As you may be aware, the Hon’ble Finance Minister, Sh. Arun Jaitley while presenting Union Budget 2014-15 on 10th July 2014 said that in order to streamline the tax administration, avoid harassment of the business and increase revenue collection both for the Centre and the States we need to work towards a smooth transition to Goods and Services Tax (GST). He has also asserted for working towards approval of legislative scheme to facilitate introduction of Goods and Services Tax in India.
The current structure of the Indirect Taxes poses a lot of issues to masses who are impacted by its cascading effects. For Example: In an activity wherein goods being food or any other article of human consumption or any drink are supplied in any manner as a part of the activity at a restaurant the value of service portion is 40% of the total amount. The supply of food/drink is already covered under the VAT provisions as the same amounts to sale of goods under the sales tax provisions. So on a bill of Rs. 100 with Service Charge of 12%, we pay 100+ 12(service charge) + 13.5 (VAT @ 13.5%) + 5. 4384(Service Tax @ 4.944%) = Rs. 130 approx. Imposition of multiple taxes on single product/ service puts a burden on the consumer which can be subsumed by introduction of GST.
With a view to facilitate the smooth implementation of GST in the country, the Institute of Chartered Accountants of India has decided to support the Government in this upcoming tax reform. In this regard, as a part of its distinctive research, the Indirect Taxes Committee of ICAI has taken up an initiative to collate issues/ hurdles related to Indirect Taxes to be submitted to relevant authorities for a hurdle-free transition to GST. Accordingly, we request you to share the current issues related to Indirect Taxes which can be eliminated in the upcoming GST regime. The issues so received would be shared with the respective authorities in order to help them to provide a solution to these issues with introduction of GST. We request you to share the issues at the following link:
We trust that the issues shared by you with your experience and expertise will help the government in framing the law which meets the need of the masses.
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