India Inc. gives a thumbs up to the progressive momentum of the GST regime on its sixth year and pushes for the second phase of reforms for ease of doing business 

• Increased acceptance of the simplified tax regime amongst businesses of all sizes with 88 percent MSMEs reporting a reduction in goods and services costs along with optimised supply chains     
• Business leaders have expressed the need for additional reforms to encourage Ease of Doing Business (EoDB) and propel sectoral growth in the next 1‒2 years      
• Introduction of the Amnesty scheme to resolve existing disputes and legislative ambiguities from the system

National, 20 June 2023, New Delhi: Appreciating the progressive momentum of the GST regime, India Inc. said that the time has come to unleash the next phase of reforms in indirect tax administration to enhance EoDB, resolve legislative ambiguities, and give new impetus to India’s growth story. Respondents to the survey acknowledged the need for introducing an amnesty scheme, essential for resolving existing tax disputes that had tied up business capital and government revenue. Per the survey, 70 percent business leaders have reaffirmed their positive reliance on evolving aspects of GST law—a 10 percent increase from the preceding year.

Hailing the tremendous transformation in the tax administration since the introduction of the GST regime six years ago, Deloitte India, for the second consecutive year, conducted a survey capturing India Inc.’s views about this transformational tax reform. In the survey, 80 percent business leaders expressed that the time is ripe for the next phase of GST regime reforms for enhanced EoDB and sectoral growth in the next few years.

On the findings, Mahesh Jaising, Partner and Leader, Indirect Tax,
Deloitte India said, “India Inc. is very positive towards the changes facilitated by the GST regime and the increasing supply-chain efficiencies.
India Inc. continues to look forward to the continued promotion of EoDB reforms, working capital rationalisation, and reductions in input tax restrictions. The 22 percent YoY growth in GST revenue is testimony to the overall economic development and tax-payer-centric administration. The survey indicates a positive impact on businesses of all sizes with Micro, Small and Medium Enterprises (MSMEs) being the biggest beneficiary of the simplified tax regime. About 88 percent of MSME respondents have acknowledged the reduced cost of goods and services, attributing it to the improved uniformity of the GST regime.”

To boost economic progress and create a conducive business environment, the government could introduce additional measures for MSMEs in the country, granting them an opportunity to avail input tax credits on invoice receipts and relaxing corresponding requirements to further reduce the cost and compliance burden.

Jaising further added, “While the sentiment towards the GST regime remains positive across businesses in India, and in fact better than our survey last year, there is a push to dispel legislative ambiguities around input service distribution (ISD) vs. the cross-charge mechanism, self-supplies, and deemed valuation to ensure uniformity in the taxation system. We also found an inclination towards export rule liberalisation under the GST law with 78 percent respondents citing it as the most-needed impetus, followed by unlocking working capital, removing ITC restrictions, and the removal of “deemed supply” provisions.

Additionally, taxpayers and authorities have struggled to gauge the complexity of the law, align internal systems, and train professionals, leading to inadvertent slippages. The government could deliberate on introducing a one-time amnesty scheme to resolve existing disputes, many of which have arisen due to interpretation issues or minor non-compliances during the initial years of the GST regime.”

Business leaders across industries have been quite appreciative of the transformation brought in by user-friendly tech engines, such as GSTR 2B, sequential return filings, the timely transition of e-invoicing data, and the GST portal. However, the government must resolve current issues and demands, particularly those that are revenue neutral, to fully realise the benefits of the GST regime in India.

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About the survey:

GST@6: An Insight into the Sixth Year of GST was conducted
by Deloitte Touche Tohmatsu India LLP (DTTILLP). GST@6 survey conducted in May 2023 delves deeper to comprehend India Inc’s views on the integration of GST against the ease of doing business in India, tax technology, investment-centric growth, taxpayer profiling, and recommendations. The study also comprehends the industry's views on the effectiveness of significant government changes aimed at promoting the ease of doing business and the adoption of tax technology. The survey has responses from 612 senior leaders across industries and companies and tracks the impact of GST across industries, including Consumer, Technology, Media and Telecommunications, Energy Resources, Financial Services, Life Sciences, and Government and Public Services.

 Notes to the editor for reference purposes only:

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