The Agro Food Chamber of Commerce and Industry (AFCCI) in Madurai has appealed to Union Finance Minister Nirmala Sitharaman to simplify GST laws at the forthcoming 54th council meeting scheduled for September 9. The aim is to ensure that entrepreneurs do not suffer.
The current GST is full of complexities and is not easy to understand even by tax experts, as per the chamber. Over the past 7 years, various notifications, clarifications, and amendments have made it more complex, it added.
According to the chamber, it is a welcome move that the Finance minister has directed to ease the tax notices and is asked to recommend the income tax department to work for being fair and friendly with assessees.
A simplification must ensure transparency in the tax rate for distinct products, as per the stakeholders.
GST is charged based on the Harmonized System of Nomenclature (HSN code), an internationally standardized system of names and numbers utilized to categorize traded products presented by the World Customs Organization (WCO), S Rethinavelu, president, of AFCCI, Madurai stated.
The HSN code has 21 Sections encircling all products, under which there are 99 chapters with 1,244 headings and 5,224 subheadings, illustrating different products.
The things that come under the headings and sub-headings are within distinct tax rates under GST and that complicates the tax rate which directs to litigations, Rethinavelu mentioned.
Selecting different tax rates by different authorities on Advance Ruling (AAR) for the same commodity is a confirmation of the conundrum persisting in the present structure of tax rates, he expressed.
It was recommended by the chamber that the mere solution is to impose the tax based on the sections in the HSN code for all products that have been covered under the heading of one section.
Chamber mentioned that it takes much time to simplify the GST process when imposing the same tax rate for products other than the products that opted for the total exemption.
It must learned that most global countries have chosen a single GST rate, Rethinavelu cited.
