It has been one year since the implementation of Goods and Services Tax (GST) in the country. Former prime minister Atal Bihari Vajpayee first introduced the concept in 2000 and set up a committee headed by the then West Bengal Finance Minister Asim Dasgupta to design a GST model. After years of deliberation, the concept of GST turned into a reality in India last year, and it was this day last year that entire India was brought under the tagline of ‘One Nation, One Tax’. The GST implementation was not smooth and was accompanied with opposition both from policial parties and business houses showing apprehension on the consequences of adopting the new tax regime. Also Read - GST Collections in Oct May Cross Rs 1 Lakh Crore Mark For First Time in FY21
One year down the line we have compiled a list for you on what all experts have to say on completion of one year of GST. Also Read - ITR: Income Tax Return Filing Deadline For FY 2019-20 Extended To Dec 31, Check Details
Real Estate Industry on GST
Anshuman Magazine, Chairman, India and South East Asia, CBRE Also Read - Businesses Not Ready With GST E-invoicing Get 30-day Grace Period
“While office and residential segments have remained the traditional investment drivers, alternative sectors such as retail and warehousing have also come to the forefront. With the implementation of GST, the warehousing sector has attracted interest from domestic as well as national players, resulting in the emergence of better quality, investment-worthy assets.”
Ankur Dhawan- Chief Investment Officer-PropTiger.com
“GST is a revolutionary tax reform rolled out by the government of India. One of the key benefits for real estate sector under GST is input tax credit which developers can now avail for taxes paid on construction material and services. This benefit was not available in earlier service tax regime. Another benefit for the sector is streamlining of tax administration. However, the initial few months of the implementation was full of confusion for developers as well as customers. On one side developers were not sure how much benefit they can get out of input tax credit and new raw material prices, on the other end customers were protesting a significant increase in taxation. While by end of 2017, things became clearer, most of the developers started passing 4 – 6 per cent discount to customers.
Going forward, demand for lower GST on the under-construction real estate or inclusion of all real estate properties in GST will be key from the industry. This is especially important for properties where land cost is significant in overall pricing of property. In the long-run GST reform is expected to streamline the sector that will further strengthen consumer sentiments rekindling hopes of a revival for the sector.”
Insurance Sector on GST
Gaurav Seth, Chief Financial Officer, Canara HSBC Oriental Bank of Commerce Life Insurance Company
“The year for this new prodigy child has been extremely interesting and full of challenges. The increase in tax rate from 15 per cent service tax to 18 per cent GST rate had a direct impact on the insurance premiums. Further, tax compliances have been extremely challenging with a multifold increase in the number of tax returns as well as dealing with multiple tax agencies. This coupled with teething issues with technology which seem to now be settling down.
While there has been a settling phase, however, the good outcome is that all of these were envisaged by the industry and therefore were prepared with alternatives. Also, right from the start, everyone knew that the real long-term benefits would take some time to reap. Although the customers have to pay more now to buy insurance, the industry hopes that customer’s decision to buy insurance should not be impacted by the increase in taxes in the long run since the primary objective of life insurance is to give financial protection to the family in case of an unfortunate event. At the same time, the industry continues to request the Government to reconsider lowering the GST rates on insurance since any reduction would result in improvement in long-term financial savings which gives a huge boost to the overall economy.”
Tax Experts on GST
Pratik Jain, Partner and Leader Indirect Tax, PwC
“Implementation of GST is truly a remarkable achievement for the Government, India Inc. and the public at large. Although it is at its early days still, GST has started on a positive note and the benefits for all the shareholders are evident.
‘One nation one tax’ has empowered the consumers by improving the accessibility of products and a close watch from the Government on prices has kept the inflationary trends at bay. From the industry standpoint, except the initial technological challenges in filings and blockage of funds for exporters, GST has not caused any major disruption. In many cases, there has been a saving of 3 to 5 per cent due to incremental credits and vendor price renegotiation, which can potentially go up further. From Government’s standpoint, while the revenue collections a tad lower than expected, there is definite expansion in tax base with some visible buoyancy over last few months. With the wealth of data available with Government and measures such as E way bills, tax leakage is likely to be further plugged in next year or so.
While our GST is still far from perfect, it’s a moment to feel proud of country’s achievement, with a hope that GST 2.0 which is at works now, would be much better version.
Abhishek A Rastogi, Partner at Khaitan & Co
“As India completes one year of GST, the revenue collections in the last three months show a decent trajectory growth of revenue. With this growth and better compliance in the months ahead, it appears that the Government will achieve its revenue target from the indirect tax side. While the increase of revenue is appreciated, it needs to be seen whether Government will cut rate on certain essential commodities. Further, the progress of refunds needs to be closely monitored”
Vishal Raheja, DGM GST, Taxmann
“Today GST has completed one year and now taxpayers and GST officers are comfortable with the newly enacted law of GST. Also, GST department and its officers are sending alerts to defaulters and tracking suspicious activities. Apparently, GST collection rose to Rs 95, 610 crores which clearly indicates that anti-evasion mechanism of e-way has shown results which were implemented from the beginning of this financial year. In the upcoming months, we can also expect more rise in collection of GST due to the fact that GST officers have started matching of GST returns and notices have been issued to companies involved in suspicious transactions. Also, GSTN is working to provide tools to GST officers to easily monitor and analyse data of GST Returns. This will certainly help to evade tax evasion and collections will get a boost.”
Parag Mehta, N.A Shah Associates LLP
“GST collections have shown a steady improvement over a period of time. It had reached a peak of 1 lakh crore in the month of April. That was due to year-end compliance for the year ended March 2018. Average monthly collections for the period ended March 2018 was Rs 89,000 crores. However, due to increase in compliance level and returns filing to around 70 per cent the collections are further improving. Collection figures of 94,016 crores in May’ 18 and 95,610 in June ‘18 clearly reflects the business sentiments. Even the survey conducted by CII has shown that more than 80 per cent of the respondents are satisfied with GST. Further, it appears that there is revival in business which is bound to also set the employment cycle in motion. All the factors seem to suggest GST collections should touch the 1 lakh crore figure very shortly.”
Sanjay Agarwal, Partner, TASS Advisors
“The Goods and Services Tax Network (GSTN) will not be available on the first anniversary day of GST, i.e, 1st July, GSTN said. As the Goods and Services Tax Network ( GSTN ) is planning a major disaster recovery drill of GST System on 1st July 2018, the taxpayers cannot access the portal on the same day between 9 AM to 9 PM. From the very first month of GST rollout, the technical glitches in the portal cause troubles to both taxpayers and professionals. Several times, the Government was compelled to extend the return filing due dates frequently as the system was not working properly.”