FICCI for bringing down GST rate to a uniform level gradually
August, 19th 2011
Ahead of the meeting of the State Finance Ministers on GST here on Friday with the Finance Minister Pranab Mukherjee, industry body FICCI on Thursday said there is a need to bring down rates under the proposed indirect tax regime to a uniform level of 12 per cent.
The proposed rates of 20 per cent, 16 per cent and 12 per cent are good enough to begin with, but these would need to be gradually brought down to a uniform level of 12 per cent, FICCI president Harsh Mariwala told reporters in New Delhi.
The Empowered Committee of State Finance Ministers is meeting on Friday to discuss ways to take forward the proposed tax system, which will subsume most of the existing indirect taxes. The finance ministers of the states will also hold a meeting with Mr. Mukherjee later in the day.
Mr. Mariwala also supported the need for a broad-based GST that encompasses all sectors of the economy within its ambit.
He said the proposed exclusion of certain sectors would be detrimental for the sectors consuming these goods as they form an integral part of Indias industrial and commercial activities.
The proposed exclusion of sectors such as petroleum, natural gas, real estate, alcohol and power generation...would result in significant adverse implications for the sectors which consume these goods, and thereby cause tax cascading and high costs in the economy, Mr. Mariwala said.
The industry chamber also called for all central taxes and state taxes to be subsumed under Central GST and State GST respectively.
We will come out with a white paper on GST very soon, Mr. Mariwala said.
The co-chairman of the FICCI Task Force on GST Sachin Menon said the proposed tax regime could play a role in tackling issues related to corruption and the menace of black money, at a time when the country is witnessing a big debate of such issues.
GST is a perfect platform to unearth black money gradually... If somebody has to evade taxes under GST, buyer and seller both have to connive. Therefore, avenues for tax evasion will be much lesser, Mr. Menon said.
The Empowered Committee, under its new chief Sushil Modi, will meet here on Friday to discuss various issues related to the roll out of the ambitious indirect tax regime.
The Centre had introduced a Constitution Amendment Bill in the Lok Sabha in the last Budget Session to pave the way for implementation of the new indirect tax regime.
The Bill, however, is being opposed by BJP-ruled states as well as the BSP-ruled Uttar Pradesh government, saying its provisions would curtail their power to levy taxes.