RSM India

GST - THE JOURNEY BEGINS - Updated 7 July 2017

We are delighted to enclose our latest GST publication viz. ‘GST – The Journey Begins (Updated 7 July 2017). This publication comprises of all the enacted & updated GST regulations up to 7 July 2017 and analysis of significant regulations. As GST has become operative from 1 July 2017, the publication content may be treated pretty much as the final law although clarifications keep coming every day.

The Goods and Services Tax (GST) which has replaced a plethora of current indirect taxes is undoubtedly the most iconic structural financial reform undertaken in India. Indirect taxes generally account for 10% to 20% of the turnover and as such, GST will have far reaching impact for virtually every business in terms of tax rates; overall tax incidence, input credits, distribution system, prices and costs. GST seeks to reduce the cascading effect of the multiple indirect taxes such as excise duty, VAT, service tax, central sales tax, countervailing duty (CVD), octroi duty and harmonize tax administration between the Centre and the States which will improve the ease of doing business. The destination based GST provides businesses with seamless credit across the value chain. The agreement and coherence between the Centre and the States is indeed a remarkable feat and envisages creation of a common market throughout India. The GST regime will enable a vast majority of Indian businesses to access the entire national market without having to invest heavily in a country wide warehousing and distribution network and in the process further propel India’s economy.

Electronic return filing and assessment will smoothen the process of tax credits and set offs across the value chain, reduce tax evasion, significantly reduce compliance cost and eventually transaction cost. Also, reduction in multiple product and area based exemptions will make the tax system more transparent, regular and predictable. A single taxable event viz. supply makes it easier for businessmen to understand the levy and the subject matter of taxation. While it is good and admirable to ponder on the benefits of GST, businesses need to undertake a series of concrete actions that would ensure they are well poised and equipped to benefit from the GST regime. GST is a complex legislation and does have far reaching impacts on businesses, some of which are extremely challenging and disruptive. It is easy to get lost in the jargon of GST and get lost in the labyrinth of legislative changes.

This GST publication can serve as a roadmap for businesses to navigate through this complex mist and haze surrounding GST. The book presents a one-stop roadmap for consideration of the impact of GST from a business perspective. These include pricing and renegotiation of agreements, changes in Enterprise Resource Planner (ERP) and supporting IT infrastructure, supply chain optimisation, compliances and consideration of impact on cash flows and business processes. GST presents an opportunity for those who are willing to make suitable adjustments to cope with the same and could result in tremendous cost savings and improve competitiveness.’

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