In a historic movement the Upper house today passed the Goods and Services Tax that the industry feels would transform India’s tax regimen and help the country in moving few notches in the ‘ease of doing business’ index. The GST bill was already passed in the Lok Sabha but it was being repeatedly stalled by various parties in the RAjya Sabha where the ruling BJp doesn’t have majority.
However, the passage of the GST bill became successful because of the unanimous support from all the parties including the opposition parties. Prime Minister Narendra Modi thanked all parties for their support. “It is the best example of cooperative federalism,” said the PM.
Just not the politicos, the entire India Inc is gung ho about the passage of thee GST Bill. Here are the reactions from some of the industry stalwarts.
Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises
“A truly remarkable day in India’s economic history. The transformational legislation will not just significantly improve ease of doing business in a vast and complex federal setup like ours by creating a single market but will help prop up our GDP growth rate by an additional 1.5 – 2 percent. The Prime Minister and Finance Minister deserve all praise for their untiring efforts towards bringing bipartisan support in favour of this important legislation.”
Bhaskar Pramanik, Chairman, Microsoft India
“I am pleased that the Goods and Services Tax (GST) Bill was passed in the Rajya Sabha today. It is a positive development and I hope the Government will implement this long pending reform by April 1, 2017. The Government’s idea of a single tax regime is crucial to improve ease of doing business in India and address the ambiguities of the current indirect tax landscape, proving beneficial for the economy, at large.”
Narendra Bansal, CMD, Intex Technologies
Finally India gets united, which was living in a legacy of almost 30 different markets within the country. We were saddled with a plethora of diverse state-level taxes and levies of around 25-30% – or even higher in the case of some sectors. GST will ensure India finally emerges as one common market with an approximate tax rate of around 18%, with no double taxation and no cascading effect of multiple levies.
Being a manufacturing entity, Intex Technologies stands to benefit from a uniform tax regime because this will boost operational efficiencies, increase cost savings and make products more competitive. This will help in a major way to simplify the way we do business and will boost government initiatives on “ease of doing business in India”. The world will now recognise India’s potential and the government’s willingness to take bold steps to boost the economy.
As 1.3 billion consumers across India benefit from lower prices, GST will spur higher consumption and increase the tax base through better compliance with the held of information technology enablement. In the long run, these factors will raise India’s GDP growth by 1 or 2 points, generating millions of new jobs and driving greater prosperity.
Rajan S Mathews, Director General, COAI
“The passing of the GST Bill is a major turning point in India’s history driven by the visionary leadership of Prime Minister Mr. Narendra Modi and Finance Minister Mr. Arun Jaitley, to support the growth of businesses in the country. The industry welcomes and celebrates this iconic reform, while urging the government to ensure that the rate applied for the telecom services should be no more than the existing 15% to meet the government’s vision of a connected digital India and ensuring affordable services. This paradigm shift in India’s indirect tax regime must play an enabling role in the growth of key sectors like telecommunications. There are certain aspects relevant for the telecom sector that would need to be considered by the policy makers while finalising the GST legislation. We look forward to our continued engagement with the committee and working with them to make the implementation seamless, transformation meaningful and optimal.”
Abidali Z. Neemuchwala, Chief Executive Officer and Member of the Board, Wipro Ltd.
“We welcome the passing of the Constitutional Amendment Bill paving the way for implementation of GST in the country. We congratulate the Government on this significant milestone. We are sure that the implementation of the GST would go a long way in strengthening the economy as one common market for taxation as well as address key issues of transparency, ease of doing business and simplification of tax laws. In the process of implementing GST through legislations, we must collectively ensure there is no drifting away from the intent of the Bill and the cornerstone principles of this Government in improving Ease of Doing Business and reduced tax related litigation in India. I am sure the Government would engage meaningfully with the Industry on its concerns and arrive at an effective framework for implementation of GST.”
Alok Dubey, CFO, ACER.
“The IT Industry has been actively engaging with the industry associations after the introduction of the model GST law. The discussions to understand business models and devise appropriate solutions have already begun. In many cases, the tax departments currently are solely catering to the needs of tax efficacy. With the introduction of the new law however, businesses will be motivated to remodel their financial infrastructure and bring more efficiency. Duties paid can now be claimed back/taken credit as opposed to the existing chain effect of taxes (CST, Octroi/local body tax/central excise/Service tax) levied upon previous ones. Such additional cost will now not get absorbed at each level. The tax cascading will be minimised.
The law, giving enough incentive for companies to declare transaction in order to claim tax credits will reduce overall tax evasion. Businesses will now only have to deal with State and Central GST Departments instead of variety of state and central departments. This will hopefully bring down disputes, litigation and cost of compliance.
Unless the final GST rate on each product category is known, the calculation of the pricing shall remain speculative. With GST, overall taxes on goods are likely to come down and make them cheaper. However, there may be some teething troubles as the new law comes into effect. In the long run, the lower tax burden could translate into lower prices on goods for consumers.
The new law will motivate businesses to remodel their logistics and warehousing solutions. Most organisations have put any major warehousing or logistics decisions on hold till they have clarity on GST law.”
Ashish Goel, CEO and Co-founder at Urban Ladder.
“Introduction of GST will be a huge step by the government in backing it’s promise of ease of doing business. As a consumer e-commerce brand, our focus is on building a seamless supply chain and logistics network that helps us fulfil customer orders in different parts of the country. GST will help create a single unified market across India and allow free movement and supply of goods in every part of the country. Additionally, it will also eliminate the cascading effect of taxes on customers which will bring efficiency in product costs. Overall, GST is going to be a game changer for most industries and especially for e-commerce.”