The apex body of the IT industry also wants the government to ensure that GST does not become negative from point of view of ease of doing business.
Nasscom has already made suggestions to the Centre to address the concerns of IT services providers in the model GST law, which is likely to come up in two to three months.
Nasscom President R. Chandrasekhar told reporters here that while they welcome the GST which will unify the country as one tax regime, they hope that the government will address their concerns.
While under the existing regime, IT services providers have single point of taxation (central service tax), single point of registration, single invoice and single place to go for refund, under GST these will be as high as 111 points across the country.
Nasscom suggested that there should be at least single unified point for central taxes that is central GST and inter-state GST while states can retain their GST.
"We have suggested three enabling provisions which we feel can hugely mitigate issues and challenges of service providers with zero impact on tax revenue. We are not asking for reduction in tax," he said.
He said the IT services providers would face challenge also from the point of view of how transactions will be taxed. If a large IT services company India is providing services to a bank which has operations in all 36 states and union territories, under the existing system, CST is calculated and paid on the basis of contract between two parties.
However, under GST, the value created and added in each of different locations of service provider have to be put down and this will be subject to scrutiny by tax authorities even though it is an internal transaction of the company. Then the consumer or bank has to indicate where all it has been consumed that is how much in each state.
Invoicing will also be a problem as the service providers have to make many invoices and if they are subject to disputes, then lot of litigation can follow, Chandrasekhar said.
He said as an industry they support GST and believes GST is good for the country. "It will improve the efficiency of trade and business. It will streamline the whole taxation and make the system much more transparent as the entire thing is being implemented on IT platform thorough GSTN," he said.
He said GST would also facilitate rational tax regime based on actual value addition. "If you look at step by step value addition in manufacturing this will encourage true value addition as opposed to tax arbitrage."