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AAP sees political opportunity in GST’s teething problems, woos small traders

The party is now closely monitoring the impact of the roll out on small traders and has rallied behind traders protesting the new tax norm.

india Updated: Jul 04, 2017 10:14 IST
Jatin Gandhi
Jatin Gandhi
Hindustan Times, New Delhi
GST,AAP,Narendra Modi
The Aam Aaadmi Party has launched a campaign to highlight the problems associated with the new taxation regime. (Arvind Yadav/ HT Photo )

The teething problems with the roll out of the goods and services tax (GST) and the possible impact of the cumbersome processes on small traders have come as a political opportunity for the Aam Aadmi Party (AAP).

To grab the opportunity, the party has launched an active campaign to highlight the problems associated with the new taxation regime and how its government in Delhi by reducing value-added tax (VAT) on several items actually augmented revenue collection.

The AAP organised a slew of protests over 45 days in the run up to the July 1 launch of the GST by the Narendra Modi government.

Though the GST intends to simplify the country’s complex indirect tax system, it has its own set of complexities. It has been divided into four slabs – 5%, 12%, 18% and 28%.

The small traders, many of whom do not even have personal computers, are the ones most likely to feel the initial hiccups, experts feel.

Most of these businessmen are finding it difficult to register themselves at the GSTN portal, a mandatory requirement for commercial tax payers, and are forced to take help of the chartered accountants, paying hefty fees.

The AAP is now closely monitoring the impact of the roll out on small traders in Delhi, Punjab and Rajasthan, a party leader privy to the developments said.

The party’s traders’ cell convenor Brijesh Goyal said AAP is organising a meeting of the local traders with the Delhi’s department of trade and taxes to explain processes related to the GST. This will be followed by workshops for traders in Delhi and Punjab on how to cope with the new system. “The new regime pits the small manufacturer against the larger one and makes survival more difficult,” he said.

Speaking to volunteers on Sunday night over a Google hangout, which was widely publicised by the party, AAP national convenor Arvind Kejriwal said GST “would hit the small trader and lead to inflation.”

The party stands with the idea of GST but is opposed to the way the Modi government is implementing it and it has rallied behind traders protesting the move mainly in Delhi, Punjab, Rajasthan and Gujarat. “We are still studying the impact and formulating our strategy. As an agrarian state, Punjab is going to be hit,” said Aman Arora, a legislator from the state’s Sunam, who is also the chief of the traders’ cell of the party’s Punjab unit.

The AAP is trying hard to consolidate its position in the capital after its dismal performance in the municipal elections in April.

In Punjab, it wants to go beyond its core constituents – the rural voters of the south-- and woo small traders, who largely voted for the Congress. Despite holding 65 of the 70 seats in the Delhi assembly, the AAP barely won 48 of the 270 municipal wards in the capital. In Punjab, it won 22 seats with its ally, the Lok Insaaf Party in the February polls.

While in the 2013 and 2015 assembly elections in Delhi, the AAP was widely supported by traders, the party saw these voters shift to the BJP in large swathes during the municipal elections, a senior leader said. Delhi alone has over 20 lakh traders.

In Punjab, AAP’s appeal was limited to the rural belt, predominantly of the Malwa region and a campaign around the GST could win the party new urban supporters.

The party believes after demonetisation, the GST will hit shopkeepers and small traders hard by increasing their costs on tax compliance. “If demonetisation was the coffin that the Modi government prepared for small businesses, the GST is the last nail,” AAP leader Dilip Pandey said.

First Published: Jul 04, 2017 09:39 IST