Industry pitches for 18% GST, exemptions for e-comm players

New Delhi, Aug 30 (PTI) India Inc today pressed forkeeping GST at a maximum 18 per cent while e-commerce firmssought to be kept out of the new regime, as state financeministers began consultations on deciding the rate for theunified nation-wide indirect tax. They also demanded relaxation in penal provisions whileadmitting that April 1, 2017, deadline will be tough as theyneed sufficient time to put in place the IT infrastructure. "A lot will depend on the timing of rules andnotifications. (About April 2017), it looks difficult," Ficcisaid. In its first meeting after Parliament cleared thelandmark Goods and Services Tax (GST) Bill earlier this month,the empowered committee of state finance ministers, headed byWest Bengal Finance Minister Amit Mitra, discussed the issuewith industry bodies, traders and chartered accountants. "The committee is taking (feedback) in an open andtransparent manner from the businesses of India, whether theyare big, medium or small. Many points were made looking at GSTfrom the other side — those who would be paying taxes — asagainst the government which would be collecting taxes," Mitrasaid after the meeting. According to India Inc, a reasonable rate will generateadequate tax buoyancy without fuelling inflation. The constitutional amendment mandates that at least halfof the 29 states and two Union Territories should ratify theBill for its rollout. So far, 13 states have approved thelegislation. Once implemented, the national tax will subsume indirectones like excise duty, service tax and VAT. At today’s meeting, online retailers submitted that theyonly provide a ‘platform’ to vendors and customers and do notmake money out of the sales. So, companies like Flipkart,Amazon India and Snapdeal are only ‘service providers’ to thevendors and are liable to pay GST only on service income. CII President Naushad Forbes said, "We believe a maximumrate of 18 per cent as the standard rate will be revenueneutral and ensure adequate tax buoyancy. Also, the Centre hasagreed to a full 5-year compensation for revenue loss tostates. So, 18 per cent rate will be more than adequate." Ficci on its part suggested that the standard rate shouldbe "reasonable" and be such that it checks inflation andtendency to evasion and ensures compliance. "Goods fully exempted from the levy of excise duty andVAT by all the states should be categorised as exempted goodsin the GST regime as well," it suggested. As for preparedness for the GST rollout, Forbes said CIIis committed to April 1 deadline and will do "everything wecan to ensure we stick to the deadline". "If we work towards that deadline and have clarity onsome of the provisions as early as possible, we can ensureour own IT systems are put in place quickly so that we can golive as early as possible," Forbes said. (MORE) PTI JDARD