‘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:
NEWDELHI:
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. JULY 7 Consumer affairs minister Ram Vilas Paswan clarifies that pasting stickers with revised prices on pre-July stock is not a breach of rules; allows revised MRP stickers till Sept 30
JULY 8 President Pranab Mukherjee promulgates two ordinances introducing GST in Jammu and Kashmir; Govt spares airlines from dual levy of GST on leased aircraft
JULY 10 Govt clarifies that benefits to staff by employers as part of employment contract, occasional gifts up to R50,000 are not subject to GST
JULY 11 Finance ministry clarifies that GST is not applicable on free food supplied by religious institutions
JULY 15 CBEC clarifies that services by lawyers and law firms will continue to be taxed under ‘reverse charge’
AUG 5 GST Council lowers tax rates on a few services
AUG 31 Finance minister Arun Jaitley indicates the number of GST slabs could be pruned in future
SEPT 1 Modi proposes GST registration for small taxpayers; GST Council waives late fee for July tax returns
SEPT 3 President Ram Nath Kovind promulgates ordinance enabling increase in GST cess on motor vehicles from 15% to 25%.
SEPT 26 GST receipts for August touch R90,669 crore, 3.6% less than July collections
SEPT 29 Consumer affairs ministry lets businesses to sell pre-GST goods till Dec 31, 2017 with revised price stickers
OCT 6 GST Council to meet in New Delhi to review compliance, transition issues
OCT 8 GST to complete 100 days