Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) wrote to the Chairperson of the GST Council, Nirmala Sitharaman, requesting her to refrain from introducing new GST slab rates. Increased rates can adversely impact businesses, the Chambers said in the letter.

AP Chambers president Potluri Bhaskar Rao, on Tuesday, December 17, said that it was a matter of concern to see recent media reports that suggest the committee recommending a fresh slab attracting a rate of 35% for certain products. It goes against the grain of GST simplification and rate rationalisation. It not only leads to higher evasion and litigations 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, he said.

The proposed 35% GST slab, if implemented, could significantly impact various sectors and stakeholders in India, he said. “India already has one of the most aggressive GST tax structures in the world with 28% 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, he added. 

Source: The Hindu