Piet Vandendriessche, indirect tax head with Deloitte, one of the Big Four accounting firms, was in India recently. In an inverview with FE?s Bijay Shankar Patel, Piet highlighted the importance of the goods and services tax (GST) and emphasised that it should include all important items. He also said that a negative list of services ? which implies all services except the select few would be taxed ? should come along with GST.
The government is planning to bring a comprehensive GST. How do you see this helping the Indian economy?
If it is implemented well, I believe it should help boost the Indian economy further. India today is one of the leading economies in the world with a very strong growth rate. The GST should be such that it must be acceptable to all stakeholders ? businesses, consumers, states and the Centre.
Based on international experience, how much increase in revenue could we see if GST is implemented?
That depends on how well and efficiently it is implemented.
Do you think that GST should include all the items or there should be a considerable number of exemptions?
Global experiences show that the at the start itself, the GST system should include as many items as possible. Inclusion of more items would help in lowering the rates. If certain elements are excluded, it would be very hard to include them later.
So are you advocating that petroleum products should be included in GST?
Yes, I believe so.
The government has floated a discussion paper on a negative list of services to replace the existing positive list. However, since the GST is taking longer than expected, do you think that the negative list should be implemented even before GST comes into force?
I think the negative list of services should go parallel with the GST implementation. Businesses would need to adapt themselves to the system, so both the steps should go together.
According to Germany, the stumbling block to a free trade agreement between India and the European Union is the high import duty New Delhi imposes on some items, like cars. Do you think India should think globally on the issue and reduce the high import duty?
I agree that import duty on certain goods coming to India are quite high. In my view, not specifically to India, any economy that wants to play a key role at the global level should be open enough. So acceptable rates should be charged for goods imported.
