Industry Urges Centre To Ease Sales Tax Norms

There is a need to declare a road map for the Goods and Services Tax (GST) that would eliminate taxes leading to cascading and distortionary effects, industry chamber CII said. The chamber has sent its suggestions to the finance ministry on constituting the GST model, adding that it must be simple to administer with efficient tax collection and credit disbursement mechanisms. CII has recommended that India should have only two indirect taxes - GST (Central & state GST) and property tax. The Central GST should include central excise, service tax and education cess while state GST could include a combination of all taxes currently levied by the state and octroi by municipalities.

Tax on property sale must be levied on the value addition under the state GST and not on the total amount as applicable currently. The Centre could collect GST from manufacturers and service providers while states could collect it from others, comprising traders, the chamber recommended. The input tax credit to be available for the Central GST as well as state GST should be paid irrespective of the collecting agency and a nationwide clearing house mechanism must be created to facilitate transfer of Central and state GST and allow credit for tax paid, CII said.