India Inc feels time ripe for next phase of GST reform: Deloitte
The survey indicates a positive impact on businesses of all sizes with micro, small and medium enterprises (MSMEs) being the biggest beneficiary of the simplified tax regime.
The Indian industry feels the time has come to unleash the next phase of reforms in GST administration to enhance ease of doing business and called for an amnesty scheme for resolving existing tax disputes that have tied up business capital and government revenue, according to a survey.
The GST administration has undergone tremendous transformation since its introduction on July 1, 2017, a Deloitte survey said on Tuesday.
The survey found an increased acceptance of the simplified tax regime among businesses, with 88% of MSMEs reporting a reduction in goods and services costs along with optimised supply chains.
According to the survey, 80% of business leaders expressed that the time is ripe for the next phase of GST regime reforms for enhanced ease of doing business and sectoral growth in the next few years.
Respondents to the survey acknowledged the need for introducing an amnesty scheme, essential for resolving existing tax disputes that had tied up business capital and government revenue, the survey said.
Further, it added that 70% of business leaders have reaffirmed their positive reliance on evolving aspects of GST law—a 10% increase from the preceding year.
Mahesh Jaising, Partner and Leader—Indirect Tax at Deloitte India, said India Inc is quite positive towards the changes facilitated by the GST regime and the increasing supply-chain efficiencies.
"The 22% YoY (year-on-year) growth in GST revenue is testimony to the overall economic development and tax-payer-centric administration. About 88% of MSME respondents have acknowledged the reduced cost of goods and services, attributing it to the improved uniformity of the GST regime," Jaising said.
The survey indicates a positive impact on businesses of all sizes with Micro, Small and Medium Enterprises (MSMEs) being the biggest beneficiary of the simplified tax regime.
However, taxpayers and authorities have struggled to gauge the complexity of the law, align internal systems, and train professionals, leading to inadvertent slippages.
"The government could deliberate on introducing a one-time amnesty scheme to resolve existing disputes, many of which have arisen due to interpretation issues or minor non-compliances during the initial years of the GST regime," Jaising said.
The survey has responses from 612 senior leaders across industries and companies and tracks the impact of GST across industries, including consumer, technology, media and telecommunications, energy resources, financial services, life sciences, and government and public services.
Edited by Kanishk Singh