Analysis

Goods and Services Tax

Frequently Asked Questions

A perspective by Prashant Deshpande, Partner, Deloitte India.

Can India go GST by April 1, 2017?

Yes. India can introduce GST by April 1 2017.

There are several challenges and to do’s for the Government before it introduces the GST

The to dos are:

  • Establish a legal framework that will include formation of GST council after the bill becomes obtains Presidential assent,
  • Recommendation of Model GST laws by GST Council
  • Cabinet Approval and passage of law : for the CGST and IGST laws by Centre and for SGST laws by ALL states
  • Notification of GST Rules and exemptions

And the seven more important challenges which by Governments own admission need to be dealt with for smooth implementation of the GST are:

  • calculation of revenue base of Centre and states and compensation requirements,
  • structure of GST rates,
  • list of exemptions,
  • forming of consensus on Model GST Bill,
  • threshold limits, compounding limits and
  • cross empowerment to mitigate ill-effects of dual control

It would be critical for the Government to obtain stakeholder concurrence on all of the above for ensuring safe passage of the GST laws and gaining acceptability to GST.

Besides the Government will also have to ensure the readiness of IT infrastructure, the GSTN.

For a successful implementation of GST bringing about a change management in Central and State tax department cadres and fulfilling training needs would be of paramount importance

Will businesses manage the transition by then?

Yes, the businesses will have no choice but to be GST ready by April 1 2017.

There are several steps that businesses may consider for GST readiness and they include:

  • Map the current business transactions and over lay the GST footprint to assess impact of new law
  • Take impact mitigation measures by restructuring transaction flows and / or supply chain
  • Redesign the processes in line with the above
  • Assess IT readiness requirements and take necessary steps to bring in functional modifications
  • Assess and implement registration and compliance requirements and
  • Assess steps to be taken to ensure smooth transition including stakeholder communication and documentation requirements 
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