GST pangs for 3 months only, people will adjust to new way of life soon
June, 27th 2017
Revenue Secretary Hasmukh Adhia today said that the initial pangs of Goods and Services Tax (GST) might be felt for the first three months but after that things will settle down.
"The main pang will be in the first three months. There would be temporary disruption but not at a heavy cost. It won't take longer for people of India to adjust to the new way of life," Adhia told ET Now.
Here are some of the highlights of the interview:
* Whether there will be inflationary or not depends how input tax credit is being used
* In the first year there will be implementation challenges....we estimated very moderate growth in indirect tax revenue
* There will be some inflation in the first year but in the long run GST will be non-inflationary
* There could be some reduction in revenue in items where we have reduced taxes...but due to better compliance, which would offset some of the losses in revenues
* Have kept taxes very low for key items
* Expect large FDI inflow under GST regime
* GST to boost Make in India
* GDP growth will go up due after GST's implementation * Suppose large section of informal economy to come into the formal economy due to GST
* It is difficult to imagine what can go wrong...we are not witnessing no stocking of items. after July 1 new stocks to come into the market
* Not seeing delay in implementation as the new tax rates have already been announced.
* By and large GST is positive for most companies
* If you are a composite dealer, you have to file one return in three months and you have to file only turnover figures.
* For B2B businesses, returns are in 3 parts for sales, purchases & payment
*No tax on used car, except on margin amt of profit made by 2nd hand car dealer
*Don't see much handholding requirement for small traders due to GST
*No plans to change TDS, TCS laws under GST, just postponed for 2 months
*Value of the goods sold in at retail unit will exclude GST rate