My friend was really very worried during the roll-out of GST on the midnight of June 30-July 1 2017. He asked me about the doubts raised by various experts apart from opposition parties. He was also frantic that due to confusion about GST things might get out of hand leading to losses for the common people.
Interestingly, I have been receiving many jokes on social media on GST. One such jokes says: 'I don't know anything good or bad about GST. But I am confident that it would be beneficial because it is opposed by Congress, TMC, Left and RJD.'
Frankly speaking, I personally also have no idea what would be the consequences of GST implementation. Being in the construction sector, even I'm confused over GST's impact as different people are saying different things contradicting each other. Although, I have read a lot of articles on GST's impact on the real estate sector and works contract but can't recall anything as of now.
One must note that in the construction sector we quote very competitive prices due to cut-throat completion. Thus, the construction sector is skeptical that GST might negatively impact construction projects, and as a result the executing companies like my employer might suffer losses. This in turn would affect the cash-flow further resulting in non-payment/delayed payment of liabilities, incentives to staff etc. By all counts, the GST rates are much higher and the input credit system is very confusing. We have made lot of discussions on this. Interestingly, as we don't know what would be the exact impact so we have no idea how to tackle/mitigate this GST impact.
I am sure other people too have worried and confused a lot. Many have talked regarding their frustration too. But I have an answer for all those who are worried. Let me explain it logically.
No doubt Narendra Modi government pushed GST for roll out on July 1. History also tells us that implementation of GST is never smooth at least in first two-three years. In many countries implementing governments couldn't be re-elected because of chaos due to GST implementation. I think Narendra Modi is aware of all such risks.
Narendra Modi is an effective Prime Minister. He is also a seasoned politicians. He has to face around four state's election in late this year. In 2018 also there are couple of assembly election and finally he has to face 2019 general election. Didn't he know that such chaos may cost him politically?
I think he knows the risk at the same time he knows the rewards. He is a politician who takes calculated risk with confidence that he can manage things if something goes wrong. Demonetisation proved it. Then all must agree that Narendra Modi is one of India's most influencing Prime Minister where entire system remains firmly under his control.
Thus he would never allow things to go wrong and particularly affecting common men/consumers. He is a politician who always estimate both gain and loss. Thus he must have estimated the initial hiccups/credibility losses and then gains within three to four months (before upcoming assembly elections).
Considering his political acumen, ability to control things and his ambition to be re-elected in 2019, I feel that GST implementation wouldn't be suffering for majority people. According to some BJP ministers, some business men who usually cheat (both on tax and on MRP) may be vulnerable to problems, but honest businessmen and common public will be benefited.
I don't see it on reform point of view at present although it should one of greatest tax reform. I just view it now from the angle of Narendra Modi's political gain. If Narendra Modi is sure to gain politically, then GST implementations must be beneficial to people.
Well if, Narendra Modi sudden became unintelligent politically then definitely both public as well as Narendra Modi will suffer hugely. But I don't think that to happen. Hence don't worry, be happy and trust Narendra Modi and his political intelligence wishing that GST would be good for public and nation.