New Delhi, Nov 12: Despite a temporary economic slowdown post implementation of the Goods and Services Tax (GST) in July, India is poised on the threshold of sustainable growth, industry chamber Assocham said on Sunday citing its latest report.
“There has been a temporary slowdown even though government has ideated and implemented a number of initiatives to improve business conduciveness,” an Assocham release said here citing its joint study with EY.
“But a consensus view is that India is poised towards a sustainable growth in the near future,” the report titled ‘Ideate, Innovate, Implement: Invest in India,’ said.
The report said that GST will have a significant impact on all aspects of business operating in the country, including supply chain, sourcing and distribution decisions, inventory costs and cash flows, pricing policy, accounting and transactions management.
It also said that GST will have an impact on prices agreed for contracts entered under the pre-GST regime and proposed to be executed either partly or completely under the GST regime.
“Also, introduction of GST should entail a reduction in overall process on account of reduced tax costs,” the report added.”
Highlighting that a complex legal framework makes investors wary of investing in an otherwise promising market, the study suggested that government urgently carry out effective judicial reforms.
Making the biggest revamp of the new indirect tax rate structure the GST Council on Friday decided to slash tax slabs of 178 items from 28 per cent to 18 per cent, leaving only 50 items, including sin and luxury goods, in the highest bracket.
West Bengal Finance Minister Amit Mitra earlier told reporters on the sidelines of the Council meeting held in Guwahati that the loss on account of a “hasty and ill-designed” GST had resulted in the exchequer losing around Rs 60,000 crore for the Centre and Rs 30,000 crore for the states in just the first three months.
Finance Minister Arun Jaitley revealed to reporters that the GST collections in the first three months had been in the range of Rs 93,000-Rs 95,000 crore per month.