Transition pangs: A month on, GST is still a work in progress

Businesses are yet to figure out the full impact on their financials

A month on, the new indirect tax regime is still a work in progress. Businesses — big and small — are slowly coming to terms with higher compliance requirements, but are yet to figure out the full impact on their financials.

GST: India Inc sees long-term benefits despite short-term disruptions

The picture remains hazy for India Inc a month after the goods and services tax (GST) was introduced. Companies across sectors from fast-moving consumer goods (FMCG) to retailing, real estate and construction say they are grappling with transition challenges as trade, shoppers and suppliers struggle to make the switch. Manufacturers, in particular, have felt the destocking pinch the hardest, as the FMCG trade steps away from giving purchase orders to companies. Most traders and small-time suppliers Business Standard spoke to say they need time to fully transition to the new regime. Many privately say they are clueless on how to start. Also Read

GST: Car makers drive a feel-good factor

The automobile industry brought a feel-good factor for its consumers even before the goods and services tax (GST) came into effect on July 1. In the run-up to the roll-out of the new tax regime, carmakers and dealers doled out steep discounts to clear the inventory and avoid losses due to an input tax credit on stocks that entered the system before July 1. To ensure buyers do not postpone purchases, luxury car makers such as Mercedes and BMW offered benefits equivalent to post-GST rates immediately after clarity about the new regime came in the second fortnight of May. Buyers also lapped up these offers and companies saw a surge in retail sales for June.

Migration to GST from VAT: How states have taken to new tax regime

Most states have  posted robust growth in migrating existing VAT payers to the GST. So far, 8 million taxpayers have registered for the GST, which includes 0.6 million new ones.

The GST story is one of initial success

In terms of the constitutional amendment made last year and notifications issued under it, the GST regime had to be mandatorily implemented by September 2017. However, both the policy-framers and legislators worked in fairly synchronised fashion to put in place the legislative and regulatory structures and commence on the design from July, showing the zeal to reform the indirect tax paradigm swiftly. Further, the integration of Jammu & Kashmir State within one week of the GST commencement despite material constitutional challenges facing the integration (of the State) in the GST regime reflects the importance given by the government to the idea of ‘one nation one market’. On these grounds alone, the efforts of North Block are laudable.

GST: Future tense for small businesses

It’s a repeat of demonetisation for Surat-based diamond polisher Arjanbhai Ambaliya, who has hardly seen any orders since the roll-out of the goods and services tax (GST) on July 1.

GST Network: After soft launch, testing times ahead

The real test for the GST Network (GSTN), the IT backbone of the new indirect tax regime, is still 30 to 45 days away when the deadline for the first set of return filing approaches. Delayed by a week from its own estimate, the GSTN opened up the facility for sales invoice upload on July 24, which is the first step in the three-part return filing process. With rules finalised by the GST Council only a fortnight before the rollout, it was a race against time for the GSTN, whose portal is capable of handling as many as 3 billion transactions every month.

Selling GST: How the govt spread the message and eased concerns

The government still relies on the appeal of actor Amitabh Bachchan for marketing and selling the goods and services tax (GST) to the masses. However, when it comes to the nitty-gritty of clarifying the tax structure or evolving a consensus on emerging issues, Union Finance Minister Arun Jaitley, Revenue Secretary Hasmukh Adhia, Central Board of Excise and Customs (CBEC) Chairperson Vanaja N Sarna, and GST Network Chairperson Navin Kumar take centre stage. Complementing these efforts, Jaitley's colleagues in the Council of Ministers — such as Piyush Goyal, Suresh Prabhu, Smriti Irani, Nitin Gadkari, Jayant Sinha, Nirmala Sitharaman — went all out to allay apprehensions about the new tax regime among stakeholders. The biggest issues that created apprehension were the difficulties faced by the small and medium enterprises, traders, and dealers when it comes to registering on the GSTN, generating invoices, and getting input tax credit.