New Delhi: Tax officials’ priority over the next few months is to aid businesses and traders in adopting the goods and services tax (GST) without hassle, not hounding them for inadvertent lapses, said Vanaja N. Sarna, chairperson of the Central Board of Excise and Customs (CBEC).
Sarna said that the government will be empathetic to businesses and try to ensure a smooth transition to the new IT-driven indirect tax regime. It will not question why a new registered taxpayer was previously out of the system or invoke the anti-profiteering provision in stray incidents of price rise.
CBEC is the apex central government body on indirect tax administration.
“Enforcement is not the biggest thing in our mind at present. We are looking in terms of facilitating taxpayers. There will be no witch hunt of any kind," Sarna said.
The chairperson assured that the proposed anti-profiteering body was conceived with the idea of addressing widespread profiteering of any kind and not for micromanaging individual pricing decisions of companies.
“The provision is to address price-rise tendencies across the country on products which ought to be getting cheaper due to reduced tax burden," said Sarna.
The proposed anti-profiteering body is likely to be in place by end July. The assurance comes in the wake of suggestions from traders that procedural lapses by taxpayers be treated leniently during the first nine months of GST.
The government expects the tax base—the number of registered indirect taxpayers—to go up in the GST regime because of the lower Rs20 lakh threshold for a business to come under GST, compared to a Rs1.5 crore threshold that existed in the earlier system for paying excise duty on production.
Also, many entrepreneurs may have started business afresh. A larger tax base is beneficial as it will allow the GST Council, the federal indirect tax body, to lower the tax rates in future.
The chairperson said that although the effort was to make the shift to GST as revenue-neutral as possible, there is tax reduction in many mass use products and minor increases in certain other products as a counter balance.
While GST is designed to eliminate tax breaks, the excise duty waiver already promised to businesses in north-eastern and hill states will continue in a modified form till they are phased out. A company that set up a production facility to avail of this benefit will have to pay central GST but will get refund from the central government for the remaining period of the incentive’s term.
“CBEC is working with the Department of Industrial Policy and Promotion on preparing this refund scheme," Sarna explained.