India Inc and tax experts are hopeful of implementation of Goods & Services Tax from April 1 next year. However, they are slightly worried over possible developments in the Rajya Sabha, where the Government is in minority.

India Inc upbeat Terming the new taxation as a ‘milestone reform,’ Chandrajit Banerjee, Director-General of industry chamber CII, expressed the hope that the Bill will get Rajya Sabha’s nod in the current session of Parliament. He said the provision of an Integrated Goods and Services Tax (IGST) system, where only the Centre may levy and collect GST on supplies in the course of inter-state trade or commerce, which would then be divided between the Centre and states, will provide much needed clarity and transparency to the indirect tax system.

A Didar Singh of industry chamber FICCI said this extremely important reform measure is needed to bring about efficiency and transparency in the indirect tax system and to enhance competitiveness of industry. “A unified common national market which the GST will help bring in long-term benefits to all — government, industry, traders as well as consumers,” he said.

DS Rawat, Secretary-General of Assocham, felt that GST will also push up GDP by 1.5 per cent. Besides, passage of the Bill will send a strong signal to global investors. “There will be lot of vibrancy in the tax which will get the benefit of a common market within the country, which has been missing so far,” he said.

Harishanker Subramaniam of EY India said the acid test would be the Bill’s passage in the Rajya Sabha. “Any reference to the Select Committee, as some political parties want, will only defer the passage to the monsoon session, which can delay the April 2016 implementation,” he said, adding that the Finance Minister’s statement that one per cent origin tax will not be cascading, though welcome, needs to be reflected in fine print.

Revenue neutral Krupa Venkatesh of Deloitte felt the most heartening aspect from the Lok Sabha debate was the Finance Minister’s acknowledgement that 27 per cent (revenue neutral rate or GST rate) was way too high and merits reconsideration. “The assurance on CST compensation payout would help boost States’ confidence that the shortfall in revenue, if any, would be made good,” she said.

Nihal Kothari of Khaitan & Co said GST will change the way people do business. “If properly administered, it will increase GDP rate by 1-1.5 per cent, the tax-GDP ratio by up to 2 per cent and reduce the cost of indigenous goods by up to 10 per cent. Hence, it is a win-win for all stakeholders,” he said.

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