GST was essential but there is room for improvement, says Gadkari

With the Goods and Services Tax (GST) regime completing four years, Union Minister Nitin Gadkari on Wednesday (July 1), said the tax reform was ‘very essential’ while observing that there is room for improvement in the indirect tax regime.

Gadkari, who holds the micro, small and medium enterprises (MSME) portfolio along with road transport, said there is a need to build consensus with states to bring petroleum products and alcohol under the GST regime, as the country has a federal structure.

“This tax reform [GST] was very essential… though we have completed four years of GST, I feel there is room for improvement and we can make it better with support of stakeholders,” Gadkari said at an event organised by the Institute of Cost Accountants of India (ICAI) on GST Day.

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The nationwide GST, which subsumed 17 local levies like excise duty, service tax and VAT, was rolled out on July 1, 2017. Gadkari, who is known for expressing his frank views, also said that some problems related to GST are still troubling the MSME sector.

The minister said that when MSMEs bill any material and give them to firms, it remains the responsibility of MSMEs that whether they receive payments or not, they are required to deposit tax.

“And in the government, particularly with the MSME, there are a lot of problems, their delayed payments are a big problem for us. And all small MSMEs are already facing the problems,” he said.

The minister said there is a need to find a way out so that some relief can be provided to the people.

“Because the state governments, the state government undertakings, central government, central government undertakings, different departments, major industries, and big people… are not giving their payments [to MSMEs], delayed payments are there, that is one of the reasons that we have a lot of economic issues,” Gadkari noted.

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He said GST is founded on the notion of ‘One Nation, One Market, One Tax’, which has helped and will be helping the trade and industry a lot despite the prevailing pandemic situation.

The minister said digitisation and information technology have an important role to play. He said for transparent and time-bound decision making, process performance audit along with financial audit is very important.

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Gadkari noted that India has got all the potential to become the number one economy in the world. “We are giving the highest priority for the development of infrastructure in the country. We are constructing 38 km of road per day. We are making green highways,” he added while listing out the achievements of his ministry.

The minister stressed the need to create more jobs, and said for that reason, the country needs more investments and upgrading in technology.