Swatantra Bharat Party

National Press Release – to be released across India
4 November 2017 – for immediate release [Word version]

Mr Sanjay Sonawani, senior leader of Swarna Bharat Party, highlighted the party’s many concerns about the design of the GST and its implementation. The Modi government has imposed extraordinarily high rates of GST, creating a regressive regime that harms the middle class and the poorest. It has also created an administrative nightmare with multiple tax rates. Further, the roll out of GST has been dismal and new taxes have been imposed in the process, further harming the poor.

The otherwise sensible idea of GST has been mangled by the Modi government, creating havoc across the country. This comes on top of the havoc created last year by an ill thought out demonetisation. It is almost as if the Modi government has the capacity to take good ideas and make mincemeat of them.

Books illustrate the huge design failure of the GST. Even though there is no GST on books, book prices are expected to rise by 12-15 per over and above normal inflation due to GST payable on inputs. Book publishers are not be able to claim this back, thereby forcing the GST cascade to the public.

The situation has been made worse by imposing a new tax on book royalties. This applies also to authors of textbooks. Authors’ book royalties were previously exempt from sales taxes since authors perform a fundamental and essential service by creating literature and knowledge. Authors pay income taxes where applicable, but are now required to pay both GST and income tax. 

Many publishers will use a “reverse tax” mechanism to pay GST where a writer has not registered for GST but they can obviously bear only a part of this extra burden and will have to allocate most of the incidence of the tax to someone. It is expected that publishers will be forced to increase book prices and lower royalties. This is a terrible blow for the poorest who can least afford books and amounts to BJP taking India to the stone age. It also hits authors who face rising prices in all aspects of their life and are now being expected by BJP to live off lower earnings. This amounts to an attack on knowledge itself. 

Mr Sonawani demanded that the new tax that has been imposed on author royalties be withdrawn with immediate effect and the GST design for books be reviewed to allow at least some GST to be claimed back by publishers. Newspapers in Maharashtra have highlighted Mr Sonawani’s concerns. 

Mr Sonawani said that SBP is not going to allow anti-poor Modi to harm the country. The party is preparing to contest the 2019 Lok Sabha elections and invites all well-wishers of India to join SBP and fight the anti-poor Modi government. 

Mr Sonawani said that SBP will ensure that consumption taxes, which are regressive and harm the poorest, are minimised. SBP will slash GST to 10 per cent and abolish the tax on book royalties. SBP is also committed to broadening the income tax base so that the rich will pay the taxes in India henceforth, including rich farmers who flaunt their extraordinary wealth but pay no taxes under Mr Modi’s regime. 

Notes for Editors:
SBP is India’s only liberal party, committed to defending liberty and promoting prosperity.

Rahul Pandit (Hyderabad) National Working President, +91 9703425422
Sanjay Sonawani (Pune), +91 9860991205
Sanjeev Sabhlok (Melbourne), sabhlok@gmail.com

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