GST glitches only to be expected–07.08.2017

Kota stone, for example, attracts the lowest 5% GST, compared to marble that attracts the highest rate. But kota stone makers want clarity on the classification to ensure that revenue authorities do not come calling on them. Recently, the government clarified that sarees, designer or embroidered, will be treated as fabric and not garment, and hence attract the lowest GST of 5%. Differential tax rates on the same kind of product should go.

The pricier products consumed by the well-off, will bear a higher tax burden, even if the rate of tax is the same as on a cheap alternative. A clean GST will ease administrative compliance. It would be useful to start an online forum for industry, especially small and medium enterprises, to raise their grievances, throw them open for public discussion, leading to resolution.

The rates for most products will go down now that excise duties and value-added tax have been subsumed in GST. Manufacturers and retailers must ensure that they stamp new prices on their pre-GST stock, instead of levying GST on top of the old maximum retail price. Surely, there is scope to converge GST rates once the tax base widens.

This piece appeared as an editorial opinion in the print edition of The Economic Times.
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via GST glitches only to be expected

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