Benefits of goods and services tax (GST) are still unclear, experts from various sectors said on Monday.
Abolition of central sales tax will help firms in streamlining operations, but multiple slabs and exemptions complicate the GST structure, Kavita Rao, professor, National Institute of Public Finance and Policy, said while participating in a conclave to address the myth and realities around GST at the Symbiosis School of Economics.
“Exemptions are apologies of the government for its inability to provide equitable access to goods. Direct benefit transfers or other expenditure methods should be relied on for equity and not a distortion of taxes,” she added.
Economist Manadi Phadke said while GST will have a positive rub-off effect on growth, the magnitude of impact would not be too large.
Real estate representative Ranjit Naiknavare, director, Naiknavare Developers, said GST has dampened demand in the sector as tax rates are quite high. “Demonetisation and GST have been double blows to the realty sector. The initial impact of GST in India has been inflationary quite similar to how it has been in other nations when GST was implemented,” he added.
Stock market analyst Deepak Mohani said GST is not what it was made out to be. “If GST was perceived to bring positive change in the stock market, it did nothing. The markets find it hard to react as GST rates are dynamic and its long-term impact is not clear,” he said.
Rajendra Khadilkar, director of Ameya Management Consulting, which provides inputs to businesses on GST implementation said provisions around input tax credit will lead to many litigations, if loopholes are not ironed out.
Recently, former finance minister and senior BJP Minister Yashwant Sinha had also said so many rates in GST lend itself to lobbying, and is a “textbook case of how GST ought not to be implemented.”