With the implementation of the Goods and Services Tax (GST), there are widespread complaints consumers are being fleeced by imposing tax above the printed rate. It has been brought to the notice of the government such illegal bills are being issued to the consumers.Some people are using the change in tax structure as an opportunity to make huge profit. Kerala has argued before the GST Council such a situation would arise. The anti-profiteering clause has been included in the GST Act after constant pressure from Kerala.
The warning issued by Kerala earlier has come true now. The new tax structure has caused price rise in the state and also exploitation of consumers. Steps should be taken to find a solution to this problem and protect the rights of the consumer. The Department of Taxes will intervene in cases where the tax concession is hidden from the consumer and additional tax levied over the MRP.
Consumers who receive such bills should upload it on the Facebook page of the Taxes Department. https://www.facebook.com/postbillshere. Consumers with smart phones can do it easily. Checks will be conducted in shops issuing such bills.
With the implementation of the GST, the Central Excise, Service Tax, Central Sales Tax, Entry Tax and VAT have been done away with. Since GST rate is less than the aggregate of all these taxes, the price of the commodities should naturally come down. The government is firm this benefit should definitely reach the common man. A comparative chart has been published in newspapers with the old tax rate on the one side and GST on the other. The difference in price should definitely reflect in the market.
The Kerala Government has released the list of commodities that fall under 101 categories. Such commodities now enjoy tax reduction ranging from 0.5 per cent to 14 per cent. The tax of chicken has come down from 14 per cent to zero. The tax on toothpaste and soap has been reduced to 12 per cent.
The state has continuously demanded before the GST council such a comparative chart should be prepared by the Central Government. However, the Council is playing hide and seek in this matter. There should be clarity among the people on the list of commodities that enjoy tax concession.
A vegetarian meal costs `75 on an average at an air-conditioned restaurant with a turnover of less than `75 lakh. Prior to the implementation of GST, the tax levied by the state and Central Government was `7.95. So, the actual price is `67.05 on which five per cent GST is levied now. Hence, the final price is `70.40 which means there should be a reduction of `5 per meal post the GST implementation.
The tax on a full chicken, which costs `350, used to be `56 in an AC restaurant prior to the GST. Since the actual price is `294, there should be a reduction of `42 after GST implementation. However, in some restaurants, five per cent GST is levied over `350, taking the total amount to `367.
All countries have witnessed price rise post GST implementation. Such a price rise is artificially created to hoodwink the consumer. As per the old tax regime, only 14.5 per cent tax used to be visible on the bill. If the tax levied by the state and Central Government is taken into account, the tax burden will come up to 30 to 40 per cent. Levying of GST over MRP has created price rise. The Central Government should take steps to revise the MRP rate. The Kerala Government has written to Finance Minister Arun Jaitley listing out the state’s concerns.
Taking into account the seriousness of the matter, the state government has convened a meeting of hotel and restaurant owners. Due to various tax rebates, the state and Central governments would incur a loss of `1 lakh crore. This should reflect in the family budget of the common man. To ensure it happens, the Anti Profiteering Clause in the GST Act should be strictly implemented.
(The author is Finance Minister, Kerala)