Tamil Nadu Chamber of Commerce and Industry senior president S. Rethinavelu has urged the Centre to amend the GST prior to its implementation.
He said that the “GST council” should have representatives from trade and industry, which was the main stakeholder in the implementation of the GST, of course, without any voting power. They should have the opportunity to ventilate their grievances and suggestions to ensure continuation of “ease of doing business”.
He called for strict self-policing which might ensure there was no scope for evasion of tax under GST regime. Since the RNR (revenue neutral rate) was expected to be as high as 18 to 20 per cent, law-abiding traders would be demotivated and severely affected as they would lose their business, when their competitors evaded tax.
Chamber president N. Jegatheesan said the exemption limit for taxation purpose might be enhanced to Rs 50 lakh.
This would protect the interests of small traders and manufacturers.
He pointed out that under the excise duty, at present, exemption was given up to a turnover of Rs. 1.5 crore per year.
As suggested by Chief Economic Advisor Aravind Subramanian, the GST rate should not exceed 16 per cent.
“Only if the rate was fixed as low as possible initially, the GST would be welcome by consumers. Since the Centre would compensate fully the revenue loss, if any, sustained by the States on account of GST implementation for the first five years, all the States, including Tamil Nadu, must urge the GST council to fix the RNR at 16 per cent,” he added.
Mr. Rethinavelu also said that utmost care should be taken while fixing the GST rate for food products.
He suggested that it might be worked out in such a way that it did not exceed eight per cent to avert inflation.