India studied the Malaysian model before implementing the GST and borrowed the anti-profiteering clause to ensure GST benefits are passed on to the end-consumer by the industry
New Delhi: Malaysia deciding to scrap the goods and services tax (GST) on Wednesday, three years after its roll-out, may prompt India to tread with caution over the next few years to stabilise the new indirect tax regime implemented in July last year.
Although the development in Malaysia may not have any direct impact on India, experts suggest the government should closely study the Malaysian experience, take ‘necessary precautions’, and come up with additional reforms to expand GST in a phased manner.
“Events unfolding in Malaysia are unprecedented and quite interesting. Rolling back the GST system, which is only three years old there, would be challenging for India as well as businesses. It might be worthwhile for the Government of India to closely study the Malaysian experience and take necessary precautions over the next few years,” said Pratik Jain, partner, PwC India.
He, however, added that he does not see any impact on the Indian GST. It came in after years of building political consensus, which led to a constitutional amendment as well.
“The Indian GST is now stabilising, tax base is expanding, inflation is largely under control, and there has hardly been any resistance from businesses,” said Jain.
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