The biggest indirect tax transformation ‘GST’ will be upon us in a few weeks from now. The law makers are deliberating on the specific clauses and contours of it – so that the appropriate legislations can be passed. The Confederation of All India Traders (CAIT), the umbrella association for traders in the country extending their full support to GST, raise their concern of the impact on certain clauses of the GST Law on the small businessman.
More than 6 million businesses are due to fall under the GST net. Most of these people come from the SME community who are also key contributors to economic growth. These businesses suffer from uneven cash flows but are largely compliant. If availability of input tax credit is linked to payment of tax by their supplier, it will worsen the situation of these small businesses.
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Speaking on the concern, Secretary General of the Confederation of All India Traders (CAIT), Praveen Khandelwal said, “We are happy that the GSTC has cleared the way for the new law to get implemented. The trading community and other small businesses will benefit from the single tax regime undoubtedly. However, the provisions in the law to do with input tax credit availability if not corrected will be detrimental to their survival. ”
CAIT, National President, B.C. Bhartia said that input credit is the heart and soul of GST and therefore its smooth passage will encourage more and more traders to comply with the law efficiently. On behalf of the entire trading community, we urge the Finance Minister to remove this roadblock so that GST can be a great law for all, added Bhartia.
Under proposed GST law, input credit against the taxes paid by the purchaser can be availed only if the seller deposits the said tax with Government treasury. In the event of non- compliance at the end of seller, it is the purchaser who will be denied input credit. It is an anomaly which needs to be looked into for a smooth transition to the GST regime for businesses.
India Retailing, 10 March 2017