New Delhi: A large section of India Inc would like the GST rate to stay below 20 per cent along with services of mass consumption being included in the ‘merit’ list to ensure that prices of critical services like telecom, banking, healthcare, railways, do not lead to inflation, according to a survey by ASSOCHAM.
“An interaction with a large number of Assocham constituents felt that the focus should be to get the maximum tax buoyancy through more and more trade and industry channels in the small scale and unorganised sectors joining the mainstream value chain, rather than keeping the standard GST rate high,” it said.
Assocham said that no tax reform can succeed unless adequate revenue generation is assured both to the Centre and the states. “Likewise, in the case of GST, the Revenue Neutral Rate (RNR) should be worked out, taking into account the tax buoyancy. With the kind of IT backbone being readied, the taxation stream should be able to detect any single link seeking to break the chain of value. On their parts, the trade and industry would also like to fall in place if seamless input credit is available and adjusted with the net result that the overall tax incidence, especially on goods is brought down,” ASSOCHAM said.
Besides, doing away of octroi and entry tax at the inter-state borders would bring in a huge amount of operational efficiencies that in turn should have a positive implication for the transaction cost, it said.
