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GST & Economics General Discussions

HOUSE-MD

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The easiest way to kill the character and purpose of Goods and Services Tax (GST) is to bring as many distortions as possible to it. One way of doing it is by imposing significant additional levies above the already agreed GST rates, terming it necessary to compensate losses for states. That is exactly what states like Maharashtra and Tamil Nadu are doing by forcing additional tax above GST rate on new vehicle purchases and on movie tickets, respectively.

Tamil Nadu has imposed an additional 30 percent tax on movie tickets in addition to the 28 percent (for tickets priced above Rs 100) and 18 percent (for tickets less than Rs 100) GST rates. That would make the majority tax incidence for the industry close to 60 percent. Reason: Only about 10 percent of the total share of movie tickets sold is below Rs 100 ones and these make up only about 6 percent of their revenues, a Times of India report quotes Deepak Asher, President, the Multiplex Association of India, as saying. In the pre-GST regime, the pan India tax rate on movie tickets was 19.5 percent. Hence the clamour in Tamil Nadu led by the likes of Kamal Hassan is least surprising.

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More on: GST was never 'one nation, one tax'; Tamil Nadu, Maharashtra only putting final nail in its coffin
 
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HOUSE-MD

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When the power to tax was with the state they subsidised hotels and state based industries like the fireworks & matches, dry grinders etc so all food items even in medium hotels were within 2% tax and this tax too was included within the food products so we have most affordable means at hotels. But now under GST this has become 18% (AC = 18% & Non-AC = 12%) and all this on our bill. For people who say tax only for hotels with over 20 lac turnover (1.67 lac approx per month), please note even a small hotel in a city like Chennai will easily make a turnover of over 2 lac per month so this tax applies.

So if from 1st july if we eat at hotels for Rs 500 then GST is Rs 90 (equal to 1 regular means at saravana bhavan), if the bill is Rs1,000 then GST is Rs 180 (equal to 2 regular means at saravana bhavan). I think most people will either quit or atleast limit going to hotels.

Result:
Fireworks & Matches: Over 70% of India's fireworks and matches comes from sivakasi and they are shut down indefinitely.
Tamilnadu textile makers: To shut down indefinitely from Wednesday (source: Business Standard).
Tamilnadu Theatres: shut down indefinitely.
Tamilnadu Hotels: All hotels across state was shut down on May 30.

Excellent Job.
 
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Sarkar

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Strange situation in TN. Here West Bengal govt is giving 7% rebet on entertainment tax from SGST share. So taxes on movie tickets below Rs100 will be 11% instead of 18%.

For tickets above Rs 100 state is giving rebet of 12% from SGST share so taxes will be 16% instead of 28%.

 
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akshayprabhu

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Total Jerks!

At least they could have seen the trend for about 6 months and then spoken to centre about potential losses!
Things take time to come into proper effect...
 
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Ashok L

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Some of them are blindly supporting for GST. But as HOUSE MD said we (consumers) are paying heavy charges for tax in Tamil Nadu. Even small shops in Chennai are forced to put 18% as tax previously no tax for them. And big hotels they increased their tax 8% (Service Tax 6% + Vat 2%) to 18% (CGST & SGST) which is agreeable. But why small shops needed to pay tax. In most of TN cities it is impossible to run a hotel below a turnover of 2 lakhs / month. For Eg: (for parotta master they have to pay atleast 15,000 - 20,000/ month + Server + cleaner + Supportive cooks + Shop Rent + Electricity Bills + Shop Maintenance + some commissions to local bodies) this cant be done below 2 lakhs/month. These things will actually fall on middle class people like most of us....

In simple words, Rich becoming richer, poor becomes poorer and middle class becomes more sufferer...
 
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HOUSE-MD

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The major reason for issues in TN is because TN Govt subsidizes almost all people beneficial products and also tries to lower the tax as much as possible. Now under GST its "One Nation, One Tax" no idea how TN govt will resolve the issues.
Theatres ticket max at Rs 120 now under questions after tax hike.




 

dinee

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No proper govt in Tamil nadu to oppose every thing what central govt is imposing it...central govt is handling all political parties with their corruption charges and blackmailing them to impose it...even in Congress rulling states they were doing it as governor were mostly by bjp govt...
 

Sarkar

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What's wrong with center when it is TN govt who is imposing additional taxes to subsidize useless service like cable TV

 
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Ashok L

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What's wrong with center when it is TN govt who is imposing additional taxes to subsidize useless service like cable TV

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How can you call Arasu cable tv as useless service without using it. Can any dth operator give max Tamil + sports + English movies at low price....???
Once they are fully operational across TN then dth operators will get down in TN as happened during JIO launch
 
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