OBJECTIVE OF GST
The Government has not been clear on the OBJECTIVE other than the slogan of “ONE NATION-ONE TAX SYSTEM”
- THE JOURNEY BEGAN WITH FUSION, TURNS OUT TO BE FISSION, AND AT PRESENT THERE IS COMPLETE CONFUSION
- GST IS NO MORE A GOOD LAW AS CLAIMED BUT “ GOD SAVE THE TRADER” (GST)
GST: JOURNEY SO FAR – FUSION, FISSION
Seven Questions Haseeb Drabu Must Answer on GST
1) When 101 amendment which has been notified carries applicable to J&K without concurrence makes the notification ultra virus and illegal in law constitutionally, how & why will state Consider to give the concurrence when India has already notified that it is applicable to J&K
2) When 101 amendment has been already cleared without concurrence the amendments which were in 1958 done earlier with respect to central excise , CST, CUSTOMS have got lapsed in law , the power of collection by the centre has been lost , and now constitutionally 101 amendment also falls in the category of non applicability unless the correct process is again done by India.
3) in 1865 Artisans (carpet weavers) got martyred when Maharaja taxed the HANDS BY 40% , does he know that handicraft like shawls, carpets , paper machine has been taxed @18% and Walnut furniture @28% from 0% and these are our informal sector and traditional craft . Does it mean GST is taxing our hands for which we have fought with blood .
4) Does he know the traditional hawkers cannot sell , or artisans cannot sell the way they were doing without E-Invoice and can be imprisoned and also stock confiscated , and cannot travel to plains in winter or use this system while in summer in their own state
5) GST is consumer based and the transaction value definition has been changed which was previously based on cost plus direct cost and now is based on cost plus all operative costs ( cost plus direct and indirect costs ) which is as per VAT definition whereby the manufacturers in MSME AND SISI and units which are at disadvantage because of logistics and diversity of location and unavailability of skill labour will find themselves unable to compete with LARGE SCALE OR MASS PRODUCTION units and which are placed where infrastructure , logistics and skill labour availability are well developed . For example let us take J&K , jammu , Srinagar , Kupwara , Poonch, Kargil , Leh units or trade cannot compete or MRP cannot remain the same as that is the goal of GST, similarly we cannot compete with large scale from Gujarat, Mumbhai, delhi or Punjab, take for example poultry farm of Punjab can outsell our poultry farms as now no longer protection like entry tax does not exist
6) Everywhere in democratic set up every proposed bill or action the government proposes is put in public domain, why the amendment proposed to be given concurrence and how section 5 of J&K constitution for fiscal autonomy will be safeguarded has not been made public. This shows government is not coming clean.
7) Trade and civil society have rejected gst in its present form, as it is no longer a progressive tax system which was considered as fusion has become fission and confused tax system. And most important they believe our fiscal autonomy is affected. In such scenario how can j& K give concurrence and why not come out with the lternative system by declaring whole j& K as sez and make our own j& K gst and j& K gst council by which all collection will remain within j& K and fiscal control will remain within state.
These questions are very important and need to be answered by Dr Haseeb Drabu.
Some Claims Made By The Government And The Realities
CLAIM: THERE WILL BE VERY FEW TAX RATES.
Reality: 8 different tax rates 0%, .25%, 3%, 5%, 12%, 18%, 28% +CESSWith pressure from different sectors number of tax rates may go further up
CLAIM: FULL SEAMLESS INPUT TAX CREDITS WILL BE ALLOWED
Reality: Too many terms to avail tax creditsTransaction value definition has been changed which will further increase the commodity rates at the consumer levelThe list of blocked credit is very long Various formulas beyond common man understanding for input creditRate schedule for many services have provision that it is without input tax credits or restricted input tax creditsCenvat credit which was available on PAN INDIA basis is now fragmented into 30 states and union territories – thus making this claim HOLLOW
CLAIM: SYSTEM WILL BE SIMPLE
Reality: System is made further complicated Borrowed various concepts from existing laws and put together Borrowed reverse charge from service taxBorrowed tax collection from vatBorrowed tax deduction from works contractBorrowed job work concept from central exciseBorrowed related party transaction from customsMost of these have no significance relevance with VAT system of taxationIt has made system more complexReverse charge tax on inputs from unregistered person has put the last nailIncrease unnecessarily clerical work without any substantial revenue gain
CLAIM : WILL IMPLEMENT GST WITH FULL PREPAREDNESS
Reality: Success of robust GST depends upon robust IT system and infrastructureNot developed or not known to work properly Accounting system not complementing with GST, which are used by tax payersNot a single Accounting software which can claim to be GST complaintDoes Government expect lakhs of Traders learn in 15 daysLaw made by cut paste from existing laws and put together cannot give a smooth law but is bound to complicate GST Act is hard to decipher and DIFFICULT TO IMPLEMENTGST can or may help LARGE SCALE INDUSTRY but not MSME or SISI or small entrepreneursNo provision for tax exemptions as already prevalent or any scope of future exemptions
Syed Niaz Ahmed Shah
The MNKSD ENTERPRISES