GST rate structure needs complete overhaul: Govt
New Delhi: With the new GST regime firmly entrenched, a complete overhaul of the tax rates is now required to reduce the burden on small and medium businesses, Revenue Secretary Hasmukh Adhia has said.
In an interview, Adhia said the Goods and Services Tax (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.
Nearly four months since its introduction, the new indirect tax threw up teething troubles and compliance issues, which the GST Council – the highest decision-making body of the new regime – has addressed through several rounds of changes.
To ease hassles facing medium and small 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 had rationalised rates on over 100 commodities and made refund process more manageable for exporters.
"There is a complete overhauling that is required... it is possible that some items in the same chapter are divided.
So ideally we should do harmonisation of items chapter wise, and wherever we find there is a significant burden on small and medium businesses and the common man, we have to bring them down (and) then only there will be a better compliance, a better acceptability of GST," Adhia said.
He, however, said the overhauling would require some calculations by the fitment committee, which will decide which items need a rationalisation of the rate under the GST regime which kicked in from July 1. The GST Council has already cleared an approach paper for items to be taken up for rationalisation but it is not binding, and the council can always make a deviation from the approach paper.
"So the committee will work on it for a month, and then we will try and bring something as early as in Guwahati or later on," Adhia said.
The 23rd meeting of the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising of representatives of all states, will be held in Guwahati on November 10.
The GST Council has reworked various provisions of the new indirect tax regime which was introduced from July 1 to make it more industry-friendly.