Wednesday, 11 Dec 2019
Taxation without Representation: GST Council has no woman or dalit! PDF Print E-mail

Amidst the slogans of “One Nation One Tax”, one thing that is probably a saving grace is that the slogan, thankfully, is a misnomer. There is no one tax. GST regime, with five slabs of tax rates and continued presence of luxury taxes and exceptions to fuels and alcohol, excludes almost one-third of the national production. Taxation is a policy instrument that incentivizes and promotes certain industry so that the objectives of employment and even self-reliance could be realized.

In fact, there is probably no “one nation”. We should remember what Ambedkar stated, decades ago, “How can people divided into several thousands of castes be a nation? Whenever there is any conflict of interest between the country and the untouchables, so far as I am concerned, the untouchables’ interests will take precedence over the interests of the country”. Ask 20 million people who are called as Denotified tribes, they are continuously stigmatised and harassed under the same uniform criminal law. They crave for a Sampurna Vimukti (complete denotification) to proudly call this nation as their own nation. The same is true for different identities, including women. And if there were One Tax, assuming that there is One Nation, it has a potential to destruct the very concept of Nation, because it is better to acknowledge diversity and integrate, rather than solving diversity and disintegrate.

The Government of India introduced the Goods and Services Tax as an effective policy instrument on July 1 2017. It is promoted as a very significant growth story. The first growth story is clearly about the potential role of GST in enhancing the Ease of Doing Business Index, ranking and thereby influencing investments, which would promote India’s economic growth rate. This is a story, which of course sees ‘growth in GDP’ as the driver of human progress. Further, it is envisaged that the income from taxes would substantially increase-, which the Government would be able to support development projects.

The second progress story is about criterion for assigning tax slabs. There have been interesting debates on different goods and services being assigned different tax slabs. Clearly, this story is about how the Government could instrumentalise the slab rates to promote a certain industry over another. The criteria of assigning slabs here would be important. The tax slabs could even be used as instruments to promote responsible production and consumption. A gender lobby could influence the body to ensure that sanitary napkins made by women run small-scale enterprises is assigned the lowest slab. This story, therefore, is a very significant political story - for whoever is able to ‘influence’ the body that determines criteria and tax slabs successfully, would win! The growth would depend upon how successfully the government is able to incentivize different parts of Indian economy through this instrument.

The third progress story is probably the most important from the lens of marginalized communities. This is the story about “who decided the GST slabs”. It is important to look through the establishment of the GST Council – and determine whether it is an indication of human progress or not. What has GST council done to the following three relationships among constituents? Firstly, how has GST impacted the accountability relationship between the State and the people? According to a Member of Parliament, “From 2018, the budget will not be about taxation. The Executive has abrogated the right of the Legislature.” Is it not true that what has got abrogated is the right of the people to be represented in the budget decisions-through representative institutions? Isn't it true that the role of legislatures at the Centre as well as states has been curtailed? Is it not true that a lot of discussions that happens in the Parliament on taxation would now be limited? Does it not have impact on the democracy negatively? It is actually the right of the people to be represented in budget decisions, which has been abrogated. An institution directly elected by the people no longer does taxation.

Secondly, when there is a growingly felt need to decentralise and bring Government closer to the people, does GST council not redefine relationship between Centre and States in a more centralized fashion? According to a Minister in a provincial Government, “The GST takes away the ability to raise revenues at the state level. This just leaves the elected State Government with a job that's best left to bureaucracy- that is, implementation”. The taxation responsibility on a number of issues has moved away from the state governments to an institution located at the central level. Is the principle of cooperative-federalism to be the new mask for centralization? It is important to understand that the power of ‘local’ has been curtailed through the establishment of this council.

Finally, there is high possibility that the representation from marginalized identities would have substantially reduced in the taxation role. The GST Council does not have a single woman member. There is probably not a single Dalit face in the Council. The GST Council has membership only for the Union Finance Minister and Finance Ministers of all states. It is important to note that there has never been a Dalit Finance Minister in Union Cabinet. Indira Gandhi was the only woman to ever ‘man’ the Finance portfolio in the Union Cabinet, way back in 1969. There have been women chief ministers, but a woman finance minister in even the state cabinet is a rarity. Taxation until last year was decided by the Parliament and State legislatures, which had relatively more numbers of woman and Dalits, so can the establishment of the GST Council with this kind of membership be termed as human progress? I believe even if the first and second progress stories become true, the third story defines human progress more definitively than the other two stories. The establishment of GST Council has now circumvented the entire success of reservation, which ensured representativeness to Parliament. If representativeness were a criterion, GST council probably could have representation from other Ministries as well. I believe even if the first and second progress stories become true, the third story defines human progress more definitively than the other two stories. Is taxation all about Finance? Is it not about making economy inclusive?

It is all about how one defines progress. How will you define a progressing country- India, with a growth rate of 7 to 8 per cent, with marital rape not criminalized, or, Tonga with a growth rate of 3.5% having criminalized marital rape recently in 2013?