GST & CAIT
“It has been a long and arduous task to convince various stakeholders to come to a decision that will benefit the entire country. But soon it will be seen that GST is actually a guide to conducting business in India,” says Khandelwal. As a votary of the ‘one nation one tax’ proposal, Khandelwal has played an important role in ensuring that the trader community comes on board and remains there throughout the treacherous journey of roll out and implementation. And in the process CAIT has taken upon himself the mission to educate traders about GST in particular, and best retail practices in general.
To this end, CAIT has taken a big leap forward in its attempt to train and educate shopkeepers about GST compliance and adoption of digital payments. It launched a national campaign in May this year in association with MasterCard, HDFC Bank and Tally Solutions under which market camps, seminars and workshops are being organised in close vicinity of small shopkeepers across the country. “CAIT has also launched Digi Varta national campaign including DIGITAL RATH, to educate and empower small business and the trading community on enhanced adoption of digital payments. These are intended to help traders transition towards the GST regime,” asserts Khandelwal.
While there have been intermittent protests, Khandelwal remains upbeat. “GST will widen the tax base, and going forward the first positive implication will be on income tax,” he says with confidence. He explains that with widening of the tax base, the share of government revenue from indirect tax will increase; as a result the government would be more than willing to pass on the benefits to individual tax payers. “As of today there are eight million assesees enrolled under GST, and this figure will in all likelihood touch 20 million in the next one year.”
According to Khandelwal, the government’s attention will now be on expenses, and that with the increasing application of technology in compliance, the days of connivance are gone. “The various initiatives that the government has taken are intended to move towards an era of efficient business. GST has brought equality in business,” he says.
Speaking for the traders who are not tech savvy, Khandelwal says, “We demand an interim period of nine months, from July 2017 to March 2018, during which no penal action should be taken against any trader for procedural lapses. Of course, tax evaders and willful defaulters should be dealt with in accordance with law.”
While CAIT has been putting forth to government the issues raised by various industry sectors with regards to GST, it is unable to support the demand of the textile trade to be kept outside the ambit of this tax. “Textile contributes 40% to retail trade,” says Khandelwal, adding that while the government is ready to listen to their grievances, resorting to bandhs and protests would not serve any purpose. Besides, it is impractical to have a large chunk of the trade outside the tax net. “The GST rule is very clear on this; if your turnover is below Rs 20 lakh you do not come under GST, and traders who have turnover below Rs 75 lakh will have to pay just 1% tax. So where is the problem?”
While CAIT is satisfied with the broader aspects of GST, Khandelwal says the body has been making representations regarding rationalisation and simplification of procedures. This, he feels, will help the traders as well as others come under the fold of GST. “I am in constant touch with the ministry and related departments, and have been making a point to reduce the anomalies in rates, and have been suggesting them to opt for mass outreach programmes to educate the stakeholders on HSN, RCM and input credit.” He adds that CAIT has conveyed its skepticism over the E-way Bill, which in the long run could prove to be counter-productive. “If the transaction is already under the government’s scanner, then where is the need for the E-way Bill?”
The placement of building hardware products in the 28% tax slab is another concern that needs to be addressed at the earliest, he concedes. “The tax structure needs to be reworked based on end-consumer use. Taxing hardware products at 28% defies logic.” He explains that the initial proposition of the 28% rate slab was to put luxury goods and demerit goods under it. “We are going to put before the government our argument that placing hardware products under the highest rate-slab is against the basic structure of GST,” he shares. “I am confident that the government, which has an open door policy for grievance redressal, will listen to our demands and do the needful.” However, the industry needs to get together under a wider umbrella of building products, and make a joint representation.
Time to Stabilise
“GST will take a minimum of a year and a half to stabilise.” In the meantime, the government must increase its interaction with the trading community to dispel the myths regarding the system. “To see to it that the GST is a success across the business spectrum, interaction with the business community should be an ongoing exercise.” It is evident that with application of technology, the interaction with government officials will decrease drastically. “Technology will put an end to inspector raj; the human interface will be reduced and there will be tax compliance through technology.”
Acknowledging that challenges accompany every radical policy decision, he states, “There is always a resistance to change. What we need to do is prepare people for the change, and provide a conducive environment for the change.”