EY India chief seeks easier GST refunds, tax credits

NEW DELHI: The GST Council should speed up refunds and address issues around accumulation of input tax credit, including for services and capital goods, while also allowing companies to take credit for expenses related to travel and insurance, EY India chairman & CEO Rajiv Memani said ahead of Wednesday's meeting.Several of these issues are expected to be addressed by the all-powerful body, led by Union finance minister Nirmala Sitharaman."GST 2.0 has been reasonably successful. Right now, we should look at how you can make GST more user-friendly. GST refunds, audits should be simplified as companies are having multiple audits, which should be consolidated at the central level," Memani said, while adding decriminalisation and easing of filing to his wish list of reforms.The head of EY India, which provides tax advisory services to leading names in the corporate sector, said that the rate and process rationalisation initiative taken last Sept was highly successful."You're seeing good growth in India relative to other parts of the world is due to the reforms that have been undertaken. The most significant, tangible impact has been from GST reforms," he said, arguing that the growth in consumer goods, automobiles has been powered by rate cuts and procedural simplification."You look at sector by sector, the reform has really played out very well. From a consumption standpoint, it has resulted in more hiring, private capex has been higher, and it has also helped direct tax collections grow faster. GST revenue growth will be significantly higher (than what was targeted). It's a very strong endorsement that if you have simpler rules, if you moderate the tax rates, there is positive impact on the economy."Memani suggested that govt also needs to address issues related to direct tax disputes as part of efforts to step up FDI inflows. He also said that inter-ministerial approach to resolving issues flagged by large investors can boost inflows."We can cross $100 billion FDI this year and double that in three years. The opportunity is humongous." Citing feedback from companies, he said India was in a sweet spot with high growth at a time when global corporations are looking at "strategic diversification" with India's FTAs also expected to attract investors. Besides, he said, sectors such as space, defence and electronics are more open to overseas investment.FDI flows were estimated at around $97 billion in 2025-26 and grew 12.5% to $43.9 billion during April-July, according to RBI data.You use AI every day. Now get your AI Quotient. Take the AIQ test.