Andhra Pradesh - Call for uniform GST dispute resolution mechanism      

With the Union Government preparing to roll out nation-wide Goods and Service Tax (GST) beginning October 1, 2010, the Federation of Andhra Pradesh Chambers of Commerce and Industry (Fapcci) has called for the establishment of a unified dispute resolution mechanism and common tax rates across the country.

In a memorandum to Mr Asuthosh Misra, Principal Secretary (Revenue, Government of Andhra Pradesh), Mr Nitin K. Parekh, Chairman (Trade, Commerce, Retailing) of Fapcci, said the absence of uniformity would make free flow of goods and services across States difficult.

“We cannot achieve the goal of national common market in the absence of uniformity,” he said.

For a meaningful reform of the indirect tax system, the Government should strive for complete harmonisation of the Central and State components of GST. Or, the dual GST had the potential to become a tax nightmare to the dealers and would result in avoidable litigation and loss of time and revenues, he said in the representation to the State Government.

While welcoming the initiative to prune the list of tax exemptions (on commodities), the Fapcci, however, wanted the Government to continue the exemptions on foodgrains.

Consumer organisations

Asking the Government to take into confidence the consumer organisations as it prepared the GST structure, Mr Nitin Parekh said the Government should not only take into consideration the consumers' capacity to pay but it should factor in their willingness to pay a particular rate of tax.

“This would help increase the compliance levels significantly,” he said.

He reiterated his stand that the Government should go for a simultaneous launch of direct and indirect tax reforms. Also, there should be a lag of at least six months after the preparation of the draft bills to let all the stakeholders convey their suggestions. And, the trade and industry should be given a lead period of six months after notifying the Act for understanding and incorporating its salient features into their business strategies.

Calling for a legitimate and well laid-out demarcation of powers between the State and Central Tax authorities, he said dealers should not be forced to deal with multiple authorities as it would significantly increase compliance costs.

Source: The Hindu BusinessLine, India, dated 26/01/2010