The Union Budget proposals have compelling merit and incontestable purpose about them but implementation will be the key, according to a KPMG India team.
This line of thought ran as a common thread through a series of presentations and panel discussions of the Union Budget impact analysis held here on Tuesday.
The thrust of the budget seems to be on making India an easier place to do business, said Menon. The serious intent on adopting GST from next year is unmistakeable, too. But the deadline is only a year from now. Will that be good enough to do the compliances? What does it take in terms of achievement of milestones?
First and foremost is that the Constitutional Amendment Bill that needs to be passed during this Budget session itself. If that doesn’t happen, it could upset the entire timetable.
Assuming that it gets passed, it will be referred to the Rajya Sabha where the ruling front is in a minority. Then it will have to go to individual States for their approval.
After that the Centre will have to introduce the CSGT and IGST Bills. Then, it will be the turn of the States to take up the GST Bill for consideration.
Tax terrorism “The indirect tax regime beats logic. The revenue here is projected to grow at 19 per cent. When the economy is supposed to grow at best at 8.5 per cent, how can collections grow by 19 per cent, a jump of almost 130 per cent?” Menon asked.
Where is this kind of growth going to come from, he wondered. This represents tax terrorism by other means, he said.
When the industry is not yet seeing a growth of rate of 6 to 7 per cent and you have a target of growth of collections of 19 per cent, what is the tax officer going to do?
This is the root cause of frivolous litigations across the country. At least ₹2 lakh crore, if not more, is locked up in this manner. The success rate of settlement has been 8 per cent, according to official figures. No wonder, and sensibly so, reduction in litigations is the aim of new laws being framed.
Permit Raj The Centre has appointed a committee to look at the number of permissions required to set up business in India. There are 86 permissions needed to set up manufacturing activity in India.
And these are from 86 different authorities. The committee is trying to reduce the number of these permissions, looking at automatic processes wherever possible and making it easier to do business, Menon said.