Government using scientific method in GST to remove ambiguities: Hasmukh Adhia

MUMBAI: Even as the goods and services tax ( GST) framework is just round the corner the government is using harmonised system of nomenclature (HSN) that provides for detailed scientific method of classification for goods, revenue secretary, Hasmukh Adhia told ET.

This, said Adhia, is set to remove definitional ambiguities and minimising classification/rate of tax related disputes.

Adhia was responding to a query mailed by ET last week. Following which ET had on March 25 written a story on GST debate on categorisation of products. After the ET article the opposition had questioned the government on how categorisation of products was carried out under GST and how is it tackling ambiguities.

The ET article wrote that as the government moves closer to rolling out GST, many product distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation presumably with a view to make sure that revenue collections can be maximised.

Adhia stressed that the product categorisation under GST is being carried out in a way that no future disputes could emerge. “At present, this classification (HSN) is followed for the purposes of central excise duty, minimizing the classification/rate of duty related disputes. So far the VAT administrations have not been following the HSN based classification, which might have resulted in classification/tax rate related disputes,” Adhia said.