Economy & Market

GST regime is full of challenges and needs resilience

Published

7 years ago

September 30, 2017

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Endorsed as "Good & Simple Tax", Amman Devralia, Executive Director, KHD Humboldt Wedag, has a high expectation that it will buoy the Indian economy and bring the informal sector into the formal sector. In an interview with Nitin Madkaikar, Devralia reiterates its success will depend on the readiness of the entire supply chain (suppliers, distributors, retailers, logistics partners etc.) to adopt the regime. Is the GST regime conducive as it described before the launch on July 1, 2017?
GST has been endorsed as "Good and Simple Tax". ‘Good’ because it minimises the cascading effect of taxes (i.e., levying of tax on things that have already been taxed), thereby reducing the cost of doing business, and ‘Simple’ as it replaces multitude of indirect taxes, thereby increasing ease-of-doing business.
There are huge expectations that the biggest indirect tax reform will boost the Indian economy in the long run and huge shift will be seen from unorganised to organised sector. However, a period of three months is too short to come to a conclusion.
The fundamental aspect of GST is the seamless flow of input tax credit along the entire value chain, wherein credit of taxes paid on inputs at each stage is available in the subsequent stage of value addition, thereby making GST essentially a tax only on value addition at each stage. The ability to claim input tax credit under the GST regime depends on timely compliance and matching of data filed by the parties along the entire supply chain. Any lapse on part of the supplier may lead to denial of input tax credit in the hands of the recipient, thereby casting an additional burden on the recipient to ensure timely compliance by the supplier. As a safeguard, two-stage payment mechanism is being followed by the recipient wherein the basic portion is paid upfront to the supplier and tax portion only after reconciliation of data filed in the respective GST returns.
Some of the concerns includes:
a) readiness of the entire supply chain;
b) un-interrupted connectivity to GST Network;
c) increased level of compliance and reporting on a monthly basis. Reports say that three returns have to be filed each month. Is this posing any operational problem/s in the supply chain?
Large entities were filing at-least three returns each month under different indirect tax laws (i.e. excise return, first stage dealer return, VAT and CST return) under the erstwhile tax regime as well. The real pain area under the GST regime as compared to the erstwhile tax regime is the level of compliance and reporting required to be done on a monthly basis. Entities are required to enter invoice level details in the monthly GST returns, which is a cumbersome process. Smaller entities without the required infrastructure are finding it difficult to manually enter invoice level details and large entities are facing infrastructural bottlenecks in uploading huge volume of data. In some ways, the government has outsourced the tax compliance to businesses in order to ensure compliance along the entire supply chain. Are you satisfied with the procedures that came into force after July 1?
The design of a single IT platform – GST Network – as a common interface between the tax payers and tax authorities for the core functions of administration (like, registration, filing and processing of returns, payments and refunds), is definitely a step towards paperless regime. However, provisions with respect to self-invoicing and payment vouchers for inward supplies from unregistered vendors, issuance of advance receipt vouchers on receipt of advances from customers, etc., entails additional paper work. Further, the ongoing glitches in the GST Network has been disappointing and raises doubts about the operational capacity of the GST Network, which is the foundation for paperless regime. The three months being seasonally weak for the industry, what was the impact on business compared with the past weak seasons?
As per industry reports, cement production witnessed a decline of 3.9 per cent in Q1FY17. Cement production stood at 72.67 million tonne (MT) in Q1FY17 as compared to 75.7 MT in Q1FY16. The decline was due to low inventory addition in the real estate and housing sector (accounting for about two-third of the total cement consumption in India), as the regulations and compliances under newly implemented Real Estate (Regulation and Development) Act, 2016 – RERA, made the developers cautious. With RERA implementation to be completed by the end of Q2FY17, clarity on the impact of GST on the real estate and housing sector coupled with government’s initiatives towards building affordable housing should eventually drive the demand for cement from the real estate and housing sector. Also, public infrastructure development lead by execution of smart cities and national highways projects across the country should drive the demand for cement from the infrastructure and construction sector in the next quarters. Has the need for working capital risen, given that refunds are still locked with exchequer?
Yes, under the erstwhile tax regime, exporters enjoyed upfront tax exemption on purchases against concessional tax forms, which is not available under the GST regime. Under the GST regime, GST paid on inward supplies is required to be claimed as refund by the exporters. However, due to glitches in the GST Network, the deadline for filing GST returns for July 2017 (the first month under the GST regime) has been extended twice, with GSTR-3 now required to be filed as late as November 10, 2017. The extension in filing GST returns for the first and therefore subsequent months means delay in processing of refunds by the authorities thereby increasing the requirement for additional working capital. Do you think GST regime will attract investment in your end use industry?
The demand for cement is driven by real estate and housing sector, accounting for about two-third of the total cement consumption in India. The other major consumers of cement include infrastructure, commercial construction and industrial construction. Given the government’s initiatives towards building affordable housing and public infrastructure development, GST regime will certainly attract investment in the real estate and construction sector. Further, bringing the real estate under the ambit of GST can boost the investment in the sector. Is there any other information you wish to share.
The GST regime aims to widen the tax base by bringing the informal sector under the ambit of formal economy resulting in higher tax revenues for the exchequer, gradually allowing a move towards fewer slabs and lower GST rate. The transition has just started and the ride to make GST a "Good and Simple Tax" will be long and full of challenges requiring resilience on part of government and businesses. The successful implementation of GST will certainly drive the Indian economy offering opportunities for growth across sectors.

