Govt says GST rates may be rejigged to reduce burden on SMEs
Just few months after the introduction of the GST, the new tax regime has seen several teething troubles and compliance issues.
GST to cut inflation by 2%, create buoyancy in economy, says Revenue Secretary Hasmukh Adhia
61 lakh taxpayers enrolled under GST, says Hasmukh Adhia
Indirect tax collection grows 17% in January 2017, Hasmukh Adhia says
Deposit in bank acounts of political parties exempt from tax, says Hasmukh Adhia
Ensure IT set-up for GST by September 30: Hasmukh Adhia to banks Key highlights:
- Hasmukh Adhia said that some rejig in the GST rate structure is required to reduce the burden on SMEs
- He further said the GST will take about a year to stabilise
- The GST Council's 23rd meeting will be held on November 10 in Guwahati
The government seemed to have made yet another indication that it may reduce the Goods and Service Tax (GST) burden for small and medium businesses. Revenue Secretary, Hasmukh Adhia said that some rejig in the GST rate structure is required to reduce the burden on SMEs.
He further said the GST will take about a year to stabilise. GST is a combination of dozen central and state levies like excise duty, service tax and VAT,
"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 in a PTI report.
Just few months after the introduction of the GST, the new tax regime has seen several teething troubles and compliance issues. The GST Council, which decides on the rates, has tried to address several of these problems.
The GST Council also tweaked some aspects of the new tax regime in order to ease the hassles faced by the medium and small business in paying taxes and filing GST returns. It also rationalised the rates of over 100 commodities and made refund process easier for exporters.
Adhia said that 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.
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 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's 23rd meeting will be held on November 10 in Guwahati and will be chaired by Finance Minister Arun Jaitley and comprise of representatives of all states.
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 with up to Rs 1.50 crore turnover have been allowed to file returns and pay taxes quarterly, as against monthly earlier, said the report.
When asked how much time will it take to stabilise the GST system, Adhia said: "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 streets because nobody knew what VAT is, the last fellow was only paying sales tax. It was more opposition that time than this," he said.
Introduced in 2005, VAT replaced the earlier sales tax systems. VAT was a tax on sale or purchase of goods within a state and was levied by state governments.
(With inputs from PTI)
ALSO READ:
