Shifting of financial year to January-December should be done by all states in one go, not in turns: ASSOCHAM

The Centre, states and all the Union Territories need to evolve a consensus on the lines of the Goods and Services Tax for shifting to January-December financial year and move to the new system in one go throughout the country instead of some select states choosing to shift to a new financial year, creating practical difficulties for trade and industry, ASSOCHAM has said.

For pan-India businesses, the accounting standards and the financial year of all the government organisations should be uniform. We should not have a situation where the industry and trade has one set of books for Madhya Pradesh, Telangana and Andhra Pradesh and the other for Uttar Pradesh and yet another for the Central government, said the ASSOCHAM. It said if all the states and the Centre agree to a shift of the financial year from April-March to January-December, NITI Aayog should work towards building a consensus and then, let the entire country shift towards the calendar year becoming the financial year in one go.

This is even more important in the wake of roll out of the Goods and Services Tax from July 1, which will unite the entire country into a single market. The businesses are all busy and working overtime to meet this deadline in terms of putting their IT infrastructure in place and in sync with the GSTN. At this point in time, if some select states choose to shift their fiscal year to a new system, it could be quite a task for the trade and industry; first to comply with the GST, then to align with the financial years of different states. Uniformity is the key, whatever is the financial year, that is critical, the Chamber Secretary General Mr D S Rawat said.

He said, if there is a merit in shifting to the January-December financial year, then, it should not be difficult for the states to come to a consensus. Although , states have their own Constitutional right to have their accounting methods, for the sake of ease of doing business and ease of convenience to the common citizens, uniformity is essential.

In any case, under the impending GST regime, there is a dual registration with the Centre and the states. Ideally, both must have a uniform financial year t. Now with a few states taking the lead in shifting to the new system, the system of IT network would have to be re-configured. Although, the financial year may not come under its purview, the idea for a consensus building can be flagged at the meeting of the GST Council itself, purely on voluntary basis. Merits of 'one nation, one tax' should be disseminated along with other best accounting practices, the chamber said, making a plea to the NITI Aayog to work out an ideal system.

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