Tuesday, 23 October, 2018

Ready or not, Indian businesses brace for GST

Ready or not, Indian businesses brace for GST Ready or not, Indian businesses brace for GST
Melinda Barton | 29 June, 2017, 09:04

And government thinks that under Goods and Services Tax, the credit input for construction cost of the materials will be passed on as benefit to buyers. Moreover, the State will not suffer any financial loss due to implementation of the GST regime as any loss occurred during the initial stages of the new regime will be compensated by the Government of India. Divyesh Lapsiwala, tax partner at consulting firm EY India, said, "The goal is to track transactions and not collect taxes, and therefore it is imperative that the "collectors" have a clear point of view from the government". Moreover, the GST will be applicable on consumption level rather than the state of origin, which can give a much needed boost to the automobile sector. And about 80 per cent of the 59 million phones sold in the country in January-March were made locally, according to Counterpoint Research data. So, filing taxes every month will not be possible.

SAIL Management feels that the introduction of this unique indirect tax regime will have powerful impact on the domestic economy.

VAT (with rates differing from one state to another) and Service Tax together accounted for 7-9% of the ticket price for a residential property, which is 3-4% lower than the GST rate.

Stressing on the need to shun tax evasion, he said, "There is a need to inspire confidence of the people in our governance and by doing so we could motivate the people towards discharging their lawful responsibilities". Imported phones and parts are meanwhile expected to cost more or less the same post GST. This has been clarified by the announcement from the Finance Ministry, which indicates that there will be no tax under GST for housing projects which comes under the affordable housing scheme. Moreover, since GST is a destination-based tax, locally manufactured goods will pay the same amount of tax as imported goods, encouraging companies to reach out to local units, and in the process, significantly benefit small scale industries. Other small traders have also registered their protests against the GST through the traders' association, the Confederation of All India Traders (CAIT).

"We feel that in keeping with the objectives of "Digital India" the ideal GST rate should have been 5 per cent". It combines more than a dozen taxes levied on various products and facilities in the market, although most staples and fresh vegetables are spared.