With the Goods and Services Tax (GST) Council initiated a major revamp of the indirect tax regime, the small industrialists in Punjab have expressed their unhappiness over the dual system of returns. They said the government has introduced a dual tax return filing system which is apparently not benefiting the traders.
The traders having turnover of Rs 1.50 Crore or above are required to file their tax returns in one month while those who are having turnover less than Rs 1.50 Crore are required to file tax returns quarterly.
The traders in the state have demanded a single system for filing of tax returns. “It is still creating the confusion as the input tax credit will vary from trader to trader. The buyers will avoid purchasing the material from small units as they would not be able to take the input tax credit from them on a monthly basis. A single system for all traders to file returns quarterly basis should have been introduced,” Punjab’s small and medium industry association president, Badish K Jindal told The Statesman.
He also said that the construction sector is still under 28 per cent GST limits. “It is causing huge tax evasions. The enhancement of composite scheme is useless as the buyer requires to pay the tax to such dealers, but they cannot claim the same from their buyers,” he claimed.
Similarly, president of Small Scale Industries and Traders Association in Punjab, Rajinder Singh said that GST will destroy the small and informal industry. “How we will be able to take the refund from our clients as they will be paying tax under a different slabs up to 28 per cent. Most of the small traders use to maintain manual bills. Codes of various items under GST are different. It is very confusing and tedious to implement in the business,” he said.
Sources in the state excise and tax department said that the new tax regime has proved a cumbersome process for the traders. Over 25,000 traders are yet to be register under the new tax system in Punjab.
In it’s recent meeting, the GST Council has decided to allow tax payers with Rs 1.5 Crore to file quarterly returns and at the same time increased the threshold for composition scheme to Rs One Crore from the present Rs 75 lakh.
It also exempted exporters from payment of tax under various promotion schemes, deferred implementation of the tax deduction at source and collection at source provision to 1 April 2018 and suspended the reverse charge mechanism until the fiscal year-end.