Taxes in the Time of Internet Shutdown

Darjeeling, West Bengal: In mid-June, SC Sharma, a tax lawyer in Darjeeling, was in a fix. Thanks to street protests, he had not left his house for a week. There was an internet shutdown across the district. As a third assault, the finance minister was announcing a new tax regime that confused him. A combination of these factors made Sharma anxious: many of his clients were going to miss the tax deadline and be saddled with a huge fine.

Spurred by the West Bengal government’s new language policy that sidelined minority interests, the Gorkha Janmukti Morcha, a political party that campaigns for a separate state for Nepali-speaking Gorkhas, had called for a bandh from June 12 across the northern hills. Schools and offices were closed. Public transport stopped. Banks would be closed for 104 days. GJM activists and the police clashed everywhere.

The state administration shut the internet down in the Darjeeling hills on June 18. A fortnight later, with the lockdown still in place, the central government rolled out the implementation of the Goods and Services Tax (GST), a pan-India single tax to replace several state-level indirect taxes.

“My clients were jittery because of the penalty issues,” Sharma says. “There was no way I could study the GST, as there was no internet. We were crippled from all sides.” He had also heard reports of GST filing website crashing repeatedly even in regions with regular network services. “Everything was already a mess, and then GST is launched with all the fanfare.”

Since the GST was a new concept, it had to be studied before returns were filed. With no internet, most businessmen were in the dark. Even advisors like tax lawyers and chartered accountants were in a soup as they were unable to use the internet or go down to the plains in Siliguri to address the issue.

Girish Sharda, owner of Nathmulls Tea, an online-cum-retail business of high value tea, felt lost when the GST was introduced. “We tried to solve the GST issues but we could not go online and find a solution.So we just sat around as all shops were shut too, and waited for the bandh to be declared open. It has been a terrible time for all of us in business.”

The June-July season was one for second flush tea, the darker, stronger variety that constitutes 21% of Darjeeling tea exports, and 41% of its revenue. Losses of Rs 250 crores ($39 million) in the season from the triple attack trickled down to the 55,000 permanent and 15,000 temporary workers in the 87 tea gardens in the region.

Ranjeev Pradhan, who runs a construction company in Darjeeling, says those weeks were nightmarish, “The bandh, the internet shutdown, the voice call drops, the sudden introduction of the GST – all this has really taken a toll on me and several others who run small businesses in Darjeeling. Things are still not right. All we need is some peace of mind which is missing right now.”

Only small-scale businessmen like Jeevan Sharma, who had dual offices in Darjeeling and Siliguri, managed to file GST. “If I did not have my chartered accountant based in Siliguri, it would have been impossible to file returns. Siliguri was open and the net was available, so the CA didn’t have a problem. Although the process was very slow because of technical snags in the servers.”

Businessman Gyanendra, who runs Krishna Service Apartments, was not so lucky. “I was held up in Darjeeling because of the bandh. We had practically zero business for the 108 days of forceful bandh, and yet I had to think about filing GST first. This magnitude of shutdown was unthinkable for us.”

Anjan Kumar Kahali, a prominent lawyer who deals with income tax and GST, had a harrowing time during the initial launch. “The system was not stable at all and the GST site kept on hanging after a short duration of use. Entries were taking forever to upload and results were not shown on time and taking really long to verify. The delay was hampering all my other work. Even today, the servers are still far from fast. I have heard that it is not before the end of this financial year that matters will be sorted out.”

In September, the GST council headed by the finance minister Arun Jaitley provided some relief for GST defaulters by extending the July deadline to October first, and then again to November. “I am relieved that I will be getting some extra time to file the returns without paying heavy fines,” says Kahali.

The tea and tourism industries, on which Darjeeling depends most, were severely hit by the bandh. In a politically sensitive time, the double whammy of the internet ban and GST seems to have deepened anger against the state. “The people of the hills feel betrayed, both by the centre and the state,” says Sharma. “They feel they have been taken for a ride once again like they have been several times before.”

Avijit Sarkar is a Siliguri-based journalist and a member of 101Reporters.com, a pan-India network of grassroots reporters.

Shutdown stories are the output of a collaboration between 101 Reporters and CIS with support from Facebook.