The Goods and Services Tax (GST) completed one year yesterday.

The Congress Party is happy that the idea that was first proposed by the UPA government in 2006 has become a reality. We are also relieved that the Bharatiya Janata Party, which stridently opposed the idea for five years and obstructed the passage of the Bills, changed its patently wrong view and adopted the idea of GST.

Unfortunately, the story did not end happily. I had written this “government did bad things in a big way (demonetisation) or big things in a bad way (GST).”

The design, structure, infrastructure backbone, rate or rates and implementation of GST were so flawed that GST has become a bad word among business persons, traders, exporters and common citizens. The only section that appears to be happy about the GST is the tax administration that has acquired extraordinary powers that frighten the average business person and the common citizen.

Beginning with the GST Constitution Amendment Bill, every step taken by the BJP government with regard to GST was deeply flawed. The GST Bills ignored the advice of the Chief Economic Adviser on many aspects of GST, notably on the rates.

The net result is that what we have today is a very different animal and not a true GST.

Multiple rates going upto 40%, and arbitrary cesses on top of the rates, have completely distorted the idea of GST. An intolerable compliance burden has been put on the average business firm, especially on the SMEs, by requiring the assessee to file three returns a month in every State where the assessee carries on business. That means that an all-India business is required to file over 1,000 returns a year! Gross delay in refunds has blocked crucial working capital of firms. It is widely perceived that GST has increased the tax burden of the common citizen; it has certainly not reduced the tax burden as was promised.