2017 November GST

If you are in Santipur or Burdwan and are riding a toto there is a 60% chance that the driver might be a master weaver. It was very gratifying to be in the presence of so many talented individuals all renowned and experts in their fields... handloom, handicrafts, artisans. An afternoon well spent. It was a GST seminar organised by Kamala a Crafts Council of India intiative.  Mr Sumit Dutt Mazumdar, who has an august career with the Government and otherwise dealt with the queries ably.

A problem which appears to be a hurdle in terms of comprehension is in reality a chaotic mess. THE GST or Goods and Service Tax has been on the anvil for quite sometime and the idea was introduced by the previous Government, the baton handed over to the BJP.  In theory it is a wonderful idea. It subsumes 17 Union and State taxes into one entity. Earlier often one ended up in paying a tax on tax. As an example a mineral water bottle with a manufacturing tax added on is sold to the beverage Company after charging Excise of say 10%. After filling with water the tax is another 10%. So a cost of Rs 100 attracts a tax of 20% and is sold at rs 120/-. The Sales tax of another 10% makes it Rs 132/= wherein Rs 2/= is tax on tax. This Tax avoids the cascading effect and tax on tax. There is just one integrated tax (IGST) shared by the Centre (CGST) and State(SGST) equally. The list for rates is provided in the Act.

Seems an effortless brilliant exercise but the problem begins with the variances in fine print. Lets focus on the textile sector. A tax free product was introduced to the tax domain making it onerous for the handloom / handicraft sector. Genuine problems were voiced as sales had dropped considerably because of the added tax burden. It was mandatory to have a GST to send a courier. One could not buy large quantities unless one had a GST registration no.

The weavers are largely illiterate and handling the accounts with computer skills  is almost an impossible task. They were concerned that administrative work had increased multifold. They were all quite savvy having updated themselves on most details.  Most of them articulated their problems and angst with informed reasoning. The hassle has pushed many to shut shop and take up other available jobs to feed their families, A death knell for this sector as there was general despondence all around in the meeting today..

Recent modifications have made khadi free of tax whilst handloom is still chargeable, For the uninitiated khadi is hand spun and hand woven and handloom uses machine spun yarn in hand woven textiles. The handicrafts made of bamboo, grass etc remain in a grey area. I have known all along but it was voiced today. Some prominent Govt programmes are promoting powerloom textiles as Khadi. These units are reaping benefits which makes their pricing even more attractive vis a vis the real handloom products.

China is prospering at our expense. One can officially import goods paying a Humpty Dumpty Tax. Despite the tax the stuff is dirt cheap. In this materialist age low priced  glitz counts and our artisans are paying the price for it .

The parallel economy still subsists in insidious ways. With GST the Govt had wished to mechanise the process eliminating the human element with no scope for the black market. GST has pushed up prices so most of them have resorted to kachha challans etc. Can one really blame them?

Mr Mazumdar however tried to dispel queries and the ray of hope is that the GST Council in the Centre is trundling along, realising its errors in spurts and trying to undo the monster they have unleashed. The Help Desk is pro active. They are willing to listen. There has been a substantial roll back.  There have been many lobbies representing the various state Governments. In Kolkata a resolution was taken to summarise the problem areas and petition the Govt.

The “Gabbar Singh Tax”? it sure is proving to be a noose more because of ignorance and lack of planning and proper implementation. There needs to be communication, education, simplification,  GSP (GST Suvidha Provider). Kitne aadmi the? Let it be a movement to save Hasta Shilpa from extinction. Thakurs in the seat of power are you listening?

 

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