Panaji: Goa’s industry bodies on Monday called for further structural changes in the goods and services tax (GST) regime, especially the convergence of several tax slabs into just two tax rates for the entire nation.

Goa Chamber of Commerce and Industry, Confederation of Indian Industry – Goa chapter and even Shrinivas Dempo recommended that the all-powerful GST Council should look at simplifying the tax rate structure.

 

“They could look at simplifying the slabs which could ultimately be two rates, one for the really luxury goods which should be taxed at the maximum rate and the other rate for all other goods,” Dempo, the chairman of the Dempo Group, said.

 

CII – Goa chairman Lalit Saraswat concurred and said the convergence of the current five tax slabs into two slabs would be welcomed by the industry. “The GST slabs should be brought down to two rates with 28% covering only the demerit goods,” Saraswat said.

 

GCCI president Manoj Caculo raised concern over medium, small and micro enterprises (MSMEs) being starved of working capital due to GST compliance.

 

“After the GST regime, when an invoice is raised, you have to charge the GST and pay it. However, small industries supply their material to larger companies and big customers and the money does not come in for three months to six months, so their funds get blocked,” Caculo said.

 

Caculo said that the delay in payment by larger companies may also force MSMEs to pay their tax after the due date, thus incurring an interest burden.

 

“Banks are not very friendly when it comes to working capital, so working capital is getting blocked. If the GST council can work out some solution to this it will be a relief,” Caculo said.

The industry bodies also suggested that the 28% GST currently levied on five-star resorts should be reduced so that Goa can remain competitive in the global tourist market. Caculo pointed out that with 28% rate on five-star hotels Goa was overpriced as a tourist destination compared to Malaysia, or Sri Lanka or Singapore.

 

Published On : 02-07-2019

 

Source : Times of India