GST to catalyze economic reform in IT sector: Anwar Shirpurwala, MAIT

Akshaya Asokan August 16, 2016
GST to catalyze economic reform in IT sector: Anwar Shirpurwala, MAIT

The bill expected to transform the indirect taxation in India will ensure simplified and homogenous tax structure for goods and services as per MAIT.

With the much touted GST Bill passed few weeks ago, industrialists and IT manufacturers are gearing up for an economy face-lift.

GST which promises to eliminate dual levy of taxes, is expected to propel India’s GDP. The concept of one market is also believed to usher in operational efficiency.

The IT hardware lobby group, MAIT, a body comprising of key industrial players have been hopeful for the approval of the bill since the release of the Model GST Law in June this year.  The bill is expected to transform the indirect taxation in India and will make possible for simplified and homogenous tax structure for goods and services, the body said in a statement.

The key advantage that the bill could offer to the industrialists is the elimination of 1 percent additional tax and full compensation to the states for tax revenue loss for five years.

“The benefit of tax cascading would be that the entire country will become one market, as the manufacturers can move goods between states and different boundaries within the country. No entry taxes, no octroi, no state AATS and CSTs levied adding to the operational efficiency,” Anwar Shirpurwala Executive Director of MAIT, said.

On GST impacting PC maker companies operating in India, he said that it is very unlikely that demand for these products to go low as the revised tax on them will be 4 percent extra than the existing one. The current tax on these products is 14 percent and the proposed tax is 18 percent. “The 4 percent increase would mean a rise in the product price. I don’t think this increase would bring down the demand for the product substantially,” he said.

Also read: MAIT collaborating towards success of Make in India, Digital India: Anwar Shirpurwala

MAIT has been extremely supportive and optimistic on Indian government's big ticket initiatives like Make in India, Digital India. Shirpurwala expects GST to be an important catalyst for the success of these initiatives. As he says, “Make in India will be extremely important, in a way that the current policy and schemes be seamlessly integrated into GST.”

At present the duty differential scheme gives 8 to 10 percent advantage over imports. Hence it is important for the same benefits to be carried in a way that all the investments made right now or the effort towards manufacturing put by various companies in the past year and a half, wouldn’t go waste.”

MAIT is currently in talks with government to carry over the current of Make in India with GST implementation as well.

 

 

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