GST biggest destroyer of economy, needs overhaul: Congress

GST biggest destroyer of economy, needs overhaul: Congress

Source : IANS
Last Updated: Tue, Nov 07, 2017 10:20 hrs

New Delhi: Terming the Goods and Services Tax (GST) as the "biggest destroyer" of the Indian economy, the Congress on Monday said it will raise issues of complication of compliance, high tax rates and those relating to GST Network in the next GST Council meeting on November 10 in Guwahati.

The party said earlier the government showed arrogance in considering the recommendations of the party, but as the Gujarat election was round the corner its attitude had changed. It is hopeful that the GST Council would look into its recommendations seriously and also lower the tax on certain items.

"GST has turned out to be the biggest destroyer of the Indian economy, for which successive generations will pay a price beyond redemption. It requires an urgent and holistic fix. Nothing less will do," said party leader and Punjab Finance Minister Manpreet Singh Badal.

The party further said the GST had promised a GDP rise of up to 2 per cent per annum primarily on the back of simple and clear tax laws, low tax rates and lower prices to encourage higher consumption, liberal tax credits and removal of cascading that worked to the disadvantage of Indian businesses by pushing imports, reduced cost of logistics and simplified compliance.

"GST has disappointed on all the above parameters, and in some areas turned the clock back by a few decades. It is surely a case of poor implementation on all fronts -- concept, design, tax rates, exemptions, compliance requirement and technological preparedness," said Badal.

"As a result, there is mammoth confusion all around, with harassed taxpayers running for cover and the government going for quick fixes in the wake of forthcoming elections," he added.

The party would also raise the issue of filing returns every month, said Karnataka Finance Minister Krishna Byre Gowda.

"A taxpayer is required to file 37 returns in a month in the states in which he has business. Thus a person present in all states and union territories will file 37x36 or 1,332 returns a year," said Gowda.

"The GST Council in the last meeting had agreed to our recommendations to allow filing of returns quarterly instead of every month for businesses up to a turnover of Rs. 1.5 crore. But we have recommended that it should be extended to a turnover of Rs 2-3 crore," said Gowda.

The party said the biggest sufferers were the small and medium entities, so much so that their existence itself was under threat.

"Almost all construction inputs have been taxed at 28 per cent and services relating to construction taxed at 18 per cent without tax credit of such construction used for business activities. This is a strange logic of milking a sector and yet keeping it out of the tax credit chain.

"As a result much of the sector will be subjected to GST twice -- once when the construction is done and second time when that sector renders services. A large part of the consumption in GST has been taxed at 28 per cent," said Badal.

Badal further said: "With most states falling short of the expected targets, the pressure on government finances is severe, creating legitimate doubts about its capacity to manage fiscal deficit and usher in a growth-oriented GST."

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