Rahul Gandhi is a gift that keeps giving, albeit to the opposition and not to his party. For the Congress party, Gandhi is nothing more than a liability who has not only sunk the party’s fortunes but is also blissfully unaware of the ramifications his party has to bear on account of his ramblings on issues he clearly lacks understanding.
Recently, Rahul Gandhi went on a bizarre rant against India’s Goods and Services Tax or GST. In a public meeting in Jharkhand, Gandhi fulminated against the GST, claiming that it is only the poor who pay the GST while the rich and the privileged never pay it. In addition to this, Gandhi also resorted to what he does best when he is addressing a public gathering in rural India: demonise India’s industrial class and portray them as dishonest and thieves. The Gandhi scion targeted Adanis and Ambanis to claim that the two do not pay the GST while hardworking adivasis and tribals who haul 200 Kgs of coal to earn a living pay it.
“Rich don’t pay GST. It is the poor who pay for it. Adanis and Ambanis never pay GST. A tribal man I recently met who hauls 200 Kgs of coal to earn a living pays the GST,” Rahul Gandhi said in a public meeting during Bharat Jodo Nyay Yatra, another boondoggle project by the Congress party to keep their senior leader busy.
While Rahul Gandhi didn’t cite any evidence or report that states that Ambanis and Adanis don’t pay the GST, anyone with a modicum of knowledge about the indirect taxes would know the Congress leader was making scandalous claims not rooted in reality. Perhaps, the Congress leader may not even be aware that GST is clubbed under Indirect taxes and not Direct taxes.
Anyway, the Goods and Services Tax (GST) functions as a value-added tax (VAT) imposed on the majority of goods and services traded for domestic use. Consumers bear the burden of the GST payment, yet it is the responsibility of businesses vending these goods and services to remit the tax to the government.
Adani and Ambani run big businesses in India. They buy raw materials by paying GST on them, churn out finished goods, charge GST on them, and the difference between them is paid to the state and the central government. For instance, Fortune Edible Oil is owned by Adani Enterprises, a company owned by Gautam Adani. It procures raw materials, pays GST on them, and turns them into finished products, which then get sold in the market. Similarly, Mukesh Ambani also pays GST on raw materials that he procures locally for the manufacturing of his products.
At the same time, to make such a sweeping statement that Adanis and Ambanis don’t pay GST at all is to assume that Adanis and Ambanis don’t buy any product domestically, even for their personal consumption, and all their purchase is from the international market, which invariably involves import duties to the government.
In short, the Goods and Services Tax is a tax collected on the consumption of goods or services, the higher the personal consumption, the more that person has to pay in terms of taxes. It is evident that people like Ambani and Adani consume more than the rest of the society so they likely pay more in terms of taxes when it comes to GST. Anyone consuming a product or availing services bought from the domestic market pays the GST, which goes to the state and the central government that uses it to provide better facilities to the people like hospitals, paved roads, improved public transport etc.
The Centre has come up with different GST slabs so that items and services of basic necessity are minimally charged while other products and services are grouped under higher GST slabs. The introduction of GST, therefore, has played a pivotal role in lowering the prices of several commodities vis-a-vis taxes charged on them before its introduction. The poor now pay much less for products and commodities that are essential to them than they used to before the implementation of the GST.
As explained by an X user named Ankur Singh, the introduction of GST has only helped in lowering the prices of essential commodities. Before GST, the total taxes on garments were above 18 per cent. However, after the introduction of GST, a garment that costs less than Rs 1,000 is grouped under a 5 per cent GST slab, meaning the consumer had to pay only 5 per cent tax on it for which he was paying over 18 per cent under the previous tax regime.
However, this nuance was missing from Rahul Gandhi’s rants against the GST as he made broad generalisations that rich people in India don’t pay the GST. This stereotyping of affluent people as non-compliant of GST and insinuating that they evade paying indirect taxes without offering any evidence to back it up speaks to the Congress’ historical attempt to foment class divide among the Indian society and pass the buck of their incompetence to alleviate poverty to businesses and industrialists responsible for driving India’s growth and providing employment to its youth.
Sure, there are a few businesses and businessmen who may be corrupt and who may have evaded paying taxes, but to use a broad brush to paint every marginally privileged person in the country as corrupt and non-compliant with GST is an insult to those who conscientiously pay taxes, both direct and indirect, and contribute to nation-building.
Rahul Gandhi, too, can start with the noble work of nation-building by first educating himself about the GST, how it works, and how it is different from the direct taxes, and then perhaps come up with suggestions that help tribals and the lower strata of the society instead of ceaselessly going about against the GST from time to time. Until then, the Modi government can continue lifting people out of poverty as it did in the last 10 years, with a staggering 13.5 crore people elevated out of poverty in the past five years alone.