GST 2.0: India Inc shows confidence in GST reforms implemented by govt, says Deloitte Survey

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GST Council meet: About 84% of India Inc. has expressed strong support for the GST implementation and has called for progressive steps to take the regime to a new level. A Deloitte India survey stated that the companies have reported that their confidence in the reform has significantly increased from 59% in 2022 to 84% in 2024. 

Deloitte India conducted the survey to capture India Inc.’s views on this transformational tax reform. The survey stated 88% of the top C-suite leaders indicated areas of challenge, including aspects around audits and assessments, underscoring the need for continued simplification, technology integration and capacity building. 

GST refors, which subsumed 17 local taxes and levies, was rolled out on July 1, 2017.

The survey also pointed out there is widespread feedback for enabling effective dispute resolution mechanisms, with 91 percent of leaders endorsing the extension of audit timelines to address issues and improve compliance. 

Besides, more than 70% respondents advocated for aligning pre-deposit requirements for GST appeals with the pre-GST era norms, aiming to streamline the dispute resolution processes.

The survey highlights the areas where more reforms are required: these are rationalising tax rates, offering an effective dispute resolution process, removing credit restrictions, adopting faceless assessments, liberalising export rules and implementing a compliance rating system.

Automation of tax compliance, including e-invoicing, continues to be voted as a top performance area. Also, enhanced and continued stakeholder consultation, leading to the issuance of clarificatory circulars/instructions was considered as a positive move in policy making.

Some of these crucial recommendations are expected to be key discussion points at the upcoming GST Council meeting on 22 June 2024.

“India Inc. has enhanced confidence in the workings and efficiency of the GST regime. Such positive sentiment is reflective of supply chain efficiencies, the benefits of tax, technology and continued stakeholder engagement on GST policy matters. The survey reveals that it is time to push for further reforms to make the regime more robust, dynamic and responsive to taxpayers’ needs. GST 2.0 should review the possibility of expanding the GST regime’s tax base, rationalising tax rates, removing ITC restrictions, further export liberalisation for services, unlocking working capital and addressing concerns related to operational areas of compliance,” said Mahesh Jaising, Partner and Leader, Indirect Tax, Deloitte India. 

To support the Micro, Small and Medium Enterprise (MSME) sector, the survey suggests easing GST registration by implementing streamlined processes, such as virtual verification and standard documentation across the country. These measures can help MSMEs effectively navigate compliance challenges and contribute more robustly to India’s economic growth.

About 78 per cent of MSMEs have shared a positive sentiment towards GST implementation this year versus 66 per cent in 2023. Nearly 70 per cent of respondents continue to believe that the quarterly filing of returns for MSMEs is beneficial and improves compliance. Specifically, the key positive area for 70 per cent of MSMEs has been called out to be supply chain efficiencies.

“Key initiatives sought by MSMEs are paperless invoicing and that uniform registration guidelines across India will significantly ease compliance burdens. Matching concept challenges of MSMEs in 2023 were at 64 per cent and are now down to 37 per cent, indicating that this area is more streamlined now,” he said.



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