Confusion galore as new tax regime kicks in

Confusion galore as new tax regime kicks in

Confusion galore as new tax regime kicks in

What will be the final levy on a mobile phone when the handset is taxed at 12%, earphone at 18% and the charger at 28% under GST. And, how to determine GST on rolling shutters for shops, extensively used across markets, when the handle is charged at 18% and the inbuilt lock at 12%?

These are some issues on which businesses need clarity even as India's most significant tax reform was rolled out.

Problems have also arisen due to ambiguity in the tax structure. While the GST Council had decided to levy the highest 28% GST on luxury and sin goods, the final fitment of taxes shows that 28% tax is being imposed on the most basic items of daily use. For example, a mobile charger or some spare parts of two wheelers.

On services, too, multiple rates are applied and there is absolutely no clue on which rate to charge. GST for AC restaurants is 18% but in case the AC restaurants have outdoor arrangements such as rooftop or front yard seating, the tax rate is still not clear.

For food grain and pulses, a distinction has been drawn between branded and non-branded, which has created a lot of confusion. The GST Council has not defined branded but all food-related packaged commodities have to be registered under the Food Safety Standard Act. The moment a trader lists himself under this Act, his commodity becomes branded and he has to pay GST at the rate of 5%.

Besides, a large number of traders across the country do not know their compliance obligations like raising an invoice, availing input credit, reverse charge mechanism, its implications and how to use it.

The e-way bill appears to have compounded the problems. Under the GST regime, e-permit is required for moving goods over Rs 50,000 within a state or between states. Traders are asking why login to e-way bill for trading in goods within Delhi or Uttar Pradesh or Karnataka?

GST half-baked, says Rahul Gandhi

Congress Vice President Rahul Gandhi on Friday targeted the Narendra Modi government for rolling out a “half-baked” Goods and Service Tax with a “self-promotional spectacle”, DHNS reports from New Delhi.

In a series of tweets, Gandhi said the GST holds “great potential”, but it is being “rushed through in a half-baked way with a self-promotional spectacle”.
“India deserves a GST rollout that does not put crores of its ordinary citizens, small businesses and traders through tremendous pain and anxiety,” Gandhi, who is abroad since June 13, said.

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