“Goods and Services Tax [GST] has a lot of issues. It is 50 times more complicated than Value Added Tax [VAT] owing to the inclusion of the services sector,” said Industries Secretary Rajeev Ranjan on Saturday.
Delivering the keynote address at ‘Industry roundtable on GST implementation' organised by the Center for Asia Studies and FoxMandal Little, he said that the GST, likely to be rolled out by April 2011, offered tremendous benefits. It would transform the whole country into a common market. Issues concerning the State government have been flagged off. However, the Centre and State governments should adopt a give-and-take policy to ensure its success.
Noting that Tamil Nadu was the second last State to implement VAT owing to various reasons, he said it was the only State to have provided training to 75 per cent of its staffers on GST in the last three years.
“We have been insisting on having dual rate GST structure, as single rate was not acceptable to us. Single tax rate will have serious implication for the future of the country. We took a strong position and in the process eight months were lost. Goods are easier to tax, but services are not. In the new system, taxes are levied on consumption. Tamil Nadu has a huge manufacturing base and it might lose out on revenue. We have flagged the issue,” he said.
Mr. Ranjan said that the State Finance Minister, K. Anbazhagan, was not able to attend some of the meetings. In his absence, Tamil Nadu's views could not be presented at the Empowered Committee of State Finance Ministers on GST. The problem was sorted out by circulating Mr. Anbazhagan's speech copy to those present in the meeting and it had tremendous impact.
In his inaugural address, Venu Srinivasan, Chairman, TVS Motors, said the proposed GST should subsume all existing taxes for effective implementation. “Many State governments sought exemption for State level taxes, which would detract from the objective of levying GST. This is a serious issue. If GST is to be implemented, do it properly subsuming all taxes,” he said.
On implementation, GST would be the single most and biggest tax reform in the country. It would improve administration efficiency, reduce harassment and hassles to trade, increase GDP, taxation and revenue collection. It would be a win-win situation to all, he said.
Presenting a rosy picture about India's economic performance, he said “though we have done well in recent times, we are still behind China on several parameters. We have to work aggressively to bridge the gap. They have also started learning English and that advantage would also wane with time.”
S. Narayan, president, Center for Asian Studies, said the rollout of IFRS, GST and Direct Tax code would bring in fundamental changes in the way companies, organisations and institutions managed their businesses.
