Keep labour-intensive sectors out of GST ambit: Commerce Ministry

January 03, 2017 04:54 pm | Updated January 04, 2017 05:59 pm IST

A file photo of Commerce and Industry Minister Nirmala Sitharaman.

A file photo of Commerce and Industry Minister Nirmala Sitharaman.

Commerce and Industry Ministry today asked the GST Council to grant ab-initio exemption to exporters from the Goods and Services Tax and keep the labour-intensive sectors like leather and plantation completely out of the tax net or put them in lowest slab.

Commerce and Industry Minister Nirmala Sitharaman, after attending the meeting of the council, said the ministry officials gave presentation to the members.

“For the leather industry, we want complete exemption from the GST or keep them in the lowest slab. We made a strong pitch on that as the sector create jobs,” she told reporters here.

Ms. Sitharaman further said the ministry favoured “fair” look under the GST regime for the cement industry, where taxation is “very high currently".

The sector is important as the government is looking at schemes like housing for all, besides modernising road, port and other infrastructure.

She said that exporters should be given “ab-initio exemption” from the upcoming GST regime.

She asked the council “would you treat exporters in such a way that they do not have to pay upfront. Give them an ab-initio exemption and tax them when you have to tax.”

The ministry is not asking for exemptions, “but we raise concerns about the entire procedure” of paying duties first and then seeking refunds.

As regards the plantation sector such as coffee, the minister said: “Ideally, we would like to completely keep it out” from the GST but if at all it comes under the new indirect tax regime “it should be kept in the lowest slab".

Our Special Correspondent reports:

Commerce ministry favours reduction in gold import duty

The commerce ministry favours a reduction in import duty on gold. Commerce minister Nirmala Sitharaman told reporters that, “I have been talking about cutting the duty as gold is a critical raw material for gems and jewellery sector.”

Ms. Sitharaman added that making the imports free of curbs will also help discourage smuggling. The gems & jewellery sector have asked the government to bring down import duty on the yellow metal from the current 10 per cent to 5 per cent. India had imported around 650 tonnes of gold in 2015-16 and is the world’s second biggest gold consumer after China.

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