E WAY BILL & HSN CODE MAY BE SUSPENDED FOR 6 MONTHS
On the eve of crucial meeting of the GST Council tomorrow, the Confederation of All India Traders (CAIT) has questioned the classification of goods placed under 28% tax slab of GST and has urged the Union Finance Minister to re-visit this slab and confine it to only luxurious and demerit goods for which originally it was evolved. This slab has become a root cause of unrest among a section of the traders who are agitating past two days demanding reversal to a lower slab of their respective items placed under this category . Such anomalies, disparities and contradictions in tax slabs and ignorance about basics of GST are distorting the spirit of a good taxation system that GST is-said the CAIT. It is hoped that corrective actions will remove confusing atmosphere and will encourage traders to adopt GST in a smooth manner.
CAIT National President Mr. B.C.Bhartia & Secretary General Mr. Praveen Khandelwal said that as per statements of the GST Council decided that the tax slab of 28% will attract only those items which are currently taxed at 30-31% ( inclusive of VAT & Excise Duty) but with a rider. And the rider is that in this category there are several items which are now being used increasingly by a very large number of people, particularly the lower middle class. So for them 28 or 30 or 31% rate will be higher, and so these items will be shifted to 18%. However, about 19% of the goods fall under 28% category defeating the object of the Council.
They further said that items like spare parts of two wheeler and four wheeler, housing necessity items like Cement, Iron & Steel, Building Hardware, Paints, Marble, Furniture, Sanitary ware, Electrical Fittings, Beauty & Cosmetic Products, Health & Nutrition products like Bournvita, Amul Pro, Horlicks, Polishes & Creams for footwear, scientific instruments, are some of the prominent items which falls under this category.
Both Mr. Bhartia & Mr. Khandelwal said that following the principle set by the Council regarding 28% tax slab, it has reduced number of items from 28% to 18% in its last meeting held on 11th June which has been termed as a positive step and acclaimed by the trading community. Similar approach may also be taken with regard to other items and 28% tax slab may be restricted to only luxurious and demerit goods.
The CAIT has demanded that much confusion has been prevailed about keeping food grains under 5% tax slab if they are branded goods else these items have been exempted from the tax. In order to make clarity, it is necessary that clear distinction may be drawn so that these items of mass consumption may not fall under tax rate of 5%. It has also urged the GST Council to make official declaration to treat first nine months i.e. from Ist July,2017 to 31st March,2018 a ” interim period” and no penal action should be taken against traders for procedural lapses or unintentional mistakes though tax evaders must be dealt with in accordance of the law. The CAIT has also urged that since cloth traders were never part of taxation system, an exemption of one year may be granted to them to understand the taxation system and make themselves compatible to comply the law.
On the other hand recycle products/scrap collection items like empty used glass bottles have been placed under 12%, Washing Soap, Laundry Soap and Toilet Soap though different from one another have been clubbed together and placed under 18% and other such items may be placed under lower tax slab. The CAIT has urged that Sanitary Napkins essential for Women Hygiene must be removed from 12% tax slab and placed under exempted category like contraceptives.
The CAIT has also urged the GST Council to suspend implementation of E-Way Bill and HSN Code for at least six months since most of the small businesses are quite unaware of these procedures which were a part of Excise Act. They need breathing time to understand the system to make themselves compatible to comply.
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