By Anil J. Sathe, Editor
I am experiencing mixed feelings
as I write this last editorial of my tenure as the editor of one of the most
prestigious journals of our profession. It has been an enthralling journey,
with a number of challenges. Like everything that you do at the BCAS, this
stint as editor has enriched me greatly. The Journal will soon enter its 50th
year and to share with you that golden moment, you will have my young successor
Raman Jokhakar at the helm. Raman is brimming with new ideas and energy. We at
the Society are sure that this heavy responsibility will rest lightly on his
young shoulders.
On each annual day, the Society
brings out a special issue of the Journal with a theme. I am singularly
fortunate that I will sign off, with the GST special, an issue that contains
more than 20 articles from eminent authors covering virtually all the facets of
this new law. Since the issue is fully devoted to GST it does not contain any
of the regular features. Goods and Service Tax (GST), is possibly one of the
most significant milestones in national history since the independence. It has
been discussed for more than a decade and its impact on all sections of society
can be gauged from the fact that the Parliament will hold a special session on
30th June, to mark this historic moment and will ring in this new
law at the stroke of midnight from 1st July 2017.
While we as citizens take pride
in India’s character as a land with diverse people, cultures, languages and
religions, this diversity, at times, is a bottleneck and hurdle for growth of
business. Our country has a federal structure wherein the states have the power
to legislate on the taxation front. Consequently, we had excise levied by the
Centre, octroi, sales tax and other local taxes levied by different states.
With the growth of the service sector, we had the Centre levying service tax
from 1994. All these, different levies, maze of compliances, enabled the
unscrupulous to evade the law.This, finally resulted in increased costs to the
hapless customer. GST was a necessity to support the Prime Minister’s promise
of creating an environment where there would be “ease of doing business”. On 1st
July, it will become a reality. It is significant that this new law commences
on CA Day, possibly indicating the opportunities that it will create for many
of us.
Undoubtedly, the law that has
been passed after the required constitutional amendment is not ideal. One had
expected GST to be one levy to subsume all others but in its current form we
have CGST, SGST and in the case of interstate transactions IGST. Different
registrations in different states will create substantial compliance burden on
business entities. Normally, GST was expected to be levied in a manner that
only the incremental value addition would attract the tax. Unfortunately, due
to stringent rules for grant of input credit that may not happen. Further
reverse charge mechanism (RCM) would create a burden on the registered
taxpayers. It is also felt that RCM may severely affect the small and micro
enterprises who do not register themselves because they do not cross the
threshold of the turnover limit.
Though there are large number of
problems /issues, GST is indeed a historic step. One is hopeful that as we go
along, many of the creases will get ironed out. The government is alive to
various procedural glitches and is responsive to representations from
professionals, businesses and other stakeholders. Another significant
characteristic of GST is the digital platform through which it will be
administered. If this turns out to be robust it will reduce the leakages and in the long run
consumers will certainly benefit. The next couple of years promise to be
exciting and challenging for professionals.
This special issue seeks to
unravel some of the mysteries of this new law. I am sure that readers will
benefit from finding answers to their questions at one place. I am thankful to
the chairman of the Indirect Tax Committee Govind Goyal and his entire team for
conceptualising this issue. I am
grateful to all the authors who have devoted their time and energy in
contributing excellent articles.
I must also thank, all my
colleagues, my seniors in the Journal Committee for supporting me in my tenure.
Thanks are due to all authors and contributors to this esteemed journal.
Finally, I must record appreciation for all readers for their love and
affection.
As I write this piece, there is
the relief for having been relieved from a great responsibility, and a tinge of
sadness that I will miss writing to you each month. My successor has assured me
that he will occasionally grant me the opportunity to write to you.
Therefore, I bid adieu, till we
meet again!
