How do you describe GST’s evolution during the last five years? Many stakeholders allege that it is still very complicated…
To a large extent, the government has been able to simplify the processes. But there has to be a counter-balance to its possible misuse. Initially, we made the registration process very easy. It took just three days once it was applied online. As there were no physical checks, some unscrupulous elements took advantage of the system and manipulated it by creating bogus entities. So the government had to tighten the process to plug revenue leakages and misappropriation of input tax credits.
For a big reform like the GST, there can’t be a most appropriate time. One has to go ahead. The government of the day had the political will to bring in the reform without any further delays. So it happened. We effectively communicated about it with all stakeholders. In the run-up to its implementation on July 1, 2017, I myself travelled to many commercial hubs (non-metros) such as Vadodara, Bhopal, Guwahati, Bhubaneswar, Mysore, Indore etc. to clear doubts in the minds of business community and chartered accountants.
A many number of states are now demanding an extension of the compensation clause beyond June 2022. Do you subscribe to that view?
The compensation provision (for loss of revenue arising out of its implementation) was embedded because the GST was to bring about structural changes. It was a shift from production-based taxation to consumption-based taxation. So there was an apprehension that the revenue of the states with more manufacturing hubs might actually come down. So the compensation was more an insurance against tax losses for five years (2017-22). But if it is continued for too long, it will lead to laxity in states’ bureaucracy. It will act as a disincentive in mopping up more taxes. The GST compensation to states should end now.
What’s your projection for monthly GST collection in six months to one year?
After a year or so, the monthly GST collection should be around Rs 2 lakh crore. Such a mop-up is possible because it is increasingly becoming difficult for any entity to manipulate the system.
Going forward, shouldn’t India have just two GST rates?
Yes, there needs to be a rationalization of tax rates. The number of rates should be slashed to three and eventually to two. But what those rates should be is a matter of calculation only. The revenue-neutral figures have to be factored in.
Ahead of the July 1 rollout of the Goods and Services Tax, Revenue Secretary Hasmukh Adrian explains the tax regime and why manufacturers and consumers need not worry about prices rising.
Revenue Secretary Hasmukh Adrian is a man on a mission. While taking charge in September 2015, Adrian had the Goods and Services Tax (GST) in a “time-bound manner” as his top priority. His resolve is close to fruition, with the GST — considered the biggest indirect tax reform since Independence — set to roll out from July 1. With the countdown for the unveiling of the reform having begun, Adrian is at the forefront of creating awareness about the GST regime, touring states across the country and interacting with the industry. While he concedes there will be difficulties and problems after the rollout, the government, he says, is trying to ensure that every single loose-end is tightened before the GST launch.
You must be logged in to post a comment.