The GST has evoked a happy response from India Inc. Most of them were happy at having just one tax instead of the multiple taxes that they have to pay for as of now.
Here are some reactions:
Saurabh Srivastava, Co-Founder at Indian Angel Network: GST is in line with the PM’s focus on ease of doing business by creating one single Indian market, was one of the most awaited steps by Indian business and can add a point or two to our Growth rate. There are of course several concerns that still need to be addressed such as the potential challenges that companies supplying services on a pan-India basis will face as they will have to seek registrations in 37 jurisdictions ( states , UTs and the Centre), there may be need for multiple invoices for supply under a single contract if delivered from different locations, valuation can create TP like issues for intra company transfers and “tax collection at source” will be discriminatory for e commerce, making this new age marketplace non viable. Export Competitiveness of the IT sector could be impacted by complex billing and invoicing requirements due to place of supply and valuatione, reverse charge of GST on import of services used as inputs for export and removal of exemptions for SEZs.”
Kulpreet Kaur, Co-Founder, Shop Pirate Coupons: For the e-commerce sector, there are lots of opportunities and the best part is that now it will simplify the complicated tax structure in India. It will minimize the cascading effect of taxation issues. State to state taxing system used to effect the end users who used to end up paying more for any products. But now there will be transparency in the costs. The only issue will be the increase in the documentations work and administration costs.
Ajith Karimpana, Founder & CEO, Furlenco: Doing business in India will now start becoming easier. At Furlenco, while it probably would increase prices during the shorter term, but over the longer term, we would start getting efficiencies from the supply chain which we plan to pass it onto customers.
Archit Gupta, Founder & CEO, ClearTax.com: Though the government to yet arrive at the GST rate, it is keenly awaited by businesses. GST will lead to faster movement of goods. Also, wider availability of input credit. While there will be ease of registration, some of the compliance provisions need deeper evaluation as details are still awaited.
Hari Menon, CEO, BigBasket: If implemented correctly, it will bring relief from one of the key issues faced in the e-commerce segment - cascading taxes. We are hopeful that in the long-run the creation of a unified marketplace will reduce the tax burden, inventory cost and logistical issues; and ensure seamless movement of goods across the country. This will help bring efficiency, transparency and boost profitability and growth of the sector.
BVR Mohan Reddy, Founder & Executive Chairman, Cyient : GST will certainly transform India into a unified marketplace and will have a positive long term impact on Indian economy. It will also be a catalyst to enhance ease of doing business in the country and will greatly benefit start-ups. The passing of the bill is the first step. Clarity has to come on several amendments mentioned in the GST Bill. Implementation challenges like increase in documentation, multiple registrations, etc. for companies having pan India operations need to be addressed. For IT Services, the immediate concern is on the valuation of services, and needs more structure and clarity.
K Ganesh, Serial Entrepreneur, Partner - GrowthStory and Promoter: The Bill in the Rajya Sabha is a progressive measure as it can facilitate seamless movement of goods across inter-state borders enabling better efficiency and spurring growth of the (eCommerce) sector. However, like every regulation, it needs to be implemented correctly, and should not make lives of e-commerce players even more complicated by burdening them with more administrative hassles. For the consumer, the price points of many products should come down or remain at the current levels (depending on the GST rates) as there will be free flow of credits since the total indirect tax cost embedded in the price (of products) is likely to decrease.
Sandeep Aggarwal, Founder &CEO, Droom: GST is not just tax simplified but a tax regime that no longer ignores the existence of a digital economy and the 21st century commerce. Implementation of GST is a great move for e-commerce players. GST will help eliminate the ambiguity that currently exists and will help to build a unified market across India. Hope government does not pass the burden of implementing GST, operating costs and technology build out to e-commerce companies who to begin with have scanty profit margin of not making loses.
Govind Shrikhande, Managing Director, Shoppers Stop Ltd.: I hope there is a quick rollout as per the intended deadline of April 1, 2017. This bill will transform India's $2 trillion economy and 1.3 billion consumers into a single seamless market for the first time making it a win-win for the economy, industry and the consumer. It is now important to quickly calibrate and finalize the rates on multiple categories without impacting retail price in a big way. From a retailer’s standpoint, the icing on the cake would be, if a preferred status is given to 'Fashion and Apparel' within the GST framework.
Sameer Parwani, Founder & CEO, CouponDunia: It will open new avenues for the e-commerce players to sell goods and services across states in India. It would be interesting times ahead with considerable changes and we look forward to see how the Government’s resolve to put in place a significant structural change will benefit all industries The ideal GST rates should be along the lines of existing tax structures so that it doesn’t hurt small businesses specifically.