Concrete

The RAHSTA to Innovation

Published

4 weeks ago

November 23, 2024

Roshna

As part of the 10th India Construction Festival, the RAHSTA Awards recognised outstanding contributions to the road construction industry.

On October 10, 2024, the RAHSTA Awards were held at the Jio Convention Centre in Mumbai, forming a significant part of the 10th India Construction Festival. This esteemed event serves as a pivotal platform for recognising and honouring outstanding contributions in the road construction industry, particularly those that prioritise sustainability, innovation and excellence.
RAHSTA, an acronym for ‘Roads and Highways Sustainable Technologies & Advancement’, has become synonymous with the promotion of advancements in road construction equipment and technologies. Organised by the FIRST Construction Council, the awards seek to highlight the importance of sustainable practices in infrastructure development and celebrate those organisations that lead the way in this critical area.
At the event, Pratap Padode, Founder, FIRST Construction Council, underscored the importance of skilling the workforce in the construction sector. He pointed out that construction is India’s second-largest employer, with the potential to reach 100 million jobs by 2030. However, he emphasised that a significant portion of this workforce remains unskilled, with 80 per cent of the 70 million workers lacking adequate training.
“To bridge this skill gap, we must incorporate practical orientation in engineering and management courses,” Padode urged. He highlighted the Indian Government’s initiative to onboard 1 crore interns through CSR funding over five years, encouraging construction companies to participate actively
in this programme. By doing so, he said, the industry could not only enhance skill development but also position itself for future growth and sustainability.

The RAHSTA Awards recognised seven outstanding contributions to the road construction sector, celebrating innovations that drive sustainability and efficiency:

Award for Highest Standards of Excellence in Road Engineering & Construction: Patel Infrastructure
Award for Excellence in Bridge Engineering: L&T Construction, DIAL Phase 3A Project
Best Road Financier Award: HDFC Bank
Award for Best Use of Waste Material Recycling in Road Construction: Tata Steel
Best Digital Technology Award in Road Building: Cube Highways and Transport Assets Advisors
Award for Excellence in Project Management: Haryana Rural Road Infrastructure Development Agency
Innovation Award in Project Execution:
CC Precast Solutions
Indeed, the RAHSTA Awards 2024 were more than just a ceremony; they represented a vital call to action for the road construction sector in India. By highlighting the importance of sustainability and technological advancement, the awards inspired industry stakeholders to strive for excellence
and innovation.
As the event concluded, it left attendees with a renewed sense of purpose and a collective vision for a more sustainable and efficient future in infrastructure development. The RAHSTA Awards stand as a testament to the possibilities that lie ahead when industry leaders come together to embrace change and foster growth.

Concrete

Equipment India Awards 2024!

Published

4 weeks ago

November 23, 2024

Roshna

The titans of the construction equipment industry were honoured at the 12th BKT Equipment India Awards 2024.

