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The Confederation of Indian Industry (CII) has voiced its concerns over the penal clauses included in the Model Goods and Services Tax Bill.
CII President Naushad Forbes, sharing the dais with Finance Minister Arun Jaitley at the Vibrant Gujarat Summit, listed two key concerns for industry.
“We believe the best way to control a firm is to have an independent firm to scrutinise the process and be accountable only to the GST Council. But even if it one needs these provisions, can they be made quite simple and transparent such that there isn’t scope for discretion and scope left for harassment?” Forbes said.
Instead of resorting to penal clauses, the Indian government could look to adopt a model followed in Australia wherein authorities shame companies if lower taxes are not passed on to the customers, Forbes said.
Meanwhile, Finance Minister Arun Jaitley reiterated that GST, coupled with the government's demonetisation drive, will ensure better tax compliance.
Despite the slim chances of meeting the 1 April deadline for implementing the GST, Revenue Secretary Hasmukh Adhia said the government would maintain that as the target date for implementation of the new indirect tax regime. Adhia evaded specific concerns voiced by industry participants and spoke instead about the simpler and more transparent tax payment structure under GST.
Forbes agreed that the proposed tax structure was simpler and more transparent but emphasised on the need for a single window registration process. The government is likely to miss the 1 April, 2017 mark, but the new regime should be in place by 1 July, he added.
(This article was originally published here.)
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