CFOs hail six years of GST, but seek more simplification on tax regime

July 4, 2023

​​The GST law subsumed a host of taxes such as central excise duty, service tax, value added tax, etc, and as against many rates in the erstwhile regime, the new structure has just four tax slabs 5%, 12%, 18 and 28%.

Finance executives in companies hail the six years period of the goods and services tax reform saying the new tax regime, introduced by the government on July 1, 2017, has simplified the compliance for businesses and made the tax system more transparent.

Thumbs up to the first 6 years
GST is by far India’s biggest economic reform to date. It has completely transformed the indirect tax structure (with only four rates). The regime formalized a full nation of traders, it empowered small and medium enterprises and heralded a new era of digitized tax compliance process,” Anand Agarwal, CFO at fashion apparel V-Mart told ETCFO.

The GST law subsumed a host of taxes such as central excise duty, service tax, value added tax, etc, and as against many rates in the erstwhile regime, the new structure has just four tax slabs 5%, 12%, 18 and 28%. Also, businesses, especially manufacturers and traders, have seen their compliance burden reduced due to the centralized return filing in the GST regime; previously they were to file returns state-wise which had been a huge pain point for them.

Pankaj Vasani, CFO, of Cube Highways InvIT, added the GST regulation removed inter-state barriers, thereby facilitating the seamless movement of goods and services. The seasoned finance veteran pointed out that it has been a win-win situation for the government also with the reform helping it increase the tax base as well as improve its tax kitty. " It has generated more revenue for the government, and created a level playing field for businesses,” Vasani told ETCFO.

The government's GST collections hit an all-time record high of Rs 1.9 lakh crore in April; the revenue numbers are continuing to remain over Rs 1.5 lakh crore mark thereafter with the latest month June mop-up coming in at about Rs 1.6 lakh crore.

GST Tribunal, rate rationalization for next 6 years
Sandeep Modi, CFO, of Hindustan Zinc, said setting up GST Appellate Tribunal (GSTAT) should be the government's top priority for the next six years.

GSTAT is the forum of the second appeal in GST laws and the first common form of dispute resolution between the Centre and States. The Central GST Act empowers the Central government to constitute by notification an Appellate Tribunal for hearing appeals against the orders passed by the Appellate Authority.

"Taxpayers are still knocking on High Courts’ doors for dispute resolution," Modi pointed out.

This finance veteran also indicated on setting up of Centralised Authority to address the issues arising from contradictory orders passed by the Authority for Advance Rulings (AARs) in different states.

"Divergent rulings by different courts in different states and the multiplicity of proceedings by multiple agencies are adding to the compliance issues faced by the industry," Modi said.

Sameer Agarwal, Group CFO, of Manipal Hospitals, agreed, adding there should be further rationalization of rates. Agarwal also said the next six of the regime should focus on better technology infrastructure and a more structured approach by the taxmen to the GST assessments.

"A structured approach on assessments or self-assessment would be a positive way to assess any past issues…The GST portal needs to be more robust and transparent as many times there are still a lot of glitches leading to reconciliation which is time-consuming,” Manipal Hospitals' CFO signed off.

[The ET-CFO]