NIHAL KOTHARI

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NATIONAL GST A Key Enabler For Competitiveness
Growth
Road Map 2010-11

• NIHAL KOTHARI
• Delhi June 29, 2009

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GST FOR GROWTH COMPETITIVENESS
BACKGROUND

• Global markets passing through turbulent times
• India can not remain unaffected
• Intensified Global competition is major challenge
• We have potential and opportunity to become
  growth engine for global economy by taking
  appropriate policy initiatives and reforms
• Creating a one Indian common market through
  National GST would be a first major positive step

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GST FOR GROWTH COMPETITIVENESS
INDIAN GROWTH POTENTIAL

• A recent research on Emerging Economies indicates
  that India has potential to become 2nd or 3rd
  largest economy by 2039 with per capita income
  going up from 1000 to 22000
• Key enablers would be competitiveness (improved
  productivity Infrastructure), good Governance
  social harmony,
• Present Multiple indirect tax structure is a
  major constraint on competitiveness

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GST FOR GROWTH COMPETITIVENESS
IMPACT OF CURRENT TAX STRUCTURE

• Multiple tax complexity increases transaction
  cost, litigation uncertainty
• Cascading impact of taxes increases cost of
  Indigenous goods by 10-20
• Restricted tax base limits revenue - GST can
  increase tax GDP ratio by 2
• Barrier to common Indian market for growth
• Production and distribution inefficiency

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GST FOR GROWTH COMPETITIVENESS
ASSOCHAM PROPOSED NATIONAL GST Compatible with
Federal structure

• Research study released in 2007 with 3 models
  feasible under Indian constitution
• Held 2 National conferences widely
• Inputs to joint working groups
• Objective of 3rd GST conference is to focus on
  major concerns and sector specific issues

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GST FOR GROWTH COMPETITIVENESS
KEY CONCERNS

• All taxes on goods and services should be merged
  in to GST (Electricity duty, multiple Cess, entry
  tax entertainment tax)
• Seamless Credit without accumulation
• Uniformity across India and in all states
• Simplified administration and documents
• Suitable transitional provisions

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GST FOR GROWTH COMPETITIVENESS
KEY CONCERNS

• GST structure facilitates inter-state trade and
  stock transfers
• Rational taxation of cross border services with
  clarity on state jurisdiction
• Adequate time to understand prepare
• Binding treaty for stability of GST
• Transparency and involvement of stake all holders

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GST FOR GROWTH COMPETITIVENESS
COMMITMENT TO TAX REFORM

• ASSOCHAM has been actively supporting Government
  initiatives on tax reforms.
• Chamber proactively provides tax research
  relevant to India and practical to implement
• It provides platform to all stake-holders to
  address issues and build consensus
• ASSOCHAM disseminating knowledge to wider
  sections across the country
• We today have among us highly respected thought
  leaders and catalysts to Indias reform process
  large number of industry leaders and expert
  speaker

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GST FOR GROWTH COMPETITIVENESS

• Taxation Committee of ASSOCHAM welcomes all
  participants, speakers and guest speakers to this
  important National Conference and wish it a great
  success

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THANK
YOU
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NEW DELHI
BANGALORE
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