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Mr. A K Jyotishi, IRS, Principal Chief Commissioner of Central Taxes: 5-Rate Tax Slabs Under GST May Get Pruned to 2 Slabs in the Future

Mr. AK Jyotishi, IRS, Principal Chief Commissioner of Central Taxes, Bengaluru Zone today said that the Government is seriously contemplating to reduce the number of tax rate slabs under GST in the near future.

Delivering the inaugural address at the Workshop on GST: Practical Requirements and Challenges organised by Bangalore Chamber of Industry and Commerce (BCIC) today Mr. A K Jyotishi said: “There is a proposal with the Government to reduce the current five-rate tax slab to two rates, as 90 percent of the taxes imposed come under the 18 percent tax bracket.”

Mr. AK Jyotishi said that a lot of misconception among tax payers have been quelled over the last one year of the law (GST) being launched. He said: “GST is not a disruptive law but a transformational law. As the law is maturing, the industry, which initially had inhibitions and doubts is now voluntarily complying with the law. We do accept the fact that, GST initially had several glitches and had created complexity in complying with it, but now a sizable chuck of the hitches stands removed.”

In the same vein, he also sounded a word of caution to GST defaulters. He said: “There is an impression that tax assessees can get away by not complying with GST law in the garb that the Department is still using manual methods. But let me flag you, after the initial handholding and a go-slow attitude, which was deliberate, we now have all the wherewithal to track tax defaulters and will act with a stern hand, if tax payers continue to default”. He also said that the Government is using data analytics and the defaults have already been detected. 

Explaining how simple and plain the GST law is Mr. Jyothishi cited an example of a credit card seller and how he forced him to buy the card despite his strong reservation. “After initial no-no, I was coaxed to take the credit card. After reaping the benefits of the Credit Card, I was overwhelmed by the benefits and the ease of transaction. Similarly, GST may look complex initially, but let me tell you that once you begin to adapt to the new law, operations will be as simple as sending an SMS to the Department.”

Mr. Jyothishi said that as per current records there are 8 lakh assessees (3.4 lakh Central Government monitored and the rest by the State). The Department collects on an average Rs. 6,500 crores every month. The Tax base has increased from 60 lakh crores to 1.10 crores. Basically, the increase is due to voluntary compliance and also some sectors, hitherto left out, have now come under the GST gambit.

Mr. Jyothishi said: “Any change in taxation policy is very sensitive in nature as it has wide range of ramifications across Population and Asset class. However, what is undeniable is that we must embark on reforming tax structures, simplifying the code, widening the tax net and also aim at reducing the slab rates of GST.”

In his welcome address Mr. Kishore Alva, President, Bangalore Chamber of Industry and Commerce (BCIC) & Joint President and Executive Director, Adani - Udupi Power Corporation Ltd said: “Despite few drawbacks the industry is facing due to the new tax legislation, we must celebrate this landmark reform in the history of India. At the same time, we also must acknowledge that it is only half the job done, as far as tax reform is concerned. We have a long way to go.”

Experience of the past one year has shown that tax buoyancy and tax compliance has improved during last one year. This is basically due to cut-back of ambiguity and less of tax avoidance.  Further, if GST Council brings the entire petroleum sector under the ambit of GST, tax cascading will automatically get ironed out further.

The Chamber feels that GST will increase productivity by unifying the Indian market and it will help formalise economic activity in India.