New Delhi: Aviation Minister Jayant Sinha has said the sector is ready for the tax reform and that the implementation issues have been resolved.
“We have had a series of meetings with all the stake holders regarding implementation issues related to GST,” Sinha told CNBCTV18 in an interview. “By and large I think they have been resolved.”
The Goods and Services Tax, the biggest overhaul of the taxation system since Independence, is set to be unveiled at midnight today. It will roll up as many as 17 indirect taxes into a single, multi-tiered levy, increasing compliance and business efficiency and promoting transparency in business transactions.
There have been concerns from businesses about switching over to the new system. Sinha said that stake holders in the aviation sector had some issues regarding the definition of ‘stopover’ and ‘continuous journey’. There were also rate related issues.
Since there are four rates under which all goods and services will be taxed, there has been some confusion about what tax rate will be levied on which item. These issues “Pertain to exactly how rates will be applied and there we are looking at things like the movement of stock, like spare parts and so on across the country,” Sinha said.
The other issue that has vexed companies is the input tax credit, or the refund that tax assesses will get from the government. Under the current VAT system there is no refund. But under GST companies will be eligible for a partial refund provided they’ve done all their paperwork. “We are looking at input tax credit for import leases so that we understand exactly how tax is going to be applied in the GST framework for these expenses,” he told CNBCTV18.
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