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Monday, April 10, 2017

Daily Editorial Update - Focus shifts to GST execution on ground


Hello and welcome to exampundit. Here is today's Editorial from the favorite Economic Times titled "Focus shifts to GST execution on ground".

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Today's topic: Focus shifts to GST execution on ground

The government is committed to implement GST before the July 1deadline and seems to be moving at a fast place to get the law, rules and other requirements in place.

With the passage of the Central Goods & Service Tax Bill, 2017, the Integrated Goods & Service Tax Bill, 2017, the Union Territory Goods & Service Tax Bill, 2017 and the Goods & Service Tax (Compensation to States) Bill, 2017 in the Lok Sabha, the timely rollout of GST seems to be imminent. The GST council is due to approve the GST Rules on March 31 and then the entire set of legislation would be available in the public domain for effective implementation. The government has also created working groups to address concerns of the trade and industry in certain key sectors.
The focus now shifts to the implementation of the law. The government and the industry need to prepare themselves before the eventual rollout. While the government needs to work out the rates, exemptions and procedures for the actual implementation, the success of the transition would depend on setting up of a robust administrative mechanism including training of the officers in GST law and procedures.

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A strong IT infrastructure is going to be the backbone of an effective GST system. GSTN should be ready with its full array of services and the portal functionality should be ready for testing well before the date to go live. It is to be noted that migration of assesses (phase-I) — which had just 19 fields of information to be fed into the system — itself had a lot of hiccups. The credit matching and reconciling facility needs careful testing and the small and medium players in the Industry need to be sensitised of the procedures and their responsibilities.

The immediate challenge for the GST Council is to decide which product should fall under which category. It also needs to decide the rate structure for services, many of which are currently on lower side than the proposed tax slabs. The industry needs to be aware of these rates soon to work out the pricing mechanism and be compliant with the anti-profiteering law, if the same is implemented.

The industry also requires sufficient time to internalise the impact of the law and make appropriate changes in their business processes, contracts, and pricing among other things. These changes then need to be built into the IT systems, especially the ERP systems.

The rollout of GST within a time span of next 3 months seems a herculean task, keeping in mind the paradigm shift in the indirect taxation in India. Thus, both the government and the industry have a lot to do and miles to go before the GST can be implemented in right earnest.


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