Industry sees India hitting 10% GDP post GST rollout

[proud_indian]

Aug 03, 2016, 11.51 PM | Source: Moneycontrol.com
Industry sees India hitting 10% GDP post GST rollout

The country witnessed a momentous occasion after the Rajya Sabha today passed the historic Goods and Services Tax Constitutional Amendment Bill.

The country witnessed a momentous occasion after the Rajya Sabha today passed the historic Goods and Services Tax Constitutional Amendment Bill.
The tax, upon rollout, will replace almost all state and central indirect taxes and levies such as excise, service tax, sales tax, VAT and octroi.

The most vocal proponent of the bill, Adi Godrej, believes the tax's rollout will add at least 1.5-2 percent to the country's growth rate.

GST's benefits are many: it will widen the tax base by easing compliances, boost ease of doing business, reduce the overall tax rate in the economy and thus help investment and boost growth. Being value-added in nature, it will also eliminate the economically-negative practice of levying tax on tax. Further, by doing away by differential tax structures in various states, GST will for the first time create a national market and boost inter-state trade.

"The biggest positives from the GST is that it will lower the tax rate and make tax evasion very difficult," Godrej said.

The general expectation is that the GST rate would be closer to 18 percent. Currently, manufacturing is tax at around 30 percent while services are at around 14 percent.

Further, the GST will also level the playing field between the unorganized and organized sector, as the former could get away from paying taxes and enjoyed a tax advantage.

"The industry will benefit tremendously," said Godrej. "Overall, consumption, production and investment, all will get a boost."

Maruti Suzuki Chairman RC Bhargava said that while the Bill has been passed, effective implementation of the tax will be equally important.

After all, the minutae of the Bill -- the standard GST rate, which items will qualify for the standard, concession and luxury/sin tax rates -- will all be thrashed out later the GST Council comprising the state and central officials.

M&M's Pawan Goenka said that the transition period around the time GST is rolled out will be important.

"The transition will be fairly complex. GST's success will depend on the complexity of the documentation processes. The model law as it stands needs finetuning," he said.


The tax's rollout will, however, give a fillip to credit growth, Yes Bank chief Rana Kapoor said. "This is the second take-off of the economy. It will rebuild private sector confidence in investments. and unleash several multipliers of growth."

Kapoor, who said GDP growth could hit double digits post GST rollout, added that logistics and transporation sectors will gain the most.

"Post the strong monsoon, this is icing on the cake," he said.

http://www.moneycontrol.com/news/bu...-hitting-10-gdp-post-gst-rollout_7193801.html

 

[ito]

10% is possible, but private sector investments have to pick up.

 

[SparrowJack]

We have to wait till 2018 for results....if it really touches double digits then it certainly will be a game changer for our economy

 

[proud_indian]

GST to boost GDP by 2%, attract foreign investors: Industry
Last Updated: Thursday, August 4, 2016 - 18:04

​

New Delhi: Buoyed by the passage of the GST Bill in Rajya Sabha, industry leaders Thursday said the roll out of the indirect tax reform will lure more foreign investors to India, improve the country's manufacturing competitiveness and boost economic growth by nearly 2 percent.

"GST will be the most pivotal 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.

"The low tax to GDP ratio of the country will go up, helping the government to adhere to fiscal discipline and keep the inflation in check. It will improve productivity and transparency," the Chairman of Hinduja Group of Companies India, Ashok P Hinduja, said.

However, he sought clarity on the continuance of existing exemptions especially those linked to investment made both at the Centre and state levels.

The Rajya Sabha yesterday gave its approval to the long- pending GST Bill as government forged a consensus with Opposition parties for passage of the reform legislation.

"GST is India's most significant tax reform in decades. When implemented, it is expected to usher in a harmonised national market of goods and services and shall lead to a simplified, assessee-friendly tax administration system.

"Once implemented, it will subsume all of the country's central and state level duties and taxes thus making it a national market and contribute significantly to the growth of the economy," CII President Naushad Forbes said.

CII said it anticipates that GST, if implemented from April 1, 2017, would reduce transaction costs and boost GDP by 1.5 to 2 percent.

US-India Business Council (USIBC) termed the indirect tax reform as a "game-changer" that will boost economic growth by streamlining domestic supply chains and remove the compliance burden of contradictory state tax regimes. These factors, it said, are bound to increase India's global competitiveness as an investment destination.

"There are deep benefits for both domestic and global industries in this clear, predictable, and unifying approach," USIBC President Mukesh Aghi said.

