“The industry, at large, seems to be in a welcoming mode for GST, even though one would agree that the overarching public opinion with regards to GST is that contrary to the declared intent, GST would make things more complex rather than simplifying them.”
While the country is welcoming Goods & Services Tax (GST) some very happy and some are anxiously confused. In order to clarify some level of confusion, Rajeev Dimri, Leader, Indirect Tax, BMR & Associates LLP shared his views with Faiz Askari of SMEStreet.
No doubt that GST is country’s biggest social reform, it is more than just a financial reform. GST is also the most hyped, discussed bill since independence.
India being only one day away from the biggest tax reform witnessed since Independence, it is crucial to evaluate the nation’s readiness for the new Indirect tax regime. With more than 80 percent of India’s existing taxpayers having successfully migrated to GST, it may be overly critical to say that the country is not ready.
Please Note: SMEStreet has done a Industry wide Survey on GST Readiness among MSMEs The Survey is almost completed and is on final stages of becoming public. Very Soon, the findings of this survey will be announced.
Rajeev mentioned, “The key industry players have been working since the past 12-15 months towards a successful GST implementation and are at a reasonable stage of readiness. Albeit it needs to be acknowledged that few sections of the society not equipped with sufficient resources are still struggling to gear themselves with the fresh regime. The industry, at large, seems to be in a welcoming mode for GST, even though one would agree that the overarching public opinion with regards to GST is that contrary to the declared intent, GST would make things more complex rather than simplifying them.”
However, the initial few months of GST implementation, companies do expect significant challenges with respect to effective delivery by various re-aligned IT systems and continuous changes required in processes and systems on account of the law evolving each day. “It is also highly expected that many sections of the industry may not be fully compliant with various requirements of GST law from Day 1 itself and would require a transitioning period of few months post go-live date. This struggle is aggravated on account of the fact that for certain period of time, the companies will have to run parallel systems to account for existing tax transactions as well to meet the requirements of the GST regime. Lack of clarity with respect to taxability of transactions with Jammu and Kashmir is also leaving many companies unnerved. It would also be of utmost importance to carefully book all expenses and sales and map all the credits accurately in initial days of GST implementation for successful transition of all such credits to GST.” Rajeev added.
While it would also be fair to say that the staggered manner in which the Government has been releasing draft rules, rate schedules, notifications, amendments etc is making tax experts anxious, let alone the general public and the trade, the tremendous amount of work that the Government has put in for the July 1 roll-out of GST deserves appreciation. The Government has also tried to ease the pain of the industry with the introduction of relaxation for filing GST returns for the first 2 months of GST implementation.