“Implementation of GST in one sweep will lead to efficient allocation of resources, smoothen supply disruptions, harness inflation, aid tax buoyancy and improve compliance, thereby reinforcing conviction in “Believe in India”, said Rana Kapoor, founder and managing director of Yes Bank.
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“GST is to ease corporates taxing”. In a bid to pass the GST legislation, the BJP had agreed to a key Congress demand to compensate states for five years for any loss of revenue and drop a 1 per cent additional levy on movement of goods between states.
Moody’s said it expects GST implementation by states will take place in the next few months.
Under the proposed 2016 amendments of GST Bill circulated, GST Council will be required to establish a mechanism for adjudication of disputes, which could arise between the Centre and states or among states themselves.
Tiny Goa could become the first state to clear the mega reform.
The Minister said the rates of most of the commodities will gradually come down under the new indirect tax regime. The Bill will now be returned to the Lok Sabha for its approval. He informed that a team has been formed to go through the representations and do the needful. The introduction of GST is predicted to boost India’s GDP growth by between 0.9-1.7 per cent, according to a study by the National Council of Applied Economic Research.
Interestingly, the state-run Global Times predicted in an article that the passage of the GST Bill will not only boost Prime Minister Modi’s political legacy but will also give him a better chance of returning to power in the 2019 general elections.
The Lower House had passed it in May a year ago, but will have to approve the latest version of the Bill.
“We have to wait for the finalisation of rules of GST”.
On the IT and infrastructure front, the government has targeted that the systems for the indirect tax administration – both at the central and state levels – be set up by November this year, while also involving all stakeholders, including the banks and accounting authorities.
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“I hope in true spirit of cooperative federalism you will take initiative to abide by the consensus that we all had arrived at, together”, Isaac said in the letter. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage.
