GST credit reforms may unlock Rs 60,000-cr for industry
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓GST credit reforms may unlock Rs 60,000-cr for industry starting April 1, 2027.
- ✓Experts said the move could free up blocked working capital for sectors like pharmaceuticals and textiles.
- ✓“If the machinery component is actually released over five years, the annual cash-flow or ITC benefit could be materially smaller,” one noted.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Financial Express
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
“If accumulated input tax credit (ITC) attributable to input services and capital goods is also brought within the refund mechanism, the pool could increase by Rs 50,000-60,000 crore annually, subject to the final eligibility criteria and the refund methodology,” a tax expert said.
Another tax expert at a leading consultancy estimated the ITC currently stuck in the system at around Rs 50,000 crore. However, “this does not mean the entire amount will flow into the system immediately,” the expert cautioned, adding that the actual benefit would depend on grandfathering provisions and the expenditure eligible for refunds. “If the machinery component (of refunds) is actually released over five years, as reported, the annual cash-flow or ITC benefit could be materially smaller at the beginning,” the expert said. A public finance economist also concurred with these estimates.
Unlock the Full Story with ArthNow Premium
To continue reading this complete financial story and in-depth market context, upgrade to ArthNow Premium. Enjoy unlimited access across Web and Mobile.
Financial Express
Read the full, original unfiltered story directly on the publisher's portal.