“Advocates’ Tax Bar Association urges Finance Minister to reduce GST interest rate from 18% to 12% per annum. The letter emphasizes the strain on businesses, proposing a balanced approach for economic growth. Read the full text for insights into the association’s concerns and the potential impact of a reduced interest rate.”
This letter is addressed to the Finance Minister of India, representing the Advocates’ Tax Bar Association. It requests a reduction in the interest rate charged under the Goods and Services Tax (GST) Act. The letter highlights the burden the current 18% per annum interest rate places on businesses, impacting their growth and economic contributions.
Advocates’ Tax Bar Association acknowledges the importance of tax compliance but draws attention to the financial strain caused by the high-interest rate, particularly during economic challenges. To strike a fair balance, the association requests a reduction in the GST interest rate to 12% per annum, aligning it with the interest rate specified under the Income Tax Act.
The letter concludes by expressing confidence in the Finance Minister’s wisdom and considerate approach toward addressing business concerns. A reduced GST interest rate is seen as crucial in supporting economic development, achieving government objectives, and creating a vibrant business landscape in India.
FULL TEXT OF THE LETTER IS AS FOLLOWS:-
Advocates’ Tax Bar Association
The Finance Minister Of India,
Ministry of Finance,
Government of India,
North Block,
New Delhi – 110001
Subject: Request for Reduction of Interest Rate in Goods and Services Tax Act
Respected Madam,
With due respect that the various tax reform, we are writing to you on behalf of the Advocates’ Tax Bar Association, representing the concerns and interests of numerous businesses and entrepreneurs across the country. We extend our heartfelt gratitude for your efforts to boost the nation’s economy and promote a business-friendly environment.
We are writing to bring to your attention an urgent matter of concern faced by the business community, which relates to the current rate of interest charged under the Goods and Services Tax Act. As you are aware, the interest rate currently stands at 18% per annum for any delayed GST payments.
While we acknowledge the significance of prompt tax compliance, we wish to draw your attention to the substantial burden this high-interest rate places on businesses, particularly during economic challenges and unforeseen circumstances. The 18% per annum interest rate proves to be a significant financial strain on businesses, hindering their ability to thrive, invest, and create employment opportunities in the country.
In light of this, we earnestly request you to consider our representation and take measures to reduce the interest rate under the Goods and Services Tax Act from 18% per annum to 12% per annum. We believe that this adjustment will strike a fair balance between encouraging tax compliance and easing the financial load on businesses. The rate of 12% per annum aligns with the interest rate specified under the Income Tax Act, making it a reasonable proposition.
We are confident that such a reduction in the interest rate will not only provide relief to businesses but also foster an environment that supports growth, entrepreneurship, and overall economic development. This, in turn, will contribute to the nation’s progress and help achieve the objectives set forth by the government.
We, the Advocates’ Tax Bar Association, stand ready to offer any assistance or information required in this matter. We trust in your wisdom and considerate approach toward addressing the concerns of the business community. Your attention and prompt action on this issue will undoubtedly have a positive impact on numerous lives and enterprises in the country.
Thank you for considering our request. We eagerly await your favorable response and look forward to witnessing a prosperous and vivacious business landscape in India under your esteemed guidance.
With the utmost respect and sincere regards,
Author Bio
I appreciate your concern. CMA fraternity having very few scope of practice. Something must be done by our finance ministry.