Palem Srikanth Reddy, Founder & Chairman, LatestOne.com: Execution to deliver the benefits envisaged in the initiative remain a challenge, given the amount of time to implement (April 2017). As for e-commerce, particularly e-tailers this is a positive development because the market places are able to knock off various tax components in the complex combination of services they provide through multiple legal entities, against each other. This will reduce the overall cost structure of e-tailers by about 5 percent and make several businesses viable which were earlier struggling to break even.
G.V. Kumar, Founder, CEO & Managing Director, XIUS: The telecom sector, particularly from the Network Services perspective, is also expected to benefit under a uniform tax regime since streamlining of resources and financial planning can be managed in a more efficient way under GST. It will also outdo the multiple taxes applicable on the telecom sector and will help in driving further the interests of internet services for the common man.
Shobhit Bhatnagar, Co-founder, GradeUp, mobile education platform: A lot of start-ups have faced several tax regulations in different states. As a young company we can't afford to spend too much time and energy looking into elaborate tax procedures. GST will help cut to the chase by integrating all taxes. Overall, I believe the new tax law would improve competitiveness and efficiency of the startups.
Ullas Kamath, Jt Managing Director, Jyothy Laboratories: GST will not only simplify the taxation in the manufacturing sector and consumer goods space but it will also improve the overall efficiency in the FMCG space. Also the advent of GST will further enhance the operating efficiency which will result in saving cost and time, the benefits of which can be passed on the end consumer. Overall it will be a win -win for the economy, industry and the consumer.
Ajith Karimpana, Founder & CEO, Furlenco : Doing business in India will now start becoming easier. At Furlenco, while it probably would increase prices during the shorter term, but over the longer-term, we would start getting efficiencies from the supply chain which we plan to pass it onto customers. I think the biggest difference GST is getting is the ease of registration process for taxes. GST will also give higher exemptions for taxes.
Dhruvil Sanghvi, CEO & Co-Founder, LogiNext: From a technology point of view, there are so many planning and analytics tools available globally which Indian enterprises were not able to use due to a complex tax structure. Companies will now be able to use more advanced tools and technologies to improve their internal operations and trade cycles across the country will become shorter and faster. For e-commerce and retail sectors, we had gathered location data over last three years and it clearly showed that more than 10 percent of the time in trade and transportation was spent at state/city borders due to various tax checks and penalty payments/collections. After GST, this time and cost will be reduced and our optimization algorithms will be able to suggest better routes for our users. In addition to that, the warehouse planning and positioning will also become much better as there won’t be a need to have many small warehouses across the states. This will unify the warehousing loads and reduce overall cost and time in end-to-end supply chain.
Sumit Sawhney, Country CEO & Managing Director, Renault India Operations: GST will positively impact several sectors, including the automobile industry, by minimizing and simplifying the taxation burden. It is expected to drive overall consumer demand since the cost for the logistics and supply chain inventory will be curtailed by almost 30-40 per cent, the benefits of which are expected to be passed on to the consumers. The focus will be on establishing a robust infrastructure and harmonizing the licensing and environmental regulations across the states.
L C Singh, Vice Chairman & CEO (Founder), Nihilent Technologies: While the initial hiccups maybe an inconvenience to stakeholders, in the long run GST would usher in a seamless and improved business ecosystem that will take India closer to being an economic superpower. The IT industry will also have an increased role to play as an enabler of the success of GST rollout.
Raghu Kumar, Founder, RKSV, online stock and share trading firm : Since the markets have already priced in GST and its effects, a favorable outcome might not trigger a strong movement. Secondly, it is possible that the GST outcome when it comes to the implications of the capital markets in the short term may not come in a positive manner as it was expected. So, we may expect selling pressure in the market.
Asheer Kapoor, Managing Director, EPPS Infotech: It will have one of the biggest impacts on the IT structure both in terms of time and effort involved wherein organizations will have to train their employees, rework invoices and work in compliance with the new regulation. Companies across industries will now be on the lookout for an integrated ERP system that will support all their business requirements under GST regime. ERP vendors that offer a seamless transition to organizations in upgrading their existing system with GST will have a competitive edge in the market.
Samay Kohli, Co- Founder and CEO, GreyOrange: The maximum impact of a GST rollout will be on the supply chain, as this will enable companies to finally optimize their supply chain networks based on scientific principals and logic, instead of disparate tax structures across the country which has been the case so far. We look forward to partnering with enterprises in helping them realize the maximum benefits of large scale automated warehouses.
Pavan Sondur, CEO, Unbxd: GST is a relief for start-ups like us, because it brings in much needed clarity and ease of compliance. The bill in its present form however complicates things for e-commerce marketplaces, where the onus of sellers' compliance and tax paid on inputs is now on them.
