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GST will be a game-changer for M&E sector, says FinMin’s Rashmi Verma
MUMBAI: The rollout of the Goods and Services Tax (GST) would be a game changer for the media and entertainment (M&E) industry since it would mitigate their apprehensions about multiplicity of taxes, tax rates and lack of uniformity in the tax structure across the states, Ministry of Finance special secretary revenue Rashmi Verma has said.
Speaking at the CII Big Picture Summit, Verma said that multiplicity of tax would go in one stroke with GST implementation. “Entertainment, services and goods tax both at the Centre and states will be built into one making compliance hassle free,” she said.
However, she added that entertainment tax levied by local bodies like panchayats and municipalities would remain the same since that is a major source of income for the local bodies. However, the share of such taxes to the total tax collected would be insignificant. Close to 99 per cent of the taxes levied under the Centre and state dispensations would be merged with GST, she added.
Responding to a point made by a panellist that the proposed GST would complicate the process of levying taxes on M&E segments like advertisements where there would be multiple claimants for tax proceeds depending on the place of origin of the ad and where it is displayed, Verma said that such details were collated to decide the apportioning ratio of the proceeds of the tax among the Centre and the states.
The consumer and industry need not have to worry about the apportioning of the tax proceeds since it is under the purview of the Centre and the states, she said.
She also allayed the concerns of the industry that definition clarity was lacking between goods and services and tangible and intangible goods, by mentioning that under the GST regime, goods and services would be taxed uniformly to obviate the occurrence of such incongruities.
Referring to the 1 per cent additional tax that would be levied during the transitional period of GST for two years, she said that the tax was mainly on the manufacturing sector and the services would be kept out of it. She also clarified that all industries would be eligible to take credit under GST to set off against other tax liabilities.
“We are working on the transition roadmap so that the changeover hiccups will be minimal and if there are any concerns remaining, the GST Council, which will be set up after the constitutional amendment, will look into it and take corrective actions,” she added.
Verma assured trade and industry bodies would be consulted before any decisions were taken. In this regard, she mentioned that three draft processes have been put in the public domain and the fourth draft on returns would be hosted on the internet today.
She wanted trade and industry to give their concerns and suggestions to those drafts before finalisation. A model legislation will be put in public domain by the third week of November this year, and regional workshops would be held in major cities to elicit the views of the industry associations at the apex and state levels. The dialogue process would be continuous and the GST Council will take stock of the suggestions from time to time.
Ministry of Finance Member (Service Tax) V Krishnan said that the three pillars of GST would be rate, technology and legislation.
Regarding rate, he said that National Institute of Public Finance & Policy (NIPFP) was looking into the possible rate structure, which could keep cascading effect to the minimum. With respect to technology, Infosys was entrusted with the task of creating a world-class portal to provide for an IT platform for the implementation of the GST. Regarding legislation, he assured that industry would be consulted at every stage to bring to the fore their views, concerns and suggestions to be incorporated in the GST framework.