GST Query

This is perhaps the single largest tax reform in India ever since the economic reforms of 1991 and we need to compliment ourselves for having succeeded in building a consensus on this topic of national importance. What makes our achievement even more special is the fact that a country like the US, despite trying for decades, has not been able to put in place a GST. The expected passage of the 122nd Constitutional Amendment Bill for ushering in the Goods and Services Tax (GST) Bill. The progress of the Bill through the LokSabha and RajyaSabha has probably been the most closely followed legislative function in the history of independent India. Thus, it definitely took us a while to reach that stage where the GST is more or less ready now to be rolled out, but the effort put in and the time taken are definitely well worth. A shift from a production-based indirect taxation to a system of taxation which happens at the point of consumption has been the central concept of GST which has been in the making for more than a decade and a half. Global investors are on the lookout for opportunities. India, with the right reforms, can attract substantial foreign investments. But GST should not be viewed only from a foreign investment perspective. It is even more important for our domestic economy. Our domestic market should be our insurance against any global downturn. Amidst a prolonged global slowdown, India is currently a shining beacon of hope in world economy and is expected to emerge as an engine for global growth. In this backdrop, implementing the right reforms is imperative. This is an opportunity we cannot afford to let go.

Each Tax payer would be allotted a Permanent Account Number linked tax payer identification number.  The number of digits involved in Goods and Service Tax is yet to be decided.  Based on the study of Goods and Service Tax system of other countries,   13 to 15 digits number is expected to introduce by the authorities in India.  Such GST number would bring the GST PAN linked system in line with the prevailing PAN based system for Income Tax facilitating data exchange and tax payer compliance.

The final design of GST and its registration process would be worked out in consultation of Income Tax Department of India and other concerned authorities of Goods and Service Tax. This will also substantially improve ‘ease of doing business’ for entrepreneurs, thereby facilitating job and value creation. The ambitious ‘Make in India’ program too will receive a major shot in the arm.