The Telegraph
Since 1st March, 1999
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Sangh tax whack on trader ‘bullies’

New Delhi, April 27: Finance minister Jaswant Singh’s decision to defer the implementation of value added tax may have won him friends from the BJP’s pro-trader lobby, but the RSS has taken a more objective view of the tax reform initiative.

An article titled “Vat-Phobia” in the latest issue of the RSS mouthpiece Organiser (April 27) took the traders — the Sangh’s traditional supporters — to task for opposing Vat.

The writer, Akhilesh R. Bhargava, said: “Unsurprisingly, the most aggrieved and vocal are the tax evasive traders, for whom, tax evasion is a perennial way of life. Their trenchant opposition is because Vat is designed to prevent their gigantic levels of tax evasion.”

Bhargava’s advice to the Centre is to “rise above the petty vested interests and to implement Vat expeditiously”. “While the Centre’s efforts have been bona fide and generous, it is the states who have verily succumbed and pandered to these lobbies,” he said.

“Taking advantage of a weak and dissipated government response, the traders have vehemently opposed the means and measures to discipline them and have effectively put Vat on the backburner.”

The Organiser’s editorial echoes the same criticisms, although editor Seshadri Chari insists that the views were his journal’s and “not necessarily” that of the RSS, which, he added, “did not concern itself with issues like Vat”.

The editorial — titled “Vat’s the fuss” — said: “The finance ministry’s decision to go slow on the follow-up with the state governments on the issue of implementing the Vat regime seems to be the result of the din and dust kicked up by the protesting trading community.”

It went on to explain that Vat was adopted by more than a hundred countries and was a “system where tax is levied at each value addition stage and collected and remitted to the government by all those who are responsible for collecting”. In that sense, the editorial said it was different from the present sales tax that was levied, collected and remitted at a single point.

In an apparent attempt to do the balancing act and not antagonise traders completely, the editorial — unlike Bhargava’s article — outlines the merits and demerits in the sales tax scheme and Vat.

“While the government claims that the Vat regime would widen the tax net and simplify the procedure, the agitating traders are of the opinion that Vat is a complicated system not suitable for a large country like ours,” it points out.

“If the government intends to simplify the tax structure and make it difficult, rather impossible, for the unscrupulous traders to evade tax, then it should first embark on a mission to educate the people about it and also take the various trade bodies into confidence.”

The Centre’s “dithering”, the editorial noted, would end up promoting “financial indiscipline and legitimise bullying tactics of vested interests”.

This last aspect had disconcerted sections of the BJP, which felt that by caving in to pressure from the Delhi unit, the party only reinforced its image as a “bania” (business) party and not one concerned with the rights and interests of consumers.

Although no one stated his opinions on record, privately the non-trading members of even the Delhi BJP said they were miffed with leaders like Madan Lal Khurana and V.K. Malhotra for “pressuring” the finance minister to put Vat on hold.

In their opinion, such members live in a “time warp” and are not cognisant of the demographic changes that took place in Delhi over the last 15 years which saw the balance of power shift from the post-Partition business community to white-collared and working class migrants from Uttar Pradesh, Bihar and West Bengal.

“They constitute the committed voters and not the traders living in air-conditioned houses. Vat was a godsend for our party to shed its pro-trader image and prove it cared for the poor. We have blown it,” rued a BJP member from Bihar.

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