GST Impact: GST is a success according to Deloitte survey: Mahesh Jaising – The Economic Times

Clipped from: https://economictimes.indiatimes.com/markets/expert-view/gst-is-a-success-according-to-deloitte-survey-mahesh-jaising/articleshow/92571058.cms

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GST is a success according to Deloitte survey: Mahesh Jaising

ET NowLast Updated: Jun 30, 2022, 04:15 PM IST

Synopsis

“Everybody is also at the moment pausing, reflecting and looking forward to the fifty years of GST. From an ease of doing business prospect, around 60% have said the government has done a great job to be engaging and working proactively on technical issues and the accessibility has been across the states and the centre as well. They hope that continues.”

Almost 90% of the survey participants have actually welcomed the GST law cutting across sectors, says Mahesh Jaising, Partner & National Indirect tax leader, Deloitte India, talking to ET Now about five years of GST.

Deloitte has just concluded a very exhaustive survey talking to hundreds and dozens of your big clients across sectors and different companies about five years of GST. Is it a success or is it largely still a work in progress but the direction is right?
Clearly a success and that is not my words that are the words of a survey that we have conducted with close to about 240 CXO level folks cutting across very large as well as MSME companies. I see it as a success for various reasons. But what seems to be very topical and important to cover is even at the council meeting as recent as yesterday, some of the announcements just reiterate the verdict of the industry that it is a success. Almost 90% of the survey participants have actually welcomed the GST law cutting across sectors.

What was the feedback like in terms of ease of compliance, ease of doing business and the role of technology overall?
Among the positives the industry has experienced is the one nation one tax. From the supply chain perspective, the cascading effect of tax has been done away with. All the legacy taxes have also moved away. On the compliance front, technology has played a huge role and 80% of our participants actually gave it a thumbs up that the government has probably gone faster than industry in embracing tax technology.

Also the key benefit from large corporates in particular having multi-state operations is that you no longer have a compliance format and procedures in state A different from state B and state C. There is a common technology platform which is something that has benefited industry and as Indra earlier said, the E-Way bill and e-Invoicing has of course been a big challenge initially and there were teething troubles, but on balance, a welcome step.

Having said that, everybody is also at the moment pausing, reflecting and looking forward to the fifty years of GST. From an ease of doing business prospect, around 60% have said the government has done a great job to be engaging and working proactively on technical issues and the accessibility has been across the states and the centre as well. They hope that continues.

There is also some hope and belief that there should be a little bit more path breaking changes which are not necessarily revenue impacts. If revenue neutral changes could be brought in, certain deemed supply between a branch and head office could be for services or goods. For goods we all understand but for services, it could be a pretty endless debate on two aspects on what is actually a supply or not.

Industry is saying if we pause and realise that there is really no revenue for the government, is it not time to review some of these deemed supply transactions that are creating disputes in interpretation?

The second aspect that they do hope is a little bit more on what the government can do on the working capital front. The government has been investing a lot across sectors in the PLI and other schemes and getting money into the market. But it is also an opportunity to look at GST credits that a company has. Is there a way that it can be given to them in cash?

So to me these two things stand out from an ease of doing business angle. I must add one quick point that there are certain input credit restrictions that were there and grandfathered from the pre-GST laws, whether it is in relation to immovable property or in relation to setting up of infra and certain personal consumption related services.

The industry says isn’t it time to let go of certain restrictions and since you got a record collection, keep the law simple and let the compliance which has already taken you to record collections, continue that way?

What are the areas of improvement which you would like to be streamlined so that the full potential could be unlocked?
We are in the year of audits and assessment. What industry is hoping from a certainty prospect and an ease of doing business is audits and this construct. Today there is a central GST law and a state GST law. The constitutional framework is perfectly fine but I am tagged to one set of officers who will explain tax positions. We have seen a recent and increasing trend of cross empowerment. and if you are with the centre, the state authority can walk in for their audit or a scrutiny and vice-versa. A bit more streamlining to avoid duplication is ask number one.

Ask number two is also to embrace that as you are moving to a pan-India operation and have presence in multiple states, do you really need registration with the premises in each state? It is heartening to know that the parliamentary standing committee report less than 10 days ago has actually recommended a review on that front.

I do think the tax tribunal aspect is a low hanging fruit and as the honourable finance minister mentioned, in one month the GOM is expected to give a report and a decision will be made. I am looking more at an implementation standpoint as to what industry would expect because some of the other points which I am hoping are also addressed .

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