GST important achievement but transitional challenges there: ADB president

NEW DELHI: Asian Development Bank president Takehiko Nakao on Thursday lauded the government for the Goods and Service Tax (GST) but cautioned about the challenges that the new tax regime could bring.

"GST is an important achievement of the government. There can be some transitional issues like filing of returns and its scrutiny," Nakao told reporters here.

GST will be rolled out on July 1.

Citing challenges such as businesses adjusting to to the new tax arrangement, doing away with anomalies on input credit and output tax and, enforcement by state and central government tax officials, he said: "The arrangement should be very clear."

Asked about any slowdown due to implementation of GST, Nakao said it is difficult to say because the impact is at different levels and multi layered. He explained that multi taxes are going to be rationalised which will have a positive impact on businesses. Cross trade transfer would be much simpler.

Nakao who was on a three day visit to India met finance minister Arun Jaitley earlier in the day and discussed strengthening of labour laws, land acquisition and regulation of foreign direct investment reforms. He also asked India to integrate more with the global market.


Nakao also met commerce and industry minister Nirmala Sitharaman and discusses the progress of various industrial and economic corridors.

His visit coincided with the bank pledging $10 billion support for improving economic performance of low-income states and funding infrastructure development in Uttar Pradesh, Bihar and Jharkhand, among others. The funding is part of ADB’s new country strategy, which proposes annual lending of $3 -4 billion from sovereign and non-sovereign operations over the five-year period.

Nakao said the government wants ADB to lend more but it also cares about the deficit.