CONFIDENCE ON TAX REFORMS: FM

The journey of India's Goods and Services Tax (GST) may have been a 'seven-year itch' -- to borrow the title of a Hollywood classic - with the entire exercise of carving out an acceptable framework, federal consensus, and accommodation of diversified interests but the pathbreaking overhaul of the indirect tax landscape is at an inflection point as it touches 7 years of implementation on 1 July, 2024, amidst record collections exceeding INR 20.14 trillion in FY 2023-24 and growing clamour for a simpler, less onerous and more effective architecture.

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Finance Finance Nirmala Sitharaman on Saturday chaired the 53rd meeting of the GST Council, at Bharat Mandapam. Minister of State for Finance, Chief Ministers of Goa and Meghalaya, Deputy Chief Ministers of Bihar, Haryana, Madhya Pradesh, and Odisha along with finance ministers of states & UTs (with legislature) also attended the meeting.

In its 2.0 avatar, the GST reform agenda is being dominated by demands for improving ease of doing business, effective dispute resolution, maximising impact by using GST data and optimising facilitation/compliance, streamlining the tax framework and focus on MSMEs. Amendment to overrule retrospective tax demands and offering an effective dispute resolution process are holding forth in industry, business and other stakeholder discourse ahead of the Budget to be presented in July which is expected to chart India's reform path for the next five years even as about 84 per cent of India Inc. in a Deloitte GST@7 survey express strong support for the GST implementation. As per the survey, confidence in the reform has significantly increased from 59 per cent in 2022 and 72 per cent in 2023 to 84 per cent in 2024.

The Global Trade Research Initiative data shows GST has become the world's largest platform for indirect taxes with over 1.46 crore registrations. In FY2024, GST collections reached Rs 20.18 lakh crore with 29.85 per cent from imports, 26.92 per cent from inter-state supplies and 43.23 per cent from within-state supplies.

"India Inc. has enhanced confidence in the workings and efficiency of the GST regime. Such positive sentiment is reflective of supply chain efficiencies, the benefits of tax, technology and continued stakeholder engagement on GST policy matters," says Mahesh Jaising, Partner and Leader, Indirect Tax, Deloitte India, echoing the call for progressive steps to take the regime to a new level.