GST rates need complete overhaul: Revenue Secretary Hasmukh Adhia
What's the story
Revenue Secretary Hasmukh Adhia said GST rates need a complete overhaul, given that the new regime is firmly implemented.
He said harmonization and complete review has to be done to reduce the burden on small/medium businesses.
Adhia added the GST, which unifies over a dozen central and state levies like excise duty, service-tax, and VAT, would take a year to stabilize.
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Information
Reducing burden on businesses and common man
Adhia said under GST, some items in the same chapter are divided; so, harmonization of items chapter-wise, and wherever there is burden on small/medium businesses or the common man is required. He added there would be a better compliance if they bring down the burden.
Overhauling
Fitment committee to submit suggestions to GST Council
Hasmukh Adhia said overhauling requires calculation by the fitment committee that decides which items need rate revisions under GST.
GST Council has already approved an approach paper for such items; however, it can make changes and deviate from the approach paper.
The 23rd GST Council Meeting, chaired by Arun Jaitley and comprising all state representatives, would be held on 10 November in Guwahati.
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A complete review has to be done: Adhia
Adhia said: "We are very keen to do it (revising tax slabs) as early as possible, it depends on how much time the fitment committee takes to work on it. They need data (and have to) calculate revenue loss. They need various comparisons."
Time
GST system will take time to stabilize
Adhia said GST is something very new and it will take time to stabilize.
Giving the example of VAT (Value-Added Tax) introduction in 2005, he said there was opposition for a year as people didn't understand what it was.
The VAT, a tax on sale/purchase of goods within a state was levied by respective state governments. It replaced the previous Sales Tax system.
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A new system for everybody
Adhia said: "There has been a complete overhauling of tax system in GST so one year is needed." Subsuming more than a dozen taxes, the GST has transformed India into a single market for the seamless movement of goods and services.
Major Overhaul
GST Council reworks provisions to make regime industry-friendly
On 6 October, GST Council announced several revisions in the GST structure to address the tax system's teething troubles and compliance problems.
Small/medium enterprises made representations to the Council about the problems they faced.
The composition scheme turnover threshold has been increased to Rs. 1cr from Rs. 75L.
Small businesses (up to Rs. 1.5cr-turnover) were allowed to file quarterly returns instead of monthly returns.