VIJAYAWADA, July 8:
Union Minister for Commerce Nirmala Sitharaman said that the Goods Services Tax (GST) would not trigger price hike, in fact, it would help eradication of tax evasion and also helps for export growth.
Addressing a meeting here today, she allayed apprehensions that GST would cause negative growth and confusion.
The Minister said the Export Sector would also be largely benefitted because of the removal of Toll Check Posts which would facilitate Transport of goods in an easier and faster manner. It saves time as well as fuel to the exporters.
As of now, 23 States have already removed check posts and 6 states are in the process of doing it, she added.
Ms.Sitaraman said that hitherto, the end consumer was unaware of the total tax that he was paying on a product but in the New GST regime he could now know the total tax component that he is paying in a transparent manner.
Referring to the entertainment sector, she explained that there would be 18 per cent tax for cinema Ticket, which are below Rs.100 and 28 per cent for tickets priced above Rs.100. The Entertainment Tax earlier varied from 20-110 per cent with 30 per cent being the weighted average.
The Union Minister said that the states might continue to give tax concessions for films made in their local languages, but that would be in the form of direct transfers (state GST refunds) rather than exemptions. GST would not be applicable for small scale enterprises like handloom which have a turnover of less than Rs 20 lakh. Liquor and Petroleum was not included in GST because of the several requests came from States to the centre, the Minister said.
Ms Sitharaman said the GST Council gave a slew of concessions, lowered tax rates for some items and gave relief for job workers as per the demands of different industrial segments, small traders and producers and keeping the interests of relatively low-income consumers in mind.
Even as these concessions per se would lead to a significant reduction in the overall weighted average tax rate from what it is now she added.
Responding to criticism from certain sections that the higher slab of 28 per cent is steep, she said that “people should not be under any misconception that the tax slab of 28 per cent is on the higher side compared to earlier rates because certain taxes like excise duty were not mentioned in the total tax in the previous regime, whereas the present tax rate includes totality of all the taxes in the invoice.
The Minister assured the members of various trade associations that their concern and grievances will be taken up with the GST Council. She will also recommend for a review three months after GST implementation. Ms Sitharaman clarified that there would be no penalty for non-filing of returns for small and medium businessmen for three months. (PTI)
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