Fuel constitutes a large part of revenue generation for both the center and states so there is some apprehension but in due course it will come into the GST fold, said Mr Tarun Bajaj, Secretary, Department of Revenue, Ministry of Finance, Government of India at an ASSOCHAM Event on GST – Journey of 5 years and road ahead.
“I don’t think one can expect everything will move into GST on day one. As a policy maker, I believe in navigating the process well to achieve the objectives.”
For something new as big as GST some hiccups are bound to be there. There already has been a huge difference in the thinking, not only among administrators but amongst the industry and people and clearly the acceptability of GST has increased in the past year.
There has been a great deal of formalization that has happened on account of GST. This has a positive impact on other things as well, such as Income tax, because large or even medium scale industries will only do business with someone who is a part of the GST chain because of availability of ITC. What has happened in GST has also helped increasing income tax revenue which has gone up, and last year despite the challenges, revenues went up 49%. The revenue on GST also grew by 30% last year.” the Secretary said.
“Policymakers are not fixated on achieving a particular rate for GST, more importantly this is the time for retrospection on how these rate structures have panned out, undertake recalibration of rates where needed, remedy the inverted duty structure etc. Once tax revenues have gone up there is a certain degree of acceptance of GST on the part of the states. The user industry too have benefited for a certain degree of stability and the various notifications and circulars are to be expected. The next couple of years should bring more stability and then would be the growth phase” he added.
On rate, I will request ASSOCHAM to provide their inputs on the possibility of reducing the number of slabs to the GST council, which will help us in moving closer towards achieving ‘One nation, one tax’ and make GST a simpler law.
Mr Vivek Johri, Chairman, CBIC, Ministry of Finance, said, “The feedback received from the industry has been extremely valuable in crafting and shaping GST before and after it has been implemented. It is unrealistic to view GST as an event and expect everything to fall into place automatically. A reform as profound as GST should be seen as a process. Even in some of the best governed countries it has taken years to unfold and is still in the process of settling down.
The benefits of GST and what it has achieved so far are there for all to see. GST brought a one stop solution to problems such as fractured tax system, multiple tax regimes, revenue inefficiencies etc. It has also led to the unification of the market and tax rates. The changes made in GST have been facilitative and are meant to streamline the system. There is a debate that availability of ITC has reduced. Data shows that the percentage of taxes paid via ITC has gone up over the years. When we get to a comprehensive tax base which also includes fuel, real estate and electricity among others, there is opportunity for rates to drop further and we are getting there. More works needs to be done towards trade facilitation and grievance redressal. A digital mechanism is being put in place to resolve grievances more quickly. The government is at an advanced stage of conceptualizing a tribunal to redress GST disputes”, said Mr Johri.
Mr. Vineet Agarwal, Immediate Past President, ASSOCHAM & Managing Director, Transport Corporation of India Limited welcomed the august audience and addressed that the GST is an intent to achieve standard and corruption free simple taxation system in a unified manner. He stated that it has brought the ease of doing business between buyers and sellers to transact easily. It is a landmark reform for India that saves the hassles of multiple provisions and filings, which is better for nation building, he added.
Mr. Pratik Jain, Chairman of the National Council on Indirect Taxes of ASSOCHAM said, “People should be proud of the GST and we have made significant progress as a nation over the past five years. He described the 1.44 lakh crore GST revenue for the month of June 2022. He continued, “One nation, one tax is phenomenal, and the expansion of tax era has increased by 34%.” He concentrated on the challenges ahead, which include managing cash flow, proposing an input tax, revamping tax administration, reducing litigation, and using tech to collect more data”.
Mr. Ajay Agarwal, Group Tax, Vedanta focused that the tax function in the country has been engaging and a requirement for the citizens. He appreciated the entire finance story of India and Tax rate changes decided by the GST Council is important for revenue generation and inflation.
The conclave was also addressed by industry veterans and stalwarts like Shri Sanjay Mangal, Principal Commissioner (GST), GST Policy wing, CBIC, Shri Vineet Agrawal, Senior Executive Vice President and Group Head (Taxation), JSW Group, Shri Ajay Agarwal, Group Head – Tax, Vedanta Ltd, Shri Puneet Bansal, Managing Partner, Nitya Tax Associates, Shri Himanshu Goel, Partner, TR Chadha & Co. LLP participated in a panel discussion on Policy Level reliefs / issues moderated by Shri Rohit Jain, Partner, ELP.