Sunil Munjal, the joint Managing Director for Hero MotoCorp said that the Goods and Service Tax (GST) bill will significantly help the industries. As most companies organise their warehousing and logistics based on the difference of taxation in various states., the implementation of the bill will allow warehouses to be made in accordance to the compatibility, with both the production and the market, as standard tax rates will be applied throughout the country.
The GST bill was originally recommended by the Kelkar committee, who had suggested a complete transformation from the Value Added Tax(VAT) to the GST. The current bill, being presented in the Parliament is a modified version of its previous self. The GST bill still has a long way to go. The long-awaited bill still has to pass through Lok Sabha and then move on to every state in India to pass in their respective assemblies. Munjal, in an interview to CNBC TV18 said that the realisation of benefits of this bill will take a certain amount of time, as it has in many other countries. Though more than 160 countries have followed the tax reform in one form or the another, a few countries initially saw opposition, but these opinions were shortlived. He went on to add that the GST bill has never faced an opposition for more than 2 years in any country. And since the government is providing compensations for any revenue loss for the next 5 years to every state, there should not be any problem, he said.
Munjal though was of the opinion that fully rolling out the GST and not the quantum that is in the parliament right now will help us in realising the most profit. There are still other laws that need to be implemented. He said that there are over 25 states that have not changed their labour regulations, among other things. The bill is currently being presented in Rajya Sabha and is expected to move on to the Lok Sabha soon.