Gst small and medium trade and industry's Problems

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Ref No . BUVIW5S/l5

To,

Date: 1s August 2015

C.A. Sh. Sudhir Halokhandi Loxmi Morket Beowor - 305 901

Deor Sir,

Re:

-

Proposed 6oods ond Service Tox to be introduced regording Smoll ond Medium Trode ond fndustry.

in fndio ond our

concern

We are aware ond olso oppreciote your efforts to educate trode and fndustry regarding Proposed Goods ond Service tox in fndio. We ore regulorly reodingyour inputs on the proposed tox ond we ore very much thankf ul to you for olwoys showing your conce?n towords the interest of the Smoll ond Medium trode ond fndustry which ls Ueing

represented by us.

Sir,. vvs hove our bronches, units ollover fndio in every stote ond union territories ond ore scfe guording the fnterest of 5.75 Lokhs Smoll ond Medium Troders and fndustries since Lost 34 yeors. We are the biggest and premier fnstitution of the Smoll ond Medium Enterprises in fndio.

We have noted a very surprising trend thot while discussing the GST throughout the country everybody is pressing the positive points of the GST very hord onJvery much surprised to note thot the guolity and the number of benef its arethe some os they were in 2006 when 65T wos first time referred in fndion Porlioment though lot oi compromises have been made since thon. How it is possible to have same benefits from the Stondard formot of 6sT and rndion formot of Duol Gsr? We are enlisting our concerns towords 65T with o tequest to your good self to ploce it on vorious plotforms including the Government of fndio, other trode ond fndustriol orgonizations , fCAf fthe bigge-st professionol fnstitute of the world), press ond Electronic medio by using your writing skills ond knowledge about 65T:-

(2)

1. DUAL TAX:-

owo

STIAULTANEOUS TAXES ON SAI E TRANSACTTON) Our premier concern is obout the fact thot Stondord 65T is not being introduced in fndio which wos promised in 2006. Whot is proposed is o dual 65T in which on o single transaction both stote ond centrol will collect tax. We hove noted thot moSt of our constituent dealers ore coming from the smoll ond medium sector ond not covered by the Centrol Excise ond Now due to this duol 65T all of them hove to pay Centrol 6oods ond Service tax ond olong with VAT hove to f ollow the procedures of CGST olso. How con we soy thot this is simplificotiorf of Toxes? There are Lokhs of such deolers which areonly covered under VAT only.

2. THRESHOLD LLUIT The threshold limit under 65T is proposed ot Rs.10.00 Lokhs though the threshold under Centrol Excise is Rs.150.00 Lokhs. Now oll the small monufoctu?eso?eolso covered by it.

3. RATE OF TAX:Rqte of Tox is the mojor concern ond as per the News reports the eate of Stote VAT will be 12% ond Centrol Vot will be t4% and f urther o 1% CST will olso be imposad. ft meons the rate of Tax will be oround 27%. Sir we came to know from one of your write up that worldwide 65T ave?age rote is 15 to 17% ond f urther the rote of GST is oround 2O% in the countries whose pen copito income is 30 Times more thon fndia. How this High rote will be borne by the consumers ond certoinly this will olso offects the trode ond industry of the country, speciolly the stnoll ond medium one.

Further most of the 6oods ore toxable ot 5% VAT without ony burden of Centrol Excise then how thay can be taxed at 27% in proposed 65T2 The note will bodly hurt the smoll trode ond industry ond consumers.

Even the Hon. FM ond the select committee of Rojyosobho hove olso shown conce?n with this high rate of Tox. iee here when lowmokers hove the opprehensions obout the rote then how they will introducethe 6sTsuccessfully in the country.

4. CENTRAL SALES TAX:ft wos promisad when VAT wos introduced in the country thot CST will ultimotely be withdrown but the promise wos broken by the Government ond still we are paying 2% CST. fn GST we will hove to poy CST t% then how we con have the foith in our low makers.

5. AT,IAOSPHERE OF iAISTRUST:Sir, A white PaPe? wos issued by the Government while introducing the VAT but loter the f loor rotes were violoted by the stotes f rom 4% to 5% ond L2.5% to 14 ond 15% ond insteod of discouroging the stotes from this act the central Govt itself roised the rate of tox on Section 14 CST Act rate f rom 4% to 5 %.

How in this otmosphere

Consumers d?e safe?

of

mistrust, the interest

of Trode, Industry ond

(s)

6. eST ON

PETROLIUAA PRODUCTS:Sir, the petroleum products are being kept out of the scoPe of the 65T hence the troda ond industry will not be oble to toke input credit of the some. Especiolly in some of the industries these products are used to support the monufocturing process ond if Government wonts to introdu ce GST then of leost in f ndustries where these products are

used in monufocturing Process.

7. ONLY FOR REVENUE IN THE NAAAE OF SI'UPIJFICATION:' ft appeors from wholg of the exercise thot 65T is introduced in the nome of simplif icotion but the reol foct is that Government is introducing it with on object to tncrease the revenue ond if this is the sole moto then it will certoinly homper the f uture industriol growth of the countrY. We ore olso putting our these concerns to the vorious outhorities including the Hon. Finonce Minister of fndio ond since you are connected with the study of the GST since the inception of discussion of GST in fndia hence we request you to put our these concerns at vorious plotf orms os mentioned above by us ' Thonking you, Yours foithf ully

Vijoy Prokosh Join Secretory General BUVM