New Delhi: Implementation of GST will be positive for India’s rating as it will lead to higher GDP growth and increased tax revenues, Moody’s Investors Service has said.
“Over the medium term, we expect that the GST will contribute to productivity gains and higher GDP growth by improving the ease of doing business, unifying the national market and enhancing India’s attractiveness as a foreign investment destination,” Moody’s VP (Sovereign Risk Group) William Foster said today.
GST will also support higher government revenue generation through improved tax compliance and administration.
“Both will be positive for India’s credit profile, which is constrained by a relatively low revenue base,” Foster said.
Moody’s has a ‘Baa3’ rating on India with a positive outlook.
The biggest tax reform in independent India was rolled out at the stroke of the midnight — the intervening night of June 30-July 1 — by President Pranab Mukherjee and Prime Minister Narendra Modi.
Tax compliance
The US-based agency expects improved tax compliance to be driven by incentivisation of tax credits in a GST system. It would also usher in greater ease of compliance through the usage of a common, shared IT infrastructure between the central government and the states; and a reduction in the overall cost of compliance from simplified tax rates, uniform across the country.
“We expect the net impact of GST on government revenues to be positive,” Foster said.
The Goods and Services Tax (GST) will remove plethora of taxes like excise, service tax and VAT and transform India into a uniform market for seamless movement of goods and services.
Firms need to provide GSTIN for air tickets
People travelling for business purposes on business class air tickets are now required to submit details about their companies to avail tax benefits under the GST regime.
The Goods and Services Tax (GST) framework, which came into effect from July 1, provides for certain input tax credit only on business class tickets and there is no such provision on economy class fares.
Air India, Jet Airways and Vistara — the three domestic carriers that offer business class seats — have already sent out communications to inform passengers that GSTIN details need to be submitted in order to avail the benefits. IANS