Jagmohan Garg Delhi, Sunil Singhania, Nomura, Kotak, Motilal Oswal talk about the impact of GST on corporates, economy and real estate sector. The unveiling of taxation rates or slabs for a host of products and services has affected the Indian economy and equity markets significantly. It has brought the implementation of the Goods and Services Tax (GST) bill a step closer to reality. A uniform indirect tax, GST is aimed at merging most of the existing taxes into a single system of taxation. It is looked upon as a tax trigger which will streamline the entire taxation process, making the country one unified common market.
According to DMall Owner Jagmohan Garg, the Delhi-based real estate tycoon, GST secures great hope in terms of sustaining growth in the real estate sector. “The implementation of GST is likely to have cascading effects on the real estate. It will help in ensuring transparency, alleviating the cost of property and shooting the demand”, he said, talking about the impact of GST on the economy.
Sunil Singhania, CIO – Equity Investment, Reliance Mutual Fund said, “GST is a game changing reform that is widely awaited. It has the potential of adding almost 100 basis points to the GDP growth. Though the near term will see some challenges of implementation, it is one reform that will bring efficiency in the economy and widen the tax base.”
As a matter of fact, majority of the sectors will come under the ambit of the Goods and Service Tax. Nomura, a leading research house, stated: “While corporates would pass on the direct benefits of GST (like a lower tax rate), they would aim to retain partly (if not fully) the indirect benefits from the saving in logistics costs, streamlining of business processes and the seamless flow of input credits.”
As per the Kotak Institutional Research, “It would be interesting to see how the government handles the vexatious issue of tax on gold and jewellery since the industry vehemently opposes any changes to the taxation structure and gold imports have surged of late.”
Motilal Oswal, India’s leading online share trading company believes, “The impact of GST has been a mixed bag for the Capital Goods and the Consumer sector. While the Capital Goods sector would benefit from a lower tax rate on contracts there would be higher tax incidence on cables and transformers. A few segments in the consumer sector would see higher effective taxes and need to take price hikes to offset cost pressures from increased taxes.”
While everyone hopes for a positive impact of GST, only time will spill the beans on the outcomes of its implementation.