How can it be for our good when the rates are so high?

The government is keen to start the Goods and Services Tax, or GST, by July of this year. What is GST? It is a collection of all indirect taxes, such as excise duty, sales tax, octroi, in one tax rate, which is meant to abolish cascading taxes on goods and services and speed up trade between states. Why are politicians so keen on GST? Apparently, it is to stop evasion of taxes by manufacturers and retailers by levying the entire tax right at the beginning. Businesses down the chain will have to claim credit on the tax already paid, thereby opening up their books to tax fellows. It is being touted as being consumer friendly because it may lower tax rates by eliminating cascading taxes. Will it? "Unfortunately, the GST being proposed departs from the expert view that an ideal GST should have a few exempted commodities and a single rate for all commodities, writes Montek Singh Ahluwalia, erstwhile Deputy Chairman of the now defunct Planning Commission. "The average number of rates for lower middle-income countries, which is the relevant comparison group for us, is only 1.7. Against this, the GST council has approved four rates: 5%, 12%, 18% and 28%, with a number of essential commodities to be excluded." In fact, in a sleight of hand, the government has included an even higher rate of 40% on so-called luxury goods, so that it can increase taxes at will, without the inconvenience of having to go back to the parliament. So many tax rates will be confusing for businesses, lead to court cases and higher taxes for the hapless consumer.  So why do it so badly? Because it will enrich civil servants who can look forward to expressions of gratitude, suggests Mihir Sharma. Surely this government will not allow such things? Two million tax officers are being trained to terrorize businesses and extort as much money as possible. This will be passed on to consumers in higher prices. To allow states their own plunder electricity, real estate, petroleum products and alcohol will not be included in GST, which means higher rents, high cost of flying and large bills on eating out. The informal sector, already hit hard by demonetization, will lose jobs, which means the government will have to spend more on subsidies if it is to win the general election in 2019. Which maybe why the rates are so high. In August, Harishankar Subramaniam worried that GST will result in a quadrupling of paperwork for companies, from about 22 returns every 6 months at present to 100 every month. He was right, at least for services. Service sector industries will have to register in every state in which they do business, which means large chains will need tax departments in every state, increasing costs which will be passed on to consumers. Why make it so complicated? Because tax fellows are apprehensive about job losses. We pay high taxes so that they can harass us. Aren't we so lucky?