Thomas IsaacKerala finance minister T.M.Thomas Isaac has had a crucial role in shaping up the Goods and Services Act more in favor of the states. The economist told Manorama that the GST was a better tax structure but the change of regime may not lead to an immediate fall in prices.
Excerpts from the interview:
Will the implementation of the GST bring down prices in Kerala?
Prices will not go down because manufacturers and distributors will try to maximize their profits even if taxes are cut. Moreover, service tax is being introduced in many areas. So, prices are likely to remain the same as now. The GST has formed an authority to keep profiteering in check. We are exploring the possibility of forming a similar authority in the state.
Merchants might have to spend more on hardware, software and printers when they switch to the GST.
With or without the GST, Kerala had already announced that computer billing system will be implemented everywhere within two years. The apprehensions about software are not without reason. Though the central government had announced 33 Suvidha providers, even the prominent companies among them have not yet prepared necessary software. Any further delay will create a lot of confusion.
What does the GST mean for the family budget?
The GST is supposed to help the family budget but our reliance on commercial products may queer that cause. The potential savings on family budget will be offset by the introduction of service tax in many areas and the increase in existing service taxes.
How do you plan to address the difficulties faced by merchants?
It is natural to have apprehensions when a new law comes into effect. There are many false campaigns including that the traders will be required to file 49 tax returns a year. GST proceedings are easier than the current system, if you follow guidelines. Traders will be given time to rectify initial lapses and to get a grip on the new system. More time has been allotted to file returns in the first month.
You had protested many of the center’s initiatives, including the demonetization drive. Why have you backed the GST?
For the simple reason that it is beneficial for Kerala. I admit that the GST is a better tax structure. However, I feel the new system takes out many of states’ powers.
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