One year of GST: Experts confident on the long-term benefits of GST
July heralds one year of the introduction of the Goods and Services Tax (GST) regime in the Indian economy. More than 1 crore businesses have registered under GST, subsuming over a dozen different indirect central and state taxes. The last one year has been a period of apprehensions and uncertainty; however, with combined efforts of various associations and the government, lack of awareness and technological issues were deftly dealt with along with giving businesses enough time to transition smoothly.
In the last few months, there has been mounting criticism on the implementation of this tax reform. Formats and frequency of returns, frequent lags in technology, refunds, Input tax credit and the introduction of new elements like e-way bill have all added to the uncertainty amongst business owners. However, in spite of initial glitches and challenges, experts closely involved with GST from Day 1 feel positive about the long-term effects of GST.
“The last one year has seen its fair share of the ups and downs from a GST perspective. Businesses have had a tough time in coming to terms with the new law, the new processes and complying with GST. Industries across saw an initial slowdown but now slowly things are inching towards stability. The government took on its part has been working towards making things simple for the businessman and applying corrections as per feedback received from the ground. However, the new simplified regime proposed some time back hasn’t moved enough which is supposed to make it absolutely simple for businesses to comply and greater certainty over input tax credit” , said Mr. D S Rawat, Secretary General - ASSOCHAM
“India’s new unified nationwide value-added system of taxation has come a long way in simplifying the complex tax structure of the country by replacing around 17 federal and state levies to unify a country of 1.3 billion people into one of the world’s biggest common market with minimal cascading and no double taxation, to promote ease of doing business. The introduction of the E-Way Bill system has resulted in smooth movement of goods and thereby significant reduction of turnaround time for transportation. Initial anxieties are settling, but still there is long way for GST to eventually be called a ‘Good and Simple Tax’. Robust IT system (i.e. GSTN network) with minimal fall outs, simplified system of return filing and matching of credits, further rationalising the 28% rate slab to exclude certain items of mass consumption like colour television, air conditioners etc. It might take another couple of years or more for GST to completely stabilise and settle down”,Mr. Bimal Jain, Chairman, Indirect Taxes Committee, Ph.D. Chamber of Commerce and Industry added.
Mr.Bharat Goenka, Managing Director, Tally Solutions, Pvt Ltd commented, “To begin with, getting a country the size of ours to do a complete transformation on the indirect tax front has been extraordinary in itself and something we should take a lot of heart from. What has been particularly encouraging is the continued commitment of the government to seek feedback from stakeholders on rules and processes and apply required corrections from time to time. However, the simplification of GST as a step towards making compliance simpler is still some distance away and one expects decisions to this effect to move faster. This is particularly important as one of the key learnings from the year gone by is that a semi-complete technical process, for eg. having GSTR 1 but no GSTR 2 is problematic both for the government as well as the taxpayer since compliance is not complete and confusion persists. The decisions for GST 2.0 have been taken and one is looking forward for its actualization so that the economic acceleration that GST is capable of can come alive.”
Going forward in the next phase of the GST cycle, the government will have to work towards making compliance simpler so that the resultant benefits can be felt by both the taxpayers as well as the government. Taking key learnings from the last 1 year, ensuring adequate time is allotted to stabilize the technology backbone, providing required clarity and spreading awareness among key stakeholders will boost confidence and build morale in the economy.
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