GST in India will bring about a change in the tax system by redistributing the burden of taxation equitably between manufacturing and services. GST will enable broadening of the tax base, which will further result in reduction in effective rate of tax. It will reduce distortions by applying the destination principle for levy of taxes.
GST will be a game changing reform for the Indian economy by creating a common Indian market. There would be a direct impact on the taxation structure, tax computation respective payment, compliance and credit utilization, leading to a complete overhaul of the current indirect tax system.
The impact of this new indirect tax regime will be far reaching impacting the pricing of products, services, supply chain optimization, accounting, IT and compliance systems.
What could be the impact of the GST on your Business?
Tax payers are required to be GST compliant and further depending on the operating geographies, size and sector, the change would be significant and will require proactive planning with time bound action plan. As part of the preparation for the implementation of GST, organizations/companies need to build the understanding of the policy and the implications. The subsequent transition planning needs to be devised and formulated. Sailotech consulting services can ascertain the transition is success and smooth.
The GST structure would follow the destination principle. Accordingly, imports would be subject to GST, while exports would be zero-rated. In the case of inter-state transactions within India, Integrated GST would apply in the state of destination as opposed to that of origin.
Is your Enterprise software ERP prepared for transition to the new tax regime?
The GST implementation will affect majority of the business functions including the Enterprise software. The already existing tax localization patch on the ERPs will be nullified and new way of the tax transaction handling will be critical. The primary impact business functions will be:
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