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.
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.
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.
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:
the industry thought leaders from different sectors:
MN
Vidyashankar, President, IESA
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.”
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
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.
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
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!
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.
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.
SatyaPrabhakar, 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.
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.
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.
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
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).
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.
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.
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.”
for quality and therefore extending the time for the implementation would be
the preferred choice.”
Deepak Sahni, CEO &
Founder, Healthians
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.
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.
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.
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.
