For the first time since its independence India is chartering on to a new territory. This will be a fresh experience for those doing business. It is widely believed that GST will significantly improve the economic conditions of the nation and the time is ripe for us to make the best use of this historic opportunity.
GST could turn to be a game-changing reform for India when it is implemented. The passing of four bills in the Parliament: the Central Goods and Services Tax Bill 2017, Integrated Goods and Services Tax Bill 2017, Union Territory Goods and Services Tax Bill 2017 and the Goods and Services Tax (Compensation to States) Bill 2017, is a historic achievement. Of course, there would be questions such as what is the importance of GST, what is its design, how does it compare with tax structures seen in other countries?
Notwithstanding questions such as these and many more that may come up, it is but important that the manufacturing industry takes into consideration the various positive results that could follow once GST is implemented. It is therefore apt for the industry to ready itself to embrace GST.
Paybacks for Manufacturing Industry
Vibrant manufacturing is important for India’s economic prosperity and GST is expected to offer manufacturing and machine tool industry with the much needed fillip to enable it to move in the right direction. Praising GST in his interviews to the media, Prime Minister of India, Narendra Modi stated it to be the best example of cooperative federalism which will be instrumental in taking India to progress.
GST is expected to propel “Make in India”. Today the market in India is fragmented along various tax structures. There is the Central Sales Tax on inter-state sales of goods, many intra-state taxes, and countervailing duty exemptions which favour imports as against indigenous production. GST would eliminate all these and pave way for a single national uniform tax for goods and services across India from July onwards this year.
Tax governance would get a facelift with GST implementation. The removal of cascading impact of taxes would bring efficiency and expand tax payer base as well. All this would boost the morale of the business community.
A United Front
The passing of the GST Bills in the Lok Sabha and the Rajya Sabha has come about as a collective achievement. As state legislatures give their nod to their respective state GST bills, a pan-India roll out of GST will be a reality. It is good to see that when it comes to the larger interest of business and of the nation, manufacturing fraternity has one voice though we may face some teething problems in its initial stages of implementation.
It is firmly believed that GST will ensure a predictable tax regime and ease the doing of business. Goods can move from one destination to another within India without facing the usual hurdles. This may enable manufacturing industry to attract fresh investments. Indian Machine Tool Manufacturers’ Association welcomes the country’s biggest tax reform for which it has been waiting for long.