The taxing times that we live in

May 15, 2013, 07:23 IST | Ranjona Banerji

I almost ran out of washing machine powder and had visions of myself trying to convince the cleaning lady to please please please do the scrub scrub scrub

I almost ran out of washing machine powder and had visions of myself trying to convince the cleaning lady to please please please do the scrub scrub scrub. Luckily the shops opened on the sixth day, falling just one short of God. But the point of this strike by grocery shops in Mumbai and some parts of Maharashtra was lost on me. I depend on grocery shops and never visit the large chain supermarkets. But had the strike continued, I might have been forced to do just that. And then suppose it had become a habit? Who would have been the loser?

Impasse: Traders and shopkeepers have been protesting against LBT for over three weeks

A strike — no matter how justified — which inconveniences people who have options is a self-defeating exercise. The problem was some kind of municipal tax which is supposed to replace octroi — which everyone hated, a leftover colonial horror which had no cause to exist after Independence. Retailers, wholesalers and traders agree that octroi — charges on goods entering a city — is unacceptable and must go. They also apparently agreed in principle to the new “Local Body Tax” but went up in arms when implementation time came.

But there are some intriguing aspects to their objections, which should interest our anti-corruption activists if they could only see beyond lakhs of crores to where graft really hurts the “aam aadmi”. Shopkeepers fear harassment by municipal officials sent to check their records. Bribery was what gave octroi a bad name but how will LBT be any better if the same municipal system is the tax collector. The traders’ therefore feel they would be happier if VAT — value added tax — is increased. But VAT goes to the state government and LBT is a municipal tax. The two are not interchangeable.

The solution which is not a plausible or feasible solution would be to tackle corruption in the BMC, higher and lower levels... Actually I can’t believe I just wrote that. The shopkeepers undoubtedly have a point? How will they escape the ever-tightening noose of the tax collector? The problem is that some of them just sound like wannabe tax evaders. We all have to pay taxes and we do pay them. By what logic can a grocery shop be exempt? People get harassed by income tax officials all the while (by the way — anyone knows what “vital” files were lost in the fire at Aaykar Bhavan the other day?), not to mention customs, sales tax, excise and all the other wonderful forms of harassment which governments invent and then perfect. Harassment may be an annoyance but it’s hardly an excuse not to pay taxes. (On second thoughts, maybe we could all go on strike against taxation... Okay, tax people in case you can read, I am only joking. Note to chartered accountant, kindly file returns on time.)

It would be foolish for these shopkeepers to go on strike again having already made everyone unhappy for a week. Many in fact kept their shutters down to please the associations and went on with home deliveries to please their customers. That’s no show of strength at all if you ask me —that’s just a form of appeasement. It means that the traders and shopkeepers are themselves confused about what this strike means and how it will benefit them. The government is unlikely to go back to the drawing board but it can listen to concerns and do a little tweaking.

This sort of strike is on the verge of becoming counterproductive. It will only push those who have not yet converted into the arms of large supermarket chains. Online services will also get a boost — ideal for those (like me) who are used to home delivery. Even worse, the shopkeepers’ associations themselves will see splits since not all their members can afford long-term closure and alienating their customers.

The sensible solution will be the boring one: Negotiation. And to stay open so I save Vrushali and myself the scrubbing brush...

Ranjona Banerji is a senior journalist. You can follow her on Twitter @ranjona  

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