Budget 2019 expectations - Changes eyed in GST system: from input tax credit to incentives, check out these demands

Finance Minister Nirmala Sitharaman is set to present Union Budget 2019 on July 5 and the expectations are high in the world of businessmen that this time there will be something big for them. This is the first budget of the second term of the Modi government. While several industries have put forward their demands, more and more voices have been asking for changes in the Goods and Services Tax (GST) asking for it to be simplified and also the companies which provide clean pre-reconciled purchase data should get  input tax credit (ITC) immediately. 

Vinod Subramanian, CEO, Logo Infosoft, told Zee Business Online that, “The true power of GST is in government providing complete input tax credit, on time, helping companies with monthly cashflow. This can be achieved only when full reconciliation is in place – every invoice between parties, at every line item level."

On GST, Subramanian said, "The biggest disappointment till date with GST is that the government has been very lenient with data asks. This is a two way street, companies which provide clean pre-reconciled purchase data should get ITC immediately."

He suggested, "Government should look at providing at least 1% tax incentive to companies providing pre-reconciled purchase data for next one year. For SMEs, this can be higher at 2% of the ITC claimed. Such incentives can drive positive behaviour, increased compliance and higher tax collections”

The GST Council had recommended a few changes to the GST law recently. These changes are expected to be brought into effect in the ensuing budget.