1. GST: Landmark tax change a huge implementation challenge for India

GST: Landmark tax change a huge implementation challenge for India

While India’s on track to meet its deadline for a much-delayed national sales tax, implementation is seen as a test in the nation that has more states than the EU has members and a population twice that of North America.

By: | Published: March 29, 2017 10:48 AM
The introduction of the four bills is a “concrete step toward implementation from July 1,” said Santosh Dalvi, partner, indirect tax, at KPMG in India.

While India’s on track to meet its deadline for a much-delayed national sales tax, implementation is seen as a test in the nation that has more states than the EU has members and a population twice that of North America.The goods and services tax will replace more than a dozen levies that were fracturing the world’s fastest-growing big economy, unifying India for the first time into a common market with more than 1 billion consumers. Proposed over a decade ago and since then refined to win bipartisan support under Prime Minister Narendra Modi, roll out is scheduled for July 1.

“It’s a massive tax change, administrative change at the center and the states, lots of procedures, processes, new forms, so there’s a huge implementation challenge,” Arvind Subramanian, Modi’s chief economic adviser, said Wednesday in a Bloomberg Television interview from Hong Kong. “But I think that’s going to be a temporary thing. Initially there’s going to be bumps on the road.”

Also watch: 

Subramanian’s comments come hours before lawmakers are set to debate bills to finalize the structure of the GST. Parliament needs to approve the legislation in the session ending April 12 to meet the government’s deadline, and a select group of ministers are hashing out various other rules behind the scenes, including which goods will be taxed at what rate.

The introduction of the four bills is a “concrete step toward implementation from July 1,” said Santosh Dalvi, partner, indirect tax, at KPMG in India. However — apart from the classification of goods and services — companies are also seeking clarity on whether existing tax exemptions will continue and need enough time to prepare their technology and compliance structures, he said.

Calculate your income tax post budget 2018 through this Income Tax Calculator, get latest news on Budget 2018 and Auto Expo 2018. Like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top