NEW DELHI: The government’s reconciliatory approach to get the opposition Congress on board and ensure the passage of the GST Bill has Dalal Street anticipating an early breakthrough on the landmark tax reforms.
Eight out of every 10 market enthusiasts that took part in an ETMarkets poll on Twitter expressed hope that the GST Bill would be a reality soon. The landmark tax reforms are expected to add 100 to 200 basis points to India’s annual GDP growth.
The survey was conducted on Monday. A total of 926 participants cast their votes in the poll, and a huge majority of 79 per cent voted a resounding ‘yes’ when asked whether they expect the GST Bill to go through in the ongoing session of Parliament.
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C Jayaram, Joint Managing Director of Kotak Mahindra Bank, pointed out that the Opposition, particularly the Congress, has already moved from taking a maximalist position like it had done the last time around.
Do you think the govt move to reach out to the Opposition will ensure the passage of GST bill in winter session?
The debate now is more around two or three key issues, which they have raised – the 18 per cent cap on the GST rate through the constitutional amendment bill, an 1 per cent inter-services tax and a dispute resolution mechanism,” Jayaram said.
At time when the domestic stock market had little expectations from the winter session of Parliament, Prime Minister Narendra Modi’s initiative to hold talks with Congress president Sonia Gandhi and former prime minister Manmohan Singh on the differences over the GST Bill has added an impetus to the reform process and raised hope on the Street.
Kirit Gogri of Quant Broking said a passage of the GST Bill would bring in significant benefits to the economy and help improve corporate earnings. “It will not just cut costs, but also enhance the ease of doing business. It could mean potential windfall for companies. Besides, consumer prices are also going to come down too. All put together, it is going to be beneficial for everyone in the system.”
The GST will make tax administration a lot more efficient, collapsing manufacturing taxes through excise duty and the service taxes as well as state VAT into a single tax.
Sashi Krishnan, Chief Investment Officer of Birla Sun Life Insurance, said: “Even if the constitution amendment bill on GST goes through, it will take at least six months to get implemented. That is the process followed globally, wherever GST has been implemented. From a very short-term perspective, I would recommend investors to keep an eye on the stocks that are likely to benefit from GST implementation.”