Dr. K. Thirumurugan
State President, Tamil Nadu Appalam Vadagam Morvathal Association
On behalf of the Tamil Nadu Appalam Vadagam Morvathal Association, letters have been sent to the Prime Minister of India, the Union Finance Minister, the Tamil Nadu BJP President, Finance Ministers of 28 states, and Finance Ministers of 8 Union Territories. These letters urge the authorities to protect the interests of small traders and manufacturers in the state and to oppose the imposition of an 18% GST on commercial property rentals through the Reverse Charge Mechanism (RCM).
GST Council Decision:
Effective from October 10, 2024, the GST Council mandated that commercial property rentals attract 18% GST under the RCM. This has caused significant concerns for small traders and businesses under the Composition Scheme, as they are not eligible for Input Tax Credit (ITC), making the GST paid under RCM non-recoverable.
Implications of Ambiguity:
There is a lack of clear benchmarks for determining fair rental rates, potentially leading to future disputes and penalties for property lessors.
Protests by Traders:
In response, the Tamil Nadu Food Traders Association and the Federation of All Trader Associations organized a state-wide shutdown on November 29, 2024, disrupting business operations in many cities. Further protests took place in select areas on December 10 and 11, 2024.
Actions by Representatives:
An MP from Kerala raised similar concerns with a Union Minister and provided a copy of their correspondence. This move has become a model for other MPs across India to take similar initiatives in support of the traders.
Key Demands:
- Revoke the 18% GST on commercial property rentals under the RCM.
- Reconsider the GST portal's upcoming IMS procedures set to take effect from January 1, 2025, to reduce the associated accounting burden.
The trader community has appealed to all MPs nationwide to act collectively in Parliament to safeguard the welfare of small traders and manufacturers.