GST to boost GDP; significant risks in short term: Fitch
GST
Dated:- 4-7-2017
New Delhi, Jul 4 (PTI) Implementation of GST, albeit complex, will remove domestic trade barriers and help boost GDP growth over long term, but poses significant short-term risks, Fitch Ratings said today.
\nThe four slab Goods and Services Tax (GST) was rolled out from July 1. The new regime taxes various goods and services at 5, 12, 18 and 28 per cent, while keeping essential commodities out.
\n"The GST that came into effect on 1 July is relatively complex, including multiple tax rates for different goods – ranging from 0-28 per cent, or higher where 'sin taxes' are applied – and requires frequent filing in all states in which a company <\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ST implementation, emphasised by the late changes to the bill and the disruptive roll-out of demonetisation," Fitch said. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n er cent of employment, and is largely untaxed. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" GST to boost GDP; significant risks in short term: Fitch GSTDated:- 4-7-2017New Delhi, Jul 4 (PTI) Implementation of GST, albeit complex, will remove domestic trade barriers and help boost GDP growth over long term, but poses significant short-term risks, Fitch Ratings said today. The four slab Goods and Services Tax (GST) was rolled out from … Continue reading “GST to boost GDP; significant risks in short term: Fitch”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-5817","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/5817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5817"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/5817\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nThe unified national system should offer significant opportunities for productivity, it said, adding that it will become much quicker and less costly to move goods across the country now that trucks will not be held up at checkpoints at state borders.
\n"Smoother logistics should reduce retailers' need for working capital and allow them to operate centralised warehouses, rather than in every state. Supply chains could extend, encouraging specialisation, now that there is less incentive to source goods within state borders," it said.
\nTax filing may also become less time-consuming as a result of the new<\/p>\n
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\nThis is one of the reasons why government revenue is low, at just 21.4 per cent of GDP in 2016, compared with a median of 29.9 per cent for 'BBB' range sovereigns.
\nFitch said smaller firms, many of which still keep their books manually, are likely to find the transition particularly difficult.
\nIt said India's large bureaucracy is likely to be tested by the new system, with further potential implications for businesses. For example, delays in processing tax returns and paying out refunds might create cash flow problems.
\nAlso multiple GST rates are likely to lead to disputes over which goods fall into which category and could add to strains on the judicial system, Fitch said.
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