India successfully implemented its most ambitious tax reform on 1st July 2017. The transition to the new regime has been relatively smooth except for the technology related challenges for GST compliances. The Government of India (‘GOI’) has also been quick in taking remedial action such as simplifying the GST compliances, reduction in GST rates and enforcing the anti-profiteering provisions. It is expected that GST Council would announce a simplified compliance process in the coming months.
I hope that the attached report would provide you useful insights to India’s journey in the new GST regime.
Please click HERE for the Report “Over 200 days of GST: the road ahead”.
GST regime, as it stabilises, presents challenges as well as opportunities to optimise returns. Your business operations in India would need to focus on the following areas:
1) Compliance with Anti-profiteering provisions
The Anti-profiteering provisions require any reduction in output taxes or increase in input tax credits to be passed on to the consumer. There have been no detailed guidelines as to the manner of computation of benefit. Any non-compliance would require the benefit retained by the Business to be deposited with the Consumer Welfare Fund, attract penalties and the associated impact on your brand.
2) Technology solutions for GST Compliances
The GSTN, technology platform for GST compliances, is yet to stabilise. The GOI is working on a simplified compliance process. The e-way Bill system, an electronically generated permit required for inter-State movement of goods will be introduced from 1st April 2018.
It is imperative that businesses use ‘robust technology solutions’ with adequate support to respond to the evolving compliance process. PwC India, using our network global compliance solution has developed an India specific compliance software which has been implemented for more 200 clients across various industries. A software for e-way Bill compliance is also being released.
3) Review GST transition
Businesses would be required to file an annual return before 30th September and the same has to be audited by a Chartered Accountant. It would be worthwhile for businesses to review the transition to new regime i.e. whether tax positions taken continue to be valid in light of the frequent twists and turns, consistency in implementation by various stakeholders in business, review data quality for compliance and establish internal controls.
4) Review Supply chain model
Hitherto, due to non-creditable tax on inter-State supply of goods and tax holidays in specified States, supply chains were driven by tax rather than business parameters. GST as well as ‘Make in India’ initiative of the GOI make it imperative for you to review the existing supply chain in India.
India, with the fastest economic growth rate and reforms such as GST being successfully implemented, would continue to be an exciting market. If you require any clarification or assistance, I would be pleased to introduce our India GST Team.
Bildquelle: Katharina Wieland Müller / pixelio.de