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GST Bill To Address Tax Ambiguities, Spur Growth: ICT Industry

Consumer products like mobile phones and laptops may become cheaper as the overall taxes on goods are likely to come down

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Indian telecom and technology companies on Wednesday (03 August) said passage of the GST Bill will facilitate ease of doing business and address ambiguities in the current indirect tax landscape, thus benefiting the economy.

Terming GST Bill as a "transformational" legislation, Bharti Enterprises Chairman Sunil Bharti Mittal said it will help prop up GDP growth by an additional 1.5-2 per cent.

"The transformational legislation will not just significantly improve ease of doing business in a vast and complex federal setup like ours by creating a single market but will help prop up our GDP growth rate by an additional 1.5 - 2 per cent," Mittal said.

Wipro CEO Abidali Z Neemuchwala exuded confidence that implementation of GST would go a long way in strengthening the economy "as one common market for taxation".

Microsoft India Chairman Bhaskar Pramanik said the development will address the ambiguities of the current indirect tax landscape, proving beneficial for the economy at large.

Telecom industry body COAI asked the government to ensure that the rate applied for telecom services does not exceed the existing 15 per cent to meet the Centre's vision of affordable services and a connected digital India.

Consumer products like mobile phones and laptops may become cheaper as the overall taxes on goods are likely to come down.

Acer CFO Alok Dubey said while the calculation of pricing will remain speculative till the final GST rate on each product category is known, "with GST, overall taxes on goods are likely to come down and make them cheaper."

Handset maker Intex said the uniform tax regime will boost operational efficiencies, increase cost savings and make products competitive. "GST will spur higher consumption...In the long run these factors will raise India's GDP growth by one or two points, generating millions of new jobs," Intex CMD Narendra Bansal said.

Industry body MAIT said GST would also put to rest the ambiguity around the treatment of 'intangibles' like software and the concept of dual levy of taxes.

It added that the hardware sector is hopeful that IT Agreement products would be notified under the lower merit rate which is expected to be 12 per cent.

At the same time, the industry also pointed out certain drawbacks in the Bill that was passed by the Rajya Sabha.

"One of the major drawbacks or the most critical cause of potential failure of GST will be in the transference of responsibility of tax compliance and remittance to the customers to make them eligible for input credit," said Bharat Goenka, Co-Founder and MD, Tally Solutions.

This would lead to trust deficit, extend credit cycles choking working capital, and increase complexities in businesses, he said.

"We welcome the passing of the Constitutional Amendment Bill paving the way for implementation of GST in the country. We congratulate the government on this significant milestone," Neemuchwala said.

He said implementation of the GST would go a long way in strengthening the economy as one common market for taxation as well as address key issues of transparency, ease of doing business and simplification of tax laws.

Neemuchwala said in the process of implementing GST through legislations, "we must collectively ensure there is no drifting away from the intent of the Bill and the cornerstone principles of this government in improving ease of doing business and reduced tax related litigation in India."

"I am sure the government would engage meaningfully with the industry on its concerns and arrive at an effective framework for implementation of GST," he added.


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goods and service tax telecom consumer goods coai