With GST underway, a new inspector raj threatens the new tax reform and may hinder any benefits that may be passed to the consumers. Several automakers cut down car prices after GST roll-out, however Maharashtra increased the one-time registration levy for new private cars by 2 percentage points.
In addition, there have been protests in Tamil Nadu by cinema theatres as they protested charging of 30% local tax over and above 28% GST. Cinema theatres in the state remained closed for four days.
Meanwhile, across the country, transport department officials are enforcing a new inspector raj nullifying the positive effects of GST by imposing new penalties which have not been observed in years.
Levying of more cesses and taxes could affect the attractiveness of GST. Moreover, several taxes such as entertainment tax charged by local bodies, electricity cesses, entry tax by municipal corporations, stamp duties and goods such as alcohol and fuels do not come under the umbrella of GST.
“While few levies and taxes by local bodies, entertainment tax, stamp duties etc. are outside GST, we expected that states would not immediately resort to increasing these,” said Pratik Jain, leader, indirect tax, PricewaterhouseCoopers. “It will impact consumer confidence at the time GST is just settling in.”