The city traders’ body has demanded the government to keep the upper limit of the proposed Goods and Services Tax (GST) at 18 per cent to contain inflation.
“We have calculated that the 18 per cent tax rate of GST will be able to keep inflation in control. The government shall fix this limit of GST till the economy is established,” said Praveen Khandelwal, a city-based trader who is also the general secretary of Confederation of All India Traders (CAIT). “The finalisation of tax rate depends upon the classification of goods and services under exempted category and also under a nominal tax rate which may be one per cent,” he added. Notably, a trader is required to pay around 14 per cent excise duty and around 12-13 per cent of service tax on such items including the surcharges. “GST will combine it into one slab. Further, it has provisions of ‘input credit’ in case of services as well by which traders can claim refund,” he added. The president of CAIT B C Bhartia, however, assessed some inflation in initial days. “In initial days, there might be some inflation which will subside once the taxation system is duly adopted in its letter and spirit,” said Bhartia. Both the leaders of the traders’ body said that for doing any business of trading in goods, support of service sector is required since they both complement each other. The traders highlighted that the biggest challenge before the government would be to bring the traders on a digital platform as majority of them don’t use computer and internet.
“Around 70 per cent traders are yet to adopt technology and the government must draw a time-bound mechanism to equip them with computers and impart necessary training for computer operations and this can be done through Digital India and Skill India programmes of the government but with involvement and cooperation of Trade Federations and Associations,” added Khandelwal and Bhartia.