Business In The GST Era

Bullion analyst Sanjiv Arole evaluates the pros and cons of the recently implemented Goods & Services Tax (GST).

- Sanjiv Arole

This story could be straight out of a moral science textbook. A small girl, of around five years of age, was unwell with a stomach infection. She took her syrup for fever happily as it was sweet. However, she did not quite like the medicine for the stomach infection as it was very bitter. She simply refused to drink it – yelling and weeping non-stop. No amount of cajoling helped. Fed up of the histrionics, the mother roped in the father to convince her, but to no avail. Finally, their collective patience ran out, the father pinned her down and the mother pinched her nose and forced the medicine down her throat. The next dose of medicine did not take that much time and the little girl has since then taken her bitter pill whenever it was required.

The Indian bullion/jewellery industry could well empathise with the tale. For, they went through a similar experience last year when 1% excise duty was thrust down their throat by a very persuasive, resolute and adamant government at the centre.

No sooner did the union finance minister announce the excise duty, than the jewellery trade took to arms and went on an indefinite strike. For, the imposition of excise duty reminded them of the days of the obnoxious Gold Control Act and the draconian powers that the excise department wielded.

The trade panicked and refused to listen to the government, demanding that the tax be withdrawn. The standoff lasted for over 40 days and finally the trade was forced to swallow the bitter pill, as the government made it clear that even if the shops were closed for 1,000 days it would not budge. However, the government did retreat a bit as the excise duty was imposed only on branded jewellery. The government put the message across in no uncertain terms that the excise duty was imperative for the roll out of the Goods & Services Tax (GST).