Calling the July 1 deadline for the rollout of goods and services tax (GST) as “impractical” and “undesirable”, former Finance Minister P Chidambaram has said that the deadline for implementing the indirect tax regime needs to be pushed back to October 1.
In an interview with The Indian Express, Chidambaram said the GST-related Bills are “imperfect” and could require amendments “within the next two years”. He, however, said that fitment of goods and services in the tax slabs under GST will hold the key to partly compensate for imperfections in the Bills.
“…it can be made less imperfect if you put 70 per cent of the goods and 70 per cent of the services in the rate of 18 per cent. And, if you manage to push 90 per cent of the goods and 90 per cent of the services in the modal rate of 18 per cent, it becomes even less imperfect,” he said.
Rushed introduction of the new tax regime, Chidambaram said, is heavily loaded against the country’s small and medium enterprises. “Businesses in tier-II and tier-III towns who only have a local accountant to handle their accounts and who are not yet completely familiar with electronic filing, I think, puts a huge burden upon them. And they will make mistakes. My further worry is when they make mistakes, the tax official descends on them and starts issuing notices and there will be a huge backlash against the trading community and the business community,” he said.