GST in India: A much awaited tax reform
By UK India Business Council (UKIBC)
The indirect tax system in India has for long been identified as an important area for reform.
It is considered to be highly inefficient, with multiple levies which generate problems of double taxation and barriers to the movement of goods across Indian states. For a few years there has been discussion of reform in the shape of the pan-India Goods and Services Tax (GST), one which is widely regarded as potentially the most significant in India since the reforms of the 1990s. It would mean lower tax rates across the retail chain, a simplified tax regime, and a real economic unification of the country. Its impact on the retail market would be ground-breaking.
Although repeated attempts to implement this reform have stalled, Minister of Finance P. Chidambaram has indeed expressed his commitment to the initiative. But it has been challenging to reach agreement among all Indian states, with issues ranging from the new GST design, to the amount of GST levied, and forms of compensation to the States. It is a complex task ahead, but one that we think will be worth the wait.
For this month’s sector view, we asked UKIBC’s strategic partner PwC to share their thoughts on the implications of this tax reform for the retail sector and their vision on when to expect its implementation. You can read their insightful viewhere.
If you wish to know more about opportunities in Indian retail, please contact: Tara.Panjwani@ukibc.com.
