GST impact: Tax on advances gives India Inc the jitters

Cost of a transaction is likely to increase under the new tax regime, say experts

GST, tax

Tax on advances made in course of a business transaction– both for goods and services– and the subsequent compliance requirements under the goods and services tax (GST) regime are giving Corporate India the heebie-jeebies. Tax experts feel the move to tax advances is likely to increase cost of a transaction under the new indirect tax regime and could trigger a change in the way companies do business. Some businesses may even resort to a change in nomenclature of an ‘advance’ to ‘security deposit’ to avoid paying the tax, fear ...