Recent Changes in GST & Its Impact on Ease of doing Businesses in India
Sanjeev Kumar - Chartered accountant and Consultant for M+V

Sanjeev Kumar | Chartered Accountant and Consultant | Maier+Vidorno

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December 2019

GST is the biggest tax reform in India on the principle of “one nation, one-market, one-tax”. Before understanding the changes with regard to GST, we should first understand the tax structure pre-GST regime prevailed in India:

What is GST?

The salient feature of GST law:

  • Destination based Taxation
  • Apply to all stages of the value chain
  • Apply to all taxable supplies of goods or services (as against manufacture, sale or provision of service) made for consideration or without consideration

Positive impact on businesses:

  • Seamless flow of Input credit available compared to the pre-GST regime where a trading company was not allowed/proportionally allowed to take the tax input credit of service tax.
  • Uniform Tax compliance across the Country
  • The reduced cascading effect of taxes.
  • The concept of Concessional form is eliminated.
  • Online System for all solutions
  • Transparency

Negative Impacts on business:

  • GST on warehouse transfers was introduced. Although the tax credit is available to the receiving state where the stock is transferred but this would require an appropriate assessment of working capital.
  • Restriction on payment on supplier’s Invoice within 180 days to avail GST credits
  • Dual control ( State and Central Government)
  • Anti-profiteering clauses
  • Measure to ensure the benefit of lower tax is passed on to end customers.
  • Lower tax can be for reasons like – availability of input credit and reduction in the tax rate.

There are approx. 140 countries (like Australia, Canada, Germany, and Japan to name a few) where GST has already been implemented. Implementation of GST impacts a nation both ways, positively and negatively. Ignoring negative aspects, positive aspects can be taken into consideration, in order to improve the economy of the country. In order to measure the Impact, the GST we need to wait for the time and the Government needs to communicate more and more about the systems.

M+V Offer: One time activities

  1. GST Impact analysis on present/future business operations in India
  2. To make the SAP system ready for GST and generation of reports for GST compliances.
  3. GST advisory for its probable transactions in/from India
  4. Monthly GST compliances (filing of monthly/annual returns, tax computations, tax reconciliations, handling queries, etc.)
  5. Representation services before GST authorities across India.

Have you implemented GST successfully in India? If not, let our experts help you in three easy steps with the M+V GST Tool.

For the last 20 years, Maier+Vidorno has been addressing these business needs of overseas companies. Our experience and knowledge in the field of Indian accounting and corporate compliance allow us to help international businesses explore the Indian market. We also offer other support services in areas of Market Research, Distribution Management, Import-Export Management, Supply Chain & Logistics Management, Performance Management, Business Due Diligence, Recruitment, and HR Consulting. Contact us to know more.