The government has allowed the manufacturers or packers or importers of pre-packaged commodities to declare the revised retail sale price (MRP) in addition to the existing retail sale price (MRP) for three more months from October 1 to December 31, 2017. Earlier, it was allowed for three months from 1st July 2017 to 30th September, 2017.
The government said the permission was given on account instances where the retail sale price of a pre-packaged commodity is required to be changed but not undertaken yet. The declaration of the changed retail sale price (MRP) was allowed to be made by way of stamping or putting sticker or online printing, as the case may be.
Use of unexhausted packaging material/wrapper was also been allowed upto 30th September, 2017 after making the necessary corrections. “Considering the requests received to extend the permission for some more time it has been extended to display the revised MRP due to implementation of GST by way of stamping or putting sticker or online printing for a further period of three months, up to 31st December, 2017,” said a statement by the Ministry of Consumer Affairs, Food & Public Distribution.
A short and crisp video unveiled by President Pranab Mukherjee and Prime Minister Narendra Modi for the launch of the Goods and Services Tax in the majestic Central Hall of Parliament captured the clear objective behind country’s most important tax reform till date. Unlike what economists and other commentators have been telling us as to how the GST would push the country’s Gross Domestic Product and make life easier for the trade and industry, the launch film showed a much broader aspect of the modern taxation that has the country’s people, especially those economically less privileged at its core.
In his inspirational speech at mid-night of June 30, minutes before the roll out, Prime Minister, referred to GST as a life changing instrument for the poor particularly in eastern Uttar Pradesh, other eastern states and the North East. Even as they are blessed with rich natural resources, these states have not been able to fully exploit the same for their development.
On face of it, one might ask, how is GST going to be of great benefits to the poor of the country, or is it that the same old “trickle down “ theory is supposed to play a role , via trade and industry. To an extent, it could be so, but the very character of the GST would ensure in realising what the Prime Minister said before the country’s most distinguished audience. The country’s mature polity and cooperative federalism has finally delivered a system, which is people –centric and not necessarily manufacturer centric.
Unlike the excise or other levies, the GST that subsumes seven Central and eight state taxes, is not source or manufacturer based but a destination or consumer centric. In plain and simple language, the states which have more consumers would stand to gain immensely in terms of tax buoyancy that would then be channelled in the welfare schemes for the people and overall economic development of the states. Surely, states of Uttar Pradesh, Bihar, Odisha, West Bengal and North East, which did not have much of a manufacturing base and were losing on revenue would stand to gain while the developed and manufacturing hubs would be compensated at least for five years of the GST launch. More the consumers, higher is the tax collection in a state; though the consumers need to be economically empowered!
The growth impetus to these states which could not keep pace with the states like Maharashtra, Gujarat, Tamil Nadu or Karnataka in manufacturing, would come from trade which in turn would generate huge resources for ploughing back into development efforts. Such a vibrancy would then lead to interest of investors, both domestic and global, into manufacturing and related service sectors, opening vistas for job creation for millions of people.
“GST is a system that ends the imbalances in the country’s trade. It also boosts the exports of the country. This system not only provides impetus to already developed states but also provides the opportunity to the backward states to develop. Our states are enriched with natural resources – look at Bihar, eastern UP, West Bengal, the north east, Odisha. They are all brimming with natural resources. When they will get a single tax regime I can see clearly that whatever deficiency is there those will be removed and this art of the country will move ahead. All the states of India will get equal opportunity for development”, the PM put the context right.
Besides, the one nation –one- tax from “Ganga Nagar to Itanagar “ in the words of Modi, would surely make life easier for the industry, trade and common person in different ways, encouraging honest way for the economic transactions. This is why, the GST has been dubbed as ‘Good and Simple Tax’ that would bring in a new governance culture.
Both the PM and the President gave full credit to different political parties and governments at the Centre and the states in making the GST a reality. “This is not a Sidhi (realisation) of one government or a party; it is a fruit of common efforts”, the Prime Minister said. The President, who had himself played a pivotal role in the progressive journey of the GST as Finance Minister in the previous government, had some apt words:
“The new era in taxation…. is the result of a broad consensus arrived at between the Centre and States. This consensus took not only time but also effort to build. The effort came from persons across the political spectrum who set aside narrow partisan considerations and put the nation’s interests first. It is a tribute to the maturity and wisdom of India’s democracy”.
One of the principal advantages of the new tax regime would be doing away with the cascading effect resulting from ‘tax on tax’. Through a robust IT infrastructure, the system of input credit ensures that it gets passed and adjusted against the tax liabilities. This would only help the consumers. “The prices of goods and services will come down. In the earlier system, the credit for excise duty, service tax, VAT and other indirect taxes did not get passed to the last vendor. But, in the GST, such credit goes to the supplier at the last stage of the value chain which then gets transferred to the consumers,” said noted tax expert Brij Bhushan.
Finance Minister Arun Jaitley too has been impressing upon the industry to pass on any gains which accrue following the GST roll out. He hoped that the government may not have to use the powers vested in it through the Anti-Profiteering Authority to ensure that the benefits get passed on to the common citizens.
While even the President Pranab Mukherjee said that there could be disruptions in the initial stage, such a thing would be constructive disruption. Once we are through the teething troubles and initial period of adjustment, GST would prove to be a people-centric, capable of transforming lives. (PIB Feature)
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.
India ushered in GST amid historic midnight session of Parliament, replicating the mid-night transfer of Independence from the British Raj on August 15, 1947. However, GST inauguration speaks volumes on the tax burden than power transfer.
President Pranab Mukherjee, Prime Minister Narendra Modi, and Finance Minister Arun Jaitley addressed the gathering, before the President and the Prime Minister pressed a button to mark the launch of GST, amid allegations that it would squarely burden the common man.
Prime Minister Narendra Modi described it as “Good and Simple Tax” which would ultimately benefit the people. He even quoted a shloka from the Rig Veda to describe the spirit of common goal, common determination, leading to mutual and shared benefit for the society. He said the day marks a decisive turning point, in determining the future course of the country.
He recalled that the Central Hall had been witness to several historic occasions in the past as well, including the first session of the Constituent Assembly, India’s independence, and the adoption of the Constitution, which have set the future course of action on power shift in India. He described GST is an example of Cooperative Federalism, another power shift from the states to centre in tax revenue and share.
Recalling the famous scientist Albert Einstein who said that income tax is the most difficult thing to understand in the world, he said that GST would ensure one nation, one tax and makes it simple. He noted that it would eliminate inordinate delay in movement of goods and services across the country and makes the modern tax administration far simple and curbs corruption.
Finance Minister Arun Jaitley said, “We have made sure that small traders and businessmen are out and the compliance burden on those with annual turnover of Rs 20 to Rs 75 lakh is lower through the composition scheme,” referring to criticism that the commonman and small traders will be the worst hit under the new GST regime.
The common man faces paying higher price for every purchase he makes when he buys daily needs like jam, cornflakes and hotel food bills. He pays higher when he uses shampoo in the morning, pays higher for life insurance, mobile bills and transportation tickets of all modes. The only visible carrot in the deal is biscuits, which are not good for health as vegetable oil is mostly used in manufacturing them.
He saves if he buys annually once products like shoes, garments, hair oil, cell phones, plastic kitchenware (not steel), pressure cooker, economy class air tickets among others. Once in five-year purchase of a car may cost less now after GST but still beyond the common man’s reach.
However, the impact would be felt in a month from now, while traders will have to make adjustments meanwhile. Last year, demonetisation had affected the country and this year the GST will burden the merchant community further. But there is no choice for the middle class, which gets the impact maximum every time the government ushers in something new.
