The 4 bills related to goods and services tax (GST) have been approved by the Lok Sabha on 29 March and therefore the stage is all set to the rollout of GST.
This step of unveiling GST in such a complex democracy like India is a pragmatic start with all its federal structure and divergent needs of the state. Such a commencement will grow into an ideal thing for India in the coming future. The impact of GST will create a market where the services and the goods irrespective of its location of transaction will share a common treatment with a common rate.
This new GST will put a new paradigm change into action, that is, the new compliance mechanism. All the taxpayer under GST will need to report electronically to a single portal called GST Network (GSTN) every month for all the state they belong to and present at the transaction aggregate. All such taxpayers need to match their GST credits on the basis of their sales and purchase done and then pay the net GST.
The positive change that will occur is that the zero-rated treatment supplies for the Special Economic Zones will happen with refunds for inputs. Moreover, the time limit for payment of tax has been increased to 180 days from 90 days. Such positive impacts will provide some time to the industry for adjusting itself to this self-policing mechanism.
This seems to be an expanding as well as growing tomorrow as initial announcement of rules that cover valuation, input tax credit, transition along with rate fixation are some of the critical implementation that are going to happen on 1st July 2017.