He said the GST is also likely to make goods cheaper for consumers, increase competitiveness of Indian exports in international markets and boost country's GDP growth by 2 percent, adding that the far-reaching reform places India at the cross-roads of an incredible economic opportunity.

PHD Chamber of Commerce President Mahesh Gupta said GST will enhance India's growth trajectory to 10 percent in the next few years by 2019-20.

YES Bank MD and CEO Rana Kapoor said the implementation of GST will unify India's tax architecture, make manufacturing efficient and boost ease of doing business, thus ushering a virtuous growth cycle in the country up to 2050.

However, engineering exporters' body EEPC India Chairman T S Bhasin said while the measure would help the country's manufacturing, exporters are likely to face implementation difficulties if the Model GST law is adopted.

http://zeenews.india.com/business/n...tml?utm_source=twitterfeed&utm_medium=twitter

 

[Vikas Kumar]

Hope that this works but I am not very positive about the figures. even if we sustain a growth rate of 8.5% - 9% for 10 years than also I think we would be able to come out of this mess.

 

[proud_indian]

GST will improve tax-to-GDP ratio: Subramanian

He also termed the proposed tax system - along with strategic disinvestment and twin balance sheets - as the government's major pending agenda

BS Reporter | Patna June 26, 2016 Last Updated at 17:34 IST

​

Chief Economic Adviser Arvind Subramanian has said on Sunday that Goods and Services Tax (GST) will help improve tax-to-GDP ratio in the country, while giving buoyancy to the government's tax collection efforts.

He also termed the proposed tax system — along with strategic disinvestment and twin balance sheets — as the government's major pending agenda. Speaking at an international conference on Social Statistics in India, organised by Asian Development Research Institute (ADRI) as part of their Silver Jubilee celebrations in Patna,
Subramanian said: "We need to catch up on tax to GDP front. I sincerely hope that GST would give some buoyancy to it."

Subramanian said while the country has left behind the licence-quota permit raj and opening up forforeign direct investment in greater number of sectors, what has come to afflict the economy is the "Exit problem". He meant that loss-making firms and entities have been finding it difficult to exit from the business and gave the example of the fertiliser sector. Calling this a major area of reforms, he said: "The inefficient firms are not even employment-intensive and so it's easy for them to shut down. There is a need to readjust and recalibrate exit," he added.

Subramanian also touched upon "Brexit" and termed it as a major shock in the world history after the Cold War. He said it was a setback for the international citizen, globalisation and that a great social experiment is now being reversed. As for its economic repercussions on India, he said the country had strong fundamentals to withstand the negative fallout.

He also called for an office of chief economic adviser in every state to generate ideas and policies.

The Chief Economic Adviser said India presented a picture of a highly Balkanised country with respect to power tariffs and tax rates. Showing data for power tariffs for agriculture and tax rates in the states, he said: "we should be one economic India".
Showing excitement about reforms in the garment sector, he said: "It is much more labour-intensive than sectors like auto and steel and has the potential to empower women by creating jobs for them." He also said this is one of the areas where shrinking share by the Chinese can be cornered by Indian firms.

While saying India had very few tax payers and that in as many as seven areas — kerosene, railway, electricity, LPG, gold, aviation and turbine fuel and small savings — "well-off", the top 40% of the population, were subsidised to the extent of Rs 76000 crore, he called for spending more to generate more.

http://www.business-standard.com/ar...-to-gdp-ratio-subramanian-116062600473_1.html

 

[Jlaw]

GST to boost GDP by 2%, attract foreign investors: Industry
Last Updated: Thursday, August 4, 2016 - 18:04

​

New Delhi: Buoyed by the passage of the GST Bill in Rajya Sabha, industry leaders Thursday said the roll out of the indirect tax reform will lure more foreign investors to India, improve the country's manufacturing competitiveness and boost economic growth by nearly 2 percent.

"GST will be the most pivotal 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.

"The low tax to GDP ratio of the country will go up, helping the government to adhere to fiscal discipline and keep the inflation in check. It will improve productivity and transparency," the Chairman of Hinduja Group of Companies India, Ashok P Hinduja, said.

However, he sought clarity on the continuance of existing exemptions especially those linked to investment made both at the Centre and state levels.

The Rajya Sabha yesterday gave its approval to the long- pending GST Bill as government forged a consensus with Opposition parties for passage of the reform legislation.

"GST is India's most significant tax reform in decades. When implemented, it is expected to usher in a harmonised national market of goods and services and shall lead to a simplified, assessee-friendly tax administration system.

