Loksabha passed the Goods and Services Tax [GST] bill
The Rajya Sabha on Wednesday passed the Goods and Services Tax (GST) Constitutional Amendment Bill which the Lok Sabha had already approved last year. The Trade and Manufacturing Industry welcome and support the GST Constitutional Amendment Bill.
At present, there are a large number of taxes imposed by the central government (eg. central VAT or excise duty, services tax, central sales tax on inter-state sales, etc.) and states (VAT on sales, entertainment tax, luxury tax and octroi and entry taxes levied by municipalities.
Here's what some of the industry veterans and Entrepreneurs has to say about the new GST Bill
Mr. Dhiraj Agarwal, Co-Founder, Campus Sutra comments:
From the point of e-commerce there are two points in which we are awaiting clarity. First being mechanics of GST across each state as online orders are not location dependent. Secondly, as a fashion e- commerce player we are eagerly waiting to see whether apparel continues to be in the necessity category and hence attracts a lower GST than the standard rate,” said .
Atul Rai, Co-Founder, and CEO of Staqu comments:
“GST is overall good for economy as it will eliminate various complicated taxes between states and the Centre. Being a technology company, I don’t think it will have any direct impact as most technology companies in India are B2B. The major outcome of GST will be based on how it is impacting the corresponding business partners of that technology company. In general, it may add an extra burden to those tech companies which are having their pan India presence as they have to bifurcate services and bill the customer state-wise.
From a startup’s point of view, I would say it will have a good cascading effect, as it will attract and encourage more investors from around the globe for Asia’s third largest economy with a clear and transparent tax regime
Hari Menon, CEO of BigBasket comments:
The passage of the Goods and Services Tax (GST) Bill in the Rajya Sabha is a progressive
reform, and we welcome it. If implemented correctly, it will bring relief from one of the key issues faced in the e-commerce segment – cascading taxes. We are hopeful that in the long-run the creation of a unified marketplace will reduce the tax burden, inventory cost and logistical issues; and ensure seamless movement of goods across the country. This will help bring efficiency, transparency and boost profitability and growth of the sector.
K Ganesh, Serial Entrepreneur, Partner – GrowthStory and Promoter of sector leaders such as BigBasket, Bluestone, FreshMenu, Housejoy, Homelane, Portea etc. commets:
The passage of the Goods and Services Tax (GST) Bill in the Rajya Sabha is a progressive measure as it can facilitate seamless movement of goods across inter-state borders enabling better efficiency and spurring growth of the (eCommerce) sector. However, like every regulation, it needs to be implemented correctly, and should not make lives of eCommerce players even more complicated by burdening them with more administrative hassles.
For the consumer, the price points of many products should come down or remain at the current levels (depending on the GST rates) as there will be free flow of credits since the total indirect tax cost embedded in the price (of products) is likely to decrease.
Mr Betrand Yella, Managing Director, IBEE Hosting comments:
GST Bill is definitely one of the biggest tax reform in India and is expected to change the face of business in India. It is creating a common market place for all sector in India. There are few sectors which will be highly benefited but there are sectors which will suffer as well, specially unorganized sectors. For IT sector it is neutral as at one hand it will simply the procedures, reduces the multiple taxing structure and hence help in delivering our services to across India with same billing. Whereas on other hand it will increases the expenditures for us as we work on single contract for all centres but now with every centre there will be separate billing procedure to be followed, so need lots of documentations, manpower etc. So overall its a good move but will take time to get adapted in India Market.
Gaurav Jain, Company Secretary and Founder Lexcomply.com comments:
GST is an effective step to be at par with global practices provided its rate and associatedcompliance are kept reasonable. The system will change from the current production-based taxation to being consumption-based. Along with bringing about a semblance of uniformity in taxes across states, this is expected to increase efficiency and compliance in the system.
Ssiddharth Goel, Director, KNG Agro Food comments:
Currently there is a distinction between goods and services when they are sold as a package.
Companies have to pay taxes on entire underlying value of the product/service, with implementation of GST, companies in a chain will have to pay tax only on the value-addition. So, the actual tax paid will likely be small and reduce the incentive for evasion.
Rajendra Garg, Director, Anupam Sinks comments:
In spite of the improvements made in the tax design and administration over the pastfew years, the systems at both central and state levels remain complex. They are subject to disputes and court challenges, and the process for resolution of disputes is slow and expensive. At the same time, the systems suffer from substantial compliance gaps, except in the highly organized sectors of the economy. Therefore a strong single taxation system GST is much awaited wherein various Central and State statutes will be subsumed”
Pravin Khandelwal, Director Pranay Impex Pvt. Ltd comments:
To avoid the taxes, goods are being sold mostly within the state in order to avoid paying the CST which is not credited at the stage of manufacture or in course of trading. Good quality products being manufactured in one part of the country will find more market in the farthest part of the country because there will be no CST and no entry tax. GST Bill Implementation will certainly lead to the creation of a unified market, with seamless movement of goods across states and reduce the transaction cost of businesses.