Mr Srivastava elaborated that a tax reform, if not properly implemented, might lead to increased litigation. Moreover, every sector of industry has different challenges and issues regarding the new regime. Making an amendment in the GST Law in India would be a difficult task since changes would be required in all State laws as well as the Central law. The Government is therefore targeting a unique tax system, which would take care of such issues without any detriment to revenue or to the industry, he stressed.
Mr Robert Tsang, Partner-Tax, India GST Implementation Leader, Deloitte, highlighted that the implementation of GST in India will be complicated. The devil will be in the detail, said Mr Tsang, who also mentioned two fundamental international principles that will be relevant here. First, the OECD GST guidelines specify a destination principle, "which signifies that a supply should be taxed wherever goods end up or services consumed. Second is the principle of neutrality of the tax: GST should not be a cost to a business in a supply chain, only a cost to the final consumer of the good or service. Mr Tsang noted, These two principles underline our Model GST Law too - so use them.
Finally, he added, The journey to GST is not a short one, and does not end in April next year. We should be prepared to keep sailing on the GST seas for at least the next 18 months, and be prepared for both calm waters and storms.
Throwing light on the industry point of view, Mr D D Goyal, Executive Vice President, Maruti Suzuki, stressed that in the wake of GST, we can expect the pain points in the present indirect taxation regime to be addressed. With one common tax rate for every state, GST is all set to make business transactions tax neutral. Mr Goyal also raised concerns arising in the GST regime such as transitional provisions, which the industry expects Government to resolve.
With the rates already being decided by the GST Council on 3rd November, and the vexed issues and law to be decided shortly, GST is probably all set to be implemented on 1st April 2017. GST is the most important milestone in the history of India, from an indirect tax perspective. GST is not just a tax reform, it is a complete business reform, said Mr Harishanker Subramaniam, Chairman, CII Core Group on GST.
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