In a series of online surveys, conducted by a citizen grievances portal having a tie-up with the consumer affairs department of the central government, one in every two persons has reported a rise in household costs after the Goods and Services Tax (GST) was rolled out in July. The surveys received over 40,000 cumulative responses for various questions asked on the completion of two months of GST rollout.

As it looks, the Goods and Services Tax (GST) has turned into a major headache for the government after demonetisation. The state finance ministers raised a plethora of issues related to the implementation of the tax reform at the GST Council meet in Hyderabad.

Some of the issues were addressed at the GST Council meet. But, the rising prices on account of the GST may come back to haunt the government as it readies for the Lok Sabha elections in 2019.

WHAT ARE PEOPLE COMPLAINING ABOUT?

About 54 per cent people, in a survey conducted by consumer engagement platform LocalCircles, said that their monthly household expenditure had increased after GST rollout by upto 30 per cent. Much against the government's anticipation, only six per cent of more than 9,000 respondents said their monthly expenditure had come down.

About 51 per cent of the participants in the LocalCircles survey said their monthly food and grocery bills had increased by upto 30 per cent after the implementation of the GST. Only seven per cent reported decrease in their monthly food and grocery bill.

A little less than half of the respondents in the survey said that their monthly medical also went up after GST rollout. Among other complaints of the consumers were the traders' insistence on cash payment and refusal to raise GST invoice.

Some of the consumers also complained that the traders charged GST over and above the MRP (maximum retail price) while some other shopkeepers were reported to have cut down on the discounts, citing uncertainty about the GST's impact on their business.

THE OTHER WORRY FOR GOVT

To address some of the issues raised by the state governments, the GST Council extended the last date for filing sales return or GSTR-1 till October 10 at its meeting in Hyderabad. The GST Council also announced reduction of tax rates for 30 items.

But the biggest worry for the GST Council is the huge refund claims pending with it for July. The GST was rolled out on July 1 this year. Calling GST rollout a huge success, Union Finance Minister Arun Jaitley had said that the biggest tax reform since Independence led to a significant jump in revenue collection.

Arun Jaitley said that the overall GST collection was robust with over 70 per cent of eligible taxpayers filing returns of about Rs 95,000 crore for the month of July. But, GST Council faces input tax credit refund claims of Rs 62,000 crore. This would make a net GST collection of Rs 33,000 crore.

Finance Secretary Hasmukh Adhia has on record said that the volume of input tax credit claim is much higher than the expectation of the government. The rising cost of commodities has only complicated the matter for the government.

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