GST Bill’s passage credit positive for India rating: Moody’s

The Goods and Services Tax (GST) Bill, passed by Rajya Sabha on Wednesday, is likely to be tabled in Lok Sabha on August 8 for ratification. “Along with other restrictions, the country’s complicated and cumbersome taxation system as well as bureaucracy related to tax-collection remains a hurdle for Chinese firms doing business in India”, it said.

Rakesh Srivastava, senior vice president, sales and marketing, Hyundai Motor India Ltd., said “GST is a milestone in structured tax reform that will lead to reducing the cascading effect of taxes with far reaching progressive impact on Economy”. Indications are that the Empowered Committee of State Finance Ministers, which is charting the GST roadmap, will be converted into the GST Council. “Referring to Office Automation industry, with subsuming multiple indirect taxes, there will be no more ambiguity in interpretation and classification of tax structure, GST will bring in a win-win situation for all”, said Mr. Lalit Chaturvedi, General Manager-Marketing, Kyocera Document Solutions India Pvt.

“A single tax system is beneficial both for the country and the states”. As it stands, the mooted reform will not cover alcohol consumption, electricity, real estate and petroleum products. A GST will tax consumers rather than producers and effectively create a customs union between 29 states.

Though tax on goods would come down because of GST, it might increase on services and also food grains. Businesses have lobbied hard for the tax, with business lobby the Confederation of Indian Industry (CII) estimating the GST will add 1.5 to 2 percentage points to the annual economic growth rate.

He, however, welcomed the passage of the Bill in the Rajya Sabha on Wednesday. If GST is implemented on a higher rate then it will act as a dampener for the overall industrial growth in the country. If the GST rate remains below the overall taxes we pay now, it will be beneficial, otherwise it may turn out as a real dampener, ” said Mr. Naveen Goel, Director, Glint Faucets Inc.

Leader of Opposition Narasingh Mishra said: “The GST bill was first introduced by the UPA government”. Manufacturing will get more competitive due to the emergence of a national market as against the present fragmented one.