Goods & Services Tax
What is GST?
The Goods and Services Tax (GST) is slated for introduction in India in April 2010. The GST is seen as the single most important tax reform initiative in India since independence. It is expected to provide a significant boost to investment and growth of the economy and will have a far reaching impact on virtually all aspects of businesses operating in the country. The GST is proposed to apply to both goods and services, covering virtually all sectors and industries. It will replace the complex system of levies on goods and services at the Central and State levels.
Likely impact The rollout of GST throws up issues in key areas of business such as: - Pricing of products and services
- Supply chain optimization
- Accounting and tax compliance systems
- Cash Flow management
- Investment planning
- Location of new plants
- Transitions to the new tax
| Latest Developments - The government of India, in its Union Budget 2009-10, has reiterated its commitment to introduce the GST by 1 April, 2010.
- According to the Budget, the GST will be a dual levy, consisting of the Centre GST and the State GST.
- There is a broad political consensus for the introduction of the GST. However, some states (Tamil Nadu, Madhya Pradesh and Chhatisgarh ) have expressed reservations about the feasibility of the April 1, 2010 implementation date and its impact on their revenues.
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The government is yet to release a detailed blue print for the GST design and a roadmap for its implementation. | |
Ernst & Young and GST
Ernst & Young has been closely involved with the GST initiative through its Tax Policy Advisory Group - a specialized team of experienced professionals, including former government officials, that advises businesses as well as governments on diverse policy issues, focusing on taxation. The Group helps businesses anticipate policy changes, assess their impact on their operations, and engage in a constructive dialogue with the relevant authorities for remedial measures to address any concerns.
The group has diverse VAT and GST experience with extensive interactions with both the Central and the State Governments in India and overseas engagements in jurisdictions such as Canada, China and European Union.
Ernst & Young can thus provide you the perspective and support that you need to understand the potential impact of the GST on your business and to engage in a dialogue with the Centre and State governments and their policy-making committees to shape the design and construct of the Indian GST regime and regulations.
Click here to read our published GST thought leadership series.
