KASSIA, a trade body that represents small, medium and micro enterprises in the State, on Wednesday appealed to the GST Council not to consider any proposal to raise the lowest tax slab to 8% from 5%.
Any move towards a three-tier structure such as 8%, 18% and 28% would result in goods in the low tier, at 5% presently, to shift to 8% which would lead to a spike in the price of essential commodities, cautioned P. Shashidhar, president, KASSIA.
Further, such a move would also increase the tax on goods in the second tier by 6%, by being moved up from 12% to 18%, which would mainly hit the micro and small scale enterprises hard, he explained.
“Already, MSMEs are suffering from a triple whammy of economic slowdown, three waves of COVID-19, and now the supply chain disruptions on account of the Russia-Ukraine war,” he said.
While appreciating the need to rationalise the tax structure and move towards a simplified 3-tier structure, KASSIA said this could be attempted by increasing the number of goods coming under the highest slab which had been decreased from 228 to 35, and also shifting the number of goods towards a lower tax slab i.e. from 18% to 12% instead of the other way round, the trade body insisted.
Acknowledging the need to maintain the revenue collection, KASSIA suggested that the issue could be reviewed periodically by the GST Council.
