For the first time since the roll out of the Goods and Services Tax (GST), Narendra Modi government has accepted that the new tax scheme has loopholes that need correction.
Revenue Secretary Hasmukh Adhia in an interview to News agency PTI has said that a complete overhaul of the tax rates is now required to reduce the burden on small and medium businesses.
"There is a complete overhauling that is required... it is possible that some items in the same chapter are divided. There is a need for harmonisation of items chapter wise and wherever we find there is a big burden on small and medium businesses and on common man, if we bring them down, there will be a better compliance," Adhia said.
Opposition parties and some of Senior BJP leaders has criticised Modi government for poorly implementing the GST, which amalgamates more than a dozen central and state levies like excise duty, service tax and VAT.
Senior BJP leader and former finance minister Yashwant Sinha had termed GST a “badly conceived and poorly implemented” havoc.
Medium and small businesses are facing hassles in paying taxes and filing GST returns. India's economic growth slipped to a three-year low of 5.7 per cent in the first quarter of the current fiscal.
However, Adhia was hopeful that the situation will improve and it will take at least one year’s time to stabilise the GST system.
"It will take one year. Because it is a new system for everybody... There has been a complete overhauling of tax system in GST so one year is needed," Revenue secretary said.
Since the launch of GST on July 1, the GST Council has agreed on several changes in the new tax regime following problems faced by common man and small-medium businesses.
The 23rd meeting of the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising of representatives of all states, will be held in Guwahati on November 10.
(With PTI Inputs)