Indian industry is of the view
that the proposed Goods and Services Tax (GST) will be beneficial for the
economy, but the deadline of April 1, 2010, is not realistic, a leading
consulting firm said in its survey.
About 97 per cent of those
surveyed agreed it would benefit the economy, but most
of them were not in favour of a dual GST at the Centre
and the state levels. The respondents agreed that the
implementation of GST would warrant re-engineering of
the business model and supply chain.
“More than two-thirds of respondents are not in favour
of a dual GST. About 75 per cent of respondents for
telecom, transport and logistics segments are not in its
favour…. In addition, the possibility that a few states
may not join the GST bandwagon presents an area of
concern,” the Deloitte survey said.
State finance ministers, at a meeting last week, had
also expressed their apprehension on the April 2010
deadline, though they were not against the GST in
principle.
The 304 respondents, which represented different sectors
such as manufacturing, trading and services across the
country, were divided over the extension of GST to
products of conspicuous consumption that attract high
tax rate, continuation of existing and fresh incentives
or the manner of availability of tax credit on capital
goods.
Prashant Deshpande, senior director (indirect tax),
Deloitte, said: “The most significant point to note in
the survey, not entirely unexpected, is the view that
the appropriate date for GST introduction is April 2011.
This clearly points toward the perception of lack of
preparedness on the part of trade and industry and of
the government.”
About 90 per cent of the respondents wanted the entry
tax/octroi levy to be subsumed in GST. More than 75 per
cent wanted the existing tax incentives to continue and
favoured fresh tax incentives for thrust areas under GST.
Around 60 per cent favoured pre-paid GST mechanism on
inter-state supplies, but wanted the continuation of
declaration form mechanism to track stock transfer
without payment of tax.
Source
:
Business Standard, India, dated 14/10/2009
