GST's tryst with controversies in 2017

From Tamil Nadu theatre strike to the comment war within BJP ranks, here are some of the key controversies which brought GST into poor light.

Published: 27th December 2017 08:39 PM  |   Last Updated: 27th December 2017 08:54 PM   |  A+A-

Union Finance Minister Arun Jaitley (L) and senior BJP leader Yashwant Sinha (R). | File Photo

By Online Desk

From Tamil Nadu theatre strike to the comment war within BJP ranks, here are some of the key controversies which brought GST into poor light .

The ‘Mersal’ saga:  Tamil superstar Vijay’s October release faced BJP’s wrath due to allegedly mocking GST and Digital India. A petition was filed in Madras High Court for revoking the film's Censor Certificate. While Tamil film fraternity actors supported the Atlee-directorial, Congress MP Shashi Tharoor and former Union Minister P Chidambaram attacked the BJP.

A File Image of the Mersal Poster

The South Indian Film Chamber of Commerce wrote to PM Modi and Union Information and Broadcasting Minister Smriti Irani against BJP leader H Raja for reportedly watching the film online. A 19-year-old youth was arrested in Tamil Nadu for making filthy comments on PM Modi on social media. However, on 20th October, the film’s producers decided to remove the controversial dialogues. On October 25, Vijay thanked his fans, industry friends and political leaders for supporting the movie.

Restaurants’ blatant refusal to follow the revised tax rates: On November 10, the GST Council reduced the tax rates for AC and Non-AC restaurants from 18% and 12% to 5%. However, there were nationwide reports of eating-out getting more expensive. In Bengaluru, many restaurants were charging the original 18% to their customers.

Express File Image.

In Chennai, the same situation was reported during November. Here, the eatery owners argued of compensating the benefit of input tax credit, which was revoked on November 10 by the union government as the restaurants were not allegedly passing on the benefit of lower tax incidence to consumers. Some of the agitated customers even shared their bills on social media.

GST onslaught on women health: The 18% taxation on sanitary napkins, a six per cent increase from the original rate in July, brought sharp reactions from the judiciary. While Delhi High Court questioned the move on November 15, its Bombay counterpart issued a notice to the Centre and Maharashtra government on 20th July on the same matter.

Reuters File Image

The sex workers of Kolkata’s Sonagachi threatened to reject the pad usage. There were reports of low-income group women in Hyderabad switching back to normal cloth for menstruation cycle.  Union Women and Child Development Minister Maneka Gandhi wrote to Finance Minister Arun Jaitley, seeking tax exemption for the above product.

The theatre strike in Tamil Nadu: While GST came into effect from July, the movie tickets were kept in the 28% tax slab. The Tamil Nadu theatre owners responded with a four-day strike, as they were imposed another 30% entertainment tax from the state. It forced the E Palaniswami government to keep the tax in abeyance.

Express File Photo

However, the strike came back again in October, with the state deciding to impose double taxation in the form of 10% Local Body Entertainment Tax. The Multiplexes Association of India directed PVR and INOX in Chennai to shut their shops. On 13th October, the week-long standoff ended, with the state cutting down the tax to eight per cent.

The bitter slugfest between Jaitley and his predecessors: Despite the ruling BJP hailing GST as the game-changer for the Indian economy, its veteran leader Yashwant Sinha blasted both the reform and finance minister Arun Jaitley. From calling the taxation as ‘failure which has slowed down the economy’ to demanding Jaitley’s resignation, the former Finance Minister created ripples inside the party. He also alleged that the country has now been under “tax terrorism”.  While Sinha saw opposition from his son and current Union Minister Jayant, he found support from another party leader Shatrughan Sinha.

PTI File Photo of Yashwant Sinha.

PM Modi’s predecessor Manmohan Singh said that the GST, with a "faulty design" and "complication of compliances" has killed jobs and businesses.  The 6.3 per cent growth during July-September quarter failed to impress the Congress veteran. His colleague and former Finance Minister P. Chidambaram also questioned the Centre on Yashwant’s criticism on NDA’s economic policy. He even criticized a BJP resolution supporting GST and Demonetisation. Jaitley responded by calling Yashwant a job applicant at 80 years and acting in tandem with Chidambaram. 

Infosys came under fire for glitches in GST-N: Software major Infosys faced traders’ anger over problems in the GST network or GST-N.

File Image.

The IT giant, which got the Rs 1,380-crore contract in 2015 to develop and maintain the portal, was held responsible by the Confederation of All India Traders (CAIT) behind the software’s glitch. The traders’ body even demanded a CBI probe into the entire matter. The company denied the charge last month.

Madhya Pradesh minister brings GST embarrassment to BJP: On 10th November, Madhya Pradesh Food and Civil Supplies minister Om Prakash Dhurve caused a major embarrassment for the ruling BJP government. He said that he won’t say anything on GST due to his lack of understanding on the topic.

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