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Industry Reaction on India's Goods & Services Tax 2017


New Delhi, India, July 13, 2017- World’s one of the fastest growing economy and second highest populous country in the world, India’s biggest tax reform is now a reality. The Goods and Services Tax (GST) has replaced the multiple indirect tax structure from 1 July 2017 across the country.

The concept of Goods and Services Tax was visualized for the first time in 1999. On 8 August 2016, the Constitutional Amendment Bill for roll out of GST was passed by the Parliament, followed by ratification of the bill by more than 15 states and enactment of the bill in early September.





Implementation of GST has brought lot of tangible changes in the indirect tax structure in the country. Experts are expecting a huge change in the economic growth of the country due to this one nation one tax structure.

Here are the reactions from some of the industry thought leaders from different sectors: 

MN Vidyashankar, President, IESA

“The GST rollout will impact the Indian electronics manufacturing sector in a positive way. The manufacturing sector is expected to grow tremendously as the cost of raw materials and production will significantly reduce from July 1st 2017. The Make in India initiative will see major traction from July as the unified and transparent taxation system will allow more of both domestic & foreign companies to set up manufacturing units here. Industry is upbeat about the GST dispensation. This rollout will definitely encourage more industry-wide acceptance. Post introduction of GST, litigation in tax related matters will come down very significantly bringing the much sought after relief to the players in the industry.”



Dushyant Jani, Founder & CEO, Mobclixs Technologies Pvt Ltd

The much awaited GST bill will be implemented in the Indian Economy which in reality is a boon or otherwise; will be known in few days. Different taxes for different goods will have a larger impact on luxurious expenses as compared to daily needs. GST will replace all the indirect taxes levied on goods services by the Central and State Governments with a single national tax. This will remove the confusion of the all different taxes levied forcefully. As far as VAS companies are related GST will make their business taxation model easier. After demonetisation the slow GDP growth may get hiked with GST implementation, however as per economists it will take time for steady economic growth.

Kiran Deshpande, Co-Founder, Mojo Networks & President- TiE Pune

GST (Goods and Services Tax) is an unprecedented reform for a complex, large and diverse economy like India. GST promises to streamline tariffs and make it simple to do business across the country. Good bye to excise duty, service tax, VAT, central sales tax, Octroi, entry tax, luxury tax, and various ‘avatars’ of road permits. Logistics and complexity of processes and paperwork must be costing India at least a single point in GDP growth. Kudos to political leadership across the spectrum who have contributed to GST since its seeds were sown nearly three decades back!

Having built a best in class Wi-Fi software technology in India backed by several global patents, my initial reaction on GST was, “will it simplify the logistics and alleviate the pain for those people who sell technology products or any kind of products across the country?” It’s heartening to note that everyone feels GST regime will not only simplify the logistics but will reduce the cost of doing business, adding to the country’s efficiency and its financial well-being.



Satya Prabhakar, Founder and CEO, Sulekha

GST is a game-changing move for millions of SMB’s, since thousands of them work in the unorganized sector. The Modi Government has proactively thought of innovative steps to help SMBs adapt to GST by proposing a low tax rate of just 0.5-2% if the business turnover is less than Rs 75 lakhs p.a.

Our interaction with Sulekha’s thousands of SMB customers shows that most of them are looking forward to reduced cost of operations and significant ease of operations, compared to the prior service tax/VAT regime. For instance the service tax on advertising charged by Sulekha on its customers couldn’t be taken advantage of several SMB customers in the past – particularly if they were traders who were charging VAT.

The new GST regime allows SMB customers to easily take input credit on multiple services and products consumed by them – and pass on the benefits to end-consumers. Meanwhile Sulekha is also witnessing a strong 20-25% higher-than-normal sales growth rate in the months of Jun-2017 in it sales, as some customers are taking advantage of the lower service tax rate of 15% that is valid till Jun 30th. The company however expects SMB customers to consume greater portion of targeted online advertising from Aug-2017, once customers fully adapt themselves to the new systems and processes entailed by GST.

P Venkatesh, Director, Platforms and Solutions, Maveric Systems

“The transition to GST is an important step in the revenue management side of the government. It impacts not only the central government, but the state governments as well. In line with such a step, the government has put in a structure that can handle teething transition issues as well as ensuring compliance with the schemes through the approval of GST Suvidha Providers (GSP).

If the transition is to be effective, then the systems of GSP have to be validated thoroughly to ensure compliance and their confidence strengthened, so that they are clearly enabled to handle the transition related issues. It would be appropriate to ask the question as to what do GSPs think of their technical compliance and how confident are they to handle the transition.

We would not be surprised that they are neither fully equipped technically nor are they confident about handling the transition. Do we still go ahead with the roll out? If priority be given to quality in this implementation, then obviously no is the answer.  However, if time is the most critical factor in this implementation, then the answer will be yes; which would also mean the necessity of a large team to address all those teething issues.

If our opinion is sought, it would be for quality and therefore extending the time for the implementation would be the preferred choice.”



Deepak Sahni, CEO & Founder, Healthians

By merging a large number of Central and State taxes into a single tax, GST is expected to significantly reduce the cascading effect of taxation and make taxation overall easy for the nation.

For the startup ecosystem in particular, GST provides many benefits like simpler taxation, ease of expansion in different states and cities due to uniformity in taxes, efficiency in logistics and inter- state movement of goods, transparent and digital tax processes which will enable startups to manage compliance on their own without the need of involving too many tax experts.

As for the diagnostic industry, there is no direct impact but since GST on reagents, machinery and kits will increase, this additional cost burden will either be passed on to the consumers or will be absorbed by the companies themselves, reducing margins drastically. Moreover, compliance with the new tax regime will be a time taking activity as fresh contracts with vendors will have to be processed.


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