Published Editorial

GST secretariat needed in every state

October 2016

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BusinessLine

By

VS Krishnan
Advisor, Tax Policy, EY India

A GST Secretariat is needed in every State to address the day-to-day issues relating to the implementation Goods and Services Tax.

“There is an institutional void at the State level. State GST secretariats will bring together central government and state government offices in one place. It should be a registered body under the Society’s Act,” VS Krishnan, Advisor, Tax Policy, EY and a former member (service tax and GST), Central Board of Excise and Customs, told BusinessLine.

A seamless and efficient transition without people being forced to run to GST Council should be possible. But “there is no mechanism to address the day-to-day implementation issues. You need a body or institution in the State. So, one of the things we are advocating is GST Secretariat in every State,” he said.

Asserting that GST wouldn’t have any impact on the poor, Krishnan exuded confidence that GST would lead to greater compliance. “Cheating will come down. Long-awaited transformation of transactions coming into the open will happen, which is a good thing,” he stated.

In the medium-to-long term it would create market expansion and unleash a new entrepreneurial wave. “More people will want to become entrepreneurs and participate in the economic gains because they would know there are no inter-State barriers,” he said while highlighting how such policy triggers in India and other countries in the past expanded the market.

With the implementation of GST, inter-State check posts would vanish and efficiency of the road sector will improve significantly. In the US, a truck carrying goods travels 820 km a day as against 210 km in India. In the short haulage category railways will see more competition from roadways, he said.

Krishnan pointed out that technology would be the biggest challenge for the companies. They will have to ensure that their vendors are ready and may have to go to bigger vendors to achieve compliance.