GST will make taxation difficult for IT sector, says Nasscom

As the country inches towards the uniform GST, the IT industry association Nasscom is worried. It feels that the new regime could lead to a procedural nightmare and trigger litigation. It might impact the ease of doing business for the IT industry.

Nasscom President R Chandrasekhar flagged the concern of the industry and said it had taken up the concerns with the Union Finance Minister Arun Jaitely and officials in the Government. “We are not asking for any tax sops. The suggestions we are making will have zero impact on tax. We are asking them to ensure a smooth process for the industry,” he said.

He contends that a simple tax regime in vogue for the IT industry is going to become cumbersome in the new tax structure. “It is a simple regime for the industry. It is a single point of taxation (Central Service Tax), and one single point of registration, one in-voice, one single place where we have to go for a refund. So all of these are under a single point,” he said.

Talking to reporters on the sidelines of the World IT and Services Alliance meeting here on Wednesday, he said the industry would have to deal with tax issues at 111 points and could end up increased paper work and litigation.

Giving a break-up of the 111 points, he said there was this Central GST, Inter-State GST and State GST and that multiplied by 36 (States and UTs) is 108. “Moving from the single point to 111 could definitely prove to be a challenge in terms of ease of doing business. But we are not saying that these should be unified and retain the earlier regime. We understand that for GST certain changes are required.,” he argued.

He, however, welcomed the GST that would help the economy. It would improve the efficiency of trade and business and ensure transparency.

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