GST will hit small businesses, push Chinese import: Swadeshi Jagran Manch

Small scale and cottage industries which are labour intensive will be severely hit

Days ahead of the launch of GST, the RSS's economic wing Swadeshi Jagran Manch has said the new indirect tax regime will "badly hit small businesses and push Chinese imports".

As the date of implementation of GST is approaching, the heartbeats of small entrepreneurs and traders are increasing, Swadeshi Jagran Manch National co-convener Ashwani Mahajan said.

He claimed that there was exemption on excise duty for production of up to Rs 1.5 crore for small scale industries.

"But now, according to the provisions of GST, any entity whose business is above or equal to Rs 20 lakh must register itself for GST in the state where it carries its business," Mahajan told PTI.

Small scale and cottage industries which are labour intensive will be severely hit by this law, as many of them are in the higher tax bracket, he said.

With the negative impact on these small industries, people in rural areas will lose jobs and at the same time imports of Chinese products will jump due to a slump in domestic production, Mahajan claimed.

The government has said the Goods and Service Tax (GST) could add two percentage points to economic growth. It is termed as India's most ambitious tax reform, which creates a single economic zone with common indirect taxes.

There will be four tax slabs - 5, 12, 18 and 28 per cent.

The new tax regime will be launched at midnight on June 30 in the Central Hall of Parliament.

Photograph: Rupak De Chowdhuri/Reuters