Businesses say GST will spawn unified national market
Bengaluru, July 1: Terming the GST a momentous reform, a wholesale retailer on Sunday said the tax regime, introduced a year ago, would lead to a unified national market while realty sector players said the key benefit for them was input tax credit though some grey areas remain.
"GST is one of the momentous reforms in the Indian taxation system as it has played a transformative role by making its structure simpler," said Metro Cash & Carry India's Chief Executive Arvind Mediratta in a statement here to mark the indirect tax regime's one year.
Merging a plethora of central and state indirect taxes, the Union government unveiled the Goods and Services Tax (GST) system across the country on July 1, 2017. The GST subsumed various taxes, including sales tax, entry tax, value added tax and other related taxes.
"The new tax regime has given an impetus to our sector through an increase in input tax credit on capital goods and services, which streamlined inter-state logistics movement, eliminated checkpoints and helped businesses reach a larger market base," said Mediratta.
Despite initial glitches and delays due to mismatch of the technology platform between the vendor and its stakeholders, he said the new regime had rationalised the tax rates to four slabs and ensured compliance at every stage of the transaction.
"We have been educating and engaging our trade partners and grocery owners to align their businesses with the policies to make them GST-complaint. We began a GST helpline and set up kiosks before its roll out," he said.
The government's interventions to ease transition challenges, introduction of the composition scheme, simplifying the complex procedure to file returns and extending return-filing deadlines benefited the traders, he said, noting a "positive sentiment" among Small and Medium Enterprises (SMEs) towards GST as compared to six months ago.
The $35-billion German self-service wholesaler, which entered India 15 years ago, operates 25 distribution centres across the country, including in Bengaluru, Hyderabad, Mumbai and Delhi.
According to House of Hiranandani Chairman Suresh Hiranandani, though GST had no impact on property prices, it helped in streamlining the tax administration by bringing transparency in the system.
"As expected with any game-changer of this magnitude, the initial few months were disruptive not only for the industry, but also for consumers and the government, as confusion marked from filing returns to providing e-way bills," said Hiranandani in a statement here.
The realty sector, however, sought clarification on the abatement of land cost to calculate service tax on under-construction projects.
"Clarity is needed because if the land cost is 10 per cent of the overall project, the final cost could remain stagnant. In cities, the land cost is a whopping 50-60 per cent of the total cost, with rising apartment costs," he said.
As stamp duty remains even after GST implementation with rates varying for different states, the additional burden on the sector averages 5-7 per cent.
"We hope state governments abolish the same or merge it with the GST rates to help reduce the cost of apartments," said Hiranandani.
PropTiger.com Chief Investment Officer Ankur Dhawan said the key benefit for the real estate sector under the GST was input tax credit, which developers could avail for taxes paid on construction material and services.
"This benefit was not available in the earlier service tax regime. Streamlining of the tax administration cleared the confusion of developers as well as customers, as the former were not sure how much benefit they can get out of input tax credit and the new raw material prices," he said.
After the clarification by the GST Council, developers have started passing 4-6 per cent discount to customers.
Demand for lower GST on the under-construction real estate or inclusion of all properties in GST will be key, as land cost is significant in overall pricing.
"In the long-run, GST reform is expected to streamline the sector to strengthen consumer sentiments rekindling hopes of a revival for the sector," added Dhawan.
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Inappropriate for MLAs seeking free IPL tickets, says D.K. Suresh
Bengaluru: Bengaluru Milk Union Ltd President D.K. Suresh on Monday said it is inappropriate for MLAs to seek free IPL tickets, adding that those interested in watching matches should pay for them personally.
Speaking to reporters near his residence in Sadashivanagar, he said, “IPL is a commercial tournament and does not represent the country. It is not right for public representatives to focus too much on such matters.”
Referring to the recent controversy during the RCB celebrations, he said, “let us find out who benefited the most from the statements made during the incident.” He also pointed out that BJP MLAs had received IPL tickets as well.
Responding to discussions about relocating the Chinnaswamy Stadium, Suresh said the government has already approved the construction of a new stadium at a location he had proposed.
“I had suggested building a stadium in Surya City and submitted a proposal for it. Bengaluru needs four stadiums in four directions to cater to its growing population and encourage youth participation in sports,” he said.
He noted that apart from Kanteerava Stadium, KSCA, and the Football Stadium, there are limited facilities in the city.
“When I was a Lok Sabha member, I had proposed allocating 100 acres in my constituency at Surya City. The land was later earmarked and the plan approved,” he added.
Suresh said he has discussed the project with Minister Zameer Ahmed Khan, Rajiv Gandhi Housing Corporation Chairman Shivalingegowda, and Anekal MLA Shivanna.
“The Cabinet has now approved the project, and a stadium will be developed on around 50–60 acres,” he said.
He further added that he has requested the Deputy Chief Minister to build another stadium at Shivarama Karanth Layout through the BDA, where 40 acres have been allocated. Plans are also being discussed to develop a well-equipped stadium in Bidadi.
Commending state government's recent bilingual policy move, Suresh said forcing children to learn three languages could affect their comprehension.
“It is a good decision to make two languages compulsory. Learning a third language should be left to the choice of students and parents,” he said.
Responding to criticism from BJP leaders, he said their tendency is to oppose every decision of the government.
“To please their central leadership, they take a pro-Hindi stance. Instead, they should advocate for the adoption of Kannada in all states,” he said.
When asked about the earlier three-language policy under Congress, he said, “the situation is different now. Today, the focus should be on quality learning. Kannada should remain the primary language, while students and parents can choose an additional language.”
