New Delhi: Classification of different item sunder various tax slabs of GST has created an environment of anxiety and concern among the trading community across the country, Confederation of All India Traders said today.
Various verticals of retail trade are demanding lower tax on items being dealt by them since they have been categorised under higher tax slab in comparison to tax slab of current VAT tax regime, CAIT said.
As per an analysis, 1,211 goods and 36 services have been so far classified under GST out of which nearly 50 per cent goods have been placed under 18 per cent rate; 14 per cent under 5 per cent rate; 17 per cent under 12 per cent rate and 19 per cent under 28 per cent rate, CAIT said in a statement.
In view of growing discontent about proposed GST rates, CAIT has urged the government to revisit the rate schedule.
"The wider impact of the classification of items under different tax slabs needs to be gauged very cautiously since under GST not only the taxes paid on goods but even the taxes paid on the services will be eligible for input tax credit," CAIT said.
Besides, taxes paid on inter-state purchases of goods or availing services will also be eligible for input tax credit, it added.
"Hitherto, both these advantages were not available under VAT tax regime. Therefore, impact on the prices of commodities will have to be drawn after calculating advantages of input tax credit," CAIT said.