Conversation with MR. VIJAY KALANTRI, President, All India Association of Industries & Vice Chairman of World Trade Center, Mumbai on GST

MR. VIJAY KALANTRI, President, All India Association of Industries & Vice Chairman of World Trade Center, Mumbai
MR. VIJAY KALANTRI, President, All India Association of Industries & Vice Chairman of World Trade Center, Mumbai

1. Do you agree that implementation of the GST would be a boon for the economy? Can you please elaborate?

GST is a move towards higher economic growth by creating a ‘common economic market’. It is a major step towards streamlining various Union and State indirect taxes and will help in speeding up the transportation of goods and services between various states in an uninterrupted manner. Since GST is a destination based consumption tax instead of existing origin based tax, it will result in transparency and would further in “ease of doing business” and will help in making Indian products globally competitive.

The tax rationalization would be given high importancein GST. GST will ultimately help in expanding the base of tax payers and will ultimately lead to higher revenue generation for State and Union Government.

2. How GST is one indirect tax for the whole nation? 

It is a major step towards streamlining various Union and State indirect taxes and will help in speeding up the transportation of goods and services between various states in an uninterrupted and seamless manner.

  1. The amalgamation of the Centre and the State taxes will remove the difficulty in paying multiple taxes separately.
  2. Common economic market in the absence of CST, VAT and Entry tax.
  3. Invoicing will be simpler.
  4. No entry tax, which means no waiting at the border and quicker movement of goods.
  5. Major Central Excise taxes as well as State VAT will be absorbed.
  6. Traders will be benefited since CST will go and the inter- state trade will be cheaper.

3: What will change on SMEs, when the provision of the GST Bill are supposed to come into effect? 

The Small and the Medium Enterprises (SME) are one of the weakest links to acquaint themselves to GST. Out of the estimated 8 million registered businesses under the VAT regime around 90% are SMEs. Many of the majority of SMEs are still unaware of the changes that shall be brought about in the GST.

The SMEs need to invest in their IT system for upgradation to comply with the GST requirements is a herculean task as well as it will add to transaction cost.

They do not have enough manpower to follow up with their vendors or suppliers to ensure payment of the tax by them. Under the GST regime the input tax credit available to a buyer is dependent on the tax furnished, deposited by the seller in the course of a sale transaction

5: What may be positive impact of GST on SMEs? 

When the system and business are smooth, the SMEs shall gain a cost advantage of anywhere between two to four percent and this is expected to boost India’s GDP by approx.. 1 %.

6: Does the SMEs appreciate the essentials and mechanisms of GST?

As mentioned in answer no. 4, out of the estimated 8 million registered businesses under the VAT regime, a significant proportion i.e. around 90% are SMEs. Most of the SMEs are still unaware of the changes that shall be brought about in the GST.

7: How SMEs ready to plan for changes and obey with the GST rulings ? 

As less than 10% of the SMEs are GST ready due to lack of awareness, it is suggested that regular awareness programmes / workshops should be organized by the department to create and spread awareness. 

Things would become clearer post finalization categorization of goods under the proposed 4 tax slabs.

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