New Delhi, Oct 9 (IANS) Apex business chamber CII on Friday welcomed the decisions taken at the 57th meeting of the GST Council, describing them as an important step towards further simplifying the GST framework, reducing compliance costs, improving working capital availability, and providing greater certainty to businesses.
CII lauded the focus on input tax credit, faster refunds, simplified registration and returns, rationalisation of penal provisions, facilitation of exports, and reduction of litigation.
“The decisions of the GST Council represent a significant advancement in India’s GST reform journey. The measures announced yesterday should substantially improve the ease of doing business, reduce compliance costs and release working capital for productive use,” CII President R. Mukundan said
CII welcomed the measures to facilitate faster GST refunds, including the reduction in the acknowledgement period from 15 days to 10 days and the decision to automate refunds of excess balances in the electronic cash ledger.
“Delays in refunds have an important bearing on the working capital requirements of businesses, particularly exporters and SMEs. Greater automation and faster processing should improve liquidity, reduce financing costs and allow businesses to deploy their resources more productively,” Mukundan said.
The proposed extension of credit to employee health and life insurance, telecommunication towers, pipelines laid outside factories, free samples, and certain goods required by law to be destroyed upon expiry were welcomed as measures which should reduce the incidence of embedded taxes and address long-standing difficulties faced by several sectors, a CII statement said.
The decision to extend refunds under the inverted duty structure to input services, and to permit refunds relating to plant and machinery, is another major reform. These changes should improve the economics of manufacturing investments, reduce the accumulation of unutilised credit and strengthen the competitiveness of Indian industry, the statement observed.
CII also welcomed the proposed removal of double taxation in specified services supplied through intermediaries, including hotel accommodation, restaurant and catering services, and passenger transport. The measure should provide greater consistency in tax treatment across different business models.
The Council’s decision to constitute a Committee of Officers to examine the protection of input tax credit for genuine purchasers is also encouraging. CII has consistently advocated that bona fide buyers who have received goods or services and made payment to their suppliers should not be penalised for defaults beyond their control.
On decriminalisation and litigation, CII welcomed the proposed removal of arrest provisions under GST, the increase in the prosecution threshold from Rs 1 crore to Rs 5 crore, the removal of minimum punishment and the reduction in the general penalty from Rs 25,000 to Rs 10,000.
CII also welcomed the proposed common standards for issuance of notices, pre-notice intimation, allegations of fraud, personal hearings and passing of orders. The decision not to issue notices involving amounts below Rs 10,000 should help reduce avoidable disputes and administrative costs.
The simplification of GST registration requirements for small sellers using e-commerce platforms should also enable greater participation in interstate markets, particularly by smaller enterprises, the CII statement said.
CII also welcomed the proposed rationalisation of physical inspections of goods in transit. Restricting inspections to the originating and destination States, subject to prescribed safeguards, should reduce delays in transportation, improve supply-chain efficiency and facilitate interstate trade.
The announcements relating to exports of services are especially significant. The proposed changes concerning services supplied through overseas branches and services performed in India on goods belonging to foreign clients should remove important tax-related impediments for exporters, the statement added.
–IANS
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