GST rollout not glitch-free: CBEC Chairperson

New Delhi, July 19 (IANS) The rollout of the Goods and Services Tax (GST) has not been glitch-free and has thrown up issues on various fronts, including entertainment tax, textile and MSME sectors, CBEC Chairperson Vanaja Sarna said on Wednesday.

Sarna added that the issues will, however, get ironed out over time.

"The last 18 days of GST have thrown up problems, it has not been glitch-free. We have had issues from textile, entertainment tax and micro small and medium enterprises (MSMEs)," the Central Board of Excise and Customs (CBEC) Chairperson said here.

She was speaking at an interactive session on 'Transition to GST Implementation' organised by the Confederation of Indian Industry (CII).

However, she said that no "earth-shaking" hurdles have arisen and the issues that have cropped up "will get ironed out over time".

"But in 15-18 days, nothing has led us to believe that it is not a good tax or has not been implemented in the right way," she said.

The entertainment tax issue cropped up when Tamil Nadu imposed an additional 30 per cent levy over and above GST, which led the theatres in the state go on a strike.

The strife ended after the state assured that apart from GST there will be no other entertainment tax and kept its 30 per cent levy in abeyance.

MSMEs groups are complaining that earlier the threshold exemption for them from central excise duty was Rs 1.5 crore. The MSMEs are also lamenting that their systems are still not ready for GST.

The textile traders opposing 5 per cent GST had also gone on strike demanding a rollback.

The CBEC chief said the industry was bound to have some issues with rates but that can be discussed and this was an ongoing process. "July 1 doesn't close anything."

The entire exercise of fitment of commodities and services was carried out in a transparent manner by the GST Council and revisions and discussions was an ongoing process, she said.

"There will be issues. Over 50 years, it will be naive to say that the GST law will be accepted as it is," she added.

However, the CBEC chief assured that for the next 3-6 months, the tax administration will go slow and overlook the genuine errors.

"I don't want cases to be made. I am not looking at an hardline attitude. This time is for hand-holding and trade facilitation."

She added that the comfort zone for traders will come after three months after the first returns were filed and input tax credits were availed.

Sarna said the government was closely monitoring GST rollout since July 1.

"There is close monitoring on price changes, price rise, shortage of goods, change in maximum retail price, everything is being monitored by Cabinet Secretary every week."

The government has formed 18 sectoral groups which will come out with the GST report on their respective sectors by the end of the month. The sectoral groups have been formed to assist and address the concerns of the various sectors.