Are nuances of GST not properly understood?

Many people directly impacted by the new taxation system feel more awareness is needed

Goods and Services Tax (GST) was implemented on July 1, making it the single tax window in the country by replacing all earlier taxes. Though its implementation faced opposition from States like Tamil Nadu, which has a diversified manufacturing sector, the GST was implemented across India with a few amendments.

Four months after the implementation of the GST, which was touted as a revolutionary move in the taxation system, questions are asked about it in vibrant commercial hubs like Madurai. Traders and the public are yet to understand the nuances of the new taxation system and some feel that they are still in the dark.

Speaking to The Hindu, S. Rethinavelu, senior president of Tamil Nadu Chamber of Commerce and Industry, said there was still a lack of knowledge of the GST among traders and public.

Though the GST was a progressive move, Mr. Rethinavelu said, it failed to convince the commoner at the implementation level.

When it came to e-way bill, filling invoice and uploading it to the GST portal, a trader from a rural area, who was not so tech savvy, had to rely on an auditor to do it for him. The traders’ voice in the issue should be heard, he said.

Mr. Rathivelu also expressed his displeasure over environment-friendly products being taxed high. He said clay bricks taken from fertile soil was taxed at 5% whereas eco-friendly fly ash bricks attracted 12% tax.

The public felt that they had been impacted by the GST as their average expenditure had shot up. S. Shanmuganathan, a customer at a departmental store, said, “The monthly expenditure on household products has increased by at least ₹2,000.”

He said middle and lower income groups found it hard to manage their monthly expenditure. If he wanted to have his breakfast at a decent hotel, he would have to cough up about ₹100, he said.

K. Krishnan, a retired government official, said it had gone haywire at the implementation level. “Tax on important and essential commodities like medicines can be reduced,” he opined. “One has to think twice before going for a movie or eating out,” he added.

However, some traders felt that as the GST was already implemented, it would do a world of good if all could adapt themselves to the current taxation system than keep complaining.

C. Soundarnath, who runs Sri Ram Jai Ram Commercial Centre, welcomed the taxation and said, “People should adapt themselves now that the GST is in implementation.” However, he felt that there should be a proper distribution of the tax. It was more like a cycle, where each contributed to the other.

T.M. Syed, who runs a stationery store at Anna Nagar, said the implementation of the GST was welcome and he was happy to contribute to the nation, even though it meant paying more towards tax than before.

When The Hindu contacted B. Saraswati, Joint Commissioner of Commercial Taxes, with queries on the GST, she said prices of goods and services were bound to come down. With the free flow of goods throughout the country, the logistics cost would also come down. Dealers could take credit of the GST paid by them while buying goods and availing themselves of services relating to business. They could redo the pricing to pass on the benefits to the consumers, she said.

Measures taken to create awareness among both traders and consumers would bring about a better understanding of the GST. With better knowledge of the issues, experts believe that better results can be achieved.