"Once implemented, it will subsume all of the country's central and state level duties and taxes thus making it a national market and contribute significantly to the growth of the economy," CII President Naushad Forbes said.

CII said it anticipates that GST, if implemented from April 1, 2017, would reduce transaction costs and boost GDP by 1.5 to 2 percent.

US-India Business Council (USIBC) termed the indirect tax reform as a "game-changer" that will boost economic growth by streamlining domestic supply chains and remove the compliance burden of contradictory state tax regimes. These factors, it said, are bound to increase India's global competitiveness as an investment destination.

"There are deep benefits for both domestic and global industries in this clear, predictable, and unifying approach," USIBC President Mukesh Aghi said.

He said the GST is also likely to make goods cheaper for consumers, increase competitiveness of Indian exports in international markets and boost country's GDP growth by 2 percent, adding that the far-reaching reform places India at the cross-roads of an incredible economic opportunity.

PHD Chamber of Commerce President Mahesh Gupta said GST will enhance India's growth trajectory to 10 percent in the next few years by 2019-20.

YES Bank MD and CEO Rana Kapoor said the implementation of GST will unify India's tax architecture, make manufacturing efficient and boost ease of doing business, thus ushering a virtuous growth cycle in the country up to 2050.

However, engineering exporters' body EEPC India Chairman T S Bhasin said while the measure would help the country's manufacturing, exporters are likely to face implementation difficulties if the Model GST law is adopted.

http://zeenews.india.com/business/n...tml?utm_source=twitterfeed&utm_medium=twitter

This makes no sense. Economists and investors know that taxes are counter productive to businesses. Why would this attract investors? Taxes just add unnecessary cost to the products.

GST's benefits are many

Canadian politicians have stopped using this BS for decades now. This is total BS and everyone knows it

 

[Śakra]

This makes no sense. Economists and investors know that taxes are counter productive to businesses. Why would this attract investors? Taxes just add unnecessary cost to the products.



Canadian politicians have stopped using this BS for decades now. This is total BS and everyone knows it

If you read it it says it lowers manufacturing taxes from 30% down to 18%. Also GST allows for tax offsetting, something currently not happening in India.

 

[Jlaw]

If you read it it says it lowers manufacturing taxes from 30% down to 18%. Also GST allows for tax offsetting, something currently not happening in India.

It seems to me this GST is like a hidden VAT tax correct?

 

[Abingdonboy]

This makes no sense. Economists and investors know that taxes are counter productive to businesses. Why would this attract investors? Taxes just add unnecessary cost to the products.

The GST creates one of the world's largest single markets, it is not an increased tax obligation but rather a total overhaul of the existing complex tax codes that vary state to state. Compliance costs will reduce and ease of doing business will increase, the GST will be a HUGE boost to the economy and wil most certainly attract investors who have long been put off by the "red tape" present in India.

@PARIKRAMA

 

[AugenBlick]

This makes no sense. Economists and investors know that taxes are counter productive to businesses. Why would this attract investors? Taxes just add unnecessary cost to the products.



Canadian politicians have stopped using this BS for decades now. This is total BS and everyone knows it

They are not adding taxes. They combined all taxes into one tax. Earlier you had to pay half a dozen odd taxes at both state (province) and national level. Taxes also existed when goods crossed states. All that is now gone and india is as people call it "One Nation, One Tax"

 

[Jlaw]

The GST creates one of the world's largest single markets, it is not an increased tax obligation but rather a total overhaul of the existing complex tax codes that vary state to state. Compliance costs will reduce and ease of doing business will increase, the GST will be a HUGE boost to the economy and wil most certainly attract investors who have long been put off by the "red tape" present in India.

@PARIKRAMA

I guess we can all wait to see. Canada has GST and it sucks. Most hate it.

 

[captainvancouver]

This makes no sense. Economists and investors know that taxes are counter productive to businesses. Why would this attract investors? Taxes just add unnecessary cost to the products.



Canadian politicians have stopped using this BS for decades now. This is total BS and everyone knows it

The implementation of the current GST was one of the best things that ever happened in Canada, It replaced taxes that were applied to manufacturing and made our industries much more competitive.

 

[Jlaw]

They are not adding taxes. They combined all taxes into one tax. Earlier you had to pay half a dozen odd taxes at both state (province) and national level. Taxes also existed when goods crossed states. All that is now gone and india is as people call it "One Nation, One Tax"

Sure, we tried that but it didn't work as each region's economic prosperity differed in Canada.

 

[proud_indian]