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Services spared from extra tax during GST transition

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Delhi: The government on Tuesday said that the services sector will not be charged extra tax levied during the transitional period of the implementation of the goods and services tax (GST).
According to Rashmi Varma, special secretary, revenue, in the finance ministry, the one percent additional tax which is proposed to be levied during the transitional period of GST for two years will not impact services sector.

Verma, who was addressing the CII (Confederation of Indian Industry) Big Picture summit held here, elaborated that the additional levy will only be charged on the manufacturing sector.

The special secretary assured the media and entertainment (M&E) industry that the soon-to-be-implemented GST will be a game changer for the sector.

“Multiplicity of tax will go in one stroke. Entertainment, services and goods tax both at the Centre and states will be built into one — making compliance hassle free.”

However, the entertainment tax levied by local authorities like panchayats and municipalities will remain, she clarified.

“But, the share of such taxes to the total tax collected would be insignificant. Close to 99 percent of the taxes levied under the Centre and state dispensation would be merged with GST,” Verma said.

She assured the industry that under the GST regime, goods and services would be taxed uniformly.

The industry had voiced concerns over the lack of definitional clarity between goods and services, tangible and intangible goods.

Verma said all industries would be eligible to take credit under GST to set off against other tax liabilities.

“We are working on the transition roadmap, so that the change-over hiccups will be minimal and if there are any concerns remaining, the GST Council, which will be set up after the constitutional amendment, will look into it and take corrective actions,” she said.

Besides the ongoing process, the top finance ministry official mentioned that a fourth draft proposal on returns will be put in public domain to seek the views of all stakeholders.

The ministry plans to place a model legislation in public domain by mid-November. It also plans to hold regional workshops to elicit the views of the industry associations at the apex and state levels.

Verma said there would not be any concessions or incentives schemes under the GST regime.

“The states which want to continue with the fiscal concessions for specified sectors could do so, setting apart resources from their own kitty,” she said.

She added that no final decision has been taken on GST rate.

“The slabs under the GST would be minimal – one low and the other high and in between a standard slab – to keep the cascading effect to the minimal and easy to comply.”

“It is not in the sinful list, I can assure you that,” Verma added

(IANS)

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Finance Minister Appeals To Insist On Bill For Every Purchase

the government would start a three-digit consumer helpline number

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Finance Minister Appeals To Insist On Bill For Every Purchase
Finance Minister Appeals To Insist On Bill For Every Purchase. Flickr

Seeking consumers’ participation in curbing tax evasion, Finance Minister Piyush Goyal on the eve of completion of one year of GST rollout on Saturday appealed to them to insist on bill for every purchase saying it would help the government check evasion and reduce tax rate on each item by as much as 4-5 per cent. He further said the government would start a three-digit consumer helpline number to enable them to lodge complaint against erring traders or any other kind of tax evasion.

Touted as the biggest indirect tax reform since Independence, the Goods and Services Tax (GST) was rolled out last year on July 1. “I want to appeal to the people that they should demand a bill whenever they go to purchase any goods. If you start asking for a bill…if there’s awareness about this, then we can reduce rates by 4-5 per cent for every item (under GST),” Goyal told reporters here.

He said if any shop says that they will sell at a lower price if the consumer does not demand a bill, then the consumer should immediately file a complaint, he said. “We will soon provide a three-digit simple number which will work as a call centre where customers can complain. We will ensure full confidentiality of the complainant,” Goyal said. The endeavour will be to start the helpline number within 15-20 days, he said. A nationwide campaign too could be launched for creating consumer awareness about demanding bills for purchases made. “If everyone starts giving bill then competition will be on quality and customer service and not on ability to cheat the system,” Goyal said. He further said the government wants to reduce the burden of taxation on consumers but revenue needs to increase and support of states is also needed to cut rates where it is essential.

bills
bills owing. Flickr

With formalisation of economy, the government will have more elbow room to reduce rates, he said.

Also read: Out of Total Tax Fine of $15 billion, Apple Pays $1.77 billion to Irish Government

Goyal also assured small businesses if they face any trouble, then they can write to him and it would be resolved. He said amendments would be introduced to the GST law in monsoon session to increase composition scheme threshold from the current Rs 1 crore. The GST Council had last year decided to increase the threshold to Rs 1.5 crore and also decided to amend the law to increase the statutory threshold to Rs 2 crore. (IANS)

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