GST rates need rationalisation, feel taxpayers: Deloitte survey

India’s taxpayers want a rationalisation in the rates of Goods and Services Tax (GST) across sectors, with focus on doing away with Inverted Duty Structure, a new survey report released by Deloitte has revealed. The survey report comes days before the GST Council’s scheduled meeting on Saturday, even as the tax is all set to turn seven in July.

The GST, launched on July 1 2017, is a value-added tax levied on most goods and services sold in India for domestic consumption. It is an indirect tax, and also one that is multi-stage and destination-oriented. The tax is imposed on every value addition, replacing multiple indirect taxes such as VAT, excise and service taxes.

The Deloitte report states that consumers primarily want “rationalising GST rate across sectors, with a focus on removing inverted duty structure” as far as structural changes go.

While rate rationalisation of GST could be a complex issue, doing away with Inverted Duty Structure could be a simpler process. Inverted Duty Structure refers to the situation where the rate of tax on inputs purchased — or, GST paid on inputs — is greater than the rate of tax on outward supplies — or, GST paid on sales. This can be modified, most industry experts feel.

The Deloitte report added that Indian taxpayers also want an anonymous process to deal with authorities and an amnesty scheme as far as GST procedures are concerned.

Around 760 respondents across small and big business enterprises participated in the Deloitte survey, which also focussed on why it was important to do away with curbs on using input tax credits. Several respondents spoke of the necessity of measures to reduce working capital. The survey report also highlighted the hindrances that arise owing to tax audits.