As the govt works on next-generation GST reforms, the Gujarat Chamber of Commerce and Industry has written a letter to finance minister Nirmala Sitharaman, urging simplification of the GST structure with industry-specific guidance notes.
The Chairman of the indirect tax committee of the GCCI, said, “The govt’s commitment to reducing GST slabs, fix inverted tax structures, lower GST rates on daily essentials, packaged food, electronics and insurance, resolve classification issues, eliminate compensation cess, etc., as well as much-needed technological upgradation, will not only ensure better compliance but will also make the entire structure and compliance transparent and significantly add to the GST collection.”
GCCI stated, “India’s GST system uses multiple slabs, but the bulk of revenue comes from the 18% slab (70-75%). The 12% slab contributes just 5-6% and yet adds significant classification complexity. Similar goods often fall under different rates, leading to disputes and compliance issues. Merging the 12% slab into either 5% or 18% rates would streamline the structure. It would reduce litigation, ease input tax credit mismatches, and simplify pricing for businesses.”
It added, “Many sectors today continue to face significant ambiguities in the interpretation of GST provisions, particularly on issues such as leasehold land, intermediary services and the scope of exemptions in the healthcare sector among others. To address such sector-specific complexities, the GST Council, in its early meetings (14 GST Council Meeting), approved the formation of sectoral groups across 18 key industry verticals, including textiles, MSMEs, food processing, handicrafts, e-commerce and pharmaceuticals. These groups were tasked with identifying industry-specific challenges and preparing detailed guidance notes in regional languages, covering critical aspects like legal provisions, place of supply, valuation, ITC eligibility, and sectoral exemptions. Publishing these guidance notes has now become essential to reducing interpretational challenges, standardising compliance practices, minimising litigation and providing clear and consistent direction to taxpayers operating in varied and complex industries.”
Source #TOI
