Power and automation technology firm ABB India has put in place a "very strong" project team to take care of issues that could arise out of transition to the goods and services tax framework from July 1.
Power and automation technology firm ABB India has put in place a “very strong” project team to take care of issues that could arise out of transition to the goods and services tax framework from July 1. Implementation of the GST could lead to trade disruptions initially, said Chief Financial Officer T K Sridhar. About any spillover of the GST impact beyond July-August, Sridhar said, “It is very hard to say.”
ABB India MD Sanjeev Sharma said, “Because of nature of this transition, there always will be surprises. So, that is why we keep a very strong project team which is able to take care of these issues as we go through the transition.” “When it comes to the statutory and regulatory scenario, the one that we are really looking forward to, or what is going to make a real change, going forward, is the GST,” Sridhar said during a conference call on March quarterly results.
He also said, “(GST) is expected on July 1. While we prepare, I would also like to say there could be a trade disruption initially because the systems have to get aligned to the new way of working. So, that is how it is.” GST will subsume different levies, including excise, service tax and VAT, and will create a unified market for seamless transfer of goods and services.
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About the business potential in the power sector, Sharma said, “We have about 35 gigawatts of 25 plus year old thermal power plants, which will be retired in the next 5-8 years and this will create demand for generation capacity.” Highly leveraged developers remain a concern, which is hampering investments, given lack of power purchase agreements (PPAs) and fuel supply agreements (FSAs), he added.
On the transmission sector, he said, “Because a lot of renewables are getting added to the country’s grid… about Rs 2,60,000 crore investment are planned by 2022, 61 per cent of which is estimated to be spent by the states.”
About the railways as a bright spot in terms of investments, Sharma said, “The Indian Railways is inviting bids for USD 3 billion joint venture to manufacture 5,000 electric coaches and also invest in 1,000 megawatts of solar power at 7,000 stations.”
On the oil and gas segment, he said, “There are plans to merge all state-owned oil marketing companies. Also, to have euro VI compliance will involve expected investments of about USD 6 billion to put in sulphur units in the refineries. And that will get a fair amount of attraction for us, going forward.”