Reformed GST: Challenges and Opportunities (PANEL DISCUSSION-II)

Reformed GST as you know is a law which we have introduced in National Assembly. Its main features are that we are proposing minimum exemptions because our present law gives lot of exemptions. The second basic thing is about zero rating. Presently we have zero rated even domestic supplies for five exports sectors and even others sectors also. We are restricting zero rating for exports only and for domestic supplies it will be taxable. The third major thing is that we are increasing registration threshold from Rs 5 million to Rs 7.5 million. This proposal will spare smaller tax payers from incurring the compliance cost related to keeping of records and filing of returns. Then the fourth major change in the new law is that buyers have to give their CNIC or NTN to the sellers. This provision will help in keeping smaller taxpayer outside tax net and bringing bigger ones in tax net. Then there are lot of distortions in the existing law in the form of special schemes and fixed tax schemes. These schemes will not be part of the new law. The new law has been discussed in Senate’s Finance Committee where there have been objections about certain provisions which have been considered as very harsh and government has promised to consider softening them.