The Goods and Services Tax (GST), which is to be implemented from April 2017, will be a game changer for the Indian economy revealed Dr. Rajkumar Adukia during an exclusive interview with The Times Kuwait last week.
Dr. Adukia, who was invited as guest speaker at an event hosted by the Kuwait Chapter of the Institute of Chartered Accountants of India, gave an excellent overview on the GST and its far reaching impact on almost all aspects of business operations in India.
“GST is one of the major reforms which will improve India’s international rating in ease of doing business from 134 to 100,” disclosed Adukia, revealing that major reforms in the pipeline on insolvency, bankruptcy and arbitration would put India among the top 50 countries in the ease of doing business index, within the next two years.
Elaborating on the GST, Dr. Adukia said it would be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India and would replace taxes levied by the Central and State governments.
The 17 taxes currently payable and assessed by different authorities will get subsumed in one tax which will cover two major components, goods and services. These taxes which currently come to around 28 percent will come down to 18 percent so there will be a considerable saving which can be passed on to importers as well, he pointed out.
Dr. Adukia noted that the simplicity of the tax will lead to easier administration and enforcement; which in turn would lead to a reduction in prices and also help eradicate corruption as all payments will be done online. The country’s GDP is also expected to increase by 2 percent as a result of the GST.
An extensive IT infrastructure has been created by a company called GSTN to support GST. They have prepared dedicated software where 9 million traders and 12 million goods and service providers will be migrated to a single registration known as GSTIN.
Amalgamating several central and state taxes into a single tax would mitigate cascading or double taxation and facilitate a common national market. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, with free movement of goods from one state to another, without stopping at state borders for hours for payment of state tax or entry tax, and reduction of paperwork to a large extent.
Dr. Adukia pointed out that two regulatory authorities, the Directorate of GST (DGST) and the renaming of excise tax department to Central Board of Indirect Taxes, will be responsible for overseeing the implementation and the operational part.
“On the whole, this is a very good initiative by the Indian government; being a large democracy it took 16 long years for this to come into existence, but it has evolved very positively and will bring positive results once implemented in April 2017,” he noted.
Dr. (CA) Rajkumar S. Adukia is an eminent international forensic expert Business Advisor, Author, Speaker and an authority in GST, Indian GAAP, IFRS and Ind AS. He has been conducting seminar and lectures across various countries. Having graduated from Sydenham College of Commerce & Economics in 1980 as 5th rank holder in Bombay University, he received a Gold Medal for highest marks in Accountancy & Auditing. Passed the Chartered Accountancy with 1st Rank in Inter CA and 6th Rank in Final CA examination. He also secured 3rd Rank in Final Cost Accountancy Course in 1983. He has been awarded G.P. Kapadia prize for best student of the year 1981. Besides, he holds Degree in law, PhD in Corporate Governance in Mutual Funds, MBA, Diploma IFRS (UK), Diploma in Labour law and Labour welfare, Diploma in IPR, Diploma in Criminology.