Amit Mitra, the principal chief adviser to West Bengal Chief Minister Mamata Banerjee, delivered a scathing critique of the Goods and Services Tax (GST) regime on Wednesday. He declared that the tax in its current form has completely lost the original purpose for which it was introduced.
The Original Vision Versus Today's Reality
Mitra recounted his initial advocacy for a single tax system. He explained that in 2009, he alerted Mamata Banerjee to the severe struggles faced by Micro, Small, and Medium Enterprises (MSMEs). These businesses were being strangled, as he described it, by the "tentacles of an octopus"—a complex web of 17 different taxes under the old VAT regime. This included central excise, service tax, and various cesses.
He believed a transparent and digitally empowered GST would save and empower MSMEs. Understanding this potential, the empathetic Chief Minister Banerjee took a stand in favour of the proposed tax reform.
A Flawed Implementation and Administrative Chaos
However, Mitra sharply criticised the central government's rollout of GST in July 2017. He labelled the move as "headline-grabbing" and "publicity-hungry," launched when the crucial computer system was unprepared. The GST Network, designed to process 300 crore invoices monthly, failed at this task from the outset.
This technical failure was followed by what Mitra termed a series of administrative failures. He provided staggering numbers to illustrate the resulting complexity:
- 955 notifications issued.
- 754 circulars released.
- 192 prescribed forms for return filing.
- 86 amendments to the CGST Act and 147 amendments to CGST rules.
MSMEs Bear the Brunt, Calls for Correction Ignored
The consequence, according to Mitra, is a return of the oppressive "octopus" that GST was meant to slay. He stated that the system is now "throttling MSMEs" due to an "incompetent, inept, uncaring central government." This aligns with Mamata Banerjee's recent expression of anguish over the GST "mess" at the Bengal Business Conclave.
Mitra emphasised that MSMEs constitute 92% of businesses in India, making the impact of this flawed system nationwide. He further revealed a fiscal hemorrhage, citing government data indicating a loss of over ₹2 lakh crore in resources.
Despite his efforts to flag these critical issues—including writing 12 letters to the Union Finance Minister pointing out anomalies and frauds—Mitra lamented that there has been no meaningful course correction. The original goal of a simple, empowering tax for small businesses remains unfulfilled.
