Tamil Nadu Chamber of Commerce and Industry has welcomed the GST council's recommendation to reduce GST rates on 178 items from 28% to 18%.
In a press release issued here on Saturday, its senior president S. Rethinavelu and president N. Jagatheesan said the reduction in the tax structure would go a long way in establishing a favourable climate for both small tax payers and end consumers.
Taxing 28% on super luxury goods and tobacco/gutka like commodities by the GST council was not going to affect the masses. However, bypassing the objective, when the number of goods of daily use were brought under the high tax, trade and industry were upset.
When the Revenue Neutral Rate (RNR) under GST was fixed as 18%, no product should attract GST more than that rate except super luxury goods. This anomaly would have been pointed out to the GST Council had there been a high power Trade Representatives Committee on GST with power to address the GST Council directly, Mr. Rethinavelu said.
Further there was perceptive anomaly in the fitment of goods under the other tax brackets of 18%, 12% and 5%. Essential goods were placed under 18% and 12% tax rates without realising the negative impact that would create in the growth of trade and industry.
The Chamber also welcomed the recommendation of the GST Council for reduction of GST rates for some goods from 18% to 12% and 12% to 5%. This has watered down the impairment caused to the pride of the progressive new tax system to a great extent.
The GST Council had realised the justification of demands and brought down the tax rate on furniture, ceramic tiles, slabs of marbles and granite, electronic weighing machines, articles of cement or concrete or stone and artificial stone from 28% to 18% and fly ash brick from 12% to 5% at par with clay bricks and for fixing uniform 5% tax on food served in AC and non AC restaurants. The reduction of tax on food served in restaurants would benefit those eating out.
Similarly, reduction of umpteen number of building materials would go a long way in the revival of construction industry. Having taken cognizance of the technical glitches faced by the small tax payers, the GST Council had rightly recommended for staggering of the due dates for uploading of various tax returns, the statement said.
Likewise, the complicated returns should also be simplified. Mr. Jagatheesan appreciated the GST Council for accepting the proposal of the Group of State Ministers for increasing the turnover limit for composing levy from the present ₹1 crore to ₹ 1.5 crore.
The Chamber hoped that at least now the government would constitute a High Level Trade Representatives Committee to voice their concern directly to GST Council for immediate redressal, the release added.
