New Delhi, March 11, 2018
As the implementation of the Goods and Services Tax (GST) crosses 250 days, consumers through a survey highlighted that not enough benefits were flowing their way.
Furthermore, a majority of the respondents claimed that they were not receiving GST invoices for many of their purchases, and brands were not passing the benefits of input tax credit to consumers, as per a survey conducted by citizen engagement platform, LocalCircles.
59 percent respondents said the GST enabled better tax collection for the government, 12 percent said it made doing business easier, while 9 percent said prices for consumers had lowered.
However, 34 percent citizens noted that despite the benefits, vendors sold their products without a GST invoice, around 25 to 50 percent of the time.
In terms of dining in restaurants, 50 percent citizens said costs had increased by 0-10 percent post-GST, 7 percent said it had reduced by over 10 percent, 14 percent said it had reduced by 0-10 percent and 29 percent said it was the same as in the pre-GST period.
Citizens also complained that restaurants did not pass on the benefits of the lowered GST to them, and, in turn, kept the final pricing the same. While the abolishment of input tax credit was blamed for this, citizens stated that in the end, they were forced to bear the brunt of higher bills.
Furthermore, 6 percent of the respondents said their monthly household grocery bill was lowered by over 10 percent, 13 percent said it lowered by 0-10 percent, 36 percent said it was unaffected, while 45 percent said it had increased by 0-10 percent.
Many brands have benefitted from the input tax credit that they received while buying raw materials, but did not reduce the maximum retail price (MRP) of their products, resulting in benefits not flowing down to the consumers, citizens said.
On a related note, the new taxation scheme was launched on July 1 last year and was hailed to be an economic revolution. While initial hiccups were detected, the overall GST process and collection, as per citizens, seemed to be settling down. However, its positive effect on the lives of the end consumers is yet to be concretely ascertained.
[The Business Standard]