There is an imminent threat of inflation and an all-round increase in the prices of consumer goods. This, despite the fact that for a number of commodities the GST rates now fixed are lower than the combined existing rate of centre and state taxes. It is estimated that there will be a revenue loss of at least Rs One lakh crore for the centre and state governments. This will be a bonanza for the corporates, who are not willing to pass on the benefit of the reduced rates to the consumers.
The central government is unwilling to effectively use the anti-profiteering clause in the GST law. This clause was meant to ensure that the reduction in the rate of tax arising due to introduction of GST shall be passed on to the consumers by the commensurate reduction in prices. The central government has not yet framed the rules under the anti-profiteering clause.
Utilising the lack of clarity in the details of the tax structure, efforts will be made to increase prices.
The CPI(M) demands that the central government publish a detailed list of commodity prices under the existing combined tax and under the GST and intervene to see that the MRP are reduced.
The GST tax rate is going to affect certain sectors and goods adversely. Small scale industry as a whole will be adversely affected because they will have to pay full tax for units above Rs 75 lakh turnover. Earlier, they were exempted for all units below Rs 1.5 crore.
There are various other anomalies which work in favour of the big industries and at the expense of small enterprises. The central government and the GST Council must immediately relook these issues and remove the anomalies. In no way can ordinary people be made to pay for the bonanza to be reaped by the corporates.
The Modi government has put in place the GST in great haste and this is causing a number of problems for the small entrepreneurs, traders and shopkeepers. Enough time should be given for implementation of the new tax structure.