GST rules set for further revision to fix glitches
NEWDELHI: The goods and services tax (GST) Council is set to further amend tax rules to fix glitches in the new indirect tax system and make it easier for businesses and traders to settle in. The move comes as a tacit admission by the authorities of the flaws in the system that have made it hard for businesses and traders to make a smooth transition, and that the system started off with high compliance requirements.
The original GST structure, designed as a sophisticated technology-driven tax regime meant to increase transparency and compliance, is now being re-calibrated to make it easier for taxpayers to adapt to it.
“Easing the pain of traders and businesses, especially the small and medium enterprises (SMES), is a priority,” said an official of the Council, who spoke on the condition of anonymity.
The Times of India reported on Wednesday that a committee of government officials has started a review of GST laws, signalling there is no reluctance to make the regime smoother for businesses, especially small ones. The committee headed by Vinod Kumar, GST chief commissioner for Karnataka, is looking at the entire gamut of issues, the report said, quoting sources it did not name.
Reworking the compliance needs coupled with tax rate revisions, especially by reducing the number of items in the top slab of 28%, is expected to make doing business easier as well as reduce the tax burden on consumers.
At the meeting of the Council on November 10 in Guwahati, Union and state finance ministers are expected to clear proposals from a ministerial panel for tax rate cuts on restaurants and for further liberalisation of the composition scheme meant for SMES, traders and small eateries.
Finance minister Arun Jaitley said on Tuesday that some of the items on the highest GST slab of 28% should not have been in that slab. He said items which were earlier subjected to a tax burden of over 30% were kept in the 28% slab to make the new tax rates comparable to the old ones and to make sure the transition to GST was revenue neutral.