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| Finance Minister seeks GST exemption for food grains | | | EARLY TIMES REPORT
New Delhi, Sept 16: The Finance Minister has strongly pleaded that food grains should be kept in the exempted list of goods in the proposed GST scheduled to be implemented from 1st April 2010.
He said that in the event of food grains being taxed there will be a steep rise in prices and the common man will be badly hit. Rather was speaking in the meeting of the Empowered Committee of Finance Ministers here today.
He also pleaded that goods of local importance including handicrafts should also be exempted from payments of tax in the new tax regime. The Minister said that single rate structure proposed for the GST is administratively simple and more convenient though it has been under criticism by some of the states for various reasons. There may be some merit in the reasoning given by the states, nevertheless, with the changing global scenario, fiscal reforms in the shape of harmonization of tax laws is the need of the hour to broaden the tax net and simplify enforcement and compliance, Mr Rather said.
The Minister further said that the threshold limit of the goods should be raised to 10 lakh. At the same time the Central Govt. should retain threshold for goods under Central Goods and Services T ax Laws ( CGST) at Rs1.5Cr for providing the much needed relief to the small traders and small scale industries. The Minister also pleaded that composition and compounding scheme for the purpose of the GST should be designed keeping in view the present threshold limit followed by the different states under VAT. It should have a floor on rate of tax and there should also be a cap on the upper limit of the composition of compounding scheme.
Rather said that time left for introduction of GST from 1st of April, 2010 is very short. Therefore urgent measures need to be taken for development of IT infrastructure, Legislative measures, discussions with the stakeholders and publicity campaign. He suggested that a joint team of senior officials of the centre and the sates should immediately be set up to prepare drafts each for constitutional amendments, Model Central Legislation for CGST ,Model legislation for SGST for the sates and the rules for both CGST and SGST, he said. Another team of officials of the Center and the states should start preparing the Awareness and Campaign material for GST.
Rather said that successful implementation of GST inter alia pre-supposes total computerization beforehand. For efficient and effective tax administration and better service to the tax payers’ efficient e-governance is indispensable, he said. He strongly pleaded for taking computerization of Commercial Taxes Department of J&K in hand urgently.
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