As India gets ready for its biggest tax reform in decades, industries such as eCommerce, banking and insurance, logistics and others will get another chance to resolve any niggles they have with the goods and services tax (GST), which the government wants to put in place by July 1.
Ahead of the introduction of GST-related legislation in Parliament this week, the government has set up 10 groups to iron out sectoral issues faced by trade and industry to ensure a smooth transition to the new regime with just a little over three months to go. The President gave his assent to the four GST laws last week, paving the way for their introduction in Parliament.
The groups have been set up under senior tax officials to examine the concerns of industry and submit reports by April 10.
A senior government official told ET that most issues have been addressed through feedback but it was felt some sectors having special peculiarities needed a closer look to ensure they were able to make a glitch free shift to GST.
The sectors up for review include banking, finance and insurance, telecom, exports, IT/ITeS (information technology enabled services), transport and logistics, textiles, MSMEs (micro, small and medium enterprises), oil and gas, gems and jewelry, and services received and provided by the government.
Groups to Focus on Procedures, Rate Structure
The working groups can seek the views of the administrative ministries and key industry bodies, professionals and experts as needed. They have been asked to focus in particular on procedural simplifications and the rate structure. The government will take a call based on the reports of the groups and may even expand them by including officers from the state governments to quickly settle issues.
A July 1 roll out will leave the Central Board of Excise and Customs (CBEC) about three months to sort out all grievances.
The concerns relate largely to procedural matters and compliance complexities. The eCommerce sector’s objections, for instance, relate to registration in every state while MSMEs are worried about electronic compliance readiness and costs.
Under GST, much of the scrutiny will happen electronically through invoice matching, a measure that will reduce the interface with tax officials, but this has its own challenges.
Experts welcomed the initiative, pointing to a host of unresolved issues.
“While the draft GST model law is out, several critical issues such as treatment of tax paid on transition stock, inter-office supplies, state in which GST has to be paid in case of multi-locational services, etc, are still not clear,” said Pratik Jain, leader, indirect tax, PwC. “It will be good if the government considers setting up similar groups for a few other sectors such as FMCG and media.”
Source : Economic Times