Even as the country is preparing to celebrate one year of the implementation of the Goods and Services Tax (GST) system, a cross-section of the industry is still facing problems over its implementation.
According to many experts, GST, which acted as the double whammy for the economy after demonetisation, will continue to hurt the economy until various issues aren’t addressed. The worst hit have been the medium and small scale enterprises (MSMEs), owing to the ‘complexities’ of the system.
“The sooner they move to lesser number of tax slabs, the better. The sooner, they move to simplified returns, the better,” Govinda Rao, Member, Fourteenth Finance Commission said.
For all the traders, other than composition dealers, they have to file at least 37 returns a year, higher than the earlier indirect tax regime. “It increases the costs for us, since these forms are complex to understand,” one of the traders told DH.
According to Rao, it should be quarterly returns rather than monthly returns.
“As a trading community, I think GST is a burden for us. The complexities in it have increased our costs,” Ramesh Lahoti, Chairman-Internal Trade, Federation of Karnataka Chambers of Commerce and Industry (FKCCI) said.
Industry body, Assocham also echoes the sentiment. According to DS Rawat, Secretary General, Assocham, the things are expected to improve in coming quarter, if government reduces the tax rates associated with GST. “Initially the government itself wasn’t ready for GST,” he said.
RBI echoes the sentiment of various stakeholders in the economy. “The level of consumer confidence in May 2018 was almost similar to that in March 2018; while the current situation index (CSI) slid down by one point into the pessimistic zone, the future expectations index (FEI) showed a marginal uptick,” the apex bank said in latest Consumer Confidence Survey.
The credit growth in the country was in the negative zone for fiscal year 2016-17, which ultimately led to the worst ever losses by the public sector banks (PSBs). Till now, in the current financial year as well, there hasn’t been any major uptick in the credit in the country, experts said.