GST - FICCI Wants GST to be administered by one authority alone and not by two
A delegation from FICCI met the Empowered Committee of State Finance Ministers yesterday to discuss GST related matters.
FICCI suggested:
++ Goods fully exempted from the levy of excise duty and VAT by all the states should be categorised as exempted goods in the GST regime as well.
++ Goods chargeable to nil rate of excise duty but charged to VAT in most of the States could be suggested for levying a merit rate of GST.
++ All other goods (except jewellery and demerit goods) could be subjected to the standard rate.
++ Clarity on the current exemption schemes (area based exemptions, incentives under State policies) is required because the transition provisions prescribed under the draft law do not provide for the treatment of the said exemptions / incentives.
++ In order to provide adequate time to the trade and industry to prepare itself for a hassle free roll out of the GST regime, a minimum of 6 months' time from the date of the adoption of the GST Law by the GST Council should be permitted. Additional time would be required in case the GST Law as passed by the Parliament or the State legislatures is significantly different from the one adopted by the GST Council.
++ As per present indications, there will be two separate authorities for administering the GST, one of the Central Government for the CGST / IGST and the other of the States for the SGST. Further, the draft Model GST Law contains separate and disparate provisions relating to administering the above levies by these authorities. GST is a path breaking tax reform and the opportunity it therefore provides for a thorough overhaul of the tax administration should not be missed. Consequently, GST be administered by one authority alone and not by two.
++ Given the stated intent of the Government to bring about a taxpayer friendly tax administration, with a non-adversarial relationship between the taxpayer and the tax authorities, it was hoped that the draft Model GST Law would contain path breaking provisions to bring about this desired outcome, couched in language which would further this objective. Instead, the Model Law has incorporated the extant provisions of the present Central Excise law at the Centre as also the present VAT laws of the States besides also containing several provisions which are even more rigorous than at present and worded in stringent language, such as the presumption of guilt and wrongdoing on the part of the taxpayer, in various situations which are enumerated in the Model Law.
++ In the draft GST law, wide powers have been given to Central/State Governments to prescribe transport documents for transportation of goods. Standardization in requirement of transport documents (such as consignment note, lorry receipt, delivery challan, GRN etc.) should be aimed under GST across all the States. No specific document should be required for inter-state movement of goods.
++ Valuation provisions under the draft GST laws are reflection of valuation laws of a single point tax like excise duty. Wide powers have been given under the draft GST laws to authorities to reject declared transaction value. The valuation provisions under GST (a transaction based tax) should give primacy to actual transaction value.
++ The manner of resolving the mismatch between the details of outward and inward supplies uploaded on the GST Network (GSTN) is unfair to the recipients of such supplies. The draft provides that a buyer shall not be entitled to claim an input tax credit (ITC) unless the tax charged in respect of such supply has been paid by the seller. Shifting the onus on the buyer to check whether the seller has paid goods and service tax (GST) is the most onerous provisions in the draft Model GST Law.
++ As a principle, once non-compliance is detected, it is the responsibility of the Tax Administration to proceed against non-compliant entities. This responsibility should not be fastened on the recipients.
The West Bengal Finance Minister is the current head of the Empowered Committee of State Finance Ministers and West Bengal has not yet ratified the Constitution Amendment Bill.