Fourteen state legislatures will approve their respective State Goods and Services Tax (SGST) law by mid-May, according to revenue secretary Hasmukh Adhia.
Addressing a GST Conclave here on Tuesday, he said all states were expected to pass their SGST law by May-end to ensure that the GST regime was rolled out by July .
Bihar and Telengana have already passed the SGST law.Rajasthan is likely to pass it on Wednesday.
Mr Adhia said the new regime would not have any inflationary impact on the economy since the country would be shifting from multiple-level taxes that had a cascading effect to the GST that would do away with such a scenario and aid in easing inflation.
‘Prices to fall’
Allaying fears that consumers would have to pay more for goods and services under the GST regime due to an increase in tax, Mr. Adhia said that in the GST regime prices of most items would fall and those of services might stay at the same level. “Around 60% of the income of the Centre and States comes from items that attract 12.5% excise duty and 14% value added tax. There will be a likely reduction on the tax on these items under GST,” he said. Also, though a majority of the services would bsee service tax going up to 18% in the GST regime from the current 15%, most services would get the benefit of input tax credit on purchases, and, therefore, the overall tax incidence would stay the same, he said. However, there could be a marginal increase of tax for some services, he added. All food grains and absolute essential items for people were likely to be exempted from GST, he said. Therefore, GST would not have an inflationary impact. Mr Adhia, however, said the GST Council would take a call on it.
The GST Council’s next meeting is slated for May 18-19, and is expected to discuss fitment of commodities in the four-tier tax structure under GST.
Under the GST regime, every registered person would be assigned a compliance rating on the basis of the record of compliance in respect of specified parameters. Such ratings would be made public. A prospective client would be able to see a supplier’s compliance rating. This would help in deciding whether to deal with the supplier concerned or not, according to Prakash Kumar,CEO of GST Network (company providing IT infrastructure and services for implementation of GST). He said it would help in healthy competition among taxable persons. Mr Adhia said GSTN had shortlisted 34 companies to be empanelled as GST Suvidha Provider (GSP).
GSP will develop applications for taxpayers for quick monitoring of GST compliance activities, and provide role-based access to divide various GST related activities like uploading invoice and filing returns among different set of users. Mr. Adhia said GSTN will shortly appoint more startups and firms to make simple and easy software solution for filing returns, adding that there will be helplines attending to queries in national and vernacular languages.