GST rate structure needs to be reworked: Hasmukh Adhia
23 October 2017
Nearly four months after its introduction of the new indirect tax regime on 1 July and several rounds of changes since then, the GST Council now finds the rate structure and its various provisions need to be reworked in order to streamline the system.
Despite the claims of ease of operations with the GST, the rate structure has come as a big drag on small and medium businesses and revenue secretary Hasmukh Adhia feels these need to be reworked,
The Goods and Services Tax (GST), which replaces over a dozen central and state levies like excise duty, service tax and VAT, should have been softer on businesses, but the system failed to redistribute the benefits of lower tax rate among stakeholders, rather making its impact harder on businesses.
Adhia, however, refuted reports of his hinting at a complete overhaul of the GST structure, even as he said the GST system will take at least a year to stabilse.
"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 common man, if we bring them down, there will be a better compliance," Adhia said.
News agency PTI had earlier quoted the revenue secretary as saying that the GST rate structure needs 'complete overhaul'.
Although the GST Council has rationalised rates on over 100 commodities and made refund process easier for exporters in order to ease hassles facing medium and small businesses in paying taxes and filing GST returns, the new indirect tax regime is to become industry-friendly.
Adhia 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 1 July
He said the GST Council has already cleared an approach paper for items to be considered for rationalisation but there could still be deviations from the approach paper.
"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 GST Council, chaired by union finance minister Arun Jaitley will hold its 23rd meeting in Guwahati on 10 November.