P.D Sharma writes to FM regarding some aberration in GST
Author(s): City Air NewsPD Sharma. Ludhiana, May 30, 2015: P.D Sharma, President of Apex Chamber of Commerce & Industry (Punjab) has written a letter to the Union Finance Minister regarding some aberration in GST. In a statement here...
Ludhiana, May 30, 2015: P.D Sharma, President of Apex Chamber of Commerce & Industry (Punjab) has written a letter to the Union Finance Minister regarding some aberration in GST.
In a statement here today, he added he had stated in his letter that “Industry is watching the process of G.S.T implementation with baited breath. Despite full and sincere efforts to implement G.S.T in right spirit some major distortions/aberration are discernible.
Chief Economic Advisor has brought to light some very disturbing distortions in the G.S.T formulation. There is a provision to impose a 01% additional levy on goods moving across state boundaries. Unfortunately this additional 01% levy will be applicable in every state through which the goods pass. For instance if goods move from Gujarat to Tamil Nadu they have to cross at least 4 states. This means the levy will be 4% not 1%. This may be equivalent to importing goods from say Bangkok to Tamil Nadu.
It is learnt that two states mainly Gujarat and Maharashtra are insisting on this levy. Fortunately these are BJP ruled states and litter arm twisting can resolve the problem.
It is also worth noting that this 1% additional levy will be applicable on ‘Stock Transfer mode’ also.
Industry is very apprehensive about the G.S.T rate. Although you have indicated that rate will be less than 25% but no definite level is indicative. Industries wish that G.S.T rate should not go beyond 20%.
The entire framework of the proposed G.S.T law is to move from origin based taxation to destination based taxation. So this additional levy violates the basic tenet.
Our global business mainly depends upon the state of our currency vis-à-vis other tradable currencies & mainly Dollar and Euro. Industry will be grateful if currencies are kept possible at level facilitating exports and imports.
Chief Economic Advisor has also desired that the cost of capital should be less so that our competition may become comfortably competitive. Country is aware of your efforts in this regard but it has not been fruitful so far.”
Further, he has requested FM to kindly keep in mind the apprehensions of the industry before introducing G.S.T. Industry was badly hurt in the vat mode. Taking VAT refunds has become a very miserable affair. “It is expected that this sort of things will not appear in G.S.T”, he hoped.
Date:
Saturday, May 30, 2015