Thaindian News

New Delhi, Aug 18 (IANS) The proposed goods and services tax (GST) regime should have a uniform rate of 12 percent and all sectors should be covered under it as exclusion of any segment would affect other negatively, head of industry lobby FICCI said Thursday.

“The proposed rates of 20 percent, 16 percent and 12 percent are good enough to begin with, but these would need to be gradually brought down to a uniform level of 12 percent,” Harsh Mariwala, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), said at a press conference here.

Mariwala, who is also the chairman of FICCI Task Force on the GST, said the proposed tax reform must encompass all sectors of the economy, without any exception. “Only a broad-based GST can bring out a moderate GST rate.”

He said the proposed exclusion of some sectors like petroleum, natural gas, real estate, alcohol and power generation, would result in significant adverse implications for the sectors which consume these goods, and thereby cause tax cascading and high costs in the economy.

Introduction of the GST, which seeks to reform indirect tax structure in the country, has been pending for years due to lack of political consensus among states on the issue.

The main opposition BJP-ruled states have raised concerns over the proposed tax reform, saying it would erode their autonomy to levy taxes.

An empowered committee of state finance ministers on GST, headed by Bihar Finance Minister Sushil Modi, is scheduled to meet Friday to take account of the development on the issue.

The GST Constitution Amendment Bill is pending before parliament.

The proposed tax reform seeks to bring uniformity in indirect tax structure.

Introduction of GST, which will subsume central and state taxes like excise, customs, service tax, sales tax and VAT, has been pending for years in the absence of political consensus among states.