Jab we met the GST Chairman
Working on a tip off that I got on Saturday from Vinod Solomon that the Union Minister for Finance/Defense/Corporate Affairs and the Union Minister for Commerce/Industry will be in town for a GST Conclave I was seized with the opportunity to meet him in person and to make a representation on the roll-back of GST on disability aids and appliances
You all know that we had been discussing the technicalities in various whats-app groups, Facebook discussions, live discussions with consumers and manufacturers of disability aids and appliances. Vaishnavi Jayakumar was researching and putting out data and information ‘out there’ for all of us to process, and use meaningfully in our advocacy. All we knew was that this is affecting Persons with Disability with increases in prices and that there is a burden to small manufacturers also.
It was providence that my friend Vandana Ramdeo is right now in the Ministry Of Finance and she facilitated a 2 minute appointment with the Chairman of the GST Council Shri. Arun Jaitley on 30th July Sunday morning in the pre-lunch slot where he was meeting Industry Heads from all over Tamilnadu. We were warned to restrict the delegation to 2-3 members only.
So Vaishnavi, Chaula Vyas and I with two more escorts ( Albert Rao and Olga Aaron) reached the venue where there was heightened security as can be expected. We had hurdles at various stages – gate/portico/lobby/lift/atrium of second floor/anti-chamber of Chairman. Don’t ask how we navigated each stage. Nothing but sheer boisterousness, pushiness, negotiation, persuasion. Honestly 2 persons in wheelchairs helped adding to the optics. (May I add 2 pretty women in wheelchairs).
When we finally came face to face with the Finance Minister Shri. Arun Jaitley ji, I went blank. I did open my mouth a few times, but I don’t know what I said. We were promised 2 minutes, but the meeting stretched to a good 15 minutes due to the keen interest of the Finance Minister himself in trying to understand the real issue.
1. We gave him data about how prices of wheelchairs/axillary crutches/callipers (KFO)/walkers/sticks/tripods/cochlear implants/batteries for CI etc had gone up post-GST. Primarily the FM was puzzled as to how despite the significant difference between 5% and raw material costs of 18%, the price could increase by the 10-12% that it has.
2. FM called out his Chief Commissioner Central Excise ( GST), Mr. C. P. Rao and mentioned something about taking action on anti-profiteering as manufacturer is supposed to pass on the difference to the end-user.
3. We asked him to go easy on manufacturer as input tax credits can be availed only if the entire chain registers themselves for the same which takes time. Some small workshops/manufacturers will just charge end-user fearing paper work since at the end it doesn’t make much difference to them. Already the aids/appliances sector is not lucrative, and if there is this burden on them, they will just close shop and look for alternatives. This will only affect the PwD.
4. We asked WHY ITC and made a case for ‘end user exemption’ by making the entire value chain exempt with no input tax to complicate pricing rationale. He made a valid point that raw material can’t exempt as there is no way of saying what purpose it is intended for. Aluminium extrusion rods can be used for wheelchairs as well as for 100 other purposes.
5. So we asked for a special refund scheme for Input Tax which will be simple and quick for manufacturers of disability aids/appliances keeping in mind the necessity of inclusion of this sector in education/employment etc. (Due to preoccupation with why prices were not coming down, we were unable to explore the reduced rates of 0.25 and 3% offered to rough diamonds and gold respectively. It was made clear however that objective was of Nil rate with special refund scheme to claim input tax credit. We did also ask what solution he would recommend, to which he said he would come to that later.
6. FM mentioned that the ‘Make in India’ strategy was the reason for the ITC system. He really believed that the ITC will reduce the cost of domestically manufactured aids/appliances.
7. We mentioned what about IGST tax credit instead of countervailing – And in any case so many products only imported.
8. We spoke about how this GST #exemption should not be seen as ‘subsidy: or “concession” but as an investment into development. He accepted that.
9. FM asked Chief Commissioner (GST) to figure out why prices are not reducing.
10. FM was interested in the issue of affordability of disability aids/appliances but more focused on why prices not going down. He asked for paper on taxes of raw materials pre and post GST.
11. This was the moment Vaishnavi was waiting for. Vaishnavi immediately showed her favorite table (which she has been repeatedly showing us on her links/posts on FB) on her phone – FM removed his glasses and had a good look at the table. She told him about a manufacturer taxing at 12 instead of 5 as they had not received intimation of the same via a circular. He spoke about their website and app reflecting the new rates and was informed that as far as disability goods were concerned neither the rates schedule of July 3rd not the app had been updated to reflect 11th June changes.
12. Again he asked us to work with Mr. C. P. Rao and his office and to come up with viable options.
It was a good meeting. But this is just the beginning and we need to involve all stakeholders/different disability organisation-movements-associations-individuals/care givers/manufacturers in giving our recommendations for the GST Council to act upon.
Read the first part of this article here: