Surat: Gujarat Inc, traders raise concerns over GST, Hasmukh Adhia says it will improve GDP

Surat: Gujarat Inc, traders raise concerns over GST, Hasmukh Adhia says it will improve GDP

Adhia explained that for textiles, “if the total amount of commission or service charge exceeds Rs 20 lakh per annum, then the firm will have to pay the GST.”

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Revenue Secretary Hasmukh Adhia gives guidelines on GST in Surat on Saturday. PTI

Trade and industry representatives of Surat raised several concerns about the upcoming Goods and Services Tax (GST), which will come into force across the country from July 1, at an outreach programme by Hasmukh Adhia, revenue secretary, Union Ministry of Finance, on Saturday.

The GST outreach programme was organised by the Central Excise, Customs and Service Tax Department in association with South Gujarat Chamber of Commerce and Industry (SGCCI) and Surat Art Silk Cloth Manufacturers Association, at the convention hall of Veer Narmad South Gujarat University.

Adhia said the government’s attempt was to reduce corruption by minimum human interference in the system and get rid of parallel economies like black money and terror funding activities in the country. “There would be uniform tax system in the country. It will now be a common national market, abolishing the different tax systems by different states. If common tax rate is implemented in the country, then warehousing logistics and transportation requirements will go down and we will get the benefit of the input cost. Goods will be cheaper,” he said.

Adhia added the main reason, due to which the GST is superior to the old tax systems, is the seamless flow of input tax rate in India. “The cascading effect of tax will end. Secondly, it is completely an Internet based system, starting from registration to return filing. One will even get the refund in his or her bank account mentioned during the registration,” he said.

The industry people, however, raised several concerns.


SGCCI president B S Agrawal, raising a concern on the maintenance of records, said, “The textile industry of Surat, which produces 40 per cent of India’s synthetic cloth, is unorganised. The industry players will face the burden of keeping records for GST. So they expect that the GST be first levied on the yarn and second at the garment stage, while remaining be kept exempted. If this does not work, then the rates of GST should be kept minimum as fabric is an essential item.”

Agrawal also raised the issue of exemptions granted to MSMEs, having an annual turnover of Rs. 1.5 crore under Central Excise Act. “If GST is applied then the exemption benefits will cease. The MSME in Gujarat is the backbone of its economy,” he said.

Bharat Gandhi, chairman of Federation of Indian Art Silk Weaving Industry, raised the issues of the powerloom sector. “The local manufacturers are going through a crucial period as they have to pay the excise duty and other taxes and also face tough competition from cheap fabric, imported from China.”

Recently the powerloom sector had raised concerns about how business was low and factories were gradually shutting to make way for embroidery units.

A delegate from Surat Diamond Association demanded that a special rate of 2 per cent tax be fixed for the industry as it is export-oriented.

Southern Gujarat Hotel and Restaurant Association president Sanat Relia demanded that the restaurants, whose annual turnover is below Rs 50 lakh, be allowed to pay the composition charge (without input credit) at 2.5 per cent and those above at 5 per cent.

Adhia explained that for textiles, “if the total amount of commission or service charge exceeds Rs 20 lakh per annum, then the firm will have to pay the GST.”

“Our motive is that genuine business should be done in the country and see that genuine businessmen should not get cheated by unethical players as they damage the economy. It is our duty to identify them and remove them from the market,” the revenue secretary said.

He added: “The Federal Reserve Bank of America had carried out a study with the help of two economists on the GST and it states that the GDP of Indian economy will rise from current growth by an additional 4.2 per cent. Our economy will reach up to 12 per cent in the coming days. How prosperous India and Indians will be then?”

On e-way permit, he said that rules had been drafted but was open for suggestions. “We are coming up with a small mobile application wherein if you feed details, a unique identification number automatically gets generated for the transaction. The number would be given to the driver or transporter through SMS. We have found that 33 per cent time is wasted at check posts between states. All these obstacles will be overcome. During transportation of consignments between states, the concerned party has to pay GST and the truck driver will not have to waste time at check posts,” he said.