Introduction of GST would make Indian products competitive in the domestic and international markets.
India Inc on Tuesday said it is looking forward to introduction of the much-awaited Goods & Services Tax (GST), saying it would be a very significant step in the field of indirect tax reforms in India.
The government has circulated official amendments to the GST bill to drop 1 per cent additional tax and include a definite provision in the statute for compensating states for revenue loss for 5 years as it gears up to discuss the long-pending bill in Rajya Sabha.
The 2014 bill authorised GST Council to decide upon the modalities for resolution of disputes.
"While government has left no stone unturned to seek a consensus, the willingness and maturity of the key opposition party in terms of understanding the issues and straightening out the differences is indeed praiseworthy.
"Industry can now think of 'One India', which was truly pursued by all political parties in true letter and spirit, and hopefully the Bill will see the light of the day tomorrow," Naushad Forbes, President, CII said.
"From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25 to 30 per cent.
Introduction of GST would make Indian products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth," Ficci said.
"By amalgamating a large number of Central and State taxes into a single tax, it would mitigate cascading or double taxation in a major way and pave the way for a common national market," it added.
However, Leader, Indirect Tax, BMR & Associates LLP, Rajeev Dimri said: "Irrespective of the bright side of upcoming GST, small and medium enterprises must be mindful of its accompanying challenges such as increase in compliance costs and alignment of IT systems with new processes. Thus, for the SMEs, GST throws a mix bag of opportunities and challenges to explore".
Under the modified provisions of GST Constitutional Amendment Bill circulated among the members today, GST Council will be required to establish a mechanism for adjudication of disputes, which could arise between the Centre and states or among states themselves.
With these official amendments, the government has partially met the demands of the Congress party which has been blocking the bill in Rajya Sabha. One of the three demands of the Congress was to do away with the 1 per cent additional manufacturing tax.
On the demand for a Supreme Court judge-headed panel for resolving GST disputes, the official amendments say that the GST Council will establish a mechanism for solving disputes.
With regard to the demand for putting a GST rate cap in the Constitution, the government has not mentioned anything in the official amendments.