Management News

A New Beginning

The challenges with the present tax assessment administration are unequivocal. For long, organisations have been loaded with twofold tax assessment, entangled standards, and uncompetitive expense rates and structures. Central and state governments have not been able to control leaks from the framework, and ultimately, general society has been bothered with higher costs on goods and services. However, once GST is implemented, the Indian economy will be set on course for record growth.

Breaking new grounds, however, require detaching from existing practices, systems, and dogmas. This can become a challenge for businesses, particularly on account of the slapdash usage of GST. Challenges start with understanding transitional provisions, including use of unutilised credit of taxes under existing law, spill over transactions and taxability, assessments, proceedings and consequential refund, and taxability of supply, and extends to redesigning supply chain and distribution strategy, provisioning IT infrastructure, forming new business policies and framework, studying the impact on cash flow and profitability, and addressing sector specific issues

For instance, it is not clear who will bear the burden of tax of goods. Suppose a machine purchased prior to implementation of GST and returned after six months—1st January 2018— to the vendor, say due to failure during technical testing. This kind of a transaction is ineligible for tax credit or refund. Businesses would also need to deliberate on other things, such as their present supply chain and distribution strategy which would no longer remain efficient in view of eligibility under GST, to claim credit of tax paid on inter-state supply...... Page 20 and 21