Goods and Services Tax (GST) bill has been passed! It is aimed at addressing the issue of multiple levies and its cascading effect, ushering in destination-based taxation, simplify compliances and provide for effective dispute resolution mechanisms in a time-bound manner.
The GST constitutional amendment bill passage will now pave the way for the enactment of the GST law at the Center and the states.
Big changes ahead
GST will turn India into one common market, leading to greater ease of doing business and big savings in logistics costs from companies across all sectors. Some Companies will gain more as the GST rate will be lower than the current tax rates they pay, others will lose as the rate will be higher than the present effective rate. Overall the ease of doing business impact will be a net gain for the economy as a whole boosting efficiency and transparency.
One of the biggest challenges is to understand the enormity of GST. The big overhaul will affect how the companies operate their businesses, presenting significant opportunities for long-term revenue and margin improvement. GST will be transformational and the implication on the industry extends well beyond Tax. It will affect every part of business right from Financial Reporting, Tax Accounting, Supply Chain, technology enablement and contracts redesign. The depth and breadth of the effort invovlved requires planning and no company is able to handle this work alone with multi-faceted expertise from processes to finance to technology required to restructure for growth going forward.
Positive Impact of GST
- Subsumes multiple levies
- Clarifies taxation of electronic downloads
- Robust technology framework for implementation bringing in transparency and process simplification
- Provisions for time bound processes
- Simple, efficient and transparent indirect tax regime is widely expected to accelerate overall growth of GDP in the country with spinoff benefits for all sector including IT-BPM