Complaints still galore, Amit Mitra articulates trade’s GST grievances

Report by: 
Rabindra Nath Sinha
Kolkata
5 Oct 2017

Sandwiched between the trade and the small-scale sector’s  complaints of business disruption and the Opposition’s charge of the economy being in a tough spot, Union finance minister Arun Jaitley is scheduled to chair the twenty-second meeting of the Goods and Services Tax Council in  a video conference format on Friday. In view of Diwali, the meeting, originally scheduled for October 24, was   preponed to October 6.

High on the agenda are exporters’ demand for a mechanism to ensure quick refund of paid taxes and industries’ demand for early settlement of   transitional credit claims. As   for the second demand, it may be mentioned that   the GST regime ushered in on July 1 last allows tax credit on stock purchased during the previous tax regime and this facility is available   up to   six months from the date of the GST roll-out.  As usual, there are many demands for downward revision of rates.
The agenda also includes functioning of the GST Network, which has been the cause of dissatisfaction in large sections of the industry and business. The main contention of exporters is that as the refunds are not forthcoming, they are facing cash crunch. The claims even for the first month – July – are nowhere near a resolution and such abnormal delays in the long run are bound to tell on their production programmes for exports and competitiveness in the international markets.

As far as transitional credit is concerned, it appears that with filed claims  amounting to as much as Rs 65 K crore against the July GST collection of Rs 95 K crore, the GST Council and the finance ministry find themselves in a piquant situation. The ministry has opted for strict scrutiny of the claims. Early resolution of the transitional credit claims will ultimately ease their   cash flow situation and hence their concern over persisting delays. In this context, it deserves mention that West Bengal’s finance minister Amit Mitra has been forcefully articulating the difficulties and disruptions that the trade and the small-scale sector have to put up with because of the  hasty launch of the GST.

Mitra has also been critical of the rather frequent glitches in the functioning of the GSTN as   a result of which trade and industry have not been able to comply with many requirements. Ultimately, the GST Council constituted a committee under the chairmanship of Bihar’s deputy chief minister Sushil Modi to straighten things out. Reports have it that apart from the Opposition-ruled states even the BJP-ruled states quietly share his views but are not in a position to speak out. Clearly, at the moment, Jaitley is on the defensive.