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Dynamic GST Regime Requires Corporations To Adopt Agile Solutions

As the GST regime evolves, changes will be inevitable. Hence, only those who are infrastructurally ready to adapt to changes and modifications around rates, processes and systems will ultimately be able to fully garner the multiple benefits that GST offers

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India embraced the Goods and Services Tax (GST) reform on July 1, 2017, making the country progress towards a unified market. Since then, the Government has played an active role in listening to on-ground feedback and accommodating necessary changes to the law, to make it more conducive for the tax payers. Consequently, there have been a number of notifications and circulars post GST roll-out aiming to address certain requirements and concerns. Towards the goal of tackling various practical challenges, the Government is guided by creating an engaged platform and offering flexibility.

A tax reform when accompanied by improvements makes it progressive – which can stimulate economic growth. At the 20th GST Council meeting, it has been decided to cut the tax rate for job work services in respect of textiles and textile products from 18% to 5%. While preparing for the implementation of "anti-profiteering" provisions, the Government has decided to hold more awareness campaigns. The Government wants to ensure that businesses pass on the benefit of reduced tax incidence on goods or services to the consumers. The council has also given an in-principle approval for implementation of e-way bill system, to ensure smooth movement of goods. There are few more announcements expected in the next GST Council meeting scheduled on September 9.

This dynamic and constant evolution, while being a sign of great agility on the Government’s part, also poses a short term challenge for the corporations in terms of compliance.

· Keeping pace with an ever-evolving GST landscape
For corporations, tracking these notifications and circulars and ensuring that these are duly adhered to in IT systems and processes is an arduous  task. While the rates are constantly being revised, inputting correct tax rate is critical to ensuring accurate determination and subsequent compliance. A small mistake in GST determination can snowball into a huge challenge for the corporations

In the wake of change, the immediate approach should be to work with technology partners to deploy tax technologies and focus on determination and integration to ensure timely compliance.

· Dynamic regime needs dynamic systems
As in many countries which have embraced GST, its implementation in India is a journey, which will keep evolving as we go along. If India has come this far in the journey of implementation of the biggest indirect tax reform, there is no doubt that the country will succeed in setting a global example on putting a unified tax structure in place.

What will make this journey easy and efficient for corporations is a robust tax infrastructure and technology. Corporations must adopt a proactive approach to managing tax determination and compliance as the reactive approach will mean that the corporation and responsible officials can at best play catch-up. The need of the hour is an end-to-end solution which leverages the power of data and technology to make sure that it is tax compliant.

As the GST regime evolves, changes will be inevitable. Hence, only those who are infrastructurally ready to adapt to changes and modifications around rates, processes and systems will ultimately be able to fully garner the multiple benefits that GST offers. Corporations must adopt calculation-to-compliance solutions to meet the raft of new regulations associated with the new tax regime in India.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Vinay Sethi

The author is Head, Market Development, Tax and Accounting, South Asia, Thomson Reuters

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