Lending hopes about untangling the issue over the goods and services tax (GST), Ficci today decided to meet states to convince them about the need for a new indirect tax system in the country. Harsh Mariwala, president of the industry chamber, told this to reporters, a day before a meeting of the Empowered Committee of state finance ministers under new chairman Sushil Modi.
Mariwala said GST rates should be ultimately brought to uniform level of 12 per cent. While the government proposal is for an ultimate 16 per cent GST rate — eight per cent for each the Centre and states, the chamber is agreeable to the ministry’s idea of 20 per cent, and 12 per cent tax rates for goods and 16 per cent for services to begin with.
Ficci Task Force on GST co-chairman S Madhavan said all services should be included in GST but there should be a negative list. “Ideally we will want GST in the beginning of the year. Mid-year roll-out of GST is possible, but not desirable.” Sachin Menon, another co-chairman, said the GST would be a perfect platform to unearth black money. Revenue forecasting “will be better” in GST.
The chamber is also against a proposal to keep petroleum, natural gas, real estates, alcohol and power generation outside the purview of GST, saying they form the foundation of a significant part of the industrial, commercial activities and their exclusion would cause tax cascading and high costs in the economy.
Overall, Ficci says GST will make the Indian trade and industry more competitive, domestically as well as internationally and contribute significantly to the growth of the economy.
Constitution amendment bill for rolling out GST is already with Parliament’s standing committee. The amendment bill is needed because the current system would not permit the Centre to impose tax beyond manufacturing, and states cannot levy service tax.
