Goods and Services Tax: Deloitte in the Media

Getting GST Ready: 5 things to do

29 June 2017: The introduction of the Goods and Services Tax (GST) is the most significant economic reform and is slated to be rolled out from July 1. While most businesses would have been preparing to deal with this change over the past few months, it may be instructive to take stock of a few things that are essential to be ready for GST.
 

Why GST's anti-profiteering rule will prove to be a minefield of litigation?

28 June 2017: The Anti- profiteering rules published recently, provides a substantial, potentially time-consuming process for oversight of the GST rollout to ensure that anti-profiteering behaviour is rooted out. Therefore, it’s important to understand the rules of anti-profiteering law, which have worked in the past in relation to Indirect Tax, particularly in relation to VAT. Read the article to learn more.

Four key tasks for GST migration

18 May 2017: With the recent approval of central GST laws and rules by the lower house and the GST Council respectively, implementation of GST in India from 1 July 2017 appears apparent. GST claims to change the way of conducting business, which is expected to be easier and simpler to administer. Keeping this in mind, we have listed down four key tasks every business must undertake during this transition period to derive maximum benefit of this major change. Read the article to learn more.

GST: Here is what may lead to price rise

10 August 2016: As the Goods and Services Tax (GST) would likely result in pruning of the current list of 350 tax exemptions, prices of many commodities could increase under the new regime, say analysts.

The actual impact on prices would also depend on various factors such as quantum of credits released under the GST regime, value addition at different stages of the supply chain and trade margins, among others. “It would be desirable to keep mass consumption articles on the exemption list under GST or at least at a very low band of say 4 percent to 6 percent under GST in order to minimise the inflationary impact,” said MS Mani, Senior Director, Deloitte India.

The Final Frontier

28 August 2016 (Print Edition): The Goods and Services Tax (GST) may be a reality by next year with the Rajya Sabha passing the GST Constitution Amendment Bill on August 3. Though this is a big development considering that the country's biggest tax reform till date was in the works for close to a decade, the nod to the Constitution Amendment Bill is just the first step and several big challenges await the Central government - finalisation and passage of the GST Bill (the Amendment Bill just changes the Constitution to empower the Centre and states to levy GST; the actual implementation will require the passage of the GST Bill), ratification of the Amendment Bill by two-thirds majority by half the state assemblies, ironing out of flaws in the Model GST law released a few months ago and rollout of the IT infrastructure that will process billions of documents and bits of information that businesses will upload every month under the new system.

"If we are going to have two authorities, what is the use of GST, which is supposed to be a uniform tax? No business would want the law in its current form," says M.S. Mani, Senior Director, Deloitte India.

GST crosses Lok Sabha milestone with 443 ayes, nil noes

9 August 2016: The Constitution (122nd Amendment) Bill for goods and services tax (GST), which Prime Minister Narendra Modi said will give "freedom from tax terrorism", crossed another milestone on Monday with the Lok Sabha (LS) voting unanimously for it with 443 ayes and nil noes.

MS Mani, Senior Director, Deloitte India, said now that parliamentary process was nearing completion, corporates needed to gear up and prepare for the opportunities and challenges of the new tax regime.

"Corporates should now consider April 2017 as the Go Live date as the government's determined efforts would ensure that they adhere to the stated timelines," he said.

Call of duty

14 August 2016: When the 11-year-old idea of a Goods and Services Tax subsuming an entangled web of taxes, duties and levies almost crossed its biggest hurdle in Parliament, India woke up to the reality of how to prepare for it. The passage of the GST bill in the Rajya Sabha, and the ratification of the Constitution Amendment in a majority of the state legislatures over the next few months, is only the beginning of the work for the greatest reform in indirect taxes in the history of India. Even as Finance Minister Arun Jaitley maintained that he was “in a state of readiness on GST roll out”, manufacturing companies have been working overtime to ensure it happens.

“The manufacturing companies started working towards it some six months ago and are in various stages of GST preparedness, while those in the service sector began their work a month ago,” said M.S. Mani, Senior Director, Deloitte India.

After Yes vote, government stares at GST rate challenge

5 August 2016: Now that the major hurdle of Rajya Sabha has been crossed with the passage of the Constitution (122nd Amendment) Bill for the crucial goods and services tax (GST), the government is staring at another big challenge – working out a tax structure that does not stoke inflation or widens its fiscal deficit.

MS Mani, Senior Director, Indirect taxes, Deloitte India, said," if the standard GST rate is very inflationary it may lead to slowdown in economic growth and lower the compliance rate. If it becomes very inflationary then effectively it will reduce consumer spending. And if it reduces consumer spending, then production of goods and services will go down, and if that goes down then it would start affecting the GDP growth rate,".

GST Bill Passed in Rajya Sabha: Here is How India Inc is Reacting

5 August 2016: M S Mani, Senior Director, Indirect Tax, Deloitte India, said, “The passage of the bill has set the stage for the next steps to make GST a reality. The next few days and weeks will determine the contours of the proposed legislation which has been rightfully hailed as a landmark reform. It is essential that trade and industry work actively with the government in providing constructive suggestions to iron out some of the key challenges in the new regime.”

