Comm Min wants labour-intensive sectors to be kept out of GST

The Dollar Business Bureau

Ministry of Commerce and Industry on Tuesday asked the Goods and Services Tax (GST) Council to award ab-initio exemption to exports under the GST framework and keep labour-intensive industries such as cement, leather and plantation entirely out of the tax framework or put them under the lowest tax slab.

“For the leather sector, we want full exemption from the GST framework or to keep it in the lowest slab of tax. We strongly pitch on that as the sector is labour-intensive,” Commerce and Industry Minister Nirmala Sitharaman told reporters after attending the meeting of the council.

The Minister further said her ministry is in favour of ‘fair’ treatment under the regime of GST for the cement sector, where currently taxation is ‘very high’.

The cement sector is significant as the government is looking at programmes such as housing for all, in addition to modernising of roads, ports and other infrastructure.

Sitharaman 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 has not asked for exemptions but has raised concerns about the complete procedure of first paying duties and then seeks for refunds.

With regards to the plantation sector like coffee, Sitharaman said, that ideally, we want it to be completely kept out from the GST framework but in case it comes under the new tax regime, it should be put under the lowest slab.

On the question whether the ministry has asked for a cut in gold’s import duty, she said, “I have been speaking about the duty cut as gold is a crucial raw material in the gems and jewellery sector.”

She added that restriction-free import of gold also discourages the smuggling of the metal.

India is the second biggest gold consumer in the world after China and has imported 650 tonnes in the FY2015-16.