IT-Electronics Industry Expects All-Round Positive Impact of GST

IT-Electronics Industry Expects All-Round Positive Impact of GST
Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

 

MAIT bats for continued patronage of Duty Benefits Scheme for the success of ICT sector ‘Make in India‘ initiatives under GST regime

The much awaited and talked about GST regime in India is finally attaining certainty with a four-slab GST tax structure of 6, 12, 18 and 26 per cent being mooted at the GST Council meet after unveiling of the Model GST Law in June 2016 (‘GST Law’). The government, which proposes to implement the new pan-India indirect tax regime from the start of the next fiscal in April 2017, has been moving ahead with finalising online processes for registration, refunds, returns filing and payments.

Manufacturers’ Association of Information Technology (MAIT) appreciates the concerted efforts of the Government to bring all stakeholders on board to finalise India’s new GST Law, which appears to be comprehensive in its approach. Stakeholders are optimistic that the GST tax structure being discussed will be in favour of the ICT industry.

“MAIT is very keen to see implementation of GST, which can potentially transform the Indian economy into a major global player. While the direct benefits would be on account of simplification of tax collection process, we foresee substantial increase in revenue collections that would enable government to enhance infrastructure spending. The spending on e-Governance would also fuel demand for IT products. After EVMs and UID, GST would be the third most important all time public digital transformation initiative for India,” said Mr Nitin Kunkolienker, Vice President, MAIT and Director-Corporate Affairs, Smartlink Network Systems.

“We welcome the Government of India’s move to introduce GST, which will give a significant boost to the economy. Along with improving ease of doing business and encouraging industries to expand their operations, GST will also ensure growth in job opportunities. Keeping consumer delight as a fundamental output of our technological evolution, at Canon, we are always keen to support endeavours that support progress and development in the country,”said Mr Kazutada Kobayashi, President and CEO, Canon India.

“As a leading global technology company operating across multiple business groups in India, Lenovo welcomes progressive tax reforms that ease business complexities and benefit organisations and consumers alike. Along with the rest of the industry we will keenly follow this development as GST gets formalised to help address various challenges in the current indirect tax landscape,” stated a Lenovo India spokesperson.

“The IT-Electronics industry at large welcomes the proposed move to the GST regime, which would pave the way for a simplified and homogenous tax structure for goods and services across India,” Mr Kunkolienker further added.

“The implementation of GST should block any commercial incentive for having a non-tax paid component in the value chain. It should add to a significant uptake of licenced software as also PCs with pre-installed software,” opined Mr Alok Dubey, CFO, Acer India (Pvt.) Ltd.
“Any new revolutionary change in the industry ecosystem should ensure a better investment climate and conducive business environment in the country. MAIT is hopeful the Indian ICT sector would benefit from speedy implementation of the GST Bill, and the country would become a global hub for sourcing of IT-Electronics hardware products,” concluded Mr Anwar Shirpurwala, Executive Director, MAIT.

‘Make in India’ and GST

The Government’s supportive initiatives over the last two years such as introduction of preferential tariffs for locally manufactured mobile phones, Tablets and Customer Premise Equipment (CPE) have had a notable positive impact on the production of mobile phones that is estimated to have touched nearly 100 million units in CY 2015.

The IT-Electronics industry has suggested various mechanisms to ensure that the Government’s vision of ‘Make in India’ is continued under the GST regime:

  • It is recommended that a negative list of ITA goods be introduced on import of which (for trading) no credit of CGST portion of IGST would be permissible, thereby encouraging indigenous manufacturing;
  • Benefit of upfront exemption from levy of CGST should be provided on goods manufactured in India, orthe benefit may be extended by way of a refund mechanism, wherein refund of CGST would be available to manufacturers;

Ease of Doing Business‘ and GST

Under GST regime, low tax compliance cost, low tax collection costs, low tax gap would keep inflation in check while improving the tax to GDP ratio. The supply chain and value chain of the IT-Electronics sector would go through a positive upswing. However, there are various other issues that GST needs to address from operational point of view to further improve ‘Ease of Doing Business’.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

X