The GST will also ensure that there is a reduction in logistics costs bringing great relief to manufacturing SME sector. The roll out of GST must have comprehensive awareness and industry connect.
NEW DELHI, 7 AUGUST, 2016: If we look at the economic roadmap of India since it’s independence from the British colonial rule, we have few major milestones. One was the first industrial and economic policy which was just after the independence. Then, in 1991 a major milestone India has cleared.
But, the recent GST tax reform can clearly be termed as a landmark and India’s biggest tax reform since independence with the aim to streamline India’s fragmented tax system with a single levy. Undoubtedly, the passing of the GST bill is clearly good news for Indian businesses and will provide a huge fillip to the SME sector. But, while looking at the comprehensive nature of this bill, experts are in favor of a cautious and step by step roadmap for the implantation of GST Bill.
As an immediate reaction, experts from the financial domain and Indian taxation domain are in considering that the implementation of GST from 1 April 2017 can be very tough affair because the market needs to be educated exponentially.
Moreover, the industry has come up significantly in support of GST Bill. SMEStreet explored the industry and expert reaction on the GST Bill
Mr. R. Narayan, Founder and CEO, Power2SME said, “With a goal to create one single market, the GST bill will boost economic growth with some optimistic estimates suggesting an added 2%. The GST regime will bring uniformity in the market creating a consolidated national-market-space. The distinction between goods and services will not apply, thereby, ensuring ease in tax compliances by ensuring one unified tax levy. This will also help SMEs avail the complete tax incentives paid on procurement of all input goods as well as services from various sources such as import, inter-state purchases, and local purchases and services like power, telephone etc. With the unified taxation system proposed, issues relating to regulatory uncertainty will be resolved and shipment costs will reduce resulting in business growth for the organizations in this sector. In the absence of multiple taxes such as; VAT, Excise, ST, CST, the SMEs will have a smoother and efficient inventory led model to operate, which will greatly enhance the ease of doing business. This tax system has been applied by most of the developed countries, as it helps protect businesses against multiple taxations.”
The start-ups and SMEs have more reason to rejoice as this GST structure will provide higher exemptions to new business, businesses with turnover between Rs 10 and 50 lakh will be taxed at lower rates. Narayan also added, “The GST will also ensure that there is a reduction in logistics costs bringing great relief to manufacturing SME sector.”
While sharing an overview on the GST Bill, Kunal Singhal MD of Eazy ERP commented, “GST will bring multifold changes in the business scenario in India. It will definitely be beneficial because it will reduce multiple taxes to one tax structure and bring uniformity across industries. Further the statutory compliances will reduce down to one department.”
“In toto, the move of the Government to release the GST Law has ushered in new hope amongst industry players who have been awaiting the GST regime for the last few years. With the Monsoon Session of Parliament currently underway and with the Government having agreed to do away with one percent additional tax and fully compensate the States for losses in tax revenues for five years, MAIT is hopeful the Government would get the necessary support for passage of the GST Bill in the Upper House. This would herald a new dawn in the history of India’s indirect taxation regime,” concluded Mr Anwar Shirpurwala, Executive Director, MAIT.
However, Kunal also opined, “With its benefits it bring in a lot of complications. The Input for GST can be claimed only if the seller has posted the details in his return. The complete invoice wise data needs to be uploaded to the department. What will happen to the old stocks and contracts. These are issues that need to be addressed, and that’s exactly where technology will play a key role.”
To be GST compliant every business will have to be IT compliant. All IT companies will have to update their software to support GST and auto-creation of GST returns. A huge work is going to come for the IT industry to make India GST Ready.