It’s a Big Questions mark!!!
There is some chance of delay but the government seems determined to get it through. In terms of stock market sentiment, a delay of about six months will not hurt.
If it happens, it will be because we might be under-prepared but not because GST is being rolled back. We are introducing something radical in terms of tax reform and there will be challenges in implementing it.
GST’s implementation will improve India’s image internationally and be welcomed by investors, rating agencies and multilateral institutions. Many countries in the world have successfully moved to a GST regime, including Singapore, New Zealand, South Africa, Japan and Australia.
To be sure, the Indian model of GST is far from perfect. For one, it will not have a single rate and will be implemented with at least three rates in the beginning.
“One of the most significant aspects is that the GST bill was passed with unanimity.”
Next steps forward is covering the legal framework, the IT and logistical framework and the training and outreach required for offices, as also trade and industry.
On the legal side, once the states ratify the Constitution amendment bill, the central government has to pass an integrated law as also a central GST law, and the states have to pass their …
An IT network is also to be erected for which a non-profit, non-government company has been set up called Goods and Services Tax Network that will formulate the front-end and back-end modules — the deadline is 2016-end.
Nearly 60,000 officers will also be trained by December 2016.
“Testing of and integration of GST front-end and back-end before the stakeholders will be done between January and March next year”.
Will be the revenue-neutral rate that will be fixed?
There is wide difference between the two committees that have calculated the GST rates. The impact on inflation will be dependent on the final shape that the bill will take. “If the bill does not get passed in this monsoon session, then 1 April 2017 may not be possible. But nothing stops the government from bringing in GST beyond this date, say like in 2018.
The calculation of revenue base for the Centre and the states, the actual GST rates structure, preparation of the list of exemptions, forging a consensus, and cross-empowering the Centre and states in decision-making and dispute resolution.
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