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Last updated: 05 Jun, 2017  

gst-THMB.jpg 'Industry needs to gear up for GST transition from July 1'

Industry.9.3.jpg
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SME Times News Bureau | 05 Jun, 2017
With the Goods and Services Tax (GST) headed for a July 1 roll-out, industry leaders on Saturday said that the traders needed to gear up for the transition as it was unlikely that the new indirect tax regime would be postponed further.

"With assurance from state Finance Ministers and the Goods and Services Tax Network (GSTN) on the readiness of implementing GST ready from July 1, onus now lies on the industry to prepare. Adequate information is now available in the public domain vis-a-vis return formats and rules, thus it is critical for the industry to gear up their IT systems for meeting reporting requirements for filing returns on the GSTN portal," said Rajeev Dimri, Leader, Indirect Tax, BMR and Associates LLP.

Welcoming the agreement of states to roll-out GST from July 1, the Confederation of All India Traders (CAIT) said: "Now India is moving towards adoption of its largest indirect tax reform and to ensure its seamless implementation, we call upon the government to declare first nine months of GST implementation as trial period since still large number of traders and small businesses have yet to adopt computerisation."

"Much preparedness is required at the level of traders. Large number of traders are even unaware how technology will operate in business under GST regime. Obviously many challenges will occur which needs to be sorted out and as such trial period is required," said the confederation's Secretary General Praveen Khandelwal.

Allowing input credit on excise paid stock is a welcome step as it will restrict any likely inflation of prices, he said.

In its 15th meeting on Saturday, the GST Council completed the exercise of bringing all items under a 4-slab tax structure with gold to be taxed at 3 per cent.

Somasundaram PR, Managing Director, India, World Gold Council said: "The decision to apply 3 per cent GST on gold is an encouraging step in the current context to stabilise the industry and address the concerns of the millions employed in the industry.

"Together with customs duty of 10 per cent, the total tax on gold is still high and will continue to have an impact on the jewellery industry. This may be an opportune time for the government to cut the import duty."

However, transition to GST will be disruptive in the short-term, as the large unorganised segment and consumers adjusts to the new tax system, but in the longer-term it will streamline gold trade and boost value addition, he added.

Pratik Jain, Partner and Leader Indirect Tax, PwC, said: "Stage now seems set for July 1 rollout as government doesn't seem to be blinking amidst demand of deferment by couple of months."

"On rates, largely the principle of equivalence vis a vis current rates has been followed. However, there seems to be a disconnect between the calculations of current effective taxes done by the industry and the government, particularly on sectors like biscuits and footwear. It is important that the government relooks at this in the next meeting scheduled on June 11," he said.

The GST Council in Saturday's meeting classified yarn and cotton fabrics under 5 per cent.

"The rate of 5 per cent for cotton textiles is very progressive and will lead to the growth and development of the entire value chain," said Ujwal Lahoti, Chairman of the Cotton Textiles Export Promotion Council (TEXPROCIL).

"These low rates will not cast any additional burden on the sector and will ensure that India regains it's competitiveness in the textiles sector in world markett," he said.
 
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