GST Survey 2011
Sizing it up
The introduction of GST has been a much awaited tax reform for the trade and industry in India. Deloitte had conducted a Pre-GST survey in 2009 to gauge receptivity of trade and industry regarding implementation of GST and elicit their expectations for wider circulation to the policymakers. The Survey results demonstrated a unanimous consensus amongst the respondents that GST would be beneficial to the Indian economy.
Since then, the GST implementation process received setbacks due to lack of consensus amongst the States regarding the basic tenets of the GST framework. The lack of significant progress for implementation of GST during the last couple of years has created a sense of despondency amongst the trade and industry. The Central government has time and again expressed their eagerness to implement GST and have continued to announce policy measures for the present indirect tax structure in sync with GST principles.
The present survey was focused on to understand the hopes and expectations of the trade and industry from the GST regime specifically in light of the recent developments in this area of tax reform. The survey was also initiated to gauge the preparedness status of the trade and industry for transition to the new taxation era.
The survey results indicate that GST is expected to reduce multiplicity of taxes, introduce simpler tax credit mechanism, simplify tax compliances and minimize the cascading nature of indirect taxes which is an inherent feature of the present system. However, the respondents were not sure regarding certain aspects of GST such as inclusion of petroleum products in the GST structure or impact of GST on cost or prices of goods and services.
A significant finding of the survey has been that, inspite of the setbacks suffered by the implementation process in the preceding years, the respondents are hopeful that GST would be implemented by April, 2013. This expectation echoes with the recent statement made by the Chairman of the EC regarding the promulgation of the GST regime. However, the trade and industry clearly indicated that they expect sufficient time for implementation of GST. Further, a lot of respondents seem to be awaiting a firm stride in the nature of draft GST legislation to commence their preparation for migration to the new regime.
Clearly, the message to various policymakers seems to be, that although GST implementation is a much sought after tax reform for doing business in India, the trade and industry expects a time bound and well defined roadmap for transition.