GST Implementation in India
The proposed GST implementation in India, so far, cannot be construed to be full hearted GST implementation due to the following reasons :
a. Petroleum products have been put under umbrella of GST but levy of GST has been deferred.
b. Electricity which amounts for major cost factor has been kept outside the ambit of GST.
c. Dream of One Rate & One India has failed .Whereas, so far 4 tier rate structure has been finalised and additional 1 to 2 rate slabs possibility cannot be ruled as well.
d. Levy of Cess on demerit/sin/luxury goods again frustrates the real intention of subsuming of taxes under GST regime.
e. Compensation of losses to states is again a big hurdle for real implementation of GST in India
We feel that actual implementation of GST will be after 5 years when the compensation to States will not be an issue and Petroleum products will be also attracting levy of GST. Then only a real GST implementation in India can be held as true.
This will also result into a better average GST rate structure and avoidance of any additional levy of Cess as well.