31 additional sections create more confusion: RGST bill more complicated than ST Act: experts

A comparison of the Sales Tax Act 1990 and the ''General Sales Tax Bill 2010'' has shown that total number of sections in the GST Bill 2010 has been considerably increased, from 75 to 106, with 31 new provisions in the new proposed law.
Tax experts told Business Recorder here on Saturday that the drafters of the GST Bill 2010 have substantially increased the number of sections in the RGST regime as compared to the existing Sales Tax Act, 1990. In the present Sales Tax Act, total 75 sections deal with sales tax-related issues. Under the new (proposed) law, the FBR has introduced new sections taking the total to 106 in the GST Bill 2010. Instead of decreasing the number of provisions in the reformed law, the FBR has increased them, which would further complicate the process.
Had the drafters of the GST Bill 2010 simplified the new law, it might have been acceptable to the business and trade community. Contrary to this, the new law has been made more complicated with increased number of sections in the GST Bill 2010. The simplified version of the Sales Tax Act could have been acceptable to the business and trade as compared to new GST Bill, having complicated terminology''s and definitions.
The FBR has proposed to withdraw special procedures, the Third Schedule of the Sales Tax Act, the special tax rates and other distortions in the sales tax regime. At the same time, total number of sections has been increased, which would further create technical and legal problems for the business and trade, particularly the retailers and wholesalers who could not understand even the earlier Sales Tax Act. There seemed to be no justification to introduce 31 new sections when all irrelevant laws/provisions have been abolished under the RGST, experts said.
It is very important to understand that the taxpayers and consultants are well aware of the existing language and definitions of the Sales Tax Act from time to time. With the passage of time, tax lawyers, chartered accountants, tax consultants/ advisers and taxpayers had learnt the basic concepts of the Sales Tax Act. The change in the language would simply confuse the taxpayers as well as tax consultants. The new form of the Sales Tax Act ie GST Bill 2010, has been made unnecessarily lengthy which could not be understood by the taxpayers.
During business activities, the registered persons are well aware of the basic concepts of the Sales Tax Act. The entire change of language of the Sales Tax Act in the name of the GST Bill 2010 would only create problems for the taxpayers to get well versed with the new kind of language used in the GST Bill 2010.
Experts said that there was no need to draft a new law for introducing reforms in the sales tax regime. The withdrawal of zero-rating facility, multiple tax rates and exemptions could easily be done through amendment in the Sales Tax Act under the reforms, they added.