The Confederation of Indian Industry (CII) in a release issued here today, noted that the regular meetings of the GST Council are continuously framing a better and smoother working of the landmark Goods and Services Tax (GST). “Especially noteworthy is the continuous work being carried out to bring about convergence of GST to 2 to 3 rates, which is the most transformative aspect of the tax reform” said Mr Chandrajit Banerjee, Director General, CII.
“Industry appreciates that the GST Council under the leadership of Finance Minister is responding to its needs on a real-time basis, which is bringing much comfort to businesses. At a time when stronger demand can speed up growth, the reduction in tax rates for items used by different sections of society can be expected to impart a necessary boost to the economy,” noted Mr Banerjee.
With a rapid solution-oriented approach, the GST Council has ensured that industry’s confidence in the system goes from strength to strength. Through its 31 meetings held so far, the Council has taken up numerous issues relating to tax structure as well as ease of doing business, which has greatly bolstered its smooth implementation.
According to CII, demand for consumer durables such as 32-inch televisions, digital cameras and video cameras will rise due to the tax reduction from 28% to 18%. The index of industrial production for consumer durables has led the growth of the manufacturing sector this year, recording 9.4% for April-October 2018.
The reduction of tax in items relating to pulleys, transmission shafts and cranks and gear boxes is welcomed by the user industries and would also lower prices of the final products, observed CII.
The clarification of GST rates on solar power generating plants and other renewable energy products is a relief for the sector, said CII. This would avoid litigation and promote domestic industry.
Additionally, an important sector of media and entertainment will greatly gain from the reduction of tax on video game consoles and related products as well as cinema ticket rate reduction. This was a request from the media and entertainment sector, which is targeting revenues of $100 billion in the next 4-5 years.
Apart from the tax reduction, the GST Council in its meeting on 22nd December also took up important process issues. The 31st meeting of the Council has addressed several areas which add to ease of doing business and resolve procedural matters, added the CII release.
CII said that the creation of centralized appellate authority for advance ruling will bring in uniformity in rulings across all states and greatly lower the chances of litigation. Currently, state advance ruling authorities in each state may offer different interpretations on complex issues.
Further, adoption of single cash ledger for each tax can help reduce compliance complications. The single authority for disbursement of refund amount either by the Central Government or the State Governments is to be taken up on a pilot basis, and would speed up refunds of input tax credit when fully implemented, said the CII statement.
The GST Council has referred the important issue of extending the composition scheme to the services sector as for the goods sector. According to CII, when implemented, this would bring relief to small service sector businesses and bring parity between goods and services. Requiring the payment of interest to cash liability only under GST is a great relief and hailed widely by industry.
CII lauded the approach of the GST Council to interact with industry and seek inputs while heeding the needs of businesses. CII has been bringing various issues to the notice of the Council from time to time and appreciates that these have been factored into its decisions.
“The GST is the most potent instrument for economic growth of recent years, and we look forward to working with the GST Council on a comprehensive, simple and stable tax structure,” said the CII Director General.
23 December 2018