CHENNAI: Noted economic columnist and journalist S Gurumurthy on Friday said that a lot of the confusion caused by the implementation of GST can be mitigated if small businesses are exempted from paying the tax for three years. He was speaking at the launch of a book on GST in Tamil, written by G Karthikeyan, founder of GKM Tax advisors.
Pointing out that any transition to a new system would be accompanied by confusion, especially in a country as vast and diverse as India, Gurumurthy said that a large portion of small businesses are run by lesser educated entrepreneurs.
“For them, the GST provides no protection. There also doesn’t seem to be any large scale effort to educate them about the tax,” he stated, adding that the majority of such traders did not own computers and did not know how to operate them. “This, I feel, is a weakness in the GST and that has to be addressed.”
The solution is to exempt small scale last mile traders and service providers from GST. “These have already aid the tax while buying the goods and then sell it on for a small profit. Why should we tax that sale too?” he asked. Such businesses, who are unable to enter the system, might end up creating a black market if this was not addressed, he warned.
However, despite the confusion, this is of immense long term benefit to the nation, Gurumurthy asserted, adding that many economists, intellectuals and journalists, had only concentrated on the short term negative aspects and ignored long term benefits.