GST: No rate cuts but will look into other sectoral demands, says CBEC

Vanaja Sarna, chairman of the Central Board of Excise & Customs, at a CII interactive session in New Delhi. Photo: PTI

Central Board of Excise and Customs' (CBEC's) chairperson, Vanaja Sarna, said concern over the new goods and services tax (GST) raised by the textiles and entertainment sectors were being looked into and will get settled with time.

However, the already fixed rates would not be revised, unless there were anomalies or genuine mistakes in fixing these.

On Tuesday, finance minister Arun Jaitley had also ruled out any revising of GST rates for the textiles sector.

"Unless there is something not fully justified or there is an anomaly, I don't think there is a reason to look at any rates at the moment," Sarna said on Wednesday.

Speaking at a Confederation of Indian Industry event, she added the revenue authorities would go slow in enforcement action under GST for the first six months -- they want businesses to settle into the new tax regime. "I would not want anyone to take a hard stand, as there will be genuine mistakes due to lack of understanding," she said.

GST was rolled out on July 1 and has a five-tier tax structure-  0, 5, 12, 18 and 28 per cent. Around 1,200 goods and 500 services have been fit into these slabs.

The official Twitter account set up to answer queries from businesses has been getting 13,000 queries daily.

CBEC will go easy on taxpayers for the next three to six months. "With the kind of input tax credit being offered, the assessee base will widen. I'm definitely not looking at any hard line attitude to start with; we would want it to settle down," Sarna said.

CBEC will continue with the 18 working groups constituted to address problems faced by businesses in the new indirect tax regime. "We are not looking to dismantling these groups and they would assist industries in the problems they face in the GST regime," she said.

Of the 18 groups, three gave their report on Wednesday, said the CBEC head. Of the remaining 15, eight are under consideration of the law committee, which would meet on Thursday and Friday. "I'm sure you will find all the reports in the public domain by next week," she said.

On the textiles sector that has been protesting against the GST levy of 5% on fabric, the CBEC chief said anybody who comes into the net for the first time would feel a pinch. "It is an issue that has snowballed but it is not something which cannot be settled. The issue is that the sector is being taxed for the first time," said Sarna.

Traders in the textiles hub of Surat and elsewhere have called off their two-week strike against five per cent GST, for now.

Sarna said the textiles industry would have issues relating to GST rates, laws and rules and there was still time to present its wish list.

Besides, there were concerns raised by the entertainment sector, and which will get ironed out with time, she added.

But, it would not be possible to meet any demand for GST rate reduction unless there was an anomaly or a need for correction or something had been left out, she stressed. Adding: "July 1 (GST commencement date) doesn't close everything and the kind of fitment of commodities that has taken place is kind of doing five (Union) Budgets in one."

Demands such as a transition period of 18 months, simpler procedures and quarterly returns would be discussed in the GST Council meeting scheduled for August 5.

Regional films had earlier enjoyed various exemptions in their respective states, removed under GST. The GST Council had lowered the GST rate to 18% from the earlier proposed one of 28% for movie tickets costing Rs 100 or less.

Sarna contended that the prices of cigarettes would not go up, as the government had only taken corrective measures, rectifying an imbalance in tax incidence. The GST Council on Monday had hiked the cess on cigarettes.

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