New Delhi: Hailing the passage of GST Bill in Lok Sabha, India Inc on Monday said it sees a possibility of rollout of the indirect tax reform from April 1, ushering in more investments and boosting the country's economic growth.
"With the passage of the bill, it is expected that implementation of GST with effect from April 1, 2017, will become a reality," CII Director General Chandrajit Banerjee said.
"GST will bring in much-needed transparency and higher investments in the coming years and we hope that a few percentage points to India's GDP will be added through higher tax revenue and investments," he added.
GST, billed as the biggest economic reform since 1991, will replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world's biggest single market.
The bill has to be ratified by at least 16 states in 30 days after it is passed by Parliament.
"it will enhance production possibilities in manufacturing sector and expand the growth trajectory of services sector, attract large chunk of foreign investments and create millions of new employment opportunities in the economy," PHD Chamber of Commerce President Mahesh Gupta said.
Once implemented, GST will subsume various taxes including excise, services tax, octroi and other levies, and the proceeds will be shared between the Centre and the states.
Under the new regime, goods would be taxed at the point of consumption, instead of the goods being taxed multiple times at different rates.
Assocham Secretary General D S Rawat termed it as a "big bang reform" and expressed the confidence that the run-up to the real implementation would be smooth.
However, engineering exporters' body EEPC India Chairman T S Bhasin said the implementation of GST should be done in a manner to avoid procedural difficulties for exporters.
"Instead of first paying the taxes and then claiming credit for the same, the proposed enabling GST law should exempt exporters from the taxation net since the country does not want to export taxes," he suggested.
GST, which was first proposed a decade back, is seen as potentially transformative for India's economy, adding as much as 2 percentage points to the GDP while also improving the ease of doing business and encourage investment in manufacturing.
It is also expected to result in greater tax compliance, boosting government revenues.
"It is expected that GST will lead to easy tax compliance and improve India's competitiveness in the global arena. Implementation of GST will be a big incentive for bringing new investments into India and eventually will foster the growth of the Indian economy," Ficci President Harshavardhan Neotia said.