This story is from August 3, 2016

GST could be game-changer with single point tax: Kerala officials

GST could be game-changer with single point tax: Kerala officials
(Representative image)
THIRUVANANTHAPURAM: With the introduction of Goods and Services Tax (GST) Bill in Rajya Sabha, industries department officials and stakeholders including the Kerala chapter of the Confederation of Indian Industry (CII) are hopeful that the reform would benefit the state despite concerns over the tax cap.
GST will put an end to the surging tax on taxes by the centre and state governments that affect imports, exports and business decisions, according to officials in the industries department.
It will lead to abolition of central sales tax, state-level sales tax, excise duty, service tax, and value-added tax and Central VAT (CENVAT), officials said. The centre would support the state in case of a revenue loss due to introduction of GST for five years. Unless the centre caps the tax rate at 18 %, it will lead to inflation, the official said.
Kerala State Industrial Development Corporation (KSIDC) managing director M Beena said the introduction of GST will be a game-changer in terms of uniformity and transparency in taxes. “From a taxation and production point of view, GST will be advantageous for Kerala which is a consumerist state. The services sector will be covered and there will be no double taxation,“ she said.
CII Kerala State Council chairman Harikrishnan R Nair said once GST is in place, government revenues would improve. “Exporters will benefit with zero-rated tax on exports. At check posts, there will not be further commercial tax levy and goods vehicles will not have to wait for hours to pay tax,“ he said.
Federation of Indian Chambers of Commerce and Industry (FICCI) state council head Savio Mathew said that Kerala being a consumer state will benefit more from a single-point centralised taxation system.
Uncertainty is over tax alignment and issues like double taxation on edible oils and refined vegetable oils between states will be checked. Kerala jewellers are concerned about 4 to 5% VAT here compared to one per cent tax in other states, which is a clear anomaly. This will be addressed with the advent of GST regime.
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