New Delhi: The complete overhaul of tax rates to the new GST regime, is now necessary to reduce the burden on small and medium businesses, revenue secretary Hasmukh Adhia has said that it will take about one year to stabilize the goods and services tax (GST), which is related to the acquisition of more than a dozen central and state governments like excise duty, service tax and VAT.
About four months after its introduction, new indirect taxes threw up some of the problems and compliance issues, which have been addressed through many changes in the GST Council – the highest decision-making organization of the new regime.
In order to reduce the problems of middle and small businesses in paying taxes and filing GST returns, it has attracted various aspects of the new indirect tax regime to make the industry friendly. At the same time, the GST Council has rationalized rates on more than 100 items and has made the refund process easier for exporters.
A complete overhauling is necessary; it is possible that some items are divided into one chapter. The uniformity of the objects is required, chapters are intelligent and wherever we find that there is a huge burden on small and medium businesses and the common man but, if we bring them down, then there will be better compliance, “said Adhia.
However, he said that overhauling would require some calculation by the fitment committee, which would decide which rate to be rationalized under the GST regime, which started on July 1. The GST Council has already approved an approach letter for the items to be considered for rationality, but it is not compulsory and the council can always deviate from the approach paper. Adhia said that the committee will bring its suggestions to the Council as early as possible.
The 23rd meeting of the GST Council will be held in Guwahati on November 10, under the chairmanship of Union Finance Minister Arun Jaitley and the participation of representatives of all the states will be held on November 10.
“We are very eager to do this as soon as possible, depending on how much time the Fitment Committee takes to works. They require data, revenue loss is calculated, they need different comparison but there must be uniformity. “The review must be done,” he said.
The GST Council has reconstituted the various provisions of the new indirect tax regime, which was started from 1st July to make it more industry-friendly.
The limit of business for the composition plan, under which the business can pay taxes at a nominal rate, has been increased to Rs. 1 Crore, before about Rs. 75 Lakhs. Apart from this, quarterly permission has been given to file returns and pay taxes on the business up to Rs 1.5 Crores.
When asked how long it would take to stabilize the GST system, Adhia said: “It will take one year because it is a new system for everyone; the GST has a complete overhaul of the tax system, so needs one year. If you look at the experience of VAT, then there was an opposition for one year. People were on the roads because nobody knew what the VAT is; the last fellow was just paying Sales Tax.
Presented in 2005, VAT replaced the first sales tax system, VAT was taxed on the sale or purchase of goods within the state and it was levied by the State Governments. GST has eliminated more than a dozen taxes and has turned India into a single market for uninterrupted movement of goods and services.