GST launched: What experts want now? An empathetic execution, refinement of rate slabs

With goods and services tax becoming a reality in India after long wait, tax experts, who have time and again stressed the need for such a system, are hailing the move.

However, they have also raised the concern that this is not the perfect structure for the GST and expressed hope that the government will refine it to bring down tax slabs going forward.

Representational image. Reuters

Representational image. Reuters

MS Mani - Senior Director, Deloitte Haskins & Sells LLP

The launch of GST will truly unite the country as far as taxation of goods and services is concerned; we now hope that that the government moves to a considerate and empathetic implementation regime with a focus on making the reform acceptable to all sectors of the economy. The introduction of GST signifies the completion of all processes necessary to launch the most eagerly awaited tax reform in the country and will significantly improve the ease of doing business in India; this is a defining moment in the country's economic landscape whose benefits will accrue over the next few years.

This is a defining moment for the country as the introduction of GST is a business reform intended to harmonize the indirect tax structure across the country with significant benefits for all sections of society - the focus now shifts to smooth implementation of GST.

Anita Rastogi, Partner - Indirect Tax and GST, PwC

The mega reform of GST should be a mixed bag for the fast-moving consumer goods (FMCG) sector. Clearly the GST rate structure looks  positive for some products such as soap, toothpaste and hair oil are likely to be cheaper, while tea and coffee may be neutral. On the other side aerated beverages and some consumer durables, could be more expensive.  Detergents, baby foods and sanitary napkins may be at a higher price. The rates for Ayurvedic products is not as per expectation. For most other FMCG majors, the GST rate structure is likely to be neutral or marginally positive, as their broad portfolios would see a mixed impact.

Saloni Roy, Senior Director, Deloitte Haskins & Sells LLP

The historic tax reform is finally here after a long wait. India has moved to a global system of taxation which has been intricately developed and formulated in close partnership and coordination with the central and state governments. India has awakened to GST and to a new era of taxation policies.

Gautam Khattar, Partner - Indirect Tax, PwC

Overall a positive for auto industry, exception being bikes over 350 cc which is negatively impacted. The local state VAT which leads to variations in prices across State will no longer be there and may provide single price across India. However, the existing leases will be impacted upto 30 percent. New lease will reap the benefit of additional credit available under GST.

Gyanendra Tripathi, Tax Partner, EY India

Some of the immediate challenges for the manufacturing sector from a GST legislation perspective are clarity on the mechanism for excise exempt units set up under the area based exemption, while the existing credits are permitted to transition to the GST regime. Clarity is required on the balances lying in Account Current (such as PLA, Advance Octroi deposit, etc.). The per day exemption granted for purchase from unregistered dealers is impractical from a tracking and monitoring perspective and could perhaps be simplified to provide an overall monthly limit and GST payable beyond such limit.

Muralidharan - Senior Director, Deloitte Haskins & Sells LLP

GST is now a reality! Though the version of GST being implemented may not be the best considering that it was tweaked many times to accommodate the conflicting interests of different stakeholders, it is still significantly better than the current tax regime.

GST has put behind both the multiplicity and the cascading impact of taxes besides bringing in transparency in the tax regime. Tax reform is a process and not a destination. One would eagerly look forward to refinement of the GST in the next one or two years to reduce the number of tax slabs, broad base GST to include the petroleum products and simplify the procedures relating to reverse charge, credit availment, etc. The government needs to continuously engage with the trade and industry to remove the pain points in implementation to ensure a smooth transition.

Rajeev Dimri, Leader, Indirect Tax, BMR & Associates LLP.

With more than 80 percent of India’s existing taxpayers having successfully migrated to GST, it may be overly critical to say that the country is not ready. However, few sections of the society are not equipped with sufficient resources and are still struggling to gear themselves with the fresh regime. The industry, at large, seems to be in a welcoming mode for GST, even though one would agree that the overarching public opinion with regards to GST is that contrary to the declared intent, GST would make things more complex rather than simplifying them.

In the initial few months of GST implementation, companies do expect significant challenges with respect to effective delivery by various re-aligned IT systems and continuous changes required in processes and systems on account of the law evolving each day. It is also highly expected that many sections of the industry may not be fully compliant with various requirements of GST law from Day 1 itself and would require a transitioning period of few months post go-live date. This struggle is aggravated on account of the fact that for certain period of time, the companies will have to run parallel systems to account for existing tax transactions as well to meet the requirements of the GST regime.  Lack of clarity with respect to taxability of transactions with Jammu and Kashmir is also leaving many companies unnerved.  It would also be of utmost importance to carefully book all expenses and sales and map all the credits accurately in initial days of GST implementation for successful transition of all such credits to GST.

Updated Date: Jul 01, 2017 14:00 PM

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