Getting ‘giggy’ with bourgeois, still heavily taxing his friend

Swaraat / Swaraat Editor Desk

Social media is abuzz with pictures and videos of MPs engulfing Finance Minister Mrs. Nirmala Sitaraman to congratulate her on historic budget that featured reasonable tax relief for bourgeois. It also unleashed the online debate on ‘who falls under middle class?’. But most of the population feel that zero tax for people earning twelve lakhs or less (twelve lakhs and seventy-five thousand with certain clause of deduction) is a good deal for about 80% of income taxpayer.

Some even opinionated that the slab change is confusing and someone earning a little over the zero tax cap will end up paying more, but that has been the case all along and we must consider that the tradition has been upheld diligently.Another highlight of the budget is the allocation of more than thirty-two thousand crore rupees for the labour and employment ministry with special emphasis on ‘gig workers’. This will facilitate the gig workers working on contracts or freelance to be covered under social security benefits such as identity card, e-shram enrolment, insurance and others. According to official data, around one crore gig workers are employed with food delivery, ride-hailing, grocery delivery and other similar e-commerce companies. The number is expected to go up over three crores in another seven years. According to an analyst firm, around thirty thousand will be saved by the corresponding income group annually.

The minimum qualification for such jobs other than education is possessing a motorcycle. It is not possible for college pass outs coming from a humble family to invest a lakh rupee upfront to even stand a chance to approach the employer. Though the incumbent government has been able to keep the price of essential goods under check and keep dabbling with other goods regularly during the quarterly GST meetings, there has not been a whisper either from the government or the opposition to take up the paramount problem of bringing the sub 100cc variant of motorcycles within the reach of middle class.

To put things into perspective, around 180 lakhs of motorcycles were sold in the last financial year.GST for motorcycles below 350 cc attracts 28% GST (which is 2% below the 30% tax prior to 2014) and above 350 cc is 31% GST (3% sin tax). The bare minimum basic four stroke motorcycle costs around sixty thousand rupees, incurring a GST of seventeen thousand rupees approximately. Add Registration charges, insurance and road tax over it and it almost cost a whopping one lakh rupee to own it.

Lower middle class with income below five lakh rupees per annum might not be eligible for a motorcycle loan without collateral and with high interest rates. More than half of the thirty thousand saving through zero tax bracket will be taken back through GST.

Some of the gig workers use E-Bike for their job. E-Bikes are taxed at 5% and also comes with a marginal subsidy. Possible reasoning would be that government wants to reduce the dependency on hydrocarbon fuels in turn reduce the carbon footprint to ensure they continue their sustenance efforts.

Hence, finance ministry and its counterparts from various states should consider taking up the high GST rates for sub 100 cc motorcycles in their forthcoming meeting and lower the tax rates which would be the ideal gift by the government to aspiring middle class youth of the country.