Tag Archives: goods and services tax

GST Highest in World, Arbitrary and Bizarre, Says Cong Leader Surjewala

Posted on by
Reply

Unlike what Congress proposed as a simple three-tier GST capping at 18%, the BJP-led NDA government has made it 4-slab and added 28% slab imposing one of the worst taxation system in the world, said Congress leader Randeep Singh Surjewala.

Besides the Goods and Services Tax (GST), the cess included, some products will be as costlier as 43% more than the existing prices, he said. The cascading effect will be another standstill in economic growth as it would affect the common man and daily purchasing power of many people, he said.

While the livelihood of shopkeepers, traders, micro and small businesses is at stake, the new tax regime defeats the very purpose of simplifying the tax structure.  Addressing a Traders Sammelan of ‘Vyapar Bachao-Dukandar Bachao’ protest in Haryana, he said, “The GST in its current form will be a blow to the farmers, textile sector, small and medium businesses. It will lead to run away inflation for all goods of mass consumption.”

He revealed that the original proposal made by the UPA government was simple, transparent and not at all complicated. But the new BJP framed GST requires 37 returns to be filed by every taxpayer per year. “In case, a taxpayer is doing business in all 36 states/UTs, it will be 1,332 returns, which is shocking,” he revealed.

The GST is against the basic needs of common man — roti, kapda aur makaan — as all these sectors are set for shocking rise in costs, he said. Giving examples, he said, “daily use items” like shampoos, deodrant attract 28 per cent, ACs/TVs/washing machines too attract 28%, furniture 28 %, computers/printers 28% and even small cars attract 28% and questioned the rationale in attacking the middle class which consumes most of these items.

He pointed out that even sanitary napkins, which are usually kept outside the tax regimes in many advanced and even poorer countries have been put under 12% tax regime on par with shoes and footwear. Even dialysis/blood test/X-ray/ultrasound etc. come under the same category, smacking the irrational treatment of medical services in the country, which may increase the medical bills for the common man.

Daily food items like tea/coffee/butter/biscuit/ curd/sweets/juices attract 12 pc to 28 pc, revealing the mindless aggressive attitude of the policy makers and tax administrators.

“Does it make sense to tax mineral water at 18 per cent even when caviar and prawns are taxed at 12 per cent or even when exotic imported fruits and vegetables are taxed at 0 per cent,” he asked.

Giving an example of taxing almonds and dry fruits at 12 per cent and cashew nuts at 5 per cent, he questioned the rationale behind such decision-making. It is everybody’s knowledge that almonds and dry fruits are good for health while cashew is fatty food and not advised for good health.

He questioned tax on man-made fiber and yarn, dyeing and printing and embroidery at 18% while the end product fabric is only 5 per cent, which means the service sector in textile would be hit badly and many may loose jobs.

While Indian farmer can’t compete with global farmer as there is a massive shortage of cold storage units in the country coupled with high indebtedness and suicides among the farmers, the government has imposed 18% tax on construction of cold storage units, which is more harmful to India and may increase imports.

This is what “Modi government’s method of governance: long on talks and short on delivery,” he told the protesters.

Why is GST Anti-Middle Class but Pro-Rich, Pro-Farmer?

Posted on by
Reply

When Indian Prime Minister Narendra Modi visited the White House, the pat came from the President for undertaking the daunting taks of bringing the entire 1.3 billion consumers of the country under one tax regime, making it easy for market access by sellers.

The huge transition to GST-managed tax regime may benefit those who buy white goods as discounts are visibly pushing the demand but not for the middle class, which is still reeling under demonetisation effect of last year.

Many working and salaried class families have woken up on Saturday to a high taxation as they started buying daily consumables. With one stroke, the entire unholy ‘service tax’ has gone up from 15% to 18% and immediately all banks and service providers have sent urgent SMS messages passing on the burden to consumers.

Ironic but all luxury items have seen dramatic reduction in tax structure as cars are on huge discount sale from Maruti Suzuki to Tata Motors, while mobile makers are advertising equally effective price reductions over night. Not far behind, homes will be cheaper now though an elusive dream for many.

Those in rural areas are still not affected by the GST regime. Moreover, fertilizers getting GST discount from 12% to 5%, the direct beneficiaries will feel lesser impact from the concurrent hike in prices of daily consumable items until GST spreads over the remote areas too.

But those who entered restaurants on their way to office on Saturday had to pay extra in the name of central GST tax and State GST tax. It is still not clear for them why there should be two GST taxes in the bill when the GST is being rolled out as one unified structure.

Essentially, the salaried middle class will begin to feel the impact. Since elections are far away, the government is not in a mood to revise these tax slabs on daily consumables for some time.

To offset the hike in consumable goods, commodities such as packaged cement, medicaments, smart phones, and medical devices have been showcased as products where the tax is reduced.

For instance, packaged cement worked out to more than 31% earlier but now it is 28% and if the government is expecting the builders to pass on benefits to buyers, then it’s a dream for many.

In case of medicaments, including Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic systemsalso and other medicaments in general, the rate was down from 13% to 12% now and the impact will be hardly noticeable.

Smart phones attracted a tax of 13.5% earlier and now it is 12%. Similarly, medical devices, including surgical instruments, were under 13% tax will be under 12% GST, which is not a great reduction.

Only benefit for religious-minded people is that Puja Samagri has been placed under Nil category, to woo the women who would feel the impact of GST immediately.

Otherwise, India is no longer a poor country but a rich country for the rich and for those who marvel in rich lifestyle while those who believe in Mahatma Gandhi’s simplicity would be extinct soon.