Advertisement
X

GST Has Helped In Reducing Transaction Cost, Tax Incidence: PHDCCI

The number of items under the 12 per cent tax slab has increased to 19 per cent in January 2022 from around 18 per cent in July 2017, he said. He added that GST tax slab of five per cent accommodates around 21 per cent of goods under its ambit as compared with 19 per cent at the time of implementation of the new indirect tax regime.

The implementation of the goods and services tax and subsequent changes in the indirect taxation regime have benefitted traders and manufacturers by significantly reducing the inter-state transaction costs and the incidence of multiple indirect taxation, PHDCCI President Pradeep Multani said on Friday. "There has been substantial shifting of goods from high tax slabs to lower ones after the implementation of GST. The number of items under the highest tax slab of 28 per cent has come down to only three per cent in January 2022 from 17 per cent at the time of implementation of GST," said the president of the PHD Chamber of Commerce and Industry (PHDCCI). Many items have been shifted to 18 per cent or less than 18 per cent tax slabs from 28 per cent during the past five years, he said. GST tax slab of 18 per cent contains around 44 per cent of goods under its ambit as of now as compared with around 33 per cent at the time of implementation of GST, Multani added in the statement by the chamber.


The number of items under the 12 per cent tax slab has increased to 19 per cent in January 2022 from around 18 per cent in July 2017, he said. He added that GST tax slab of five per cent accommodates around 21 per cent of goods under its ambit as compared with 19 per cent at the time of implementation of the new indirect tax regime. The number of items under the three per cent and 0.25 per cent tax slabs remained almost the same at around one per cent and 0.2 per cent, respectively, since July 2017. The number of items attracting nil GST increased marginally to around 12 per cent as on January 2022 from 11 per cent at the time of GST implementation, Multani said. "On a broader basis and in accordance with the weighted average of the tax slabs and number of items in different GST slabs, the incidence of GST taxation has come down to 12.1 per cent as on January 2022 from around 14 per cent at the time of GST implementation in July 2017," he said.


Since the implementation of GST in July 2017, significant changes have been made in the composition of GST framework on the basis of various recommendations of GST Council, which has resulted in the decrease in the incidence of GST, Multani said. At this juncture, he said, "The petroleum products should be brought under the ambit of GST to remove the cascading impact of taxes such as excise duty, central sales tax including value added tax." He added that the aviation turbine fuel (ATF) and piped natural gas (PNG) should be brought under the GST to enable the companies to avail the benefit of input tax credit. GST rates should be further rationalised to create tremendous demand in the economy, subside the inflationary pressures, enhance the sentiments of producers for production and create employment opportunities for the growing workforce in the country to help to make it a good and simple tax, said Bimal Jain, Chair, Indirect Taxes Committee of PHDCCI. Though GST has stabilised to a large extent over the years, the business entities are still grappling with some issues such as blockage of GST credit on certain inputs and input services and complicated process of availing credit, among others, he said. He added that these issues should be resolved to enhance the ease of doing business and providing a thrust to the growth trajectory of the Indian economy. Going ahead, the government's efforts should be to further liberalisation of the GST norms, ease in procedures, and shift of goods into the lower tax slabs, Jain said.

Advertisement

PTI Inputs

Show comments
US