On October 10, 2024, Mumbai played host to the much-anticipated 12th BKT Equipment India Awards 2024, an event that recognised and celebrated the outstanding achievements within the construction equipment sector. The grand ceremony took place at Jio Convention Centre and was among the highlights of the India Construction Festival, which gathered industry leaders, manufacturers and financiers from across the nation to honour innovation and excellence in this vital sector.
The inaugural addresses set a reflective tone for the evening, emphasising the importance of collaboration and information sharing within the industry. In his opening speech, Pratap Padode, Founder, First Construction Council, remarked, “At Equipment India, we have always tried to enhance the standard of the industry. During this 17th year of our existence, we still find that companies are trying to hide behind a veil as far as the disclosure of factual data is concerned.” His emphasis on transparency resonated with the audience, highlighting the critical need for the construction equipment sector to adopt best practices for data sharing, akin to those seen in the automobile industry.
For his part, Vipin Sondhi, Chairman, RAHSTA Committee, and former MD and CEO, JCB India and Ashok Leyland, also shared optimistic insights, stating, “Today, we celebrate not just the figures but the remarkable individuals behind them – the innovators, manufacturers and teams that push the boundaries of what’s possible.” He highlighted the impressive growth of equipment sales, which saw a 26 per cent increase during FY2023-24, reflecting strong market recovery and renewed confidence.
The 12th BKT Equipment India Awards not only celebrated the achievements of key players in the construction equipment sector but also served as a reminder of the collective effort required to drive the industry forward. The event reaffirmed its commitment to supporting the industry’s ongoing evolution, ensuring that India remains a significant player in the global construction equipment market. With the industry poised to grow at a CAGR of 12 per cent, reaching $25 billion by the end of the decade, the evening left attendees inspired and motivated to continue pushing boundaries in their respective fields.
A significant highlight of the evening was the presentation of the Equipment India Person of the Year 2024 award to Jaideep Shekhar, Managing Director, Terex India. Under his astute leadership, the company has achieved remarkable growth, marked by innovation and a commitment to excellence. The jury praised his strategic vision, which has not only propelled the company’s success but also contributed positively to the broader industry landscape.
Receiving the award, Shekhar expressed heartfelt gratitude, stating, “I’m deeply grateful to the jury and Equipment India for this remarkable honour. This award reflects not only my contributions but also the dedication and hard work of my team. I have been associated with the industry for more than 25 years and this award motivates me to keep pushing boundaries and to lead the growth
with integrity.”
The award presentation was made all the more special by the presence of previous winners of the Equipment India Persons of the Year, including Vipin Sondhi, former MD and CEO, JCB India (Equipment India Person of the Year 2013); Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery (Equipment India Person of the Year 2015); and Dimitrov Krishnan, Managing Director, Volvo Construction Equipment India (Equipment India Person of the Year 2013).
The event also witnessed the recognition of numerous companies across various categories, showcasing the best of the best in the construction equipment sector. Indeed, as the industry gears up for future challenges, the awards stood as a testament to resilience, creativity and the unwavering spirit of collaboration. Together, the participants are set to build a brighter tomorrow for the construction equipment industry in India, fostering innovation and sustainable practices that will serve the nation for years to come.

Winners of the 12th BKT Equipment India Awards

Equipment India Person of the Year 2024:Jaideep Shekhar, Managing Director, Terex IndiaGreen Factory of the Year: Tata Hitachi Construction Machinery
Best After-Sales Service Provider: Tata Hitachi Construction Machinery
Concrete Pumps: Schwing Stetter India
Truck Cranes: Sany Heavy Industry India
Asphalt Plants: Ammann India
Asphalt Finishers: Ammann India
Batching Plants: Schwing Stetter India
Crawler Cranes: Sany Heavy Industry India
Piling Rigs: Sany Heavy Industry India
Rigid Dump Trucks: Caterpillar India
Motor Graders: Caterpillar India
Mini Excavators: Tata Hitachi Construction Machinery
Crawler Excavators: Tata Hitachi Construction Machinery
Mobile Cranes: Action Construction Equipment
Crawler Dozers: BEML
Skid-Steer Loaders: Doosan Bobcat India
Wheel Loaders: LiuGong India
Self-Loading Concrete Mixers: AJAX Engineering
Tower Cranes: Action Construction Equipment
Compaction Equipment: Case Construction
Mobile Cranes: Action Construction Equipment

“I congratulate ASAPP Info Global on the outstanding success of the conference and award shows! It was a privilege to be part of such an insightful session with industry leaders.”
– Sanjay Koul, President- India and South East Asia and Managing Director, Timken India

Concrete

22nd CONSTRUCTION WORLD Global Awards Excellence Revisited!

Published

4 weeks ago

November 23, 2024

Roshna

At the 22nd CONSTRUCTION WORLD Global Awards, over 50 awards in 21categories were presented to industry stalwarts.

The 22nd CONSTRUCTION WORLD Global Awards, was held on October 9 and 10, 2024, at the Jio World Convention Centre, Mumbai, and hosted by infrastructure think-tank FIRST Construction Council in partnership with CONSTRUCTION WORLD (CW) and Equipment India (EI) magazines. Incidentally, the spectacular RAHSTA Expo was India’s first indoor trade fair for construction equipment technology.

