 "Ficci task force report on Goods & Services Tax to be released today")
The report has made a strong pitch for a uniform rate of GST for goods and services, and for all states to be taken on board the GST regime at the same time. Besides, the task force has emphasised a need for a single agency either at the centre or at the state, where assessees can submit composite returns instead of multiple jurisdictions and multiple filing of returns under GST.
A Ficci official told Business Standard: “There have been reports that the EC is considering giving states the option to join or opt out of the GST regime. However, the task force is opposed to awarding states the option of opting out of the GST regime. Ficci believes that will be detrimental to the growth of industry, since it will greatly affect inter-state sales.”
More From This Section
The official said while the EC was working with renewed energy towards the implementation of GST industry consultation has been missing in finalising the architecture. Under the current tax regime, there is no clear definition of what goods are and what services are. This has often led to disputes over definition.
“The task force has recommended a uniform rate of GST for both goods and services. This will help in resolving any dispute on the definition of what ‘goods’ are and what ‘services’ are. Any proposed differential tax treatment for goods and for services will continue to create interpretative disputes,” the official said. Further, the task force has argued in favour of a uniform rate of GST and has opposed the proposed band of rates. “The adoption of a band of rates is not desirable since this could very well create differential tax rates between neighbouring states thereby creating tax arbitrage opportunities that often result in unfarvourable clandestine trade,” the task force said in its report.
Under the current tax regime, excise duty exemption is Rs 1.5 crore per annum, service tax exemption is at Rs 10 lakh and varied exemptions exist for value-added tax across different states. “The task force has suggested a single exemption limit under GST at Rs 50 lakh. This will ensure the small companies are left out and in turn, reduce the number of tax assesses. This will also make tax administration easier and thereby reduce tax evasion,” the official noted.
Moreover, the official said Ficci acknowledges that the introduction of GST will make Indian trade and industry competitive both domestically and internationally. The official however, suggested that for a smooth transition, industry is a key stakeholder and it needs to be engaged with the central and state governments to ensure that the GST is business friendly.
Meanwhile, Modi will hold close door meetings today with Ficci’s task force on GST and its group on capital markets. The participants include Sunil Sanghai, MD, head of global banking, HSBC India, Anup Bagchi, CEO, ICICI Securities, Padmanabh Sinha, Managing Partner of Tata Opportunities Fund, Ravi Varanasi, Senior VP of NSE, Joseph Messey, MD, MCX Stock Exchange, Somasekhar Sundaresan, Partner, J Sagar & Associates. Subsequently, Modi will address an interactive session on GST.