Tax lawyers under the banner of All India Association of Tax Lawyers have moved Orissa high court challenging implementation of Goods and Service Tax (GST) in the country.
The association has filed a PIL in the high court on Tuesday alleging that GST levied by the Centre and Odisha government is arbitrary and unconstitutional. The tax lawyers have alleged that the Goods and Service Tax (GST) violates the basic feature of the constitution i.e federalism, especially financial federalism.
Federalism stresses on separation of powers between union and the states. However, GST encroaches the basic authority of the states to levy taxes by restricting its righs, including the right to determine the rates of tax under GST. It curtails the financial autonomy of the states.
The petitioner has further highlighted that under GST both union government and state governments levy tax on the same event of supply of goods and services, that leads to double taxation and burden on tax payers.
The tax lawyers have further highlighted that GST violates the fundamental rights of citizens to earn livelihood and carry on business. Though it is mentioned in GST that traders and small suppliers having turnover of less than Rs 20 lakh are not required to register and pay tax.
However, the reverse charge mechanism(RCM) element of GST creates a very unfair and unfavourable environment for small traders. Under RCM, the receiver or purchaser of the goods and services from unregistered dealers are supposed to pay tax under GST. Hence, big traders are not procuring anything from unregistered traders due to which many small businessmen have ruined.
“There is no proper infrastructure in place to ensure proper implementation of the new tax. The GST portal faces frequent snarls and breakdowns and there is no proper helpline in place to guide the lawyers or tax payers,” said Sharma.The matter is likely to be taken up hearing next week. EOM