Indian Inc.’s confidence in Goods & Services Tax (GST) has grown to 84 per cent in 2024 as against 72 per cent in 2023, a survey by Deloitte said on Wednesday. The survey has been done at a time, when the new indirect tax regime is set complete 7 years.
“Such positive sentiment is reflective of supply chain efficiencies, the benefits of tax, technology and continued stakeholder engagement on GST policy matters. The survey reveals that it is time to push for further reforms to make the regime more robust, dynamic and responsive to taxpayers’ needs,” Mahesh Jaising, Partner and Leader, Indirect Tax, Deloitte India, said.
Further he emphasised that GST 2.0 should review the possibility of expanding the GST regime’s tax base, rationalising tax rates, removing ITC restrictions, further export liberalisation for services, unlocking working capital and addressing concerns related to operational areas of compliance.
The survey was conducted in May involving top executives across diverse industries through online platforms. The survey comprised 40 questions, covering various aspects of GST in multiple-choice and single-choice formats. It received 760 responses from key sectors, including consumer, energy, resources and industrials, life sciences and healthcare, technology, media and telecommunications, banking and other financial services, and government and public services. The survey aimed to assess industry perspectives on GST’s influence and regulatory effectiveness in enhancing business operations and compliance.
The survey highlighted the areas where more reforms are required; these include rationalising tax rates, offering an effective dispute resolution process, removing credit restrictions, adopting faceless assessments, liberalising export rules and implementing a compliance rating system. Some of these crucial recommendations are expected to be key discussion points at the upcoming GST Council meeting on June 22.
As per the survey, 88 per cent of the top C-suite leaders indicated areas of challenge, including aspects around audits and assessments, underscoring the need for continued simplification, technology integration and capacity building. There is also widespread feedback for enabling effective dispute resolution mechanisms, with 91 per cent of leaders endorsing the extension of audit timelines to address issues and improve compliance. Additionally, more than 70 per cent respondents advocated for aligning pre-deposit requirements for GST appeals with the pre-GST era norms, aiming to streamline the dispute resolution processes, the survey report said.
To support the Micro, Small and Medium Enterprise (MSME) sector, the survey suggests easing GST registration by implementing streamlined processes, such as virtual verification and standard documentation across the country. These measures can help MSMEs effectively navigate compliance challenges and contribute more robustly to India’s economic growth.
78 per cent of MSMEs have shared a positive sentiment towards GST implementation this year versus 66 per cent in 2023. Nearly 70 per cent of respondents continue to believe that the quarterly filing of returns for MSMEs is beneficial and improves compliance. Specifically, the key positive area for 70 per cent of MSMEs has been called out to be supply chain efficiencies.
“Key initiatives sought by MSMEs are paperless invoicing and that uniform registration guidelines across India will significantly ease compliance burdens. Matching concept challenges of MSMEs in 2023 were at 64 per cent and are now down to 37 per cent, indicating that this area is more streamlined now,” he said.