Hyderabad: Opposition against the Goods and Services Tax (GST) has been mounting as the July 1 deadline for the rollout of the new tax regime nears and the central government has begun revealing the exact tax slabs for various goods.
The hotels and restaurants industry was the first to announce a bandh on May 30 against higher GST rates. Pharmacies announced a bandh the same day to protest GST provisions mandating them to upload sales data on websites within a stipulated time frame.
Multiplexes, cinema theatres, the film industry and the granite industry are also unhappy with the new tax structure and are chalking out protest programmes.
Cement companies in AP and TS, which together account for 26 per cent of the country's production, are concerned that higher GST rates may lead to further rise in prices. Cement has been placed under the highest tax slab of 28 per cent. Though the existing VAT rate is the same, the cement industry is in a crisis due to under-utilisation of capacity said to be due to low demand on account of high prices. The higher GST rate will thus not help cement prices come down.
The film industry is concerned that the 28 per cent tax on movie tickets will hurt the industry. Film producer D Suresh Babu has taken up the issue with the state government.
The current entertainment tax on multiplexes and theatres ranges from eight per cent to 15 per cent in municipalities and municipal corporations. The film industry was hoping for five per cent tax under GST and has instead got whacked with the highest tax bracket.
The granite industry, especially the small units, is worried at the effect the 28 per cent tax will have on their business.
“We are paying only 14.5 per cent VAT while an additional 13.5 per cent service tax is collected from big granite units. Now, all granite units have been brought under 28 per cent GST. This will push the granite industry in Telangana into crisis and affect the livelihood of thousands of workers,” said P Anjaneyulu, secretary of the Granite Industries Association.
The agarbathi industry is upset at being taxed for the first time. “Agarbatti industry has been exempt from VAT in Telangana all these years. But it has been placed under 12 per cent tax slab under GST due to which the price of each packet is expected to increase by 15 per cent. This industry, on which thousands of workers, especially women, depend for livelihood, was given handicraft industry status earlier. The higher GST tax rate will push this industry into crisis,” said B Manohar Rao, an agarbatti manufacturer.
The GST Council, which is scheduled to meet on June 3, is however expected to exempt agarbattis from GST. The Uttar Pradesh government, not surprisingly, has asked for an exemption.
