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GST needs rejig to cut burden on small businesses, says Hasmukh Adhia

Revenue Secretary Hasmukh Adhia, however, said the rejig would require some calculations by the fitment committee, which will decide which items need a rationalisation of rate under the GST regime which kicked in from July 1.

By: ENS Economic Bureau | New Delhi | Updated: October 23, 2017 8:24 am
Hasmukh Adhia, Goods and Services Tax, GST rejig, Small and medium businessness GST, Revenue Secretary, Business news, Indian Express Revenue Secretary Hasmukh Adhia (File photo)

Close to four months into the rollout of the Goods and Services Tax (GST) regime, Revenue Secretary Hasmukh Adhia has said that some rejig in the rate structure may be required to reduce the burden on small and medium businesses.

“There is need for some rejig in rates … it is possible that some items in the same chapter are divided. There is a need for harmonisation 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 a better compliance,” Adhia told PTI in an interview.

He, however, said the rejig would require some calculations by the fitment committee, which will decide which items need a rationalisation of rate under the GST regime which kicked in from July 1. Adhia said the committee will bring its suggestions to the Council as early as possible.

“We are very keen to do it as early as possible, it depends on how much time the fitment committee takes to work on it. They need data, calculate revenue loss. They need various comparisons. But harmonisation has to be done,” he said.

The Revenue Secretary also said that GST, which amalgamates more than a dozen central and state levies like excise duty, service tax and VAT, will take about a year to stabilise.

Asked how much time it would take to stabilise the GST system, Adhia replied: “It will take one year. Because it is a new system for everybody… There has been a complete overhauling of tax system in GST so one year is needed.”

“If you see the experience of VAT, there was opposition for one year. People were on the streets because nobody knew what VAT is, the last fellow was only paying sales tax. It was more opposition that time than this,” he told PTI.

The GST Council, chaired by Union Finance Minister Arun Jaitley and comprising representatives of all states, is scheduled to hold its 23rd meeting in Guwahati on November 10.

In an interview to The Indian Express earlier this month, Adhia had said that a move to rationalise both “processes” and “rates” across some product categories to ease out the “pain points” has been initiated. “Rationalisation has to be done for sure. The Finance Minister has said that we will wait for revenue trends to emerge but some rationalisation is required and an exercise has been initiated for that. The final decision is to be taken by the GST Council. The Council has done some work on rates already to ease the pain points,” Adhia had said.

Since its introduction, the new indirect tax has thrown up teething troubles and compliance issues, which the GST Council has addressed through several rounds of changes.

To ease hassles faced by small and medium businesses in paying taxes and filing GST returns, it has tweaked various aspects of the new indirect tax regime to make it industry friendly. Also the GST Council has rationalised rates on over 100 commodities and made the refund process easier for exporters.

The GST Council has already cleared an approach paper for items to be considered for rationalisation but it is not binding and the council can always make deviation from the approach paper.

The GST Council has also reworked various provisions of the new indirect tax regime to make it more industry friendly. The turnover threshold for composition scheme, under which businesses can pay taxes at a nominal rate, has been hiked to Rs 1 crore, from Rs 75 lakh earlier. Also, small businesses up to Rs 1.50 crore turnover have been allowed to file returns and pay taxes quarterly, as against monthly earlier.

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  1. S
    Oct 23, 2017 at 3:55 pm
    HI, mR modijee, arunjee, are u listening. MOst likely revinew secretary will be sacked soon.now u realised that small business community is facing hardship. It was modi who forced upon GST on nation without prior preparation, infrastructure as well as training. It was only MODI who wanted to impliment it. A mindless man. He only thinks that whatwver he thinks is correct and other nandibails nod. It is shame on bjp that they are trapped in modis terror. MODI amit have terrified everyone.
    1. P
      Philip Andrews
      Oct 23, 2017 at 2:49 pm
      Glad that some sense is being spoken by an individual with a sense of responsibility. From first hand experience the current structure of the GST has brought about disastrous results for a small entrepreneur like me. Irrespective of the fact that we have always followed the law and played by the rules however often these very rules were changed, it is very frustrating to see that we as a small business might die and yet live to see corrupt organizations live on... because they just happen to have at least three levels of ill-gotten reserves. Just fed up and tired of this Government's short-sightedness, ill advised strategies and absolute insensitivity to the ground realities of life here. The previous Govt. seduced the citizens... the current Govt. rapes the citizens... but in the end, we the citizens have been anyways, no matter what.
      1. P
        Parth Garg
        Oct 23, 2017 at 2:08 pm
        Foot in the mouth, Eh! Tell this to the PM who said in Gujarat that such radical(?) steps would be continued despite opposition.
        1. R
          rick patel
          Oct 23, 2017 at 1:51 pm
          If there is any sense remaining in indian public they should get rid of bjp.....This party 100 times worst than any other party in indian history...They are openly indulging in corruption and crime on one side other side spreading hatred to divide our country on basis on religion and cow..People should stop being emotional and support vikas and not support vinash (modi)..
          1. A
            Oct 23, 2017 at 2:59 pm
            I will vote for BJP. Do whatever you can, whatever you may. This is the voice of my people, this is the beat of my heart. You can kill me but you cannot change me.
          2. M
            Oct 23, 2017 at 12:58 pm
            BJP is playing - with fire! Looks like all PMs good intentions are being ruined by a foolish Fin Min - who probaly has swiss accounts hinself and a bedfellow if corrupt Congress leaders! BJP is out to destroy the commonman just the sane way the Congress did! Both parties are full if scounderals top to bottom! PM Modi has aBIG mouth while MMS never spoke! Both aid and abet wrong doings turn a blind eye! Shame!
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