AP chamber wants Goods and Services Tax put off

Wants simultaneous launch of direct, indirect tax reforms.

“Implementing a radically new tax structure in the middle of a financial year is ill-advised.”


Even as the Union Government has decided to push the implementation of Goods and Services Tax (GST) to October 1, the trade and industry feels that the Government should enforce the reforms to indirect tax regime along with the proposed revamp of Direct Tax Code to save time and effort.

TheDirect Tax Code would be operational from April 1, 2011.

“Synchronisation of these tax systems is very essential as businesses and industries plan their financials and businesses. Implementation of GST from October 2010 and direct taxes six months later will not gel well,” Mr Nitin Parekh, Chairman of Trade Committee of Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI), told Business Line.

“Implementing a radically new tax structure in the middle of a financial year is ill-advised,” he said, commenting on the move to implement GST from October. It is very difficult for the trade and business to comply with two different tax structures in one financial year,” Mr Parekh said.

Changes to tax structures result in costs to businesses as it involve staff training, reorganisation of logistics and distribution, and restructuring of information technology infrastructure. “It involves a lot of management time to incorporate all these changes. One cannot go on spending time on these issues, as one needs to focus on their core businesses,” he pointed out.

“Most companies have operations in multiple locations in the country and abroad. They are required to fan out teams to different locations to train people and help them understand the issues. The Government should help different stakeholders, including the consumers, understand the salient features of the GST,” he said.

Lead time

The FAPCCI also felt that the Government give a lead time of at least six months after the relevant Act is enacted in Parliament. “Traders and businesses are just collection agents of taxes. If they falter (in calculating taxes), they lose heavily. They should be given enough time to understand the intricacies ,” he said.