‘Hiking GST slabs will cripple trade, MSMEs’ – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/todays-paper/tp-others/tp-states/hiking-gst-slabs-will-cripple-trade-msmes/article65206037.ece

Agrofood Chamber seeks reduction in GST slabs to 5, 10 and 15 per cent

Any move by the government to increase the present minimum GST slab will deal a death blow to MSMEs which have been battling for survival in the post-Covid phase, said Madurai-based Agrofood Chamber of Commerce and Industry.

“We hear that the Union Finance Ministry is considering an increase in GST slab rates from 5, 12, 18 and 28 per cent to 8, 18 and 28 per cent. This has come as a rude shock to the trade and industry and MSMEs,” S Rethinavelu, President of Agrofood Chamber, said in a statement.

Most essential commodities are under the 5 per cent slab and goods of day-to-day importance are under 12 per cent. The proposed increase in the tax rates will push up the prices of almost all commodities when India is already facing unprecedented inflation due to the Russia-Ukraine conflict. The increase in tax rates will encourage tax evasion. Honest traders will find it very difficult to face unhealthy competition, he stated. The accepted and proven concept of taxation is to fix the tax rates well within the percentage of margin, which would spur compliance, resulting in increased tax revenue to the exchequer. Further, under the prevailing continuous inflationary trend, the government can mop up more revenue even without increasing tax rates.

Request for simplification

The trade and industry is requesting the Union Finance Ministry to reduce GST rates to 5, 10 and 15 per cent, and also simplify the enforcement of GST which has been complicated by the issuance of hundreds of clarifications, circulars and amendments, making the otherwise progressive taxation system difficult for not only ordinary traders but for tax officials and consultants too.

“We, the trade and industry, pray that this news of increasing GST rates may remain a rumour and request the Union Finance Ministry to not kill the goose that lays the golden egg,” Rethinavelu said.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s