Wednesday, December 28, 2016

Alternatives Before Central Government If GST Not Put Into Action Within Sept 2017

A national economy fillips when the taxes are property paid. India is one of those countries where there are individual types of taxes have been in the system for the decades. Research says that GST implementation can simplify the tax paying sector as this is one of a kind single paid proposition against the preceding categories.  But it seems like that the central government is unable to cater sufficient volume of money by the end of 2016 as the PM announced during his money-ban speech. Now if GST execution misses the deadline of Sept. 2017 then this could bring some worst case scenario according to the current finance minister of India.

At a Glance GST-
• Single tax to replace multiple levels
• Single tax duty on goods and service
• Automated process to lessen human interface
• Diminish compliance cost of the taxpayers
• Lesser logistic and inventory cost

GST should be implemented as early as possible to bloat Indian economical infrastructure. Agriculture and real estate are two prior sectors from which the nation earns its revenue. After currency ban these two sectors are affected in a big way. With the demonetization movement the parliamentary logjam has been an everyday issue causing by the oppositions insistent attacks. Meanwhile this GST issue has been overlooked and deferring throughout this inside-out. There will be no tax law if this time limit has been surpassed by the system. "If the GST doesn't come into force by September 16, there is one view that existing specified tax legislations would cease to have effect. Hence, the government is working towards ensuring that GST is implemented before 16th September. It needs to be seen that if the same is not achieved whether the Government has an alternative plan," said Dharmesh Panchal, India - West Indirect Tax leader, PwC.


Many big companies and conglomerates were helping vendors, suppliers and distributors to be GST prepared before the currency-ban. Some of these companies provided special chartered accountants and technical experts to these small and mid scale industries. Small companies that don’t have any direct involvement with these big industries they might have to handle the tax complexity and technology by themselves."Companies, mainly medium and small ones, are tackling the impact their businesses have faced due to demonetization. Even the biggest of the companies have put GST on their low priority list. Everyone is expecting that it (GST) would be postponed," said a senior tax expert.

Industry trackers and market experts has pointed out a couple of ways on the options that government has if they miss the deadline of GST implementation date of the H2 2017. They opine that the government may not bum any circuitous tax as the in progress taxes will go off with the GST execution.  As demonetization has impacted government’s planned timeline for GST implementation government can’t purposely cease existing tax rules. Reports suggest that many small and medium industries like- transport, logistics, chemical manufacturing firms, iron and steel industries won’t be able to comply GST by next year. In that case government should go for status quo ante or seek presidential extension for GST implementation. "The dilemma the government faces is that whether to go ahead with GST and deal with the further impact on the economic growth or postpone the GST and tackle the blushes," a tax law expert said.

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