K Satyanarayana, Director, Ecom Express Private Ltd.: The major step towards GST implementation will enable favorable conditions to the e-commerce industry and the ecosystem. All the hurdles and complexities in the supply chain track will be dismantled, thereby increasing the efficiency and turnaround times and creating a multiplier effect on growth. The logistics space which acts as catalyst to the ecommerce industry will now stand to gain as it will bring ease and simplicity in cross-state interactions, rectifying the current fragmented tax system challenge.
Dhiraj Agarwal, Co-Founder, Campus Sutra: From the point of e-commerce, there are two points in which we are awaiting clarity. First, being mechanics of GST across each state as online orders are not location dependent. Secondly, as a fashion e- commerce player we are eagerly waiting to see whether apparel continues to be in the necessity category and hence attracts a lower GST than the standard rate.
Atul Rai, Co-Founder and CEO of Staqu Technologies: Being a technology company, I don’t think it will have any direct impact as most technology companies in India are B2B. The major outcome of GST will be based on how it is impacting the corresponding business partners of that technology company. In general, it may add an extra burden to those tech companies which are having their pan India presence as they have to bifurcate services and bill the customer state-wise. From a startup's point of view, I would say it will have a good cascading effect, as it will attract and encourage more investors from around the globe for Asia’s third largest economy with a clear and transparent tax regime.
Dr Naushad Forbes, President, CII: GST, when implemented, is expected to usher in a harmonised national market of goods and services and shall lead to a simplified, assessee-friendly tax administration system. Once implemented, it will subsume all of the country's central and state level duties and taxes, thus making the country a national market and contribute significantly to the growth of the economy. The manufacturing sector in particular is expected to be a big beneficiary of GST as the economic system becomes more competitive. As GST will be aligned with an information technology platform, the tax payment system would also be streamlined.
Dhananjay Sinha, Head- Institutional Research, Economist & Strategist, Emkay Global Financial Services Ltd.: While the GST constitutional amendment bill has been passed and it represents a step towards implementation of the GST, it will be some time before the GST becomes a reality. However, on the positive side, it appears that the government is prepared with the technology infrastructure to start implementing GST from April 2017. From now on, the focus will shift towards implementation, analysis on modifications/exceptions, the determination of the tax rate and the actual benefit accrued as against what was expected.
Jaswinder Ahuja, Corporate Vice President & Managing Director, Cadence Design Systems (India) Pvt Ltd. : GST will help herald a more comprehensive and congruent tax structure benefitting the electronics and semiconductor industries and the business communities at large. As the market opportunities for electronics keep getting larger, especially in a growing economy like India, GST will encourage in the seamless transfer of goods and services across the country. It will also give a boost to the ‘Make in India’ campaign.
Arundhati Bhattacharya, Chairman, SBI: GST implementation will result in the seamless movement of goods and integration of markets across the country. This will result in increase of efficiencies. The structural transformation of GST in the long term will be enormous & as such the passage of the bill is very welcome. In our Bank we are fully geared to meet the implementation challenges and necessary IT support for it will be in place in due time.
Bipin Sapra, Tax Partner, Telecom Practice, EY: While the telecom service will become costlier as the rate of GST will be higher than the present service tax, a lot of cost will also accrue on account of difficult place of supply rules, decentralized and multiple compliances and credit blockages. The law, procedures and administration mechanisms need to be simplified to allow the prices of the mobile service to be low in the hands of the consumer.
Rajeev Wadhwa, Group Chief Executive Officer & Chairman, Baron Aviation: We need to see the impact of GST on services and trading businesses. Some of these businesses are very cost sensitive and even 10 percent difference due to added price can result in negative growth for the industry. Charter trading is one such sector that is likely to impacted by the GST bill, and not in a good way.
Simran Sial, Co-Founder, FindMyStay: Since we are a service industry and service tax have a flat 15 percent across India, implementation of GST will make traveling and booking hotels more expensive for customers as its pegged to go upto 22 percent. From an overal economy perspective, GST is a big boost as it eases doing business inter and infra states.
Rakesh Deshmukh, CEO & Co-Founder, Indus OS: Due to its centralized structure and inclusive model, certain undertaxed sectors are bound to witness an increase and some overtaxed sectors will find relief through a decrease in taxation. Although the key to its success lies in its final structure, which is yet to be formalized as various states need to come to a consensus and also its effective implementation. For the telecom sector, even though costs are expected to increase, it is less likely to hamper the momentum at which smartphone penetration is growing in India as it is not driven purely by cost but the need for increased connectivity. Two other key aspects of the GST for the telecom sector that government needs to carefully scrutinize are the accrual of tax credits and distinct place-of-supply rules.
Published Date: Aug 05, 2016 05:23 pm | Updated Date: Aug 05, 2016 05:23 pm