The Government on Tuesday said that the services sector would not be charged extra tax levied during the transitional period of the implementation of the goods and services tax (GST). The proposed GST law may be a game changer for India Inc and the Government will put up model code of the law in public domain by late November, according to a senior Finance Ministry official said on Tuesday.
“The one per cent additional tax which is proposed to be levied during the transitional period of GST for two years will not impact services sector. We are working on the model GST law. And as soon as that is made, I think by the third week of November, we should also have the model GST law also in the public domain,” said the Special Revenue Secretary Rashmi Verma at a conference on Tuesday. She was addressing a session on 'Taxing times for Indian Media & Entertainment (M&E) Industry - Is GST the Answer' in an event 'Big Picture Summit' organised by industry body CII.
The special secretary assured the media and entertainment (M&E) industry that the soon-to-be-implemented GST would be a game changer for the sector. “Multiplicity of tax will go in one stroke. Entertainment, services and goods tax both at the Centre and states will be built into one -- making compliance hassle free.”
However, the entertainment tax levied by local authorities like panchayats and municipalities will remain, she clarified. “But, the share of such taxes to the total tax collected would be insignificant. Close to 99 per cent of the taxes levied under the Centre and state dispensation would be merged with GST,” Verma said.
She assured the industry that under the GST regime, goods and services would be taxed uniformly. The industry had voiced concerns over the lack of definitional clarity between goods and services, tangible and intangible goods.
Verma said all industries would be eligible to take credit under GST to set off against other tax liabilities.
“We are working on the transition roadmap, so that the change-over hiccups will be minimal and if there are any concerns remaining, the GST Council, which will be set up after the constitutional amendment, will look into it and take corrective actions,” she added.
“The states which want to continue with the fiscal concessions for specified sectors could do so, setting apart resources from their own kitty,” she said, adding that no final decision has been taken on GST rate. “The slabs under the GST would be minimal - one low and the other high and in between a standard slab - to keep the cascading effect to the minimal and easy to comply,” she said.
Verma said the ministry has already released three sets of business processes concerning the proposed GST law into the public domain and the fourth part of it, that is on returns, will be put onto the website itself.
“We have already started the process of putting everything in the public domain. Three of the business processes are already there. The fourth one, the returns, which again is an area of huge interest to all of you because all of you have to file returns that also will be put on the website, the returns part will also be there," she added.
Verma further said, "Multiplicity of tax will go in one stroke. Entertainment, services and goods tax both at the Centre and States will be built into one making compliance hassle free."
On the model GST law, she said the Government has already started the process of consultation with all the trade and industry across India and they have been asked to give their comments online.
“We are also having regional workshops in the country starting with Delhi on October 26, then Mumbai, Kolkata and Chennai. We are not only inviting the national level trade and industry institutions but also the state level and local level. So everybody is getting a chance to interact with us,” said the official.