would not cease to exist. Then, how is it ‘one tax’?
As regards the slogan of creating ‘one market’, India’s is already a homogeneous well-integrated capitalist market where trade and commerce including agricultural commerce is operated based on capitalist laws. Fragmented are the various players into the big, medium and small. GST would be entirely based on a digital system where taxes have to be filed online. While big corporate houses and moneyed businessmen can afford to deal with the situation by appointing technically skilled people and consulting tax consultants, would not on-line tax filing system be off-putting for small traders uneducated in IT? Already many small traders are on the verge of extinction because their economic condition debars them from complying with the host of procedural hazards. How would the individuals who collect goods from the bulk-stockists, carry on their cycles or two wheelers and sell it to the customers at their doorstep keeping some margin, survive in the GST regime? These poor people mostly unemployed youths who are categorized as self-employers would be out of their means of livelihood overnight. Is it then not a fact clear as daylight that the government through GST is on a mission to eventually phasing out all these small and middle players?
Finally, is India from economic point of view a unified whole? India’s richest 10 per cent hold 370 times the share of wealth that its poorest hold. India’s 1% super-rich has been getting richer at a derailing speed. Even the President of India had to admit that 660 million Indians are unemployed, though the real figure is much more than that. Report of government appointed committee says 77% of Indians are languishing below poverty line, being unable to earn even Rs 20 a day. While the bourgeois government grants tax waivers and concessions worth Rs 9 lakh crores to the industrial houses, corporate sector and super-rich, including branded swindlers, in just one year of 2016-17, it is discernibly reluctant to write off even a few thousand crores of rupees of loan to distressed peasants fearing adverse effect on the economy. The inevitable disparity capitalism bequeaths to mankind is so glaringly visible! Can this reality of existence of two Indias be erased simply by ushering in a tax reform within capitalism? Absurdity par excellence!

Inherent flaws and incongruities of GST
We now turn to address some of the flaws and bluffs GST is stuffed with. Already, it has come to the fore that GST has turned bitter for both buyers and sellers. Traditional sweetmeat shops and confectioners of West Bengal who hitherto conducted business based on cash are now forced to switch to adopt corporate mode by investing more on infrastructure including IT support for conforming to the mandates of GST. Obviously, they would largely recover the increased cost from the customers by increasing prices of their items. Medicine shop owners and consumers already taste a shade more pungent. People are also in a quandary as to how the tax on service would be worked out post-GST. It needs to be pointed out that the coverage of the term ‘Services’ is very wide. Purchase of any goods or services can easily be associated with another service element. For example, while one pays premium towards an LIC policy, he would pay GST. If he makes the payment in digital mode, he is, as things stand today, would pay GST on that. Further, it might also happen that the concerned bank of his or her would levy GST for debiting his or her account for making the payment through the digital intermediary like Paytm. Similarly, we would pay GST while purchasing any goods. Already apprehensions galore about double taxation—one GST for goods and the second GST for service. If we make the payment through debit or credit card, we would be charged by the bank as per GST rate on that as well. Who knows whether tomorrow, the big retailers would impose GST on the service rendered by them in helping the customers to choose his merchandize, in getting the purchased items packed and even for facilitating payment at the designated counter. With this extensive coverage of and wider scope for interpreting ‘services’, one cannot rule out the possibility of GST extracting more money from the common people on this or that pretext. Secondly, while the basic precepts of bourgeois democracy mandate framing and monitoring of fiscal rules by the sovereign parliament, the GST Council, a non-constitutional body consisting of the central and state government representatives, will now be performing that job with no accountability to parliament. Similarly, Goods and Services Tax Network (GSTN), a non-governmental private organization will provide IT infrastructure and support to the government as well as the taxpayers and others concerned. Already Infosys, the IT giant has been awarded Rs 1,380 crore worth of contract to build GST technology network. More surprisingly, while the GST will be entirely operated on-line, the very software to be used for the purpose is not yet even tested. One also wonders how can a fully IT based tax system with a host of paraphernalia including submission of a number of periodic returns be operated in a country where computer literacy rate is stated to be just 6.15%? There is a quite stringent penal clause for non-compliance in GST. It means that if a computer-illiterate small businessman fails to satisfy the powerful tax regulatory authority about submission of due returns based on correct computation as well as on time, he may be jailed. Already confusions are galore about the nitty-gritties of the system. Though the seven GST categories based on rate are announced, there is no clue as to how the classifications have been made and on what basis. There is no proper guideline, no appropriate clarification, no clarity on so many related issues. Plenty of hiccups are apprehended threatening to grow into gasping death-throes for many. In such a turmoil and muddling situation as well as amongst threat of punitive steps, what would expectedly dominate is rampant corruption on a larger scale at the end of the tax collecting, assessing, monitoring and regulatory administration, which is infamous for its culpability to wrongdoing, receiving bribes and complicity with the tax evaders as well as those who wilfully defraud the public exchequer. Also, as is common and inevitable in capitalism, newer breeds of unscrupulous agents and middlemen would appear to fish in the troubled water. Thus, harassment, hassles and oppression would increase.
