Amidst so many changes coming in like IND AS, IFC, ICDS the biggest tax reform of India is on verge of being implemented, i.e. GST (Goods and services tax).
As all of us are aware of the fact government is going to implement GST from 1st April, 2017 and Govt officials are running hard against time to meet the deadlines, So being Professionals, we should also brace ourselves to face GST Implementation. For that, here are few areas where GST is going to make Impact and one should be ready to grab the opportunities and facing challenges.
Impact of GST:
1. Business strategies: Subsuming of all indirect taxes like excise duty, CST, VAT, etc. will reduce the ultimate cost of product to consumer (as effective tax rate will come down from 21-23% to 18% approx), which in turns will lead to cheaper product prices in market. So, companies will have to make pricing decisions related to products again. New entrants in market will surely take edge of lesser costs and try to gain share in market, which will compel existing players to re-draft their policies to handle competition effectively (e.g. one can relate this with Reliance Jio for better understanding). Hence organisations have to be proactive to grab the opportunity to pitch the sales up.
2. Foreign Direct Investment (FDI) : After Implementation of GST, Complexity of existing indirect taxes structure will become very simple and lucid, Also GST will lead to lower effective tax rate can help “Make in India” concept to a great extent that will ultimately result in bringing more FDI in India. Professionals have the opportunity to show the major impacts of GST and bringing international clients with a new perspective. GST will be a changing reform and a bold step by government to continue to grow with increasing rate and making India one of the favorite business hub for any major MNC. Chartered Accountants will get more work for FEMA and RBI Compliances related to infusion of funds from other countries.
3. ERP: Many Companies have already implemented ERP Systems in their busniess processes with lot of difficulties, now GST is not a minor change in system., it is change of whole Indirect tax and which will require companies to integrate new taxation laws in systems, which itself going to be a difficult task. Industries should prepare themselves to amend SAP or Oracle.
4. Ease of business: GST is going to improve ease of business in India, as existing indirect taxes like Excise duty, VAT & CST, CVD, Entertainment tax, purchase tax, octroi, etc. are going to subsumed in GST, which will obviously make ease of compliances. Various Orgnisations are setting up internal GST Team to do further research and to comply GST laws. GST law is going to improve India’s no. in ease of doing business all over the world.”
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018