GST needs rejig to cut burden on small businesses, says Hasmukh Adhia

Mangalore Today News Network

New Delhi, Oct 23, 2017 : Close to four months into the rollout of the Goods and Services Tax (GST) regime, Revenue Secretary Hasmukh Adhia has said that some rejig in the rate structure may be required to reduce the burden on small and medium businesses.

 

“There is need for some rejig in rates … it is possible that some items in the same chapter are divided. There is a need for harmonisation of items chapter wise, and wherever we find there is a big burden on small and medium businesses and on the common man, if we bring them down, there will be a better compliance,” Adhia told PTI in an interview.

He, however, said the rejig would require some calculations by the fitment committee, which will decide which items need a rationalisation of rate under the GST regime which kicked in from July 1. Adhia said the committee will bring its suggestions to the Council as early as possible.

“We are very keen to do it as early as possible, it depends on how much time the fitment committee takes to work on it. They need data, calculate revenue loss. They need various comparisons. But harmonisation has to be done,” he said.

The Revenue Secretary also said that GST, which amalgamates more than a dozen central and state levies like excise duty, service tax and VAT, will take about a year to stabilise.

Asked how much time it would take to stabilise the GST system, Adhia replied: “It will take one year. Because it is a new system for everybody… There has been a complete overhauling of tax system in GST so one year is needed.”

“If you see the experience of VAT, there was opposition for one year. People were on the streets because nobody knew what VAT is, the last fellow was only paying sales tax. It was more opposition that time than this,” he told PTI.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising representatives of all states, is scheduled to hold its 23rd meeting in Guwahati on November 10.

In an interview to The Indian Express earlier this month, Adhia had said that a move to rationalise both “processes” and “rates” across some product categories to ease out the “pain points” has been initiated. “Rationalisation has to be done for sure. The Finance Minister has said that we will wait for revenue trends to emerge but some rationalisation is required and an exercise has been initiated for that. The final decision is to be taken by the GST Council. The Council has done some work on rates already to ease the pain points,” Adhia had said.

Since its introduction, the new indirect tax has thrown up teething troubles and compliance issues, which the GST Council has addressed through several rounds of changes.

To ease hassles faced by small and medium businesses in paying taxes and filing GST returns, it has tweaked various aspects of the new indirect tax regime to make it industry friendly. Also the GST Council has rationalised rates on over 100 commodities and made the refund process easier for exporters.

The GST Council has already cleared an approach paper for items to be considered for rationalisation but it is not binding and the council can always make deviation from the approach paper.

The GST Council has also reworked various provisions of the new indirect tax regime to make it more industry friendly. The turnover threshold for composition scheme, under which businesses can pay taxes at a nominal rate, has been hiked to Rs 1 crore, from Rs 75 lakh earlier. Also, small businesses up to Rs 1.50 crore turnover have been allowed to file returns and pay taxes quarterly, as against monthly earlier.



courtesy:Indian Express