Next is that in the proposed input tax mechanism, there is a concept of value addition at various stages of the supply chain (raw leather converted into designed shoes indicate value addition at manufacturing level of the supply chain). How is this value decided in capitalism? Is it not mostly on arbitrary basis depending upon how much profit is envisaged at a particular stage of supply chain (from sourcing raw material to selling finished good to end customer) by the concerned manufacturer/ supplier/ dealer? Moreover, there is an “anti-profiteering clause” in the revised GST laws, which mandates that any benefit arising out of the GST would need to be passed on to the customers. An anti-profiteering authority would be set up to keep a close vigil on whether companies are passing on the benefit of lower taxes to consumers. This is another hoax. What is the motive force of production in capitalism? It is to earn maximum profit. How does that maximization take place? It takes place only by depriving the workers of their due wages, appropriating their surplus labour power and squeezing the rapidly depleting pockets of the exploited people by exorbitantly jacking up prices. That is the reason why profits keep piling up on the capitalist rulers while people are pauperized with every passing day. How can the basic law of capitalism be changed keeping capitalism intact? This is deception of highest order! What has happened so far? Concept of input tax credit had already been implemented in MODVAT, then CENTVAT and VAT. Have the capitalist owners ever passed on the direct benefits of any tax reduction on account of so called input tax credit to the consumers, or have they absorbed the entire benefits as extra profit? Even the bourgeois government which saved as high as Rs. 1.50 lakh crore because of drastic fall in international crude oil price did not pass on the benefit to the suffering countrymen. Instead, the government has repeatedly imposed additional duty on oil prices to better its revenue collection at the cost of the people’s suffering. In view of this, is there any cogent reason to believe that the capitalist owners would not retain the savings from tax outgo under the GST regime to improve their profit margin and instead be so benevolent as to pass on the benefits to the people? Is it not asking big manufacturers, industrial houses and corporate sector to forgo profit opportunities akin to asking the tiger to feed on grass? Can capitalism be capitalism then? Clearly, the big industrialists and manufacturers as well as other large players would stand to benefit while smaller firms and kirana shops end up spending more as their compliance cost would rise. It is pertinent to mention here that similar tax reforms have considerably wiped out small business and local grocery outlets (known as Mom and Pop shops) in the western world.
Also pertinent in this regard is the question of price rise. We have already shown above that GST would not bring down but only push up prices of almost all essential commodities. It may happen that in order to dupe people, the government in association with the big manufacturing and production houses may temporarily effect marginal reduction in prices of some identified items or cunningly manipulate or fudge data to highlight dip in inflation and then showcase those as success of the GST. But, within no time, such short-lived euphoria over limited items would be over. We need to understand in this connection that reduction of price at suo motto initiative of the government and forcing the government to bring it down under pressure of people’s movement to beget some relief to them, are two different issues. Expecting the bourgeois government to lower price on its own is a myth. Because, price rise is inevitable in capitalism. It is triggered by the very laws of capitalism. Particularly in dying capitalism today, price rise cannot be contained howsoever pious, for argument’s sake, may be the wish or steps of anyone. Secondly, taxation policy is one of the factors, though not the only factor behind price rise. Apart from general laws of capitalism, other aberrations and corruption bred by the capitalist system like hoarding, black-marketing, realization of cut money by the middlemen and various other manipulations like commodity trading on speculative capital market also contribute to price spiral. Can these factors be wiped out without overthrowing capitalism? These are issues which even a section of honest economists-scholars overlook while trying to understand the outcome of any economic reform within capitalism. Answers to all these questions cannot be found in the text books of bourgeois economics. To unravel the truth, one needs to examine these questions on the anvil of scientific methodology of Marxism-Leninism linking these with associated political aspects. Common people bleeding white under mounting economic assaults by oppressive capitalist rule need to understand the real cause behind their hardship and predicament and chart out the course of remedial action accordingly.

