Upbeat India welcomes GST, despite concerns about possible teething problems

India welcomed the new GST (Goods & Services Tax), which was rolled out on Friday midnight at a special function at the Central Hall in Parliament, though there was some confusion about the procedures.

There was a general feeling that the new tax regime, touted as a game changer, would usher in an era of economic growth and prosperity in the long run, but there was a lack of clarity as to how it was going to be implemented. There was also some concern about the possible “teething problems”.

At the same time, there was a sense of optimism among the trading community, as well as people at large, that all such issues will be sorted out over a period of time and its benefits will be visible after the new system becomes stable. 

In Chandni Chowk, the trading hub of New Delhi, it was business as usual, and traders were generating GST invoices, though there were some concerns about the procedures of filing returns. Shopkeepers were trying to clarify on their own about their doubts, either from fellow traders or consultants/chartered accountants.

Speaking to this newspaper, Praveen Khandelwal, convenor of Confederation of All India Traders (CAIT), said: “There is absolutely no problem with the new system, except that there is some confusion about certain issues. Traders have started following the new system. I think the government should rope in trade associations to make the traders’ community aware of the new regime and clarify on all the related issues.”

The Confederation of Indian Industries (CII) is going to organise 100 GST workshops, reaching out to 5,000 enterprises. There will also be “webinars” for information and awareness on “Youtube” and “ciicloud”. Besides, there will be outreach through print, electronic and social media, and customised training sessions.

According to a businessman, it will take some time to understand the new regime and get accustomed to it. “There is a little uncertainty on how the market will react to the new taxation system. For example, till now there was no tax on cycles. But now there will be a GST of 12%. So we do not know how the market will respond when the cost is a little high. There is also confusion about how to get the input credit,” he said.

Big retail shops have started giving discounts—from 10 to 25%—to the customers to clear old stocks. Banks and telecom operators are sending messages to their customers about the change—from service tax of 15% to GST of 18%. Online food apps are asking customers to update their apps in the wake of the changed tax structure.

At the GST launch function, Prime Minister Narendra Modi termed GST as a “Good & Simple Tax” and complimented all parties involved in the process calling it a mode of “cooperative federalism”. “It is a tax for new India, digital India. It does not just promote ease of doing business but also shows the way forward as a way of doing business,” he added. President Pranab Mukherjee called upon every Indian to extend cooperation for the successful implementation of GST. He remembered how as Finance Minister he had introduced the Constitution Amendment Bill on 22 March 2011.

According to sources, Union ministers have been asked to communicate with the people through various forums about the benefits of GST and how it is going to affect the economy. There will be awareness programmes to address concerns related to various procedures.