The tax could boost revenues through better compliance while making life simpler for businesses that now pay a host of central and state levies
It is also important that the bulk of goods and services should fall within the standard rate of 18 per cent and only as exception to go to the higher rate of 28 per cent and a lower rate for essential goods such as unprocessed food items, CII President Naushad Forbes said.
Ficci complimented the GST Council for reaching a consensus and finalising the four-tier rate structure.
“The rate structure will achieve the twin objective of protecting the revenues of the central and the state governments and further containing the inflationary pressures that may arise consequent upon the change of the taxation system,” Ficci President Harshavardhan Neotia said.
G P Hinduja, Global Co-Chairman, Hinduja Group of Companies said: “We hope sufficient time is given to companies to comply with the tax after the rules are finalized and made public and that the levy of cess would not lead to inflationary pressures”.
Confederation of All India Traders (CAIT) demanded that that irrespective of rates, there should be one single return and single authority to control the taxation system and only then the tax net will be widen and revenue will be increased.
CII also said that it would be challenging for companies to meet the requirements of dual administration by both the central and state governments, while maintaining consistency across different filings.
CII further suggested that the Cess needs to be levied only at the final product and total tax including cess on demerit goods should be kept within the present overall indirect tax incidence.
A 4-tier GST tax structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent, with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess, was decided by the all-powerful GST Council today.
Rajeev Jain, Director and CFO, Intex Technologies (India) Ltd said that for sectors like consumer durables, electronics and FMCG, tax rates at 12 per cent and 18 per cent will give a big boost to consumer sentiment and will boost the growth of the industry.