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Saturday, 20 May, 2017, 17 : 04 PM [IST]

Centre govt. should publish MRP of all consumer goods under GST to restrain corporates from fleecing consumers: Kerala Finance Minister

Justifies GST rate of 28% on luxury hotels
Kerala Finance Minister, Dr Thomas Issac has demanded publication of GST tax incidence and the MRP of all consumer goods in the country forthwith so as to restrain the corporates from taking undue advantage and fleece the consumers and the government. The Finance Minister, while addressing the media in Delhi on his return from the GST Council meeting in Srinagar, said that the advantages of the GST should reach the commonman in the country rather than the corporate India.

Any delay in making the GST rates of each commodity and its MRP public by the government will end up in “windfall gain for the corporates,” he said. He cited the move by industry lobbies including cement manufacturers to hike the price before the GST rates finalization.

Commenting on the rate fixation, Dr Issac said that in 80% of the cases, the rate fixed are lower by 30 to 40% than the existing rates and it will lead to big revenue loss to both Centre and States. Under the two-digit classification, out of the total of 1,200 commodities, only 200 commodities are in the highest 28% GST bracket, and remaining 1,000 items are either in 12% or 18% bracket in the new GST rates. The reason for States not protesting against the new rates is because of the assurance from the Centre of 14% annual hike in tax share to the States and the compensation clause.

“We are not against the reduction of rates, as long as the benefit reaches the poor,” he said.

Justifying the higher slab of 28% for luxury hotels, Dr Issac said that it is not rational to go by the “headline tax” in all cases. Luxury hotels get credit for many items they import. They have to pay tax only after deducting the tax they pay for input items. In such a scenario, if the government fixes a lesser rate for luxury hotels, the government will end up paying from the exchequer to hotels, he said.
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