The Goods and Services Tax is “not practical at all,” especially in the luxury and information technology services categories, Priyank Kharge, the IT minister for Karnataka stated.
The GST regime is being touted as replacing several central and state taxes, and bringing the concept of “single market”. Originally visualize by the Congress when it was in power, the GST implementation has undergone several changes under the current administration.
Kharge said that under the Congress government, the GST rate had been capped at 14-18 percent, which was ‘agreeable to everybody’.
But now on luxury they are putting 28 percent whereas in entire Asia, the highest was already in India, which was capped at 23 percent. The lowest is somewhere around 6 percent, which is somewhere in one of the south Asian island countries. Australia is 10 percent. And you are saying we will be very progressive if we get a GST of 28 percent? I beg to differ,” Kharge said.
Kharge said that the IT and tourism department representatives of the Karnataka government had raised these issues with the GST Council, but received “lukewarm responses”.
The IT services industry has raised some concerns with the implementation of GST.
The industry body National Association of Software and Services Companies has previously raised issues in GST such as disputes relating to classification of software downloaded, the likelihood of online selling becoming more expensive, electronic equipment such as laptops being taxed higher, and IT peripherals like projectors and some printers to attract the highest GST rate of 28 percent.