‘Don’t rush to seek tax exemption’

The Senior President of Tamil Nadu Chamber of Commerce and Industry S Rethinavelu has cautioned the trade and industry against seeking tax exemption under GST.

Speaking with BusinessLine , he said “the industry should not be in a hurry to seek tax exemption because if the product is categorised under the exempted category; then, the buyer will not be eligible to avail input tax credit.”

“To avail excise duty credit, one should use the product purchased either in or in relation to manufacture.”

And for availing service tax credit, the services should have been utilised in the manufacture of the final product and providing output service.

Thus stating, in a lighter vein, he said “hereafter, in the GST regime, those engaged in business — be what it may – will have to include the GST Identification Number on their business cards — to avail the input tax credit on all expenditures. GST Act allows claim of input tax credit “in the course of business or furtherance of business.”

“The buyer (or business unit) that is purchasing say stationery or any other service such as a travel ticket or hotel booking — for furtherance of business — can, with the invoice, claim tax credit,” he explained, adding “such input tax credit should be passed on to the consumer”.

Asserting that the implementation of GST would help avert tax war, he said “the Council should consider deferment of e-way bill requirement by six months and declare the first year of GST as “GST Education Year” to tide over initial hiccups and help assessees fall in line with several new procedures and formalities, all of which would be IT driven”.

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