Indian Retailers' Collective Urges Against 35% GST Slab

The Indian sellers collective, an umbrella body of trade associations and sellers across the country, has called on the Finance Minister and the GST Council to reject the recommendations of the Group of Ministers (GoM) on GST rate rationalization. The seller body believes that a new fifth GST slab of 35% and a pricing-based rate structure will fundamentally alter the country's GST framework with devastating outcomes.

These recommendations, according to the collective, violate both the letter and spirit of Prime Minister Modi's promise of GST to the citizens of India as a 'good and simple tax'. The proposed changes would neither be good nor simple, leading to compliance nightmares, reduced profit margins, and a thriving parallel economy.

Abhay Raj Mishra, Member & National Coordinator of the Indian sellers collective, warns that 'All the gains of the GST regime will be wiped out, with permanent damage to the vast age-old retailer network of India, if the GoM recommendations are adopted.'

The collective has identified five immediate fall-outs that will hurt the business environment, including making goods with incremental features more expensive, pushing consumers towards illicit and unsafe alternatives, complicating compliance for small to medium business owners, breeding corruption in the tax management system, and ultimately killing small and mid-sized retail businesses.