With just a few hours to go for the Goods and Services Tax (GST) to become a reality, India Inc. is optimistic about the landmark legislation, notwithstanding concerns expressed by sections of the trading community across India on the negative impact on business.
While the GST will come into effect from July 1, the Parliament will be holding a special session tonight to mark the historic occasion, though some Opposition parties have decided to boycott.
The session will be attended by Prime Minister Narendra Modi, President Pranab Mukherjee, Central ministers, state finance ministers and many prominent executives from India Inc.
"The Goods & Services Tax is a transformational structural reform which will have multiple benefits – the creation of a national market; enhanced ease of doing business; greater productivity & efficiency; and improved tax compliance. This reform will result in benefits for all participants in the Indian economy, including both businesses & consumers," Chanda Kochhar, MD & CEO, ICICI Bank, said in a statement.
Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances, said prices of white goods would rise in the short-term. "Home appliances have become a necessity now with evolving consumer lifestyle and a lower tax slab would have made appliances more affordable in a low penetrated market. With 28 percent, GST, we expect the consumer price (market operating price- MOP) of home appliances to marginally go up by 1-2 percent post implementation of GST. This could have an impact on demand in the short run," he said.
Rituparna Chakraborty, President, Indian Staffing Federation, said: "Cash flows are expected to become more predictable and profitability will get improved. It will lead into transparency of compliance and make working with unorganised players exponentially less attractive thereby pushing the country towards greater formalisation."
"GST impact on IT sector is positive. Exports will be taxed at zero rates while the domestic sales will be taxed 18 per cent. With this, the IT industry stands to gain the refund on its inputs credit as per the provisions of the GST Act against the export turnover," Smita Apisingiker COO, Chief Operating officer, Yitsol Technologies, said.
"The government has exempted Healthcare services from levy of GST and therefore there will be no taxes paid by patients for services rendered by hospitals. The Rates of GST on several inputs used in hospitals are increasing from July 1, 2017. Besides certain capital equipment and accessories, the key increase in tariffs have been on services like maintenance of equipment i.e. AMC and labour contracts," Jagannath MS, CFO, Columbia Asia Hospitals, said.
"The job market is looking forward to a big boost from the new GST regime and expects over one lakh immediate new employment opportunities, including in specialized areas like taxation, accounting and data analysis. It will propel job sector attain an annualized growth rate of 10-13% and fuel demand for professionals in various segments of the economy," Sumit Sabharwal, Managing Director (India & SAARC), Excelity Global, said in a statement.
"As we flag off GST, although it is still far from perfect, we realise how much better it is than the myriad taxes we've been subjected to over the last several decades. Once the regime settles in, we can look forward to it spurring the economy by incentivizing manufacturing and making business decisions independent of taxes," Pratik Jain, Partner and Leader Indirect Tax, PwC India, said.