States ask industry to pass on tax benefits to consumers
The Dollar Business Bureau
As the Goods and Services Tax (GST) Bill gradually moves towards the stated deadline date, the state governments have asked the industry bodies to pass on the benefits of lower tax rates to the consumers.
The GST framework, once implemented, will considerably reduce the tax and compliance burden, enabling lower tax rates to the industry.
“Industry bodies should work with their members to ensure they pass on the benefits of lower tax rates to the consumers,” West Bengal Finance Minister Amit Mitra said.
As many as 14 states, including Mizoram, Sikkim and Telengana, have already cleared the bill in their respective legislatures, thereby strengthening the possibility of reaching the magical number 16 even before the deadline.
Although a formal consensus was achieved on the GST rate, various industry bodies have once again urged the government to keep a moderate GST tax rate with a less compliance burden on the new framework.
Kerala’s Finance Minister Thomas Isaac, too, asserted that the industry should also lower down their products’MRP (maximum retail price), since they will earn the maximum benefits. “The incidence of tax rates will come down from 30% to around 18-22%. Industry should proportionately reduce the MRP (maximum retail price) as they will be one of the biggest gainers.”
Meanwhile, the industry bodies and exporters urged the government to keep the GST rate at 18% and allow them time to get ready for the April 1, 2017 deadline.
“We believe a maximum rate of 18% as standard rate will be revenue neutral and ensure adequate tax buoyancy. If we work towards that deadline, and if have clarity on some of the provisions as early as possible, we can ensure that our own IT systems are put in place quickly so that we can go live as early as possible,” said Naushad Forbes.