Benchmarked to global standards
At the inaugural session, Sanjay Bhatia, Upa-Lokayukta, Government of Maharashtra, along with Vipin Sondhi, Chairman, RAHSTA Expo Committee, and Pratap Padode, Founder, FIRST Construction Council, inaugurated the RAHSTA Expo. Expressing delight at the huge display of construction technology, Bhatia said, “The expo has put the construction industry on an international standard. India is experiencing nation-building at a robust pace and I am truly impressed with the work now being done by our youth with their startups, many of whom are showcasing their innovation here.”

Special bytes
At the 22nd CONSTRUCTION WORLD Global Awards, over 50 awards in 21 categories were presented to over 50 companies.
“I am thrilled to accept this award on behalf of Century Ply,” said Anup Mangaserri, Chief Executive Officer – Laminates, Century Plyboards India.
“It’s an honour to be recognised and I extend my heartfelt thanks.”
“Tata Consulting Engineers has made significant strides in nation-building projects in India and
high-impact engineering efforts abroad,” said BR Parthasarathy, Senior Vice President and Head – Infrastructure Cluster, Tata Consulting Engineers (TCE), sharing his pride in receiving the ENR Award. “This recognition underscores our global capabilities and we are honoured to be part of this journey.”
For his part, Sarat Chandak, CEO, H&R Johnson, said, “We are truly delighted to receive this award as the most admired brand in the construction world. This recognition reflects the dedication and hard work of the brand over its six-year journey in India. Thank you for acknowledging our efforts.”
And Sandeep Desai, Executive Director, and Ananta Rayaprolu, Director, Afcons Infrastructure, noted, “This is a proud moment for the entire Afcons team to have this particular trophy and prestigious award. Afcons has always been at the forefront of extreme engineering, and we are really happy for this acknowledgment, which motivates us to continue pushing the boundaries of innovation.”
Joining the chorus of gratitude, Manish Kumar, Executive Vice President, ITD Cementation, stated, “It is an incredible honour to receive this award and to be here for this event, which is very well organised. Being recognised among the best of our peers in the industry is truly a privilege. I accept this on behalf of my team and company and we are deeply grateful for this recognition.”
Many winners addressed the efforts that led to their recognition. “We are extremely proud and thankful that our founder has received the CW Person of the Year (Private Sector) award,” said Hardik Agrawal, Director, Dineshchandra Agrawal (DRAIPL). “This recognition reflects the relentless efforts of the entire Dinesh Chandra Group. We are deeply motivated by this honour and we thank the CONSTRUCTION WORLD Global Awards for this acknowledgment.” And Lalit Chhabra, Managing Director, PINI India, added, “It is a tremendous honour to receive this award. We are delighted that our global efforts have been recognised. This is a testament to what we have done in the past and our hard work. We look forward to improving our ranking in the years to come.”
Sharing his excitement, Ryoya Watanabe,
Senior Manager – BD & Marketing Division, Nippon Koei India, said, “We are headquartered in Tokyo and I am excited and honoured to accept this prestigious award. Thank you very much for this recognition.”
Meanwhile, Saji Samuel, Executive Vice President (Long Products), JSW Steel, brought the conversation around to India’s bright future. “I feel elated with this award because this is going to propel India into a five trillion-dollar economy as quickly as possible,” he remarked. “I wish CONSTRUCTION WORLD all the very best and hope many new companies will participate in this event going forward. I feel very proud to hold this trophy in my hand on behalf of my company.”
This collection of leaders from different sectors was a showcase of the diversity and excellence celebrated by these prestigious awards, marking significant milestones in their respective industries.
As Rajiv Poddar, Managing Director, BKT, observed, “India Construction Festival 2024 has once again proven to be an invaluable platform for the construction equipment industry. The convergence of innovative ideas and collaborative efforts showcased here reflects our collective commitment to growth and excellence. Congratulations to ASAPP Info Global for orchestrating such a successful event and to all the award winners – your achievements are a testament to the bright future of our industry.”

An event to remember Another highlight of the event was the launch of Pratap Padode’s book, Tarmac to Towers – India’s Infrastructure Story.
Indeed, in keeping with tradition, the annual CWGA Awards ceremony was a memorable celebration of architectural achievements and a platform for dialogue on critical issues affecting the construction industry.