By TIOL News Service

NEW DELHI, JULY 01, 2019: ON the occasion of second anniversary of GST, the FICCI has underlined that there is a need to undertake next level of reforms in the GST framework to enhance the ease of doing business in India in true sense.

FICCI Chairman Sandip Somany has said, "Both Central and State governments have taken industry’s concerns into consideration and resolved the same timely, which gives immense confidence to the business fraternity that we are on the right path. The way the GST Council and tax administrators have worked in the last two years, continuously aiming towards bringing simplification, rationalization of rates and broadening the base under GST regime is praiseworthy."

He stated that while the industry admits that the teething troubles related to GST implementation may have been resolved but the country needs to move forward to achieve the underlying objective of GST framework of creating a simplified indirect taxation system.

Mr. Somany highlighted some of the key areas that the Government should consider in the third year of GST implementation:

++ The most critical action would be to ensure 'one nation one tax’ by including all sectors under the ambit of GST. The first step should be immediate inclusion of GST @ 5% on natural gas. Further, till the time petroleum products are brought within GST net, suitable amendment should be brought in the excise and VAT laws to allow credit of GST paid on inputs/input services and capital goods against payment of excise duty/VAT to the manufacturers/suppliers of petroleum products.

++ The GST Council should now consider converging the existing band of GST rates to three in line with international standards. This will help to resolve interpretation issues regarding classification of goods and consequently reduce complexity and probability of disputes, eventually leading to simplification.

++ There is a need to consider 'Zero GST Rating’ for the healthcare sector. Since healthcare services are exempt under GST currently, healthcare providers cannot claim input tax credit, despite the increase in the rates of tax for inputs and input services that have increased the cost of healthcare services. 'Zero GST Rating’ for the healthcare sector would ensure that input tax credit is available for refund for the healthcare providers.

++ To ease the compliance burden for services sector, there is a need to have centralized GST registration similar to erstwhile service tax law. The state wise registration has increased the cost of compliance and business process development manifold.

++ Given that the tenure of National Anti-Profiteering Authority was initially prescribed for a two-year period and with GST law largely been settled, it is expected that by the end of the third-year major issues emanating from introduction of the law will be ironed out. Therefore, the prices of goods and services should be left to be decided by the market forces and the provision of anti-profiteering in the GST law should be discontinued with prospective effect.

++ To strengthen the consultative approach adopted by the government, it is recommended that a mechanism may be developed wherein an opportunity at least twice a year may be provided to the stakeholders to present their views to the Fitment Committee and Law Committee justifying the rate rationalization and policy changes required under the GST laws.