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The industry believes
that GST — the new tax structure proposed to streamline the movement of goods
across India with a single tax structure — will be a harsh blow to the MSMEs
(Micro, Small and Medium Enterprises), which are still recuperating from the
economic crisis.
Rupesh Shah, president of the Gujarat Chamber of Commerce and Industry (GCCI)
said the proposed threshold limit will be detrimental to MSMEs in Gujarat. “The
proposed tax structure and the move to bring the companies with turnover as low
as Rs 10 lakh under the regime will make it difficult for them to survive,” said
Shah.
He added that there are around 6 lakh MSMEs in the state of which around 90 per
cent will come under the proposed tax system.
He said: “The Small Scale Industry, which is making Rs 1 lakh per month, will
also be covered under the new tax regime. This means they will have to file
Returns and do other formalities. Whether they are equipped to do this is
another major problem.”
The industry is also of the view that there is a need to have different brackets
of GST for essential commodities and the high-end lifestyle products.
“The industry is of the opinion that all commodities should not be taxed at the
same rate. Certain commodities are to be used by the very niche market, such as
automobiles and other lifestyle products. There has to be different taxation for
items of necessity,” said Shah.
The Gujarat government has been saying that they are not averse to the GST
regime but have certain problem regarding sharing the revenue with the Centre.
As of now the expert committee on GST has decided that the Centre and the state
will have equal share of 8 per cent each on the 16 per cent GST being proposed.
Industries Minister Saurabh Patel, who is also a member of the finance committee
on GST from Gujarat, was unavailable for comments.
He had earlier said that the state will implement GST with some changes,
especially on revenue sharing with the Centre.
Source:
Indian Express, India, dated
09/02/2010
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