Don’t let the title mislead your, I am not ‘for debates’ on GST, I’m for GST.
Goods and services tax was the new wave that struck the Indian middle classes. While most people were yet to figure out why Cafe Coffee day charges VAT on every cookie, there was more brewing in the government’s warehouse. On the 1st of July 2017, the Indian government made GST a realist. The new tax form was greeted like a dulhan in an arranged marriage. A change they can accept, but some people were still skeptical.
I can’t speak for everyone, but I can talk about my field. On the afternoon of 18th July, I woke up to a call from Reema Gowalla, a friend & journalist from TOI Bangalore. She was writing a feature on the effects of GST on performing artists. Her article (here) was the first details piece I saw that gave a full account on the tax-change in the life of artists. The basics are: a new law by the GST council meant, any performing arts event — be it theatre, dance, music, standup where the ticket price exceeds INR250, is liable for 18% tax.
Before this reform was introduced; for an auditorium shows I organised in Bengaluru, we paid an advance tax of 10% (on tickets above INR49). This meant — if the venue can seat 100 people and the ticket prices are INR300 each. The net income comes to INR30,000. This lead to a INR3000 tax paid in advance by visiting the tax office in Yeshwantpur, Bangalore.
Now, if the 100 tickets do not sell, the tax is pre-paid and the refund for the remaining (unsold tickets) takes anywhere between six months and lifetime.
I want this to end on a positive note, so I’ll tackle the cons first…
Cons of GST
- The most clear one is the increase in tax from a 10% to and 18%. This could be a word of debate for us in Bengaluru, but comics in Mumbai and Kolkata paid taxes as high as 25–40% of ticket sales.
- The overall lack of information. After spending over two hours on the internet, tirelessly searching for the new rules of GST in my field — I found nothing. A producer friend went to the office, even the people there find it hard to answer the questions we have.
- Just the general inconvenience of new form of invoicing and generation and migration of all comedians and producers from ST to GST platform.
Pros of GST
- The uniform tax system is a great approach. It’s about time the country had more consistent laws throughout that do not change from state-to-state. (not considering the state GST mess-ups that are surfacing, that’s just greed and corruption)
- As part of the old system of entertainment tax (ET), tickets must be printed and sealed at the office before the show and this was an extras/ outdated step to the tax process.
- Payment is not in advance. The process of paying ET in advance was the one reason keeping me from planning any shows at all. With post show payment, the taxing is only on the sold tickets and not the whole directory.
- Online payment would be a great advancement. Although, I’m yet to file GST online and cannot comment on the efficiency of the platform, but having one is a good first step.
- Most Importantly, lack of human interaction. The fact that going to the tax office was painful enough, the sarkari afficers did not help make things easy. Like any other cliched government office, this one had its awful work ethic. No respect for time, making people wait for ages, asking for unwanted documents not mentioned on the website and just the sheer inability to sound or behave professional. The worst of them all was the shameless demand of bribe. Oh ya! Always! It was almost close to impossible to get your tickets stamped or ET paid without a little ‘under the table’. They would ask “Naamge yenu fees illva ?” (What about my fees?). A minimum of Rs.100 for the man stamping our tickets as a reward, to do the work he is getting paid to do. A “fee” of Rs.500 for the officer in the office to make sure this get done soon. Except the first time, I never paid a bribe. By the 10th time, they would not process my documents efficiently because they were not making anything out of me.
So yeh! Bribes. Makes me happy that GST is gonna help solve that problem.
In Conclusion, I’ve always been against most of the reforms or notions of the present government. But this one seem to be for the better good and I’ll be happy to advocate it.