GST is directly affecting the people: JS Majumdar

GST: The Core Issues all Should Know

GST is Indirect Tax System on goods and services directly affecting the people. 

1. It was initiated by Manmohan Singh government and implemented by Modi government on and from 1 July, 2017.
   
2. In one stroke, under GST regime, all goods and services have been brought under tax net (some may be zero at present - yet under tax net); ending the earlier system of item by item tax, debated and approved by the Parliament and Legislative Assemblies.
   
3. There is no more open parliamentary and public debate on indirect tax burden on the people. It has been taken over by GST Council and being decided in close door discussion in corporate style under Central government.
   
4. GST is based on one India market, States’ rights and federalism so far existing have ended.
   
   
5. Administration of GST has been outsourced by the Central and State governments to a private entity known as GST Network (GSTN), with Central and State governments together being minority share holders (49%); majority shares (51%) being controlled by 5 private firms, some of those having even 75% foreign holdings, thus, all data are available to them without security clearance. GSTN is outside the ambit of CAG audit.
   
   
6. GST is equally shared, by the Central government as CGST and States as SGST.
   
   
7. GST mainly consists of Central government’s Central Excise Duty (CED) and Service Tax; and of States’ Sales Tax. CED was origin-based while and States’ Sales Tax was destination-based. There is huge difference on cost/price at origin and consumer’s price in destination. GST is the destination-based taxation. Therefore, there is huge difference between Central government’s earlier CED at origin and CGST being collected now at destination.
   
   
8. There is spiraling increase of GST with spiraling increase in retail prices. Central government must be happy for this double windfall gain - due to transition from CED to CGST – (i) from cost-based to retail-based and (ii) increase in CGST with every increase retail prices – sharing the loot at people’s cost.
   
   
9. GST has been imposed on all public services such as rail, road, water transport, postal communication and on other essential services.
   
   
10. As GST is consumption-based, in one-India market under the GST structure only consumption states get the SGST and manufacturing states suffer losses. Though, compensation package has been designed for a limited period, it is a discouragement to manufacturing and, thereby, employment. It is free one-India market for goods and services irrespective of manufacturing/origin, including imports.
    
    
11. With GST, there is big attack on the social security of the workers. In one stroke, by the Finance Act of 2016 cess collection for several social welfare legislations, accrued by serious struggle by the working class, have been abolished from Mica, Iron Ore, Manganese Ore, Chrome Ore, Limestone, Dolomite Mines; and Salt, Merchant Shipping, Textiles, Tobacco industries and subsequently cine-workers. Cess for construction workers has been subsumed in GST in 2017. These have seriously affected the welfare schemes under respective legislations.
    
    
12. GST has caused huge increase in medicine prices which requires separate note for discussion.