Centre’s GST course-correction ducks real concerns, says Congress
ET Bureau|
Updated: Oct 07, 2017, 01.43 PM IST
The Congress said certain course-correction on GST government announced on Friday were not enough to address the core concerns in the implementation of the new indirect tax regime.
It said as long as the government was not making GST a truly “one-nation-one-tax’ structure, not bringing petrol-diesel, electricity and real estate under its the gambit, not addressing key issues in agriculture, small and medium enterprises and textile sectors, there will be no lasting solution to the issues arising out the implementation of GST.
AICC chief spokesperson Randeep Surjewala spelt out at a press conference on Saturday his party’s critique to the Centre’s course-correction on GST. “The Government has still not laid down any road map nor given any indication of bringing Petro Products, Electricity and Real Estate within the ambit of GST, repeatedly emphasized by Congress Party and all the experts. It may be worth noting that Centre continues to earn a bonanza tax of Rs.2,73,000 crore annually from cumbersome petro taxes alone”, he said.
Alleging government was only indulging in “adjournment and deferment’, rather than taking “decision”, Surjewala said, “implementation of Tax Deduction at Source and Tax Collection at Source has been postponed till 31, March 2018. Reverse Charge Mechanism requiring the purchaser to deposit GST on affecting purchase from a GST unregistered individual/entity has also been postponed till 31March . ‘E-Way Bill’ concept has been deferred to 01.April as the architecture and technology is still under conception. As tax refund system virtually collapsed with outstanding tax refund demand of Rs.65,000 crore in July, 2017 alone and exporters in peril, export exemption has been extended/postponed to 31, March until the conception and implementation of an ‘E-Wallet System’. All these are soft promises being made today with the ‘Damocles Sword’ continuing to hang in absence of a clear decision”.
The Congress leader further said even the enhancement of annual aggregate turnover for ‘Composition Scheme’ from Rs.75 lakh to Rs.1 crore “is far from satisfactory to bring the requisite relief to small and medium businesses” and that the “Pre-GST turnover limit under Central excise was Rs.1.5 crore as fixed in the year 2006 and if inflation adjusted, the limit would be at least Rs.3 crore…. This would put a large number of ‘small scale industries’ within the ambit of GST making the compliance much more cumbersome and difficult”
Alleging no relief to the distressed and agriculture sector, he said, “fertilizers, which attracted 1.03% of Central excise earlier, are now being taxed under GST at 5%. Tractor and all other agricultural implements have been taxed at 12% with tyres, tubes and transmission parts being taxed at 28%. Despite the reduction, pumps meant for drawing water, including submersible pumps, deep tube wells and diesel engines, are still taxed at 18%.....”, Lamenting no enoughbrelief for textile sector either, Surjewala said, “After a nationwide protest, duty on manmade fiber has been reduced from 18% to 12% yesterday. What Modi government does not realize is that while the fiber is taxed at 12%, the end-product, i.e. fabric, attracts a tax of 5%. This is threatening t he livelihood and profitability of non-integrated textile players of manmade fiber (70% of total), while helping the big fish in textiles sector to make huge profits”.
Reiterating the Congress demand for ending multiple tax slabs in GST, Suerjewala said, “a single GST would have meant a Standard Rate as well as Standard Plus Rate (on demerit goods) and a Standard Minus Rate (on merit goods). A Congress government would have worked towards this module, besides capping the GST at 18%.”.
He said the Government’s decision failed to reduce taxes on commonly used items including food and beverages, furniture, computer, shampoos, ACS, TV washing machines…”Overall, a vision less government is wasting a golden opportunity of putting India on a growth trajectory”, Surjewala alleged.
It said as long as the government was not making GST a truly “one-nation-one-tax’ structure, not bringing petrol-diesel, electricity and real estate under its the gambit, not addressing key issues in agriculture, small and medium enterprises and textile sectors, there will be no lasting solution to the issues arising out the implementation of GST.
AICC chief spokesperson Randeep Surjewala spelt out at a press conference on Saturday his party’s critique to the Centre’s course-correction on GST. “The Government has still not laid down any road map nor given any indication of bringing Petro Products, Electricity and Real Estate within the ambit of GST, repeatedly emphasized by Congress Party and all the experts. It may be worth noting that Centre continues to earn a bonanza tax of Rs.2,73,000 crore annually from cumbersome petro taxes alone”, he said.
Alleging government was only indulging in “adjournment and deferment’, rather than taking “decision”, Surjewala said, “implementation of Tax Deduction at Source and Tax Collection at Source has been postponed till 31, March 2018. Reverse Charge Mechanism requiring the purchaser to deposit GST on affecting purchase from a GST unregistered individual/entity has also been postponed till 31March . ‘E-Way Bill’ concept has been deferred to 01.April as the architecture and technology is still under conception. As tax refund system virtually collapsed with outstanding tax refund demand of Rs.65,000 crore in July, 2017 alone and exporters in peril, export exemption has been extended/postponed to 31, March until the conception and implementation of an ‘E-Wallet System’. All these are soft promises being made today with the ‘Damocles Sword’ continuing to hang in absence of a clear decision”.
The Congress leader further said even the enhancement of annual aggregate turnover for ‘Composition Scheme’ from Rs.75 lakh to Rs.1 crore “is far from satisfactory to bring the requisite relief to small and medium businesses” and that the “Pre-GST turnover limit under Central excise was Rs.1.5 crore as fixed in the year 2006 and if inflation adjusted, the limit would be at least Rs.3 crore…. This would put a large number of ‘small scale industries’ within the ambit of GST making the compliance much more cumbersome and difficult”
Alleging no relief to the distressed and agriculture sector, he said, “fertilizers, which attracted 1.03% of Central excise earlier, are now being taxed under GST at 5%. Tractor and all other agricultural implements have been taxed at 12% with tyres, tubes and transmission parts being taxed at 28%. Despite the reduction, pumps meant for drawing water, including submersible pumps, deep tube wells and diesel engines, are still taxed at 18%.....”, Lamenting no enoughbrelief for textile sector either, Surjewala said, “After a nationwide protest, duty on manmade fiber has been reduced from 18% to 12% yesterday. What Modi government does not realize is that while the fiber is taxed at 12%, the end-product, i.e. fabric, attracts a tax of 5%. This is threatening t he livelihood and profitability of non-integrated textile players of manmade fiber (70% of total), while helping the big fish in textiles sector to make huge profits”.
Reiterating the Congress demand for ending multiple tax slabs in GST, Suerjewala said, “a single GST would have meant a Standard Rate as well as Standard Plus Rate (on demerit goods) and a Standard Minus Rate (on merit goods). A Congress government would have worked towards this module, besides capping the GST at 18%.”.
He said the Government’s decision failed to reduce taxes on commonly used items including food and beverages, furniture, computer, shampoos, ACS, TV washing machines…”Overall, a vision less government is wasting a golden opportunity of putting India on a growth trajectory”, Surjewala alleged.
