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GST in July 2017 - Boon or Bane?

Madhukar N Hiregange 
on 27 February 2017

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The marathon race which was conceptualised in 1978 in the Jha Committee report underlining the importance of GST for India is reaching the last mile in 2017- a period of 39 years!!!

Any landmark reform cannot be 100% favourable to all sectors/stakeholders. The purpose of GST was as under with assessment of what it may achieve in the way it is drafted and expected to be implemented:


Purpose

Possible Impact (-10 to 10+)

Integrate to World Economy

+5

Bring down cost of most products

+8

Bring down cost of services

+2

Bring down cost of essentials for poor

-2

Increase Tax base by 25%

+7

Curb Bill trading (fake bill racket)

+7

Increase GDP by 1%

+8

Increase Export competitiveness

+8

Common Market – no tax distortions

+5

No of rates (100+ to 5)

+6

No credit of IDT- luxury, CST, Octroi etc

+8

Reduction in Rampant Corruption

+4

Simple law

-5

Fair Law – ease of business

-4

Transparency of tax administration

-2

Electricity, Immovable property, 5 petroleum products - out

-10

Honest Tax payer - reward - provisions

-8

Action on 300 + suggestions on Model Law of November 17 - not considered

-5

Anteriority of law ( advance public comments)

-8


Note: All ratings are the personal view of the paper writer and can at best be considered a guesstimation. Some important aspects where information not available have not been commented on.

On the whole GST would be a boon inspite of the issues above rated in negative.

It could be wonderful if the following actions were taken to ensure that it is:

A. Bring in industry and experts groups to suggest amendments to law + rules which should be considered without exceptions. Suggestions not accepted put in public domain.

B. Consideration of 300+ valid changes made in the last 3 months from industry, trade and professional bodies.

C. Changes made whole sale rather than piecemeal like Company's Law.

D. Procedural relaxation for all businesses upto Rs. 100 lakhs. Nil denial of credit for 1 year only intimation of non-matching.

E. No penalty for bona fide mistakes which are likely to be there in millions.

F. Specific provisions to safeguard/ reward the compliant and punish the errant officers. (present law is unduly harsh on the tax payers)

If GST misses the deadline due to any reason, the nations would be the sufferer first and then the youth who are hoping that the demographic dividend which can only come with the economy growing fast and near 100% employment. Let us unite to hope for ushering in better times.

Entire law analysis + FAQ + Web cats of Model Law is available at www.icai.idtc.org = all free for anybody- officer, public, industry/ trade/ professional.  


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