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Industry fears double tax incidence from proposed GST

Industry representatives and tax experts today expressed apprehensions that the proposed Goods and Services Tax regime would lay the burden of double taxation on the businesses.



 

"There would be a central tax and then the states would have their own taxes, laying a double incidence of tax on the business," said Advocate and tax expert J K Mittal at the PHD Chamber here.

The empowered group of state finance ministers has recommended dual structure of GST to the Centre, which is scheduled to be introduced from April 1, 2010. Under this scheme, there would be two chains of taxes - one at the central level and the other at the state level. The exact GST rate is, however, yet to be specified.

Earlier, certain quarters had expected that the Centre and states would impose GST on mutually exclusive list of goods and services, or the Centre would collect GST on behalf of states and then give it to them.

The finance ministry officials R Sekar and Vivek Johri were also present at the workshop organised by the chamber on Indirect Tax proposals put forth in the Budget 2008-09.

"The complex nature of the indirect taxes causes a lot of misconceptions about it", said Sekar adding "we are trying to make the indirect tax structure simpler so that it becomes more understandable like direct taxes".

Misconceptions also lead to a lot of litigations which need to reduced, he added.

"We are also in dialogue with Nasscom to find all kind of solutions to minimise litigations in the IT industry", Sekar said.

Meanwhile, the industry also raised concerns that getting tax refund from the department was very difficult, to which Vivek Johri also agreed.

Source : www.tradingmarkets.com,  dated 28/03/2008

 

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