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  3. Classification of goods under different tax slabs of GST worrying traders: CAIT

Classification of goods under different tax slabs of GST worrying traders: CAIT

29 May 2017 Evaluate

Traders body Confederation of All India Traders (CAIT) has said that classification of goods under different tax slabs of the proposed pan-India indirect tax regime of the GST has created an environment of anxiety and concern among the trading community across the country. It also pointed that this has led to various verticals of retail trade demanding lower tax on the items being dealt by them since they have been categorised under higher tax slab in comparison to tax slab of current VAT tax regime.

CAIT highlighted that as per an analysis, tax rate for about 1,211 items and 36 services have been fixed under new tax regime, out of which nearly 50 percent goods have been placed under 18 percent rate, 14 percent of the 1211 items will attract a GST rate of 5 percent, another 17 percent will be taxed at 12 percent, 19 percent of the items will be taxed at 28 percent, while 7 percent will be on the exempt list.

The Delhi-based trade body further said that the broader effect of the classification of items under different tax slabs needs to be assessed very cautiously since under GST not only the taxes paid on goods but even the taxes paid on the services will be eligible for input tax credit. It also noted that taxes paid on inter-state purchases of goods or availing services will also be eligible for input tax credit. In view of mounting discontent about proposed GST rates, the CAIT has urged the government to revisit the rate schedule. However, it said that the government remains firm on the deadline for implementing GST and is expected to announce the rates for remaining goods in a meeting of the GST Council on June 3.

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