‘Tax rates may come down with tax compliance’

ST Correspondent
Saturday, 15 July 2017

Javadekar further stated that a lot of sectors, who have been included in the 0 per cent tax slab, are demanding to be included in the five per cent bracket.

PUNE: Union Human Resource Development Minister Prakash Javadekar has assured traders and businesses from Pune that the government will not dig into past records if they start working and living honestly. He said this at a Goods and Services Tax (GST) interaction with traders and businessmen, organised by the Central Board for Excise and Customs (CBEC) in the city on Saturday.

Commissioners of CGST as well as SGST departments from Pune were present on the dais and provided inputs to solve problems haunting the traders.

Calling the GST regime as a classic example of cooperative federalism, he said that the Modi government has led to the economic integration of the country. “Any one party cannot claim the credit for the implementation of GST, which was done on July 1. It is the constitutional right of every state and the Centre to levy taxes. All the 31 states and the Centre put their power in the hands of a third body, i.e. the GST Council, to ensure a single tax regime in the country. We achieved one law and one tax with total consensus,” he explained.

He further said that once there is total tax compliance in the country, the tax rates may start coming down. “Inflation has come down post GST. The consumer price index stands at less than two per cent, while the wholesale price index is nearly at one per cent. The prices of telecommunications, fast moving consumer goods and restaurants will fall too in the coming days,” he explained. 

Javadekar further stated that a lot of sectors, who have been included in the 0 per cent tax slab, are demanding to be included in the five per cent bracket. “People who have 0 per cent tax are asking for five per cent tax. All newspapers, solar companies and others are making this demand so that they can avail credit under the Input Tax Credit system. Exporters were not getting refund of state tax but they will benefit from refund under GST. Importers will have to pay IGST on imported goods, thus providing security to Indian manufacturers. E-commerce, which was not paying any tax, has now been included under the tax ambit, thus levelling the playing field with shopkeepers,” he explained. 

In response to a question posed by Chemist Association of Pune district regarding return, expiry and breakage of medicines, Javadekar assured that a clarification on the policy for return of expired or broken goods from medical stores will be provided soon. 

About charging of 18 per cent GTS on restaurants which have both AC as well as non-AC sections, he asked the Poona Restaurants and Hoteliers Association to submit a memorandum. “There was a confusion about pricing in the first two three days after GST rollout, but we asked all our members to provide five to 10 per cent discount on menu charges and then levy GST. But, everyday we see customers fighting with us, stating that they are being charged 18 per cent despite having selected to sit in a non-AC section,” said Ganesh Shetty, PRAHA President. 

Likewise, exporters, members of Chemical Dealers Association, members of APMC, Fertilizer dealers and many others posed questions to the minister, who assured to take the issues up with the Finance Ministry.

- Traders from the city have demanded the inclusion of petrol and petroleum products under the GST ambit. “40 per cent of State revenues come from taxes levied on petrol and alcohol. Due to this, the State governments are against including these products under GST. However, petrol, liquor and land will soon be included in GST,” Javadekar explained.

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