Nasscom flags complex billing, invoicing issues in GST regime

4 August 2016: The GST regime slated to be rolled out from April 1, 2017, should ensure that issues like complex billing and invoicing requirements and reverse charge on import of services do not impact the export competitiveness of the USD 110 billion sector, industry body Nasscom said today.

Explaining the concept of a reverse charge, Saloni Roy, Senior Director, Deloitte India, said, "that export-oriented companies pay service tax for import of services (say ERP licence or management consultancy fees), and although the same can be claimed as refund, it involves delays. So far reverse charge was applicable only on services, but with GST it will be extended to goods also. But, one needs to see what goods and services are prescribed under this."

What does the passing of the GST bill mean for the media & entertainment industry?

4 August 2016: The passing  of the GST has been proclaimed as a historic day for India. But what does the passing of this one bill mean and is it as important as it seems to be?

Saloni Roy, Senior Director, Deloitte India, is of the opinion that one positive will be that businesses will get more tax credit which was not always possible under the old tax regime. She gives the example of VAT (Value Added Tax), which is in the range of 4-15 per cent.

Speaking about the media and entertainment industry in particular she said, “Service providers like broadcasters, production houses, etc. might have to pay marginally higher (in the GST regime) but the positive is that they will be able to get credit on goods procured.”

However, she also cautioned that under the GST regime it might become a bit difficult for media companies as there might not be any central registration.

GST impact: Food prices may go up initially

4 August 2016: Food prices may rise in the initial phase of GST but the proposed tax will bring in several benefits for the industry and consumers, according to experts. 

Saloni Roy, Senior Director, Deloitte India, said, “exemption or concession treatment for agriculture commodities, which are sensitive to price hike, will continue. However, food products are eligible for concessional duties today and if the GST rate touched 12% to 18%, we might see an increase in prices."

Exemption on export products should continue under GST: FIEO

4 August 2016: Exporters body FIEO today said under the Goods and Services Tax (GST) regime, exemption on final export products should continue to promote overseas shipments.

M S Mani, Senior Director, Indirect Tax, Deloitte India, said, “the announcement of the road map for GST introduction within a day indicates the determination of the government to go ahead with 'One Nation One Tax' reform. However, as some of the key steps are slated from now onwards till March 2017, the implementation date of 1st April 2017 appears difficult to achieve".

PM Narendra Modi’s one-market dream vexes India Inc. seeking clues to taxes

4 August 2016: With India close to enacting its first nation-wide sales tax, local companies are bracing for additional spending needed to align accounting processes under a more stringent regime that's yet to be spelled out. 

M S Mani, Senior Director, Indirect Tax, Deloitte India, said, “The toughest part: no one knows what the tax rates will be and what fine print will be written into the law. Most companies will need to completely retool their customer and vendor databases as they move to a streamlined tax structure and away from multiple state levies".

GST Bill: Good job Cabinet, it's only a matter of time now

28 July 2016: A day after the meeting of the Empowered Committee of State Finance Ministers raised its concerns about the GST Bill, the Cabinet cleared the changes in the Constitutional Amendment Bill in line with the demands made by the panel, clearing the way for the much-needed tax reform to be passed in the current Parliament session.

“It is indeed commendable that the Cabinet has taken up the GST matter within a day of the meeting of the Empowered Committee of state finance ministers. This depicts the resolve and commitment of the Government to move ahead on GST," MS Mani, Senior Director – Indirect Tax, Deloitte India.

Cabinet green light clears tracks for GST

28 July 2016: The Union Cabinet on Wednesday paved the way for the goods and services tax (GST) Constitution amendment Bill to be passed in the Rajya Sabha by clearing key changes. The Cabinet gave the green light to scrapping the one per cent addition tax on the interstate supply of goods. 

M S Mani, Senior Director, Indirect Tax, Deloitte India, said, “It is indeed commendable that the Cabinet has taken up the GST matter within a day of the meeting of the empowered committee of state finance ministers. This depicts the resolve and commitment of the government to move ahead on GST.” 

GST hopes brighten as Cabinet clears amendment to bill, inter-state tax scrapped

27 July 2016: India moved a significant step closer to the most comprehensive reform of its indirect tax structure. The Union Cabinet on Wednesday approved amendments to the constitutional amendment Bill, needed to make the goods & services tax a reality, incorporating suggestions by states. 

"It's one step closer to passage of the Constitution amendment Bill," said R Muralidharan, senior director at Deloitte.

State finance ministers panel likely to discuss tax rate under GST

22 July 2016: In the last meeting of the states in Kolkata in June, state finance ministers had pointed out that a very low tax rate may cause revenue loss to them.

R. Muralidharan, senior director at Deloitte, said it is imperative that the revenue-neutral rate gets decided at the earliest.

Goods & Services Tax: Make GST Work for you

Implementation of GST as a reform measure is of unparalled importance in independent India. The new tax regime will have numerous changes and developments, and it will be crucial to stay abreast of these new developments to ensure your business remains GST optimised. Deloitte is here to help you identify and work through the GST implications, to give you the satisfaction that your business’ future plans are GST optimized