GST imperils federal structure
Finally, the GST also contradicts the cardinal principle of federalism. The Indian Constitution demarcates the legislation power between the federal government (the Centre or Union) and the States in India into three parts or lists: Union list, States list and Concurrent list. Among the powers vested with the states is power of imposing taxes in certain defined areas to mop up state revenue. As per that, various state governments are granted freedom to decide their own fiscal policies within the specified parameters. For example, states hitherto used to enjoy complete freedom in deciding sales tax rates. VAT tried to reduce that freedom but did not force the states to agree to one fixed rate. But, now through GST, the central government is taking away that vital power of taxation of the states. Secondly, GST is a destination-based tax. Destination-based tax means tax is applied on goods and services at the place where the final consumption takes place as against present system of origin-based tax where tax is levied at the place the goods or services are produced. There are states which produce less but consume more. Such states might stand to receive extra GST revenue compared to those who produce more and consume less than what is produced. This would bring about another imbalance. Moreover, it is also apprehended by certain quarters that in an attempt to compensate the states for loss of revenue on account of GST there could be imposition of additional cess on certain goods now attracting higher sales tax. Also, since the quantum of revenue would be pre-determined and non-augmentable under GST, the states might fall short of adequate resources for enhanced public investment and hence forced to extend olive branch to private investors. Clearly, GST is destined to entail non-federal unitary concentration of economic power at the Centre. This centralization of economic power in the hands of union government in a capitalist state is nothing but another move towards pushing the country towards fascization of economy.
It is relevant to recall that if GST was a panacea for staving off capitalist crisis, USA, the chieftain of world imperialism-capitalism would have switched to it long back. Despite US market being much less fragmented in terms of the size of the players, US do not have a uniform value-added tax like the GST. Different states in the US have freedom to impose tax at different rates. Tax slabs also vary according to state and commodities. But that much rudiment of federalism is also sought to be banished in India. Then what could be the effect of such banishment other than bringing more distress to people? It is also to be understood that developing movement against any tax hike by a state government is relatively easier than building up such movement against any such increase in tax imposed by the central government.

Poorer sections panic-stricken but the bourgeois quarters euphoric over GST
GST has already made the economy off-balance. A panic has developed both among the common people as well as small and middle-level businessmen and traders. Many goods including medicines have vanished from the markets in absence of clarity over many issues including applicability of rates. There is chaos just like what we saw during demonetization. Already reports are pouring in that taking advantage of the chaos and absence of clarity, various manufacturers, merchants and service providers are levying GST as per their whims. Obvious question is if things are in such a state of unpreparedness and consequent disarray, why has the BJP government been in a tearing hurry to introduce it? Answer is that this so called reform is mandated by the ruling Indian bourgeoisie in the aggregate interest of capitalism, frantically trying to put an extra lease of life to their moribund stage by working out all possible strategies to load the burden of their insurmountable crisis on the common people. Long back, both the Congress and the BJP governments during their respective terms were up for introducing GST at the behest of their masters. But, the dominance of various players in the market, dispute over revenue sharing between the Centre and states and other ancillary problems were holding back its implementation. It seems that the ruling class can no more afford to delay this tax reform which, as we explained above, is part of their sinister agenda to accelerate concentration of economic-political power at the hands of capitalist state in the interest of the monopolists, both domestic and foreign. That is evident from the way top industrialists like Mukesh and Anil Ambani, Ratan Tata, Aditya Birla and Gautam Singhania, Federation of Indian Chambers of Commerce and Industries (FICCI), US President Donald Trump, IMF and such others have been asking for and stood firmly behind GST. Is there any reason to believe that the so called reforms these ruling monopolists need and hail would in any way benefit the oppressed millions?

People must resist this fiscal savagery
People cannot lie low and allow such fiscal savagery to ravage them more and more. They must rise up in powerful protest, close their rank, cement their unity and boldly face the situation with the spirit of resisting the growing economic onslaughts. Otherwise, the ruling capitalist class and their servitor parties and pliant governments would be more reckless, more autocratic in running the steamroller of gruelling oppression with more ferocity and cruelty. People must know and find out the correct revolutionary leadership that can explain the whole picture most clearly to them and inculcate in them the correct understanding about the nature, mode and gameplan of ruthlessly exploitative capitalist system and lead their just struggle to the desired goal.