The Future Group founder and chief executive Kishore Biyani on Wednesday said implementation of the new uniform tax regime -- Goods and Services Tax (GST) -- is likely to play a bigger role for the retail industry, than foreign direct investment.
"Foreign direct investment (FDI) will be a game-changer but an even bigger game-changer will be GST. I see this happening in the next 12-18 months. This will make the ground even," Biyani, who runs the country's largest organised retail chain under the Big bazaar brand, told the two-day India Retail Forum which began in Mumbai on Wednesday.
The existing regulations do not allow FDI in multi-brand front-end retail, while 100 % FDI is allowed in wholesale retail. The government is now toying with the idea of allowing 51 % FDI in multi-brand retail, but a final call is yet to be taken.
"GST is a bigger game-changer because everybody will be on a level-playing field. Today small retailers have bigger advantage as the tax they pay is different," he said.
Introduction of GST would subsume Central and state taxes like excise, customs, service tax, sales tax and VAT.
A Constitution amendment Bill had already been introduced in the Lok Sabha for rolling out GST in the Budget session, but is pending for parliamentary approval as the finance ministry has so far been unable to elicit support from the opposition block, especially the Bharatiya Janata Party.
The BJP-ruled states are opposing the current amount of revenue compensation that the states would be getting from the Centre post-GST roll-out. They also have apprehensions about losing fiscal and financial autonomy under the proposed GST regime.