Calling it a race to the finish, Archit Gupta, founder and Chief Executive Officer (CEO) of online tax filing portal Cleartax.com, said that clarity on rates under GST would help companies plan better.
“What we are doing at present is working on a dynamic tax rate module. The government has indicated that rates for each commodity under GST would be close to existing rates,” he said.
The Centre plans to roll out GST from July 1 this year. Once the enabling legislation for Centre, State, Integrated and UT GST as well as compensation are approved by the GST Council, a committee of officials will work on the fitment of commodities.
This would be within the four-tier rate structure announced for GST of 5, 12, 18 and 28 per cent.
Cleartax.com, which at present is an income tax filing platform, is also building a similar facility for GST filing and compliance.
Speaking to BusinessLine, Gupta also called for more clarity on issues such as the proposed compliance rating, input tax credit mechanism and the proposed anti-profiteering authority.
“Small and medium enterprises are slightly under-prepared for GST, which is a cause of worry,” he said.
Similarly, Bharat Goenka, Managing Director, Tally Solutions, said some provisions of the draft GST Bill could impact the SME sector.
“These relate to ‘input tax credit available to the buyer only if the supplier has paid tax inside a given window’ and the proposed compliance rating for all businesses that will worsen their cash flow problems which are already uneven in nature and drive them to closure,” he said, adding that there is a dire need to delink payment with the availability of input credit.
Under the proposed GST law, input credit against the taxes paid by the purchaser can be availed only when the seller deposits it with the government. In case of non-compliance, the credit would be denied to the purchaser.
According to Marg Compusoft, the software requirement for SMEs and MSMEs under GST is estimated to be worth ₹40,000 crore.