‘GST Council to set rules on future tax rate rejig’
Revenue secretary Hasmukh Adhia has been deeply involved in the design, drafting and implementation of the goods and services tax (GST). The mammoth task of replacing the country’s entire indirect tax system with a new one is testing the limits of policymakers’ real-time responsiveness, the resilience of infrastructure and taxpayers’ ability to adapt to a more disciplined compliance regime. Will the tax reform deliver the promised economic benefits or will it get derailed by the transition glitches? Adhia says the experience so far gives reasons for optimism. Edited excerpts from an interview: How long will it take for businesses to settle down in the new tax environment? How long will glitches in GST’s IT network persist? Businesses did anticipate initial readjustment problems because it was a tax system in which a new learning has to happen. Also, the readjustments in the IT system had to be made based on the problems faced by taxpayers. We are confident that these transitory issues will get sorted out by end of the current financial year and it should become smooth sailing in the next financial year. The revenue collection figures are satisfactory as of now. However, the better compliance in terms of 100% taxpayers filing returns will result in upside to revenue. Industry, especially car makers, has raised the concern of frequent tax changes. what would be the guiding principle for any revision in tax rate or cess in the new federal indirect tax framework? As far as automobile sector is concerned, there has not been any increase in tax compared to pre-GST. The only thing is that the mistake, which was committed by the government in fixing initial rates of taxes for highend automobiles, has been corrected subsequently, which appears like a flipflop. The changes made in other products are either in favour of the taxpayers or the consumers and they are based on logical principles. A concept paper is under discussion in the GST Council, which will lay down broad guiding principles for rate revision in future. Does the trend of many registered assessees not meeting the return filing deadline worry you? The phenomenon of some taxpayers not filing return in time is a matter of concern. This could be partly because of not being aware that under the GST regime, even if one has got no transaction during the month, one is supposed to file the zero tax return.