Senior Congress leader and former Finance Minister P Chidambaram on Sunday called for the Centre to push the deadline to implement the new Goods and Services Tax regime to October 1. In an interview to The Indian Express, he said called the July 1 deadline impractical and undesirable and said rushing to roll out the GST could be detrimental.
Chidambaram explained that implementing the new tax regime in haste would work against India’s small and medium enterprises as they were not as familiar with filing their details online. “Businesses in tier-II and tier-III towns who only have a local accountant to handle their accounts and who are not yet completely familiar with electronic filing, I think, puts a huge burden upon them,” he said, adding that they will be brought under the tax radar if they make mistakes.
The former finance minister also highlighted a number of “imperfections” in the four GST Bills that were passed in the Rajya Sabha on April 6, adding that they may require amendments “within the next two years”. “[But they] can be made less imperfect if you put 70% of the goods and 705 of the services in the rate of 18%. And if you manage to push 90% of the goods and 90% of the services in the modal rate of 18%, it becomes even less imperfect,” he told the daily.
The GST, which seeks to overhaul India’s complicated taxing system by replacing 17 different taxes with a single levy, has four slabs – 5%, 12%, 18% and 28%. The government has set the maximum GST rate at 40% and introduced provisions for an anti-profiteering authority and arrests for evading taxes. The four GST Bills are the Central GST Bill, Union Territory GST Bill, Integrated GST Bill and the Compensation Law Bill.