No clarity on tax on services a worry: Expert

“Entire discussion on GST, is related to goods. There is no discussion on services. We don’t know if services will be as per the same rate,” Prashant Deshpande, Partner in auditor firm Deloitte Haskins and Sells, said in an interview. “Services unlike goods are peculiar. If we are providing a service from multiple locations, what will be our GST rate? There needs to be clarity of law on this, so that there are no litigations later,” he said. 

“If a trader has multi-state presence, would he be assessed by states at some places and by the Centre in others?” he asked. As per the understanding between the Centre and states, 90 per cent of the GST payers with up to Rs 1.5 crore turnover will be assessed by states, while 10 per cent will be assessed by the central government. As far as those above Rs 1.5 crore turnover are concerned, the assessment will be done on a 50:50 basis between the Centre and states. 

Deshpande also noted that the tax rates for various commodities and services should be announced soon, as traders would need at least three months to plan out details. “We need to know the rates at least three months in advance. So, many things go into packaging, etc. There has to be some point of time when rates need to be announced and not just a week before GST,” Deshpande said. However, the decision on rates seems to be a long way, because the fitment into tax slabs -- 5 per cent, 12 per cent, 15 per cent and 28 per cent – is currently ongoing, which will then need approval of the Council.