The enormity (monstrosity) of GST lies in disruption of federal structure

Indirect taxation is collecting tax indirectly from the ultimate consumer. It has an inflationary effect on the economy. Whether it is Central Excise, Service Tax, VAT or GST, it will put burden on the ultimate consumer. Tax should be ideally imposed on a person who has the capacity to pay. Whether a poor person who purchases Parle biscuit from a grocery shop, is having the capacity to pay the indirect taxes and whether it is right to impose such taxes on him? If GST revenue is going to be finally enjoyed by the State Government in which the goods is ultimately consumed, unless and until such State Government utilizes the funds for the welfare of its citizens, the tax amount is as good as a bad investment by the ultimate consumer. So, instead of indirect taxes like GST, Direct Taxation (Income tax)which depends on the income earned by each individual is the most ideal. Direct Taxation stops at the individual and does not create a supply chain. The entire State machinery can focus on earning revenue through Direct Taxation using the latest IT machinery + PAN combination which GST seeks to use (with lesser expenditure). Ultimately the person who is having the capacity to pay taxes will pay the taxes.

a r vishwanathan 03/11/2016