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Today, the Maharashtra
Commissioner of Sales Tax, Sanjay Bhatia reiterated that
April 1, 2010 is in fact an over optimistic deadline for
the implementation of GST and perhaps we should be
aiming for April 1, 2011 instead.
He said that the white
paper proposes that the Central GST and State GST, that
is CGST and SGST, will be concurrently administered by
the centre and the state. Mr. Bhatia seems to believe
that this will lead to immense confusion because it
means that for every transaction, every dealer has to go
to two authorities. And in some way that sort of
subverts the intent of simplicity for which GST is being
put in place in the first place.
The second and more
fundamental concern he had was about the very structure
of GST itself. Now the empowered group of state finance
ministers in this white paper have proposed a multi rate
GST, which means that there will be a lower rate for
essential commodities and a regular rate for everything
else. According to the commissioner, this means that
states will have to put in place a very high rate for
regular items and this revenue neutral rate, or RNR will
simply end up being negative for the industry as a
whole.
Sanjay Bhatia,
Commissioner-Sales Tax, Maharashtra said, “Maharashtra
had been propagating a single rate because a single rate
would have come to about SGST 8% or roughly CGST 8% or
9%, so we could have about 16%. But if you have two
rates, let's say the lower rate is for the states 5% and
the upper rate - I have calculated my RNR, and it varies
from 13 to 15%. Plus 5%. So, if it is 15% or even 14%
and if centre also comes up with 14%, you can see what
is the upper rate.”
The industry and the
government have been giving their feedback to the
empowered group of state finance ministers on all these
issues. Hopefully they will be addressed before GST
finally becomes law.
Source :
Moneycontrol.com,
India,
dated
03/12/2009
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