Days before the launch of the Narendra Modi government’s ambitious tax reform programme, the GST has come under fire from at least two RSS-affiliated organisations, which have raised concerns over several provisions of the new tax regime.
While a delegation of Bharatiya Mazdoor Sangh (BMS) petitioned the Prime Minister’s Office (PMO) on Tuesday, voicing their concern, the Swadeshi Jagran Manch on Wednesday stated that the GST “may cause a host of problems” for small-scale industries. These units, Manch co-convenor Ashwani Mahajan said in a statement, would be put “at a loss vis-a-vis their competitors from big industry and businesses”. He said, “While deciding about the rates of GST, due care has not been taken to keep rates low for commodities being produced by SSIs”.
BMS president C K Saji Narayanan told The Indian Express, “There are several cess-based welfare schemes in nine sectors for building and construction workers, beedi workers, ores and minerals workers. These schemes will be affected once the cess is withdrawn after GST is implemented. These schemes benefit crores of workers, and it will be disastrous for them if the cess is withdrawn,” he said.
In a media statement, the BMS claimed that it was assured during the meeting that “workers need not panic about loss of funding to welfare scheme”, and that a “detailed clarification will be given by the government”.
The BMS’s demand comes in the backdrop of abolition of certain cesses after the rollout of GST from July 1. Sources in the government said that four of the five cesses referred to by BMS was abolished last year.
Swadeshi Jagran Manch’s Mahajan said, “Biscuits, pickles, confectionery, scissors and a host of other products produced by SSIs (small-scale industries) and cottage industries are attracting higher rates of GST, which is likely to affect their competitiveness.”
Underlining that the beedi industry provides “direct and indirect employment to nearly 5 crore people”, he said, under the GST regime “beedi attracts highest tax rate of 28 per cent, endangering the employment of crores of tendu patta collectors and beedi rolling workers, especially women”. The Manch said, “If new tax regime works against the interests of SSI workers, influx of Chinese products will increase, causing huge balance of payment deficit.”