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Large companies disappointed with key GST issues, await clarity

Key areas of concern include anti-profiteering laws, input credit

BS Reporter  |  Mumbai 

Arun Jaitley, GST Council
Finance Minister Arun Jaitley at the 21st GST Council meet in Hyderabad.

Large are disappointed that many key issues following the rollout of Goods and Service Tax such as anti-profiteering laws, transition credit issues, and denial of certain was not addressed by the Council in its meeting yesterday. Large corporates, who pay 90 per cent of the total tax revenues, now hope that their concerns will now be addressed in the next council meeting in November. 

“The government has addressed the immediate concerns of 90 per cent of tax payers who contribute approximately 10 per cent of the tax collection by relaxing the compliance norms. But the concerns of minority taxpayers who pay 90 per cent of the tax revenues, will hopefully be addressed in next council meeting,” said Sachin Menon – Partner and Head of Indirect Tax at Citing an example, Menon said the 35 per cent abatement on payable on existing car leases is indeed welcome but is not good enough as still the lessee will end up paying 28-30 per cent as against 15 per cent service tax in the earlier regime.  

The corporates are also grappling with other issues such as how to comply with the anti-profiteering provisions which has the potential of litigation, and restrictions on single credit note against multiple invoices. 

“The with exports have been given a relief by the council yesterday. The Council has also deferred Mechanism which was procedural concern for large corporates. The council should have given more clarity on anti-profiteering clause which is a big concern for large corporates,” said Biren Vyas, Partner, India. 

As per anti-profiteering clause in the GST, if the authority finds that a company has not passed on  benefits to its customers then it will either direct the entity to pass on the benefits to consumers along with 18 per cent interest apart from levying a penalty. And if the beneficiary cannot be identified will ask the company to transfer the amount to the 'consumer welfare fund' within a specified timeline.

Auditing firms said the council should clarify whether anti-profiterring ccompliance  is required to be implemented product wise, division wise, registration wise or company as a whole or have freedom to implement any which suits to its business operations. 

Many textile have reported a loss in business as many of their suppliers are not ready with the software and staff. Large have formed teams which are meeting their suppliers and customers so that they are ready.

First Published: Sat, October 07 2017. 18:40 IST