The goods and service tax (GST), which was launched two years ago, has stabilised quicker than expected and its benefits will accrue to the economy in the years to come, say experts on Monday.
Experts further said the way the GST Council has functioned by taking every decision on the basis of consensus suggests that the Centre and the states are on the same page when it comes to GST, which augurs well for its further movement.
The indirect tax reform was rolled out two years ago on the midnight of June 30 and since then, the government has decided to celebrate July 1 as the GST Day.
"The GST has stabilised quicker than expected and its benefits will accrue to the economy in the years to come," V Lakshmikumaran, founder and managing partner of Lakshmikumaran & Sridharan, said.
"Software and IT (information technology) glitches are getting remedied quickly", he said while commenting on the two years of the GST roll-out.
He further said benefits of the GST such as higher economic growth, increased consumption and better tax compliance will start accruing to the economy in the years to come.
According to EY India Tax Partner Abhishek Jain, the last two years of the GST journey has been a roller-coaster ride with the track being comparatively smooth in the last miles of the journey.
"While the initial few months witnessed various modifications, representations, discussions, etc, (as is the case with any change) to address business concerns including rate rationalisation, the government's focus in the recent times has been on checking tax evasion," Jain said.
Appreciating the efforts of the GST Council to simplify the return forms, Lakshmikumaran said that in the end, it would help those who are on the right side of the law and bring to book habitual offenders.
He further said compliance norm should neither be too soft nor too burdensome. "Those who comply with the law should not be penalised because of those who avoid paying taxes," he added.
On the issue of two-year extension to the National Anti-profiteering Authority (NAA), Lakshmikumaran said it was much-needed as several cases were pending before the authority. He also suggested that the state governments should immediately set up the appellate authorities as it would increase the confidence of taxpayers in the system.
Besides, Lakshmikumaran also made a strong case for setting up of a central tribunal to reconcile the different orders of the Authority for Advance Rulings (AARs) with a view to bring in uniformity on the issues raised.
Describing the GST as landmark structural reform, Assocham President B K Goenka said its impact on the economic efficiency might be seen in a gradual but decisive manner.
Alankit Managing Director Ankit Agarwal said the numbers of registered taxpayers have increased by almost 80 per cent, which is a positive sign of it as it increases the tax collections in the long run and paves way for tax rate reduction.
Unlike other nations where GST or value-added tax have been rolled out, there is no significant increase in the inflation rate in the first year, he said.