'The low tax to GDP ratio of the country will go up, helping the government to adhere to fiscal discipline and keep inflation in check.'
The Goods and Services Tax (GST) regime will weed out black money and usher in an efficient taxation system, but the April 2017 rollout deadline appears to be challenging, experts said.
“GST is the biggest reform since 1991 which will make India an attractive destination for foreign investments. Manufacturing will get more competitive due to the emergence of a national market as against the present fragmented one,” Ashok P Hinduja, chairman, Hinduja Group said.
"The low tax to GDP ratio of the country will go up, helping the government to adhere to fiscal discipline and keep inflation in check. It will improve productivity and transparency," he added.
The passage of the GST Constitutional Amendment Bill is a "milestone in the history of India's economic reforms" and makes the country competitive, especially in manufacturing, in the global market, said Sachin Menon, partner and head, Indirect Tax, KPMG in India.
The Rajya Sabha on Wednesday gave its approval to the long pending GST Bill as the government brokered a consensus with other political parties to get the reform legislation passed.
The April 1, 2017, rollout deadline for the new indirect tax regime looks tough but both the states and Centre are ready in terms of preparedness, experts said.
"In terms of the affirmation and righteous intent on GST to be implemented in the country, possibility of its implementation from April 1, 2017 would be arduous, if not impossible," said Nangia & Co Managing Partner Rakesh Nangia.
According to PwC (India) Partner, Indirect Tax, Anita Rastogi, both the Centre and states are on the right path for GST implementation with broad modalities in place.
"Technically, April 2017 can happen. It looks tough but not impossible. Implementing from June or July would be easier as GST is a transaction tax," she said.
The Centre has already put up in public domain the model GST law, the rules for business processes and refunds.
"An April 2017 deadline would therefore be challenging. Realistically, the date may be closer to July or October 2017," said Rohit Jain, partner, Economic Laws Practice.
After the passage of the GST Constitutional Amendment Bill by the Lok Sabha and the President's assent, the GST Council will be set up. About 50 per cent of the state assemblies or at least 15 states will have to ratify the bill.
Following that, the Central GST (CGST) legislation is expected in Parliament in the Winter session and the State GST (SGST) will have to be passed by respective state assemblies.
Also, the GST Network (GSTN) that will form the IT backbone for the entire levy would have to be evolved.