On the eve of the 23rd meeting of the Goods and Services Tax (GST) Council in Guwahati, traders’ associations and exporter bodies are keenly awaiting decisions related to items in the 28% tax bracket, the monthly filing of returns, the reverse charge mechanism, the e-way bill system, and job work rates.
“Tomorrow’s meeting is going to be crucial and the trading community across the country is anxiously waiting for some great relief so that GST can be made a simplified and rationalised tax structure,” Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) told The Hindu . “As per my expectations, the rate list of 28% will be slashed down greatly.
“Time and again, for the last two months, we have been demanding a total review of the 28% slab so that it can restructured to include only luxury and negative goods,” Mr. Khandelwal added. “We are hopeful that this will happen tomorrow.”
At the same time, exporter body Federation of Indian Export Organisations (FIEO) expects the reduction in rates on specific items, namely handicrafts and leather products.
“As far as exporters’ interests are concerned, there are a few products, especially in the handicraft and leather sectors, where the [GST] rate is pretty high,” Ajay Sahai, Director General and CEO of FIEO said. “There are some products in handicrafts where the GST rate is 28% — for example, stone handicrafts and some of the metal handicrafts — while for many of the handicrafts, the GST Council has reduced the rate. We expect that on these products also, the rate will be brought down; so is the same for finished leather and unprocessed leather.”
CAIT has also demanded that the return filing process be made quarterly instead of the current monthly system for businesses with a turnover of Rs 1.5 crore a year or more.
Both domestic-oriented businesses and exporters agree that the reverse charge mechanism must be done away with. Under the reverse charge mechanism, the liability to pay tax is on the recipient of the supply of goods or services instead of the supplier in certain notified categories of supply. In such cases, the supplier cannot avail of input tax credits.
“Regarding the reverse charge mechanism, where if you are taking supply from an unregistered dealer, you have to pay GST on a reverse charge basis, which has been suspended till March 31, we have demanded that this be dropped completely,” Mr Sahai added. “This is heavily tilted against small traders and small manufacturers. I don’t know how it is expected that they be competitive if they do not get input tax credit and the purchaser has to pay tax.”
The traders bodies have also called for a suspension of the e-waybills system—which is meant to facilitate the transport of goods across state borders—and has said that the system should be revisited only after more consultations are made after the confusion around GST settles down.
The GST Council is also expected to take a decision on extending the threshold limit for the Composition Scheme from the current Rs 1 crore turnover a year to Rs 1.5 crore.
The Federation of Hotels & Restaurants Association of India on Thursday reportedly said that it had met GST Council members, including state finance ministers, to urge them towards a rationalisation of tax rates for the industry.
The association is pushing for a reduction of GST to 12% on all categories of restaurants, instead of the current system where restaurants with no AC and no bar attract a GST of 12%, while all others are taxed at 18%.
Meanwhile, Ripun Bora, President of the Assam Pradesh Congress Committee, along with other state leaders such as former Chief Minister Tarun Gogoi was allegedly arrested in Guwahati following a protest they held at Radisson Blu hotel, the venue of the GST Council meeting to be held on Friday.
“Today I am arrested along with Tarun Gogoi Ex cm, Debabarta Saikia, Rakibul Hussain leader , Dy. leader CLP and many Congress workers and leaders for protesting against reckless GST and demanding rollback of GST in front of Redisson Blue Hotel the venue for GST council meeting,” Mr Bora tweeted at 12.53 PM on Thursday.
EOM
