Nine Years of GST: More reforms sought, Pg13

Key Highlights:

• The Goods and Services Tax (GST) regime will complete nine years on June 30, 2026, since its rollout on July 1, 2017.
• A Deloitte India survey found that 85% of businesses seek tax interpretational clarity, 61% desire uniformity in audits, and 36% want faster refunds.
• There is a call to expand the inverted duty structure refund formula to include input services and capital goods.
• This expansion aims to address working capital concerns, especially in sectors like pharma, food processing, and EVs.

Detailed Insights:

• The GST system was introduced to unify India's indirect tax structure, replacing multiple central and state levies.
• The mention of "last September's GST 2.0 reforms" indicates the system is continuously evolving to address emerging challenges.
• Expanding the inverted duty structure refund would alleviate credit accumulation for businesses, particularly those with pro-consumer rate reductions.
• Such reforms are crucial for improving ease of doing business and ensuring liquidity for industries.
• The GST Council is the apex body responsible for making recommendations on all GST-related policy and administrative matters.

Key Concepts Involved:

• Goods and Services Tax (GST): A comprehensive, multi-stage, destination-based tax levied on every value addition in India.
• Inverted Duty Structure: A situation where the tax rate on inputs is higher than the tax rate on the finished output product.
• Input Tax Credit (ITC): The mechanism allowing businesses to claim credit for the GST paid on inputs used for making taxable supplies.
• GST Council: The constitutional body comprising Union and State Finance Ministers, tasked with governing and recommending GST policies.