GST NEEDS REJIG, SAYS REVENUE SECY

Policymakers are considering steps to ease the compliance burden related to the GST on small businesses and to make product classification for taxation less complicated, said revenue secy. ››

: Policymakers are considering steps to ease the compliance burden related to the goods and services tax (GST) on small businesses and to make product classification for taxation less complicated, said revenue secretary Hasmukh Adhia.

The simplification process may result in some readjustment of tax rates, including a possible reduction in some items that attract the highest tax slab of 28%.

Products are now classified into various subcategories—in many cases, different subcategories fall in different tax slabs—under a code called the harmonized system of nomenclature (HSN) that existed before GST was implemented on 1 July. Such a detailed classification is hard to follow for small and medium enterprises (SMEs).

Addressing concerns of SMEs and harmonization of items for better tax compliance is on the agenda, Adhia said in an interview.

News agency PTI reported on Sunday said that the government is considering easing the compliance burden on SMEs. “There is a need for harmonization of items chapter-wise and wherever we find there is a big burden on small and medium businesses and on the common man, if we bring them down, there will be better compliance,” the report cited Adhia as saying.