The success of the online Goods and Services Tax (GST) in India could spawn similar experiments with the uniform producer levy in the common European trading bloc, PwC’s global indirect tax leader Jo Bello told ET.
“What India has achieved on the technology part of GST is pretty amazing. Many EU countries are watching India to see whether it works for you and whether they could do it too,” said Bello.
She said that GST has started changing India’s perception not just for policy makers in other countries but also for global investors. While India’s GST implementation has come under a lot of criticism from many in the domestic industry, Bello said the indirect tax reform has in fact attracted many global investors who until now were steering clear of India.
Also with GST, India may have moved the value chain and the tax system is almost on a par with countries that have good indirect tax structures, including those in China.
“There are lots of similarities between the Chinese system and the Indian system. But the Indian system is now extremely similar to the rest of the world’s VAT (Value Added Tax) systems,” said Bello.
“India has e implemented GST and it is starting to change the country in exactly the ways they were intended to. And so I think actually India has got an awful lot to be proud of in how it has achieved its ambitions,” she said.
India moved to GST last year on July 1, where all the indirect taxes like sales tax and VAT were subsumed into a single producer tax. This did create initial problems, triggering litigations. In most cases, the government has come out with clarifications. But harnessing full benefits of the biggest tax reform since independence could be delayed if the complexities faced by the industry keep increasing.
“So there are still complexities from a technology perspective or reporting perspective… and (it would) be really interesting when everything settles down. I hope for India’s sake that it’s relatively soon,” she said.