NEW DELHI: Keep out labour intensive sectors like leather and plantations out of the Goods and Services Tax ambit or place them at the lowest slab of 5 per cent, said the Commerce and Industry Ministry on Tuesday.
Speaking on the issue, Commerce and Industry Minister Nirmala Sitharaman sought the exemptions in the presentation made by senior Commerce Ministry officials to the members of GST Council. “We made a strong pitch on that, (keeping the labour intensive sectors out of GST) as these sectors create jobs,” she told reporters after the meeting.
The Ministry has also sought a “fair” examination for the cement industry under GST, since taxation is “very high currently”. Ministry officials pointed out that this is important for the sector to help other schemes that will soon be implemented by the government — like enhanced housing, modernising road, port and other infrastructure.
To promote exports, the ministry has pushed for an “ab-initio exemption,” in the proposed GST regime. The move will help exporters, as they will not have to pay up front. “Give them an ab-initio exemption and tax them when you have to tax them,” said Sitharaman.
The ministry is also seeking a change in the system where exporters pay duties first and then seek refunds. Commenting on the coffee plantation sector, the minister said: “Ideally, we would like to completely keep it out” from the GST but if at all it comes under the new indirect tax regime “it should be kept in the lowest slab”.
Sitharaman had favoured a cut in the import duty for gold — as it is a critical raw material for the gems and jewellery sector. Restriction-free gold imports also discourages smuggling, she pointed out. The sector had, in July, urged Prime Minister Narendra Modi to reduce gold import duty to 5 per cent from the current 10 per cent to check the shifting of business to neighbouring countries.