Gujarat’s textile traders claim that the Goods and Services Tax (GST), the Narendra Modi government’s flagship tax reform, took a heavy toll on their businesses, but they are still largely batting for their former chief minister in this Lok Sabha election. A similar mood prevails in the state’s famed diamond industry, where the sheen of the Modi brand stands restored since the initial shock of the GST gave way to better business, say traders. “GST has definitely impacted our business. Smaller traders have been hit the most,” said Manoj Agrawal, president of the Federation of Surat Textile Traders Association (FOSSTA).
“Business is picking up from what it was before, but it’s still down by 40 per cent. The fact that we have to give advance tax and do a lot of paperwork has added to the overall cost,” he added. “Earlier, there was no tax on textiles but now there is. So, it has certainly impacted us.” Agrawal, however, said at once that this would not translate into the defeat of the Bharatiya Janata Party (BJP). “Modi is good for the nation,” he added.
Introduced in July 2017, GST subsumed 17 indirect taxes, like excise and service tax, and sought to simplify taxation while making it more transparent. However, it was rolled out in the middle of a financial year, and teething problems left a lot of traders, especially smaller players, high and dry. That it came just months after the Narendra Modi government’s shock demonetisation move, announced on 8 November 2016, triggered a cash crisis and deepened the sense of gloom. The trading community has always been the backbone of the BJP. But a section shifted away from the party ahead of the 2017 assembly elections on the back of the twin shocks of demonetisation and GST reducing the BJP to 99, its lowest-ever tally in the 182-member House, even though it won. It had won 115 seats in the previous assembly election.