Industry unsure of lower burden

The first in a three-part series looks at how tax experts and industry executives think the reformed GST and the compliance procedures must look like

- NARAYANAN V, PRASANTA SAHU & MANU KAUSHIK Chennai/New Delhi, September 1

AHEAD OF THE GST Council's meeting on September 3-4, the question that lingers is whether the attempted changes in the Goods and Services Tax (GST) will help address the infirmities of the tax that was born eight years and two months ago, and to what extent.

There's also a fear among experts that the reformed GST could even end up no better than the current one, and may only redistribute the tax pangs among the taxpayers, without mitigating them at the aggregate level.

While the finance ministry's proposals to be considered by the GST Council have reportedly ironed out the key issue of "inverted duty" structure and the resultant accumulation of unusable tax credits with businesses to a large extent, experts are keeping their fingers crossed.

It may sound ironic that a host of industries including textiles & garments and pharmaceuticals are demanding that their outputs be taxed at a higher rate than what is presumed to be on the cards, and others like insurance insist that no exemption should be granted to them.

Rajiv Memani, president of Confederation of Indian Industry, says: "The government's efforts to correct the inverted duty structure will help, but concerns around possible accumulation of credits remain."