What Did We Achieve? Where Do We Go From Here?


A single common market. That’s subject to a consumption-based levy. And does away with the cascading effect of taxes. These principles formed the foundation of the rollout of the goods and services tax five years ago. At the time, businesses had expressed concerns around increase in compliance burden, transition, reconciliation and availment of credit. Then e-invoices and e-way bills became the new cause of worry. The push and pull on rate classification and structure continues. And disputes on most of these issues have kept courts busy.

We’re tracing this journey because the five-year milestone is a good time to pause and assess a law that has impacted all businesses—big or small.

On this special series of The Fineprint, we’re asking companies, tax professionals, and lawyers—what did GST achieve in these five years? And where do we go from here?

We’re kicking off this special series with Seshagiri Rao, joint managing director and group CFO at JSW Steel Ltd., and Mukesh Butani, founding partner at BMR Legal.

If you see prior to 2017, businesses were driven by tax, where to set up warehouses, manufacturing etc., Rao pointed out. So based on the taxes that were involved, business structure was determined, he added.

Butani said, “We have to step back and realise that we have a constitutional document since 1950, which kind of divided the powers of the federal and state government.”

Rao identified five areas that need government attention:

  • Transitional provisions, even today, there are a lot of disputes around claiming credit for prior period taxes.

  • Input tax credit provisions put the responsibility on the buyer to ensure that reconciliations are proper, supplier has filed his returns properly and has made the tax payment. So, that type of responsibility in claiming credit even for a big company is a big headache. “I think what the industry is looking forward to is seamless flow of input tax credit. Otherwise, the cascading impact objective is not achieved.”

  • There’s a requirement of registration in each state but there’s no fungibility of claiming credit from one region to another region or one number to another, even though companies are the same.

Watch the full discussion here:


Source link

What is your reaction?

In Love
Not Sure

You may also like

Comments are closed.

More in:Business