GST: Myths and Realities |A conclave of practitioners, academicians and administrators on Goods and Service Tax held at Symbiosis School of Economics

Symbiosis School of Economics(SSE) organized a conclave on the Goods and Services tax on 11^th December 2017 at Vishwabhavan auditorium. Dr. Jyoti Chandiramani, Director, Symbiosis School of Economics and Dean, Faculty of Humanities and Social Sciences, Symbiosis said, “We have brought together a very diverse panel of industrialists, academicians and administrators to provide a wholesome picture of the impact of GST”. She further added that the early days of tax reforms in India date back to the seventh plan in 1985-86 wherein for the first time in India’s history the Government presented, what was then termed as the “Long Term Fiscal Policy” with the objective of bringing predictability and stability in the economic environment.

The keynote speaker for the event was Dr. Kavita Rao, Professor, National Institute of Public Finance and Policy (NIPFP), Delhi. The program was moderated by Ms. Manasi Phadke, Economist. The other eminent speakers for the day were:

Ms. Shilpa Pophale, Managing Director of Electronica Finance;

Mr. Ranjit Naiknavare , Director, Naiknavare Developers ;

Mr. Raju Kalera, Chief Financial Officer, Zuventus Healthcare Limited;

Mr. Deepak Mohoni, Indian Stock Market Analyst;

Mr. Rajendra Khadilkar, Director, Ameya Management Consultancy Pvt. Ltd.

Dr. Kavita Rao opined that while it was early to give a verdict on the impact of GST, she said the abolition of Central Sales tax will help firms streamline their operations. She was critical of the many slabs and exemptions to GST. “Exemptions are apologies of the government for being unable to provide equitable access to goods. Direct benefit transfers or other expenditure methods should be relied on for equity and not a distortion of taxes”, said Dr. Rao.

Ms. Shilpa Pophale who has a large client base of MSMEs said that although there were initial hiccups for the proprietors in this sector, there is an increasing acceptance of the tax. Everyone wants to get into the tax system today learning from Demonetisation and GST.

Mr. Ranjit Naiknavare said that Demonetisation and GST have been double blows to the real estate sector dampening demand in the sector. He said that the initial impact of GST in India has been inflationary quite similar to how it has been in other nations when GST was implemented, but a tax slab of 28% is very high as compared to GST rates elsewhere.

Mr. Raju Kalera shared the experiences of his firm and the tremendous amount of background work that had to be done to get GST compliant which helped them to transition smoothly. He said that the pharmaceutical sector had gained from this unification of taxes.

Mr. Deepak Mohoni said that while demonetization was expected to negatively impact the financial market, it increased liquidity by channeling a lot of money into the sector. And if GST was perceived to bring positive change in the stock market, it at best did nothing. The markets find it hard to react as GST rates are dynamic and its long term impact is not clear.

Mr. Rajendra Khadilkar appreciated how GST reduced the firms’ interface with tax authorities but raised many loopholes that need to be ironed out in the coming days. He particularly mentioned Section 17(5) and Section 42 of GST Act relating to Input Tax Credit as contentious and said that more than 80% of legal disputes regarding GST will be on these two areas.

Ms. Manasi Phadke added that India did face a slowdown of growth but is currently in the recovery phase and the growth rates will only improve in the years to come. While GST will have a positive impact on growth, the magnitude of the impact wouldn’t be too large. She concluded that while many academics are lauding the change, practitioners are having trouble adjusting to it. But in the long run, it will pay out dividends.

A documentary prepared by the students of Symbiosis School of Economics on the perceptions of GST was also screened.