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Various tax slabs under GST worry traders: CAIT

Various tax slabs under GST worry traders: CAIT

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Goods & Service Tax

Classification of different items under various tax slabs of GST has created an environment of anxiety and concern among the trading community across the country, Confederation of All India Traders said.

Various verticals of retail trade are demanding lower tax on items being dealt by them since they have been categorised under higher tax slab in comparison to tax slab of current VAT tax regime, CAIT said.

As per an analysis, 1,211 goods and 36 services have been so far classified under GST out of which nearly 50 per cent goods have been placed under 18 per cent rate; 14 per cent under 5 per cent rate; 17 per cent under 12 per cent rate and 19 per cent under 28 per cent rate, CAIT said in a statement.

In view of growing discontent about proposed GST rates, CAIT has urged the government to revisit the rate schedule. “The wider impact of the classification of items under different tax slabs needs to be gauged very cautiously since under GST not only the taxes paid on goods but even the taxes paid on the services will be eligible for input tax credit,” CAIT said.

Besides, taxes paid on inter-state purchases of goods or availing services will also be eligible for input tax credit, it added. “Hitherto, both these advantages were not available under VAT tax regime. Therefore, impact on the prices of commodities will have to be drawn after calculating advantages of input tax credit,” CAIT said.

Source :http://www.moneycontrol.com/news/business/economy/various-tax-slabs-under-gst-worry-traders-cait-2291089.html
CAIT seeks exemption for MSMEs from input credit under GST

CAIT seeks exemption for MSMEs from input credit under GST

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CAIT

The Confederation of All-India Traders (CAIT) today raised their concern over the GST clause which links availability of input tax credit to payment of tax by their suppliers.

If availability of input tax credit is linked to tax payment by their suppliers, it will worsen the situation of small businesses, CAIT said in a statement and pointed out that this is despite the fact that they fully support GST, which is likely to come to force since July 1.

Under the GST law, input credit against taxes paid by the purchaser can be availed of only if the seller deposits the tax. In the event of non-compliance at the end of seller, it is the purchaser who will be denied input credit.

 Over 6 million businesses are due to fall under the GST net and most of them are MSMEs. These businesses suffer from uneven cash flows but are largely compliant, claimed the association.

If availability of input tax credit is linked to payment of tax by their suppliers, it will worsen the situation of these small businesses, the CAIT statement said.

“We are happy that the GST Council has cleared the way for the new law to get implemented. The trading community and other small businesses will benefit from the single tax regime undoubtedly,” Praveen Khandelwal, CAIT secretary general said.

“However, the provisions in the law to do with input tax credit availability if not corrected will be detrimental to their survival. Therefore on behalf of the entire traders, we urge the finance minister to remove this roadblock so that GST can be a great law for all,” he said.

Source:PTI