Struggle on to introduce GST as corruption continues

corrupGstIt is reported that rampant corruption continues at hundreds of checkpoints across India, as truck drivers are forced to pay officials bribes in order to transport cargo across state lines.

One driver who ferries 100 motorbikes to the South said he is fearful of the hours-long halts that await him at state border checkpoints, and the countless taxes he has to pay local authorities, as well as the constant harassment by corrupt officials. Consequently the trucks are stopped constantly and told to pay more money to traffic police.

In fact the World Bank estimates India’s truck drivers spend only 40 percent of their journeys on the move. The rest is spent dealing with bureaucratic hurdles. The truck drivers have recently become unlikely advocates for tax reform, but the political bickering at the government level defeats them.

Those in the know say a common Goods and Services Tax (GST) would replace the myriad indirect taxes that are currently implemented, and would make compliance easier for businesses and also boost the economy.

Finance Minister Arun Jaitley agreed the GST would be the most important tax reform and an executive of Ernst and Young said GST would be a game changer. Economists and Business owners have long complained about the archaic business and tax laws still in place in India.

Even though the BJP government said it still plans to implement the GST, it faces its own tough battle in parliament, a situation that is called ‘a logjam between the two chambers of parliament.