‘Multilayered GST rate structure must converge in future’

In What’s Happening in Retail by Elargirindia0 Comments

Click Here for Original Source – Economic Times

PANAJI: The multilayered goods and services tax structure should converge into a single or two rates and no new rate structure should be introduced in future, the Confederation of Indian Industry (CII) said recently. Further, CII has said the government should ensure the bulk of goods and services should fall within the standard rate of 18% and only as exception should the higher rate of 28% be applied.

“The GST rate structure must absolutely be limited to a maximum of four rates, as suggested by the government, and over time the government should commit to converge it to one or two rates,” CII president Naushad Forbes said.

Forbes said it was important for the Union government to ensure the bulk of goods and services fall within the 18% tax category with the higher rate of 28% being utilized as an exception.

“A lower rate for essential goods like unprocessed food items can be put in place but the proposal that the higher rate of 28% should apply only to ‘demerit goods’ and the term ‘luxury goods’ should not be used to define this category,” Forbes added.

He also raised the issue of multiple registrations in each state for the supply of goods and services saying it could result in a complex burden for companies that operate in different states. “Businesses in the services sector like telecom, banking, insurance, airlines, e-commerce, undertake pan-India operations and meeting requirements of each state through different registrations, audits and compliances would be a massive task,” said Forbes.

CII has further suggested that cess needs to be levied only on the final product and total tax including cess on demerit goods should be kept within the present overall indirect tax incidence.

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