In a panel discussion at the CII Big Picture event in New Delhi yesterday, Rashmi Verma, Special Secretary, Revenue, Ministry of Finance, announced that that all the three taxes—Service, Entertainment and VAT—will be subsumed in Goods and Services Tax (GST).
Clearing the air about GST, Verma said, “All the three taxes (Service, Entertainment and VAT) will be subsumed in one tax (GST) and the rates will be uniform everywhere. A GST Council will be controlling the states. The Service tax and the Goods tax will be of one rate, no different taxes for Goods and Services will be levied. And for the initial two years there is one per cent tax, but GST portal is working to minimise the cascading origin tax. Credits will be paid for every tax that you pay. There will be no cascading of taxes.”
Verma also added that all the rates under the GST will be uniform for all and the place of supply rules will guide the GST India portal to apportion the tax.
Though almost all the panelists were in support of GST, they had one common query regarding the transparency of the tax.
Ashok Mansukhani, Whole Time Director, Hinduja Ventures Limited, stated, “The broad strokes in GST are one, we need to bring tax assessment in the same and make it clean and transparent. We need to work out a clear, transitional phase”.
“To take up the issue of perseverance, digitisation which was started in India in 2002, 30 million homes have already been digitised and another 70 million will be digitised in the next 18 m months.”
He also added, “If nothing else, let’s provide a stable structure to the customer regarding the transparency of digitisation and its collaborativeness.”
On entertainment tax and the film industry, Ravi Kottarakara, Vice President, FFI, said, “Today we are at crossroads, there is development but at the cost of share. We, the people of the film industry are ready to pay taxes but all we need is clarity.”
Avindra Mohan, President, Legal and Regulatory, Zee Network, giving away the three-points of his expectation from GST, said, “Entertainment Tax, Service Tax and VAT add up to almost 50 per cent of the total tax and 10 per cent is the gross revenue. So, there are basically three points which I would like to talk about today about GST being the answer for the tax issues. First would be equity and fairness, second would be certainity or clarity and the third would be automatically achieved if the first two fall into place which is economic fairness.”
V.S Krishnan, Member (Service Tax), Ministry of Finance, on the future prospects of GST said, “Please don’t second guess as to what is going to happen. Judge on what has been put up on the public domain, and not on what is yet to be out. Nothing will be implemented without you looking at the draft. Best is the enemy of good, we will give you a good GST which, with time, will improve”.
This panel discussion on GST and taxation in the M&E industry was part of Day Two of the CII conclave. Moderated by A.P Parigi, Advisor to the Chairman, Network 18, the panel comprised Rashmi Verma, Special Secretary, Revenue, Ministry of Finance; V.S Krishnan, Member (Service Tax), Ministry of Finance; Farokh Balsara, Partner and National Leader-Markets, Ernst and Young; Ravi Kottarakara, Vice President, FFI; Ashok Mansukhani, Whole Time Director, Hinduja Ventures Limited and Avindra Mohan, President, Legal and Regulatory, Zee Network.