GST Updates: India’s new Goods and Services Tax system is not simple as it requires filling up of complicated forms and businesses still have some interests about its operational differences — but it still makes the country a more attractive place for foreign investors to do business, the UK-India Business Council (UKIBC) said.
“Teething issues” are bound to come up in a new taxation system, but the political opposition to GST is “inaccurate” and “churlish,” the Council’s CEO Richard Heald has said in a newsletter to the Council’s members, conceding that the Council itself had to “go through a steep learning process” to get familiar with GST.
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“Despite a temporary demonetisation-related blip in GDP, India continues to march forward with its own reform agenda. I have been watching the fanfare with which GST has just been officially rolled out across India (and) met with much enthusiasm by most of the population as well as the vast majority of business,” Mr. Heald said.
“There is political noise with opposition parties describing it as the ‘BJP’s tax terrorism.’ This sounds churlish and inaccurate bearing in mind the Ministry of Finance and the GST Council have indicated that there will be flexibility in implementation in the early stages,” the UKIBC CEO commented.
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“Of course, it is not a “simple tax” as we would know it with five slabs of tax depending on the product and the amount of form filling is complex – at least initially,” he admitted, but added that conversations with senior Indian officials suggest the introduction of the tax should be seen as ‘an evolutionary process.’
Terming the GST as a significant step towards a single market for goods and services for “a country as complex as” India, Mr. Heald expected economic benefits to accrue in time. “It is good for India, and it is good for U.K. businesses, which can now look at India as an even more attractive place to do business in.”
The UKIBC, however, flagged some residual concerns that could pose huge problems for companies unless they have very robust IT systems in place. Keep browsing our site for more updates and stay tuned with us.