A recent survey by Deloitte has identified refund delays and input tax credit (ITC) disputes as the most pressing concerns for businesses under the Goods and Services Tax (GST) regime. The survey, conducted among 1,096 business leaders across eight industries, including micro, small and medium enterprises (MSMEs), underscores the need for targeted reforms in India's indirect tax system.
Key Findings of the Deloitte Survey
The survey reveals that a significant number of respondents face challenges with delayed GST refunds, impacting their working capital and business operations. ITC mismatches and disputes were also flagged as major hurdles, often leading to prolonged litigation and compliance burdens. According to the survey, these issues are particularly acute for MSMEs, which lack the resources to navigate complex tax procedures.
Industry-Specific Concerns
Across the eight industries surveyed—including manufacturing, retail, and services—the common thread was the need for a more streamlined and predictable GST framework. The survey noted that frequent changes in rules and lack of clarity on certain provisions add to the compliance burden. One respondent stated, "The uncertainty around ITC matching and refund timelines forces us to maintain higher cash reserves, affecting our growth plans."
Call for Reforms
The Deloitte survey emphasizes that addressing these issues could significantly boost ease of doing business and tax compliance. Recommendations include faster processing of refunds, clearer ITC matching mechanisms, and reduced compliance costs for MSMEs. The findings come at a time when the GST Council is considering further simplifications to the tax structure.
Broader Impact
Experts believe that resolving these concerns could enhance revenue collection and business sentiment. The survey's insights are expected to inform policy discussions, with industry bodies urging the government to prioritize these reforms in upcoming GST Council meetings.
