Published On : Fri, Nov 4th, 2016

Big manufacturers should declare prices of products pre & post GST

The Confederation of All India Traders (CAIT) has urged Union Finance Minister Arun Jaitley to bind Manufacturers to declare price of their products for pre and post GST regime to ensure that if at all cost of production is reduced by virtue of different categories of tax rates under GST and the input they would be obtaining from the taxes paid on various expenses made in furtherance of business, the benefit of such reduction has reached to end consumer. Generally, it is observed that whenever there was any reduction in tax rate, the rate of the respective commodity was never reduced by the Manufacturers largely and consumer was denied with the logical benefit. Such a anomaly should not be a part of a progressive taxation system like GST.

CAIT National President B.C.Bhartia and secretary General Praveen Khandelwal said that four rates under GST have been carved out to curb prospects of any inflation. Trade & Industry will get full input credit for the GST paid by them on purchase of any goods. Over and above, input credit will also be available on taxes paid on every expense incurred in furtherance of business. Input credit is also available on goods purchased from other States. After enjoying such deep input, the prospects of inflation stands almost zero. In current VAT regime, no input credit is allowed on expenses or goods purchased from other States. Since GST is a combination of both goods & services, therefore, input credit is also available for the taxes paid on obtaining any services related to business. All these benefits of input credit will certainly keep the manufacturing cost low and the consumer should be entitled to enjoy benefits. Generally, monopolistic attitude of the big manufacturers deprived the consumers from such benefits and the traders are wrongly held responsible.

A casual look on proposed four tax rates under GST reveals the fact that whatever is the tax rate, the actual incidence of tax will be certainly lower than the tax rate because of the fact that trade and industry shall be enjoying input credit not only on tax paid on goods but even on taxes paid on purchase of raw material, obtaining multiple services and expenses made in furtherance of business and combining all such input credit, the landing cost ought to be remain cheaper in comparison to current prices. Taxes paid to etc. Cab services, Transport services, expenses on packing & forwarding are some of the expenses for which input credit will be allowed.

The CAIT has said that if big manufacturers are bound by declaring the prices of their products pre & post GST period, no one will be able to make any adjustments and it could be gauged easily whether prices have been affected by inflation or not post GST.