GST Council urged not to introduce new slab rates

Vijayawada: Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) wrote to the Chairperson of the GST Council Nirmala Sitharaman, requesting the government to refrain from introducing new GST slab rates and increased rates that can adversely impact businesses.

In its representation, AP Chambers stated, “It is a matter of concern to see recent media reports that suggest the committee recommending a fresh slab attracting a rate of 35 percent for certain products.” The Chambers said that it goes against the grain of GST simplification and rate rationalisation and not only lead to higher evasion and litigation, but also fuels the growth of a parallel economy that encourages illicit markets and smuggled goods. Higher taxes also lower consumer demand, particularly during times of economic stress leading to loss of livelihoods.

The proposed 35 percent GST slab, if implemented, could significantly impact various sectors and stakeholders in India. “India already has one of the most aggressive GST tax structures in the world with 28 per cent as the highest bracket. Any proposal to introduce newer slabs and also increase rates will be counterproductive, encourage evasion and non-compliance, incentivise illegal and antisocial activities and reverse the transparency of the ecosystem painstakingly pursued by the Government to enable the formal economy to expand and contribute to a virtuous cycle of growth,” the Chambers said.

AP Chambers urged the GST Council to refrain from introducing any fresh slabs or increasing tax rates that will distort the current trajectory of growth and spur undesirable activity of evasion, law and order complications and litigations.