India Inc, which will possibly benefit the most from the introduction of Goods and Services Tax, welcomed the rapid progress on this key reform even as it pointed out certain shortcomings that it hoped would be addressed over a period of time.
Industry has called for a centralised registration system under GST, while flagging concerns around the burden of complexity that could arise due to multiple registrations for supply of goods and services in each state.
“Businesses in the services sector such as telecom, banking, insurance, airlines, ecommerce undertake pan-India operations. Meeting requirements of each state through different registrations, audits and compliances would be a massive task,” said Confederation of Indian Industry President Naushad Forbes. On the four-tier rate structure that was unveiled on Thursday, the CII suggested that over time the government converge those into one or two rates.
Hemant Kanoria, chairman of SREI Infrastructure Finance, said GST as a concept would do good to the infrastructure industry, but “the process of its implementation should not be cumbersome”.
Industry stands to gain with lower incidence of tax, better input tax credit and lower logistics costs once the GST is rolled out nationally, creating a single national market for delivery of goods and services.
This should boost the profitability of companies. The Confederation of All India Traders (CAIT), however, said the final impact of the new structure would emerge only when the classification of goods under different tax rates was done.
The traders’ body called for one single return and single authority to control the taxation system, irrespective of rates.Only that will widen the tax net and increase revenue, said BC Bhartia, the president of CAIT.
“The rate structure will achieve the twin objective of protecting the revenues of the central and the state governments and further containing the inflationary pressures that may arise consequent upon the change of the taxation system,” said FICCI President Harshavardhan Neotia.