** Sagar Sandesh print version ceases to be published from December 31, 2017. New look E-paper would be available from Jan. 1, 2018 onwards. free of cost.**

GST 1-year report card: What has been really achieved vs what Modi government claimed

A year after the implementation of GST, many experts have come out with their views and the general opinion seems to be, according to the media report, that the implementation and progress have been a mixed bag. 

The GST was not just a grand mid-night event in India, it was a transformation which was felt. From initial confusion, chaos, protests and teething troubles, the GST regime has largely stabilised in last one year, but not as much as the government claims, say several experts.

The Narendra Modi government sure has won accolades around the globe and back home for breaking the 17-year-long impasse in getting the Goods and Services passed in the country, responding quickly to difficult situations and proving that the federal system can work.

But it is a work in progress and due to lack of a smooth switch to the new indirect regime, several experts told FE Online that the implementation and progress have been a mixed bag.

Here’s the report card on GST’s journey so far:

Has the GST helped in ease of doing business? Not for small and medium-sized enterprises.

The Narendra Modi government said that the GST has helped in the ease of doing business in its four-year report card. Experts like R. Muralidharan, Senior director of Deloitte India and Care Ratings chief economist Madan Sabnavis point out that GST has worked well for the bigger companies but not for small and medium-sized enterprises, as the media reports.

If the government successfully addresses issues such as expediting refunds, making the GSTN efficient and robust and bringing uniformity in tax rulings across states, the new indirect tax regime can help in ease of doing business,  Amit Parmar of GST provider Vayana Network has said.

 

Has the GST helped in reducing inflation? Yes, to some extent

 

. “It has been largely neutral when looked at in totality. Some prices have moved up while others have come down. Services have tended to become dearer, while manufacturing displays varied tendencies,” Madan Sabnavis said. 

Some efforts like reduction in tax rates, finalisation of rates to keep it aligned to earlier ones and the introduction of the anti-profiteering clause have helped in reduction of inflation, R Muralidharan said.

 

Has the GST helped in curbing black transactions? Not completely but significantly enough

The input tax credit factor in the GST has made many businesses to join voluntarily, and with this, black transactions have been curtailed significantly. Moreover, the GST led to the formalisation of the more and more businesses, which now leaves less room for tax evasion. “With a strong credit system that allows tax deduction in the hands of business, GST is designed to encourage compliance. Coupled with e-way bill system, it has ensured that the businesses record their transactions properly,” L Badri Narayanan of law firm Lakshmikumaran & Sridharan has told FE Online. 

Jigar Doshi, an indirect tax partner at SKP Business Consulting, also said that tax evasion or black transactions have come down. “Due to one to one co-relation of input tax credit with invoices uploaded by the vendor, it has become impossible to claim the credit on bogus invoices,” he said.

 

Has the GST made customers more informed, or more confused? Both!

 

The government said that the GST has led to more informed consumers due to the simplified tax regime. The experts said that too many and too frequent changes have led to confusion and chaos but the government has also been able to communicate properly to people about their rights such as asking for GST reduction benefit. “Both consumers and businesses have been kept well informed. You can see these most starkly in restaurants where bills are scrutinized for GST rates,” Badri Narayanan said

 

Has the GST helped in Make in India? The jury is still out

 

According to the media report, experts expressed negatively in the sense that GST has not helped Make in India; however, they are hopeful that it may work but a lot of work needs to be done. While many experts have said that GST has not led to any visible effect on the Make in India initiative, Badri Narayanan has said it is early to conclude. 

The GST was launched on July 1, 2017, and any decisions pertaining to the new indirect tax regime is taken by the GST Council, headed by Finance Minister Arun Jaitley and consisting of finance ministers from states known as the Group Of Ministers (GoM). As the GST completes one year, experts hope more efforts towards making GST return filing simpler and inclusion of petrol and diesel under its ambit. 

This very timely meaningful exercise is bound to fetch immense benefits to all the stakeholders, the government authorities, the industrialists, the consumers, the common man, the workers, the employees so on provided the government listens to the experts who have clearly analysed the situation and expressed unbiased facts. And from the way the GST Council has been responding to the complaints of the trade almost immediately reflecting genuine concern that GST must not fail, one can hope with certainty that the government will listen.

 


Disclaimer
Copyright © 2018 PORT TO PORT - Shipping Services Portal ( Sagar Sandesh ). All rights reserved.

Follow Us