One Year Of GST: Here's What India Inc Thinks About The Landmark Reform
Touted as the biggest economic reform since independence, the Goods and Services Tax (GST) completes one year of its implementation on July 1. In a major initiative to ease the tax system of the country, the government launched GST on July 1, 2017. Under the GST regime, a regulated tax system was introduced in the country. With the introduction of this 'one nation one tax' regime, the country's business landscape saw a widespread makeover. The roll-out of GST was accompanied with frequent changes in rules, which was welcomed by few and deemed complex by others. The launch of GST stirred a lot of hubbub in the corporate sector. India Inc gave a mixed response to this indirect tax system.
On completion of one year, here's what India Inc says about the hits and misses of GST:
Ankur Dhawan, Chief Investment Officer, PropTiger.com
"GST is a revolutionary tax reform rolled out by the government of India. One of the key benefits for the real estate sector under the GST regime is input tax credit which developers can now avail for taxes paid on construction material and services. This benefit was not available in earlier service tax regime. GST has streamlined tax administration of real estate sector. However, the initial few months of the implementation were full of confusion for developers as well as customers. On one side, developers were not sure how much benefit they can get out of input tax credit and new raw material prices while on the other end, customers were protesting a significant increase in taxation. While by the end of 2017, things became clearer, most of the developers started passing 4 -6 per cent discount to customers. In the long-run, the GST reform is expected to streamline the sector more that will further strengthen consumer sentiments rekindling hopes of a revival for the sector."
Aditya Kedia, Managing Director, Transcon Developers
"GST still aims at making the country a unified market in order to reduce the burden caused by interstate transfers and facilitate solicitation of materials at the lowest possible cost for the real estate sector. With a single non-complex flat tax rate and the elimination of state-based taxes levied on procurement such as custom duty taxes and octroi, there has been a considerable rise in the available credit. The overlapping of the two primary taxes like service and VAT (Value Added Tax) has led to varied practices being followed in the sector. Under the GST regime, these issues have been put to rest, bringing uniformity in the realty segment.
"The main aim of GST was to replace multiple indirect taxes with one single tax. It has streamlined tax compliance and diminished the room for double taxation. This measure has surely added a significant boost to the economy. This welcome reform has also safeguarded a smooth flow of credit in the economy. It is further expected to condense the construction cost in the hands of the developer, thus aiding in upholding the existing pricing level in the real estate zone."
(Also Read: How Has GST Impacted You?)
Rushank Shah, Director Sales, Hubtown Limited
"GST, to an extent, has streamlined the real estate sector and brought increased transparency in the field. However, GST should be restructured a bit so that it can be also helpful at places where land costs are higher. That may benefit the buyers."
KK Maheshwari, Officiating Registrar, JK Lakshmipat University
"The major point of argument with regards to GST in higher education is the lack of exemptions of auxiliary education services from the ambit of GST. Even though education as a service charges no GST at all, which is a relief for students as tuition and academic fees are not considered under GST, students availing other services including hostels, food, laundry, etc., which are outsourced by higher education institutions, are considered taxable under GST, adding to indirect cost increase to students.
"These outsourced services are considered at par with education services for secondary education institutions in pre and post GST era, and are, therefore, exempted from GST. I believe that higher education institutions should be extended the same exemptions as the government wants more private universities to be set up, requiring crores to be invested in academic infrastructure. These are auxiliary education services which are part and parcel of education only. The discrimination between school education and higher education should be removed. Further, no set-off is available to the university for this."
Chet Jain, CEO and Founder, Crowdera, an online crowdfunding platform
"GST as a single taxation system is important. The Indian government is investing enough money to improve the infrastructure and support the financial ecosystem of the country. However, the categorisation of services which fall under the GST bracket have yet not been well-defined. There is definitely scope for clarification in that area. Also, there should be something to show that GST has evolved for the past year. There should be incentives in place for foreign companies to come to India, build infrastructure and expand their operations here. However, I don't see any incentives. But because of GST, such companies are avoiding Indian markets, and this is something which needs attention."
Harsh Dhand, Founder and CEO, Rentsher, an online product rental marketplace
" GST has been quite beneficial for us as over 80 per cent of vendors have adopted the same and are able to provide input credit. Hence, we are paying tax only on net revenues, a dream for a startup. GST for essential electronics like laptops, projectors, TVs especially on rent can still be reduced to 12-15 per cent. I believe that rentals should be segregated from procurement price of GST if the government is serious about promoting this sector and reducing imports".
Vinay Singhal CEO, WittyFeed, an online viral content company
"With the concept of 'one nation, one market, one tax', Indian government introduced GST on July 1, 2018. Since then, GST has played a pivotal role in removing the cascading effect of taxes on goods and services. The implementation of GST proved to be a game-changer for the economy and logistics. With its advent, every state dismantled the border check-posts which saved much time in transportation. In the digitalisation process, the online facilities for filing the monthly returns, payment of tax, and majorly tax-refund application became easy and fast."
Bijender Goel, Managing Director, Terra Techcom Pvt Ltd
"GST is good for the country but it's implementation should be made more simple. Filing of four returns quarterly is a burden for a person having turnover of less than Rs 1.5 crore. Petrol and diesel should also be brought under GST to give benefit to the common people."
Jigar Doshi, Partner - Indirect Taxes, SKP Business Consulting LLP
"The impact of GST, India's biggest indirect tax reform, has been nothing short of transformational. In the past year, there have been problems in the implementation as expected...It has been a challenge to keep pace with the rapid evolution of GST and frequent changes introduced. This has been compounded with export refunds being stuck, problems being faced in adapting to e-way bills and departmental officers being under-prepared to resolve issues at the ground level. Despite this, the benefits far outweigh the negatives. India is now free of multiple and complex indirect taxes and as GST stabilizes going forward, it will undoubtedly encourage investments and remove blockages further boosting the GDP (gross domestic product)."
