Mere four months into rollout of the Goods and Services Tax, Revenue Secretary Hasmukh Adhia said that some rejig in the rate structure may be required to reduce burden on small and medium businesses. Speaking in an interview, he said, “There is need for some rejig in rates... it is possible that some items in the same chapter are divided. There is a need for harmonisation of items chapter wise, and wherever we find there is a big burden on small and medium businesses and on the common man, if we bring them down, there will be a better compliance.”
He said the rejig would require some calculations by the fitment committee which will decide which items need a rationalisation of rate under the GST regime. Adhia said the committee will bring its suggestions to the Council soon. “We are very keen to do it as early as possible, it depends on how much time the fitment committee takes to work on it. They need data, calculate revenue loss. They need various comparisons. But harmonisation has to be done,” he said. He added that GST, which amalgamates more than a dozen central and state levies like excise duty, service tax and VAT, will take about a year to stabilise. When asked how much time it would take to stabilise the GST system, Adhia said, “It will take one year because it is a new system for everybody... There has been a complete overhauling of tax system in GST so one year is needed. If you see the experience of VAT, there was opposition for one year. People were on the streets because nobody knew what VAT is, the last fellow was only paying sales tax. It was more opposition that time than this.”
Chaired by Finance Minister Arun Jaitley, the GST Council comprising of representatives of all states, is scheduled to hold its 23rd meeting in Guwahati on November 10. Jaitley has said the council will wait for revenue trends to emerge, but some rationalisation is required and an exercise initiated.
