As we are aware that Goods and Services Tax (GST) is most likely to be effective from 01-Jul-2017. GST is a comprehensive indirect tax law whereby majority of the existing indirect taxes are being subsumed in GST.
The first model draft law was released in June 2016 and thereafter based upon huge representations many amendments were made before releasing the revised Model Draft Law in November 2016. As of now, based on the recommendations made by the GST council and various stakeholders the final law has been approved by the cabinet. The draft law is expected to be placed before the Parliament in the next session. Hence, in July 2017, GST is going to knock at our doorstep to give a high-five. It is pertinent to be ready and respond the high-five with equivalent enthusiasm.
In view of the limited timeframe available, it is advisable for each business house to understand the implications and develop a strategy to ensure smooth transition to GST.
So, what’s changing? I collect taxes from my consumers, will this impact my pricing? Will I be required to take registration in multiple states? What’s this new animal named anti-profiteering?
A lot more doubts and we know that each business organization will have unique set of questions because of the modalities involved. In this special GST series, we will try to bridge the gap between your queries and the compliance required by the upcoming law. There may not be answers to all the questions. But, indeed the draft law has brought in much clarity and organizations can start structuring/ re-structuring business strategies.
We understand that GST has been propagated as a tax which is intended to reduce cost of products/ services. First time in Indian taxation history, any law is being proposed to reduce the costs. The reduction in cost is intended by way of unlocking of credits and plugging the inefficiencies in taxation structure. Many industries will need to re-look at the existing business structure and analyze the requirements of age old depots/ warehouses.
Further, in GST a lot of reliance is placed on the technology front and online matching of purchase and sale transactions. This will require a fundamental change in the existing ERP modules.
The entire country will have to switch to a mode where each of the stakeholders unlearn the existing knowledge which itself is a challenge and thereafter learn a new way of doing business. We believe that each change comes up with an opportunity and instead looking at this change as a hurdle, we should look for this as a prospect to revive the industry and rattle new cages.
Disclaimer:
The views expressed herein are strictly private and not to be construed as a legal opinion. In case of any difficulties in understanding the legal parameters, it is advisable to approach a consultant for further clarity. Shah Sangoi & Associates LLP is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site.