The perceived loss of revenue to the State with the rolling out of the Goods and Sales Tax (GST) from next fiscal has set off alarm bells in the Commercial Taxes Department here.
The main cause for their anxiety has been removal of the State’s purview to assess businesses offering services and having a turnover of up to Rs. 1.5 crore. The other concern has been divesting the State’s power to audit and inspect businesses reporting a turnover of more than Rs. 1.5 crore annually.
Officials point out that when GST comes into force, the department is set to lose assessing control of nearly one lakh firms having a turnover of up to Rs. 1.5 crore, and who currently contribute Rs. 1,500 crore annually to the exchequer. They include enterprises selling services or a combo of services and goods such as works contractors and hoteliers.
“The service sector is the fastest growing and higher revenue yielding sector. Once GST kicks in, the State cannot assess these businesses as most of them are a combination of goods and services. The GST Council’s attempt to divest the State’s power to audit and inspect such business is illogical,” C.N. Shiva Prakash, Joint Commissioner of Commercial Taxes and associate president of All-India Confederation of Commercial Tax Association told The Hindu .
Currently, about 5.85 lakh businesses are being assessed for various taxes by the Commercial Taxes Department, which collected about Rs. 47,000 crore for the State exchequer in the last fiscal. About Rs. 6,700 crore that comes from a combo of goods and services collected as Luxury Tax, Betting Tax and Entertainment tax among others will fall under GST, and these taxes will no more exist. In the current fiscal, the department has been tasked to collect Rs. 53,000 crore.
“Divesting of powers to audit and inspect businesses reporting a turnover of more than Rs. 1.5 crore between the States and the Central Excise Department will affect the State’s resources in a long run. With the Centre not having adequate manpower to monitor such large assessee base, we fear loss of revenue. These concerns have to be addressed by the GST Council,” Mr. Shiva Prakash said.
Currently, about 5.85 lak h businesses are being assessed for various taxes Source – http://www.thehindu.com [17-10-2016]