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
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
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
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