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In Focus

July, 10

Impact of the rushed GST



The Modi Government in its rush to implement the GST, and have an excuse to organise another event, went ahead and rolled out this radical legislation. The Congress party has made its stand on the GST very clear. Today we shall talk about the ramifications of the decisions of the Modi Government. How this act by the Modi Government has actually served to hurt the interests of consumers and small traders in India.

The State Governments are entitled to levy Municipal taxes. Take the case of Tamil Nadu. A cinema ticket worth Rs. 100 will have a tax of 18% under the new GST and also a 30% tax above that. This means that the total tax has increased to 48%. Take the instance of Maharashtra, where the one-time registration tax on cars has increased by 2%. This was accepted by the State Government in the wake of GST. These are just two of many examples of how the burdens on the middle class Indian are increasing.

These rises in taxes hurt the common people of India, because the companies merely pass on this expense. The question that needs to be asked is, for whom is the GST being implemented, for the Government or for the Indian citizens? This new tax has not looked at the complexities of the mercantile process in India. Take the example of the textile market in Delhi’s Chandni Chowk. Earlier there were no taxes on textile, now there is a 5% tax.

In India there are many informal and small artisans, who weren’t required to be registered if their turnover was less than Rs. 20 lakh. These small artisans and traders used to do job works, and this was purchased by bigger traders. A person who buys from unregistered traders has to cut a self invoice and he has to pay tax on it. So why should he buy from these unregistered traders, because he can't use any input credit. If he buys from a registered trader only, he gets input credit.  The small artisan, with a turnover of Rs. 20 lakh is now forced to be registered and file 3 returns a month and 1 annually. There are media reports abound on how there is confusion around the GST, and the BJP Government has done very little to educated the small traders on its process. This will leave them prone to exploitation. 

Medicines have become more expensive, with the tax on finished medicine increasing to 12% and the tax on raw materials for medicines being 18%. It is evident that the manner in which the Modi Government has rolled out the GST is hurting the common man’s right to live a healthy life.

There is confusion across India about the GST. Traders, artisans, and consumers alike are clueless as to the nature of the GST, and we then go back to our earlier question, for whom was GST rolled out, for the Government or the Common Man? Because in its current form, this tax should be called ‘Goodbye to Simple Tax.’

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