New Delhi, May 6: Welcoming the passage of GST Bill in the Lok Sabha, industry and experts said roll out of the new tax regime would add 1.5 percentage points to the economic growth and create a common market across the country.
"In our view, this is the first step in making India a single market. In terms of providing incentive to industry, this is the most extensive and far-reaching reform in the tax domain, which would encourage industry to grow significantly," CII Director General Chandrajit Banerjee said.
The long-pending GST bill was approved by Lok Sabha today after a walkout by the Congress even as government vowed to compensate states for any revenue loss and assured that the new uniform indirect tax rate will be much less than 27 per cent recommended by an expert panel.
Assocham Secretary General D S Rawat said the Goods and Services Tax (GST) will add to GDP by 1.5 per cent. Moreover, he said, the passage of bill will send the strong signal to the global investors.
"The implementation of GST Bill would be a potential game changer for the Indian economy and would lead to double digit growth trajectory in the coming times," PHD Chamber President Alok B Shriram said.
"It will simplify and rationalise the complex tax structure which would be critical to remove the cascading impact of indirect taxes on economy and to create a pan India common market across the country," he added.
GST, which is proposed to be implemented from April 1, 2016, will subsume excise, service tax, state VAT, entry tax, octroi and other state levies.
"As the volume of trade expands and growth momentum picks up, every state will benefit with the rise in their revenue collections, while industry and common man also stand to gain," Banerjee said.
Senior Director at Deloitte India Saloni Roy described the GST as a "mammoth" tax reform that should usher with it tax efficiencies and streamlining of businesses.
"Issues pertaining to tax cascading, multiplicity of compliances are hoped to be resolved with introduction of GST," she said.
Partner - Indirect Tax at KPMG India Pratik Jain said the Lok Sabha passing the GST Bill is an indication that there is broad-based alignment on GST amongst major political parties.
The reform of the indirect taxation was initiated by the Kelkar Committee in 2003 following which the UPA government in 2006 proposed a GST. The Bill had initially been brought in 2011.