Trade bodies welcome GST ratification

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PATNA: Trade and commerce bodies have hailed the state government’s move to ratify the Goods and Services Tax (GST) Bill stating that the destination-based tax is set to benefit a consumer state like Bihar.

“The swift move of the government to ratify the GST Bill is a commendable move as Bihar will gain about Rs 8,000 crore from the new tax system,” Bihar Industries Association president Ram Lall Khetan told TOI after the passage of the Constitution (122nd Amendment) Bill, 2014 on GST in the state legislature on Tuesday.

Khetan said the revenue benefit would translate into Bihar’s developmental works but the state government also needed to improve on the proposed industrial policy and make it more attractive. “Our suggestion is that the tax rate should not exceed 18% because making the goods and services expensive will not serve the purpose,” he added.

According to experts, central and state GSTs, containing about seven and 10 multiple taxes respectively, is set to do away with cascading taxes such as VAT on excise duty as well as central sales tax and entry tax among others. However, traders said a clearer picture of the rate structure, exemptions, technology, training and taxpayer service and modalities etc will emerge only in the next 3-4 months. “It’s too early to comment on GST right now as at least 15 states will have to ratify it before its full-fledged rollout,” Bihar Chamber of Commerce and Industries (BCCI) vice president Madhukar Nath Bareria said.

 Bareria recalled about a workshop on GST held earlier this month at the BCCI saying that the general perception among the participants was that the new tax system is set to benefit the industrial giants. “Unless the threshold limit is increased from Rs 10 lakh to Rs 25-50 lakh and some other confusing points are clarified, small business may have to face trouble,” he said, adding that suggesting any tax rate will be feasible only after an idea of the exemption list.
Members of the Bihar Entrepreneurs Association (BEA) welcomed the ratification of GST Bill stating that a uniform tax system will remove multiple calculation of input tax both in manufacturing and services sector. “The GST will bring more clarity on ease of doing business in Bihar as one can now easily calculate the procurement cost. It will also save money spend on meeting the compliances,” BEA secretary-general Abhishek Kumar said. Kumar added the new tax system is set to bring more business to Bihar. “The BEA has already received many warehousing proposals, from those who are on the borders of Bihar but now want to come to Bihar,” he said.

Experts have also suggested that Bihar should gear up its administration and information system, besides revising the tax exemption list and keeping it to minimum, if it wants maximum benefit from GST.
Source: TOI

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