The good and simple voodoo.

"There can be no doubt that India has one of the most onerous GST systems in the world," wrote an editorial in the Mint. "India has four non-zero GST rates (5%, 12%, 18%, and 28%)." GST stands for Goods and Services Tax which sets the same tax rate for individual products or services throughout India, thus transforming the country into one common market. The GST Council has been revising list of articles under various tax rates periodically. The Prime Minister justified the complex structure of GST , saying, " Can we have milk and Mercedes at the same rate?" The morality of taxing milk, which is food for babies, escapes us. But this is not the whole story. Indian politicians are masters of subterfuge. So while the GST rate on gold is only 3%, there is customs duty at 10% and a GST of 18% on the making charge of gold ornaments, taking the effective rate of tax to 15.67%. Petrol and diesel have not been included in GST because the combined taxes by states and the Center is over 100% and they do not want to give up this lucrative source of revenue. Excise duty was reduced by a total of Rs 8 in this year's budget but a cess of Rs 8 was added, giving no relief to Indian consumers. Money collected as cess can be used only for the purpose for which it is collected, but a report from the Comptroller and Auditor General showed that Rs 1.81 trillion, or 45% of funds collected as cess, have not been used for their declared objective. The Confederation of Indian Industry said that GST has increased efficiency of business. "GST has had a moderating impact on retail inflation, which may have risen to a higher level without the new tax regime," said C Banerjee. GST has resulted in a rise in retail inflation, but other factors, such as the jump in the price of fuel, may have contributed, wrote R Kishore. It seems almost like voodoo economics that prices will fall when the government is celebrating higher tax collections on what we buy. The service sector constitutes around 58% of our GDP and contributed nearly 54% to Gross Value Added, or GVA. When this government came to power in 2014 services were taxed at 12%. This was increased to 14% in 2015, 15% in 2016 and jumped to 18% under GST. People are having to pay higher bills on utilities and on eating out. No surprise that inflation expectations are rising, which prompted the Reserve Bank to raise interest rate for the first time in the life of this government. The GST system is so complicated that the cost of compliance is proving costly, especially for small businesses, wrote Prof S Rajagopalan. The more complicated the easier to squeeze. That is why it is a "good and simple tax".