With just two days to go for the GST rollout, the single-largest tax reform since Independence, there have been some doubts and confusion hovering in the minds of small businesses and general public at large over the transition.
Accepting that implementation may see some hiccups in the initial years, Revenue Secretary Hasmukh Adhia said that while GST will be both non-inflationary and revenue-neutral in the long run, but for a year or the government needs to wait and watch.
Here are the quick highlights of his exclusive chat with Times Network.
- Moderate revenue growth in indirect taxes in the first year.
- Whether there will be inflationary or not, depends how input tax credit is being used.
- There would be some reduction in government revenue mainly on account of those items given the reduced rate of taxation deliberately in order to make it subsidised for the common man.
- IGST or Integrated Goods and Services Tax would aid GDP growth as this would provide an effective protection to the domestic industry. Whatever taxes the domestic industry is paying, the same taxes the imported goods will attract. That means perfect protection is being given to the domestic sectors, which will boost Make In India.
- The current disruption or the confusion over GST implementation is more because of the ignorance of the structure.
- It would not take long for Indians to learn and to adjust to the new way of life, because we have always seen that only when we are forced into something, we learn and we do it.
- It is our sincere attempt to see to it that informal economy comes into the formal economy so that there is a better counting of GDP.
- The main pain will be there for the first three months post which everything should settle down. So that is why in order to take care of these three months, we have given certain concessions.
- Post July 1, new stock at new rate will be available and there is no question of any further shortages now. There is no shortage in the market as of now whether it is medicines or whether it is any other consumable goods or consumer durable. People have got enough stock and all the issues of transition have been announced, thereby making them prepared.
- We expect large FDI inflow under GST regime.