GST will regularise informal sector, opine experts

GST will regularise informal sector, opine experts

The introduction of Goods and Services Tax (GST) will slowly bring the informal sector into the mainstream economy, said experts at a business conclave held at the Indian Institute of Management-Bangalore, on Sunday.

The annual event ‘Sammantran 2017’ was organized by students of the Executive Post Graduate Programme in Management (EPGP) at IIM-B on the theme ‘India Inc. Shifting Gears’.

A panel discussion on India and Tax Reforms had participation from N P Singh, former Chief Commissioner of Income Tax, Mumbai, Madhukar Dhakappa, Partner (Corporate & International Tax) at PwC India, and Praveen William, Partner (Indirect Taxes) at KPMG.

Discussing GST, William said that under this new regime much of the parallel, informal economy will become part of the formal economy. “GST has turned all walls into glass. Even if a business owner does not disclose his purchases, if the person selling to him discloses his sales, it is sufficient. Businesses will have no other way but to comply and they will not want to conduct transactions with unregulated businesses,” he said.

Dhakappa supported this view, saying that as the collection of indirect taxes was computerised and with each business having an ID, it will be easier to track money chains. Using technology and data analytics, more taxpayers would come under the net. 

William said that the slowdown in the economy which is being blamed on GST is only momentary. “GST is a progressive tax system but the problem is that it came with a speed that the country was not ready for. Industries were not ready for the switch. But, the economy will pick up in two to three months,” he said.

The conclave also had a talk by Malo Le Masson, Head of Global Product & Planning at Hero MotoCorp. He spoke about the measures the government needs to take to realise its ambition of moving the country to electric transport. “Right now, electric cars are not popular because they are expensive and there are no incentives. The government should give tax rebates rather than subsidies. They should also focus on making charging ports easily available. We also need more competition in the sector so that consumers have more choices,” he said.

Source :  Deccan Herald


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