Other items that enjoyed a rate cut include leather
clothing, cookers, stoves, aftershave, deodorant,
detergent and washing power, razors and blades, cutlery,
storage water heater, batteries, goggles, wristwatches,
and mattresses.
Only 50 items currently remain in the 28 per cent
bracket, including ACs, refrigerators, and cameras.
“It is important that policymakers revisit their
definition of ‘luxury items’, considering standards of
living in today’s world,” said the report.
GST was implemented on July 1 and has undergone a slew
of changes to make it industry-friendly. Besides cutting
rates, the return filing has been simplified and
compliance burden eased over the months.
“There is hope that GST 2.0, which is at the works
currently, will be a much improved version compared to
the first one,” said Pratik Jain, partner, PwC India.
PwC further suggested aligning the tax with global
trends, bringing clarity by removing legal loopholes and
the need for simplification of compliance-related
requirements such as a letter of undertaking in the case
of GST-free exports.
The report pointed out that GST suffers due to
ambiguities and loopholes that came to light only after
its implementation.
Some of its provisions seem to contradict the objectives
with which these were brought into play, it added. For
instance, goods imported into a Customs bonded warehouse
and subsequently sold to a customer in the domestic
tariff Area attracts dual levy of tax. “This appears
unintentional, but it is imperative that necessary
changes in law are made soon,” it said.
“It is expected that the GST Council will bring taxation
of transport and logistics on a par with global
practices, i.e., zero rate export freight on an ongoing
basis along with incidental services, clarity on place
of supply provisions, stabilise GST Network (GSTN), and
simplify GST compliance, allowing this sector to use a
single number for e-way bills on an all-India basis,”
said Varun Dhawan, head of taxes, India, Deutsche Post
DHL Group.
Hazy rules on anti-profiteering is another concern.
There is lack of clarity on whether a company can choose
not to reduce the price of a particular product and
instead offer an increased quantity or freebies. “While
transitioning to the GST regime, various costs have been
incurred by companies. There is still no clarity on
whether such costs can be taken into account while
computing a revised, anti-profiteering and tax compliant
rate,” it said.
According to the anti-profiteering rules under GST,
“Benefits of input tax credit should have been passed on
to the recipient by way of commensurate reduction in
prices.” The government has received about 100
anti-profiteering complaints so far and about 63 are
currently being investigated by Directorate General of
Safeguards.
It further said that there was very little flexibility
offered to users of GSTN. “For instance, there is no
option to set off excess tax paid by an entity holding
the same permanent account number under one registration
vis-à-vis another registration in a different state. The
network does not allow filing of returns for a
subsequent period till the previous period returns are
filed and the penalty, if any, is paid,” it said. The
report said that resolution of these and implementation
of changes on a simple and easy-to-use online portal is
imperative for GST’s success.
Source::: Business Standard,
dated 20/03/2018.