As the Rajya Sabha passed Goods & Services Tax Bill to amend the constitution to facilitate the rollout of the uniform tax regime under the GST umbrella, the ball is now in the court of the states and so after a few amendments in the constitution, the bill is soon to get converted into an ACT which will pave the way for One Nation, One Tax, that’s the soul of GST.
Touted as the country’s biggest tax reform, GST will replace a range of existing local and state taxes and so the industry stakeholders are highly optimistic that it will reduce the heavy tax burden which may result into benefits for the buyers and hence demand in the market will grow. However, currently the industry veterans which also have kept their fingers crossed for the favourable final rate of GST.
“By replacing a large number of indirect taxes by a single indirect tax regime across the country, Goods and Services Tax (GST) is all set to bring economic revolution in India by providing greater relief to the industries from the complex tax system and so the approval of GST Bill in Rajya Sabha is undoubtedly a step towards greater progress and growth that will surely lead to a considerable increase in the GDP of the country,” said Mr. Arjunpreet Singh Sahni, Executive Director, Solitairian Group.
Going forward, with the introduction of the new law, businesses will be motivated by the uniform tax structure. “Among other industries, the real estate sector will also be immensely benefitted by the upcoming Act which will enable the real estate companies to do hassle free business across the country on the back of uniform indirect tax throughout the country on various construction materials including the steel and cement, costs of which become major deciding factor while finalizing the price of the finished products,” added Mr. Sahni.
“However, it will largely depend on the final rate of GST that what actual benefits of the reduced tax burden may be passed on to the property buyers. The GST would have been more homebuyers” friendly if stamp duty had also been subsumed into it. Still, in a nutshell, GST is here to transform the growth prospects of the real estate sector by bringing more transparency and the long prevailing gloom of slow demand is just a matter of few days,” he added.
Mr. Pankaj Kumar Jain, Director, KW Group, said “Eliminating the threat of double taxation, GST Act is soon to emerge as one of the major relief for all the stakeholders of the real estate sector as the GST Bill has been finally approved by Rajya Sabha. The home buyers are also set to cash in on the major benefits that a unified tax regime across the country is expected to offer them. If the final rate of GST is kept below the sum total of the current prevailing taxes being paid by the developers, the home buyers may also expect additional windfalls. Creating an environment of greater transparency and ease of doing business, the impact of GST will be felt in the form of increased business momentum in real estate sector for sure.”
Various industries, including the real estate sector, homebuyers and consumers are set to gain as once implemented GST will replace the currently applicable multiple taxes such as value added tax (VAT), custom duties, central sales tax (CST), excise duty and service tax etc with a single tax and hence there will be visible reduction in the cost for all the industry players and so reduction in the prices of goods and services will surely take place and thus, an uptick in market demand across the industries is expected.
Mr. Nipun Singhal, Director, Lloyd Electric and Engineering Ltd said, “As the Goods and Services Tax (GST) Bill is finally approved in the Rajya Sabha, we are expecting the fast-track implementation of this landmark tax reform which has the capacity to reignite the economic growth momentum in the country. By bringing greater transparency and ease of doing business on the back of the expected uniform indirect tax regime across the country, the implementation of GST will remarkably augment the consumer durable market which is now set to witness exponential growth. The demand in the market is here to gain momentum as the end-customers will be immensely benefited by the expected reduction in tax rate.”
“This is a reform on the scale of the 1991 Economic reforms that changed the entire DNA of the Indian Economy. The Government is moving to create a massive single market without barriers within our borders. This will bring in transformation of the overall business scenario in the country. Uniform tax rates will enable companies to be independent on selecting states for establishing their offices, or warehouses and hence, inventory cost and cost on maintaining multiple warehouses will also come down significantly. Thus, the overall business operation cost is expected to cut down by 5 to 10% and multiple taxation system will come to an end. 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. Ltd.
Mr. Rajesh Gupta, Director, Okaya Power Pvt. Limited added, “With the approval of GST bill in Rajya Sabha, the final hurdle in the way of revolutionary GST regime has been removed and so, now we can expect a highly positive scenario unfolding for the lighting, electrical and power back-up sector. We believe, the estimated decrease in the currently effective indirect taxes once the GST is finally implemented will drive the next phase of growth in the industry and the benefits of the lower tax rate, which shall be passed on to the customers in the form of reduced prices of the product line, will surely eliminate the current weak demand scenario in the market.”
For the Indian economy, the GST will create an extremely positive scenario in which indirect tax evasion will come to an end and thus a considerable increase in the country’s GDP will also be witnessed sooner or later. However, at the same time, Industry veterans have expressed their cautions optimism as well, regarding the final rate of GST which has not yet been decided. If GST is implemented on a higher rate then it will act as a dampener for the overall industrial growth in the country.
“GST is highly welcome as it will subsume most of the taxes, but it will largely depend on the final rate of GST that what actual benefits the industries are going to reap once it is implemented. If the GST rate remains below the overall taxes we pay currently, it will be beneficial, otherwise it may turn out as a real dampener, ” said Mr. Naveen Goel, Director, Glint Faucets Inc. “We expect the GST rate to remain below 18%, then only it will create a favourable situation for the industries to flourish. A lower GST rate will lower the manufacturing costs of the products and thus, the consumers will also be benefitted significantly,” added Mr. Nitin Aggarwal, CEO, Prayag.
Mr. Ashish Baheti, Managing Director, Vectus Industries Limited, said “Whether it will eliminate the prevailing high taxes and become truly beneficial for the customers depends on the final rate of GST and the effective implementation of the upcoming act.”
“The impressive scenario that will emerge after the implementation of GST is expected to bring the country’s economy back on growth trajectory. With the expected rise in the government’s revenue figures, infrastructure development will also gain momentum and thus the industries as well as the consumers, all will be the immediate beneficiaries of the upcoming growth momentum and hence investments across various sectors will also rise,” said Mr. Shuvendu Mazumdar, National Product Manager, Sharp Business Systems (India) Pvt. Ltd. “Apart from creating seamless market across the country, the GST can also become instrumental in making the industrial scenario favourable for the consumers, as they are expected to be hugely benefitted by the creation of unified market,” added Mr. Bharat Aggarwal, Managing Director, Sheetal Group.
“The upcoming GST regime will be extremely beneficial for the entire economy, as the uniform tax structure will improve ease of doing business, help build hassle-free supply network and all the industries are expected to grow due to the free movement of manufactured goods in the unified market across the country,” concludes Mr. Punit Pandey, Co-founder, Astrosage.