Large companies disappointed with key GST issues, await clarity

Large companies are disappointed that many key issues following the rollout of Goods and Service Tax such as anti-profiteering laws, transition credit issues, and denial of certain input credit was not addressed by the GST Council in its meeting yesterday. Large corporates, who pay 90 per cent of the total tax revenues, now hope that their concerns will now be addressed in the next council meeting in November.

“The government has addressed the immediate concerns of 90 per cent of tax payers who contribute approximately 10 per cent of the tax collection by relaxing the compliance norms. But the concerns of minority taxpayers who pay 90 per cent of the tax revenues, will hopefully be addressed in next council meeting,” said Sachin Menon – Partner and Head of Indirect Tax at KPMG in India. Citing an example, Menon said the 35 per cent abatement on GST payable on existing car leases is indeed welcome but is not good enough as still the lessee will end up paying 28-30 per cent GST as against 15 per cent service tax in the earlier regime. 

The corporates are also grappling with other issues such as how to comply with the anti-profiteering provisions which has the potential of litigation, and restrictions on single credit note against multiple invoices.
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