The industry chamber ASSOCHAM on Saturday wrote a letter to Finance Minister Arun Jaitley and demanded that the government should postpone the implementation of Goods and Services Tax (GST) as the IT network is not ready.
The GST is scheduled to be rolled out from July 1. ASSOCHAM's demand has come at a time when Jaitley will be chairing 17th GST Council meeting on Sunday to finalise tax rates on lottery as well as rules relating to e-way bill and anti-profiteering measures.
D.S. Rawat, Secretary General, ASSOCHAM, applauded the effort being made by the Government to implement GST at the earliest, but said there are various issues which still need to be looked at before GST can be implemented successfully.
"Going by the statements of CEO, Goods and Services Tax Network (GSTN), the GSTN will not be fully operational on the 1st of July, 2017. This being the status of preparedness of the GSTN, the taxpayers would find it very difficult to comply with GST requirements from July 1, 2017... We believe that industry deserves some more time and assistance to get prepared for GST implementation," Assocham said
The GSTN, a not for profit Company incorporated on March 28, 2013, is tasked to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the GST.
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Rawat said that during the current phase of GST migration for existing assessees, the server was constantly under maintenance.
There are at present about 80 lakh excise, service tax and VAT assessees, of which 64.35 lakh have already migrated to the portal of GST Network.
However, Assocham is not the first to raise questions about the GSTN's readiness for the GST rollout.
On June 3, West Bengal Finance Minister Amit Mitra also said the rollout of the GST can be delayed by a few days as the preparedness of the GSTN is unsatisfactory.
"With changes being made constantly by the GST council, the GSTN is not able to cope with these. There is a large volume of transactions that need to be monitored. The matrix of weights for tax incidence was given only day before yesterday. The rollout can be delayed by a few days; there is nothing sacrosanct about July 1," he said.
The GST council has finalised the rates of the commodities that were excluded from the 14th meeting.
Biscuits will be charged an 18 percent tax while a 12 percent tax has been levied on readymade garments. Also, cotton and textiles will be charged five percent under the new tax regime.
The council decided to levy five percent on footwear below Rs. 500, and 18 percent on those above Rs. 500.
Gold, gold jewellery, diamonds and silver will be charged three percent under the new tax regime.
Geometric boxes, pencils and sports goods have also been fitted to the 12 percent slab, while solar panels have been included under the five percent tax slab.
The council also fixed a 28 percent tax rate on beedi, adding that no cess